"Your challenge is to separate the good programs from the not-so-good ones. You want to be able to determine if a program will be worth your time before you embark on it."

VAM, Bam

By John Bowen

Finding the right products isn't an issue for most financial advisors. In a 2002 survey of more than 1,000 advisors, CEG Worldwide found that only a handful—just 1.3 percent—were concerned about finding high-quality products.

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Most financial institutions realize they can't compete for your attention on products alone. They know they have to go a giant step further and provide you with the kind of support you can use to grow your business and become more profitable. You're looking for advanced sales training, assistance in developing referral programs, greater insight on your target markets, technical support, and help managing your time, to name just a few items.

In response, financial institutions are focusing more on creating value-added marketing (VAM) programs to provide these support services in one convenient wrapper. By offering you the help you need, they hope to win—and keep—your business.

How are institutions doing in delivering this kind of support? We thought it would be worthwhile to find out. By knowing what's actually succeeding (and what's not), you'll be better positioned to pick and choose the programs that can really help you out. So we asked 816 advisors how they rated the various VAM programs. About two-thirds (67.6 percent) of the advisors earned net incomes of less than $250,000, while the other one-third (32.4 percent) earned more than $250,000.

Each of these advisors had participated in some kind of VAM program in the previous 24 months. These programs were delivered by a wholesaler, consisted of more than a single presentation, were not exclusively product-related, and were designed to enable advisors to be more successful.

Advisors were presented with 13.1 VAM programs in the previous two years and were willing to give many programs a try. On average, advisors either attended more than one session of or participated in wholesaler/vendor follow-up for 6.6 programs. And while the higher-income advisors were more discerning, they still lined up to try almost one out of four programs.

But advisors unfortunately found little of value in the programs they tried. The lower-income group advisors rated only 2.1 programs as extremely or very worthwhile. The higher-income advisors were even more critical, finding just 0.6 of the programs extremely or very worthwhile.

So, advisors' experience with wholesalers and institutions' VAM programs is not especially good. Yet we know there are good programs out there that are working. Our study found that when advisors do start using a VAM program, almost 80 percent of them conduct more business with the firm offering the program. Why? Because they're experiencing success with the program.

Your challenge is to separate the good programs from the not-so-good ones. You want to be able to determine if a program will be worth your time before you embark on it. To help you do so, let's look at the reasons advisors drop out of VAM programs and the questions you should always ask before you begin any new program.

Reason 1: They just aren't working (84.6 percent). At best, a program may provide some motivation, but when the advisors take the material back to their practices, they are unable to execute the program. Questions to ask: Is the content designed to be useful? Will it provide me with specific steps to take? Will it give me real-world tools I can utilize to improve my business?

Reason 2: They aren't relevant to my practice (44.1 percent). VAM programs often don't address areas in which advisors are actually looking for support. They may have interesting ideas but are designed in a vacuum with little relevance. Questions to ask: What issues does the program address? Are they critical issues for my business today?

Reason 3: The vendor or wholesalers did not know the material well (40.9 percent). Institutions' marketing and sales departments often do not work well together. A marketing department may create a program, for example, and release it for use by the wholesalers without either the proper buy-in or training from the sales department to make the program actually work. Questions to ask: Is the wholesaler well versed in the material? Has he or she had direct experience implementing it?

Reason 4: The programs were only disguised product promotion (39.2 percent). This reflects a failure on the part of institutions to design programs with the real needs of advisors in mind. All too often, institutions design their programs around what they want to gain from the program, not what advisors want. Questions to ask: Is the program focused on my needs or on the institution's products? What needs does it address?

Reason 5: The programs are badly organized (36.8 percent). This is not surprising, given that VAMs are often thrown together as a competitive response or at the last minute for a conference. Questions to ask: How long has the program been under development? Has it been used before successfully?

Reason 6: Another firm does it better (30.4 percent). Firms often try to play catch up by copying other institutions' programs. Questions to ask: Is this same type of program used by other institutions? If so, what makes this one superior?

Reason 7: The programs are presented with rehashed material (14.7 percent). Institutions that try to put a new, glossy look on old material are not likely to convince advisors they have worthwhile support to offer. Questions to ask: Does this program draw on new thinking? Does it provide fresh strategies?

The most important thing to recognize is that you are serving your clients first, so you must select the financial institutions that provide the best programs to help you serve your clients well. You can only work with a limited number of financial institutions, so you owe it to yourself—and your clients—to work only with the best.