The ROI of Financial Planning

Advocates for financial planning point out that engaging a client in planning deepens the advisor-client relationship and documents the basis for the financial advice provided. Skeptics ask, “Does it increase advisor production?” The answer to that question has been illusive, beyond anecdotes, because so many factors influence a particular advisor’s production.

The ROI of Financial Planning (September 2019)

Illusive until now. Raymond James commissioned Kehrer Bielan to take a deep dive into this question, analyzing data on over a thousand individual advisors from 34 banks and credit unions. We were able to isolate the impact of planning by controlling for many factors that impact an advisor’s production, including the advisor’s assets under administration and their composition, the ROA on those asserts, the number of clients in the advisor’s book, the size of the advisor’s branch territory and whether the advisor is based outside the branch referral stream, access to sales assistance, and the advisor’s tenure.

The ROI of Financial Planning describes the planning activity of the advisors in the study—how many plans per month they initiate or update, and the quality of those plans—and the impact of that planning activity on the advisor’s annual production.

This study helps management benchmark their advisors’ planning activity, understand which advisors benefit most from embracing planning in their interactions with clients, and what the firm and advisor can expect in additional production from reaching higher thresholds of planning activity.

The ROI of Financial Planning