‘Modern Financial Advisor’: Mark Gochnour Shares Insights from Dimensional’s Global Investor Study
Mark Gochnour, Head of Global Client Services at Dimensional, was recently a guest on the Modern Financial Advisor podcast. During the episode, Gochnour shared findings from the firm’s annual Global Investor Study and talked about actionable takeaways from the survey results.
Below are some highlights from the conversation. Listen to the full episode here.
What is the Global Investor Study, and who participates in it?
We invite advisors who work with us to distribute Dimensional’s Global Investor Study to any or all of their clients. The investors who participate represent a good mix in terms of age, size of investable assets, and the duration of the relationship with their advisor.
We break up the study into a few different themes, which center around how respondents think about investing, generally; what kind of relationship they want with their advisor; and the value they get from their advisor. It’s an anonymous study, but we do ask for some demographic information to segment responses by different categories, including geographic location, age, and size of assets.
What have been the biggest changes in recent years in investor expectations?
Obviously, the COVID-19 pandemic changed things in very significant ways for many of us. It did for Dimensional in how we work with advisors, and it did for advisors in how they work with their clients.
I think that the past few years have given people a lot more confidence in trying something new. We were forced into a totally different way of interacting and communicating, but it worked. It gave us leeway to experiment with some things, which is good.
Prior to the pandemic, when we surveyed advisors and investors about how they wanted to interact with each other, only something like 8% of respondents said virtually. Since the pandemic hit, we’ve asked a similar question and see that the appetite for in-person meetings is still there but less than it used to be. Now, we see investors wanting to meet with their advisors half the time in person, and the other half virtually.
I think the efficiency of virtual is just so advantageous for both sides, and people are comfortable with it. It does mean that time must be spent thinking through how to deliver a proper virtual experience. There is a lot more competition for our time and our mental energy. You have to get really clear and dialed in on how you can have effective communications.
It’s also important to remember that in person is still important to a lot of people. It’s critical to reach out to clients and learn from them how they want to interact.
You refer to your broad client-service offering as Dimensional 360. What is it, and how does it help advisors be successful?
With Dimensional 360, we designed a support structure that is flexible and can be very modular, depending on what the advisor is trying to achieve. Success means different things to different people. Some firms want to grow revenue. Others want to focus on efficiencies. And still others want to solve for succession by getting ownership to the next generation.
There are three major pillars of Dimensional 360: Investments, communications, and strategy—and we typically think of them in that order. It is generally our investment solutions that draw advisors to working with us. Then, they usually want resources to explain our investment philosophy to their clients. Once they understand the investment solutions and can articulate them well with their clients, they are set up for a level of success that needs business strategy.
For a lot of advisors, they got into the business out of love for the investments, the financial planning, and taking care of their clients. When they do all of that well, they grow into a more complex business. All of a sudden, there’s a need to manage people, operations, compliance. We can help them think about their business as a business.
How can next generation advisors develop their skills?
It takes time to figure out what works. You have to do thousands of meetings to get really good at it. Training can help, though. We can help them in their own training and development to potentially shorten that from thousands of meetings to hundreds.
At Dimensional, we have built out a very effective framework for communications. We call it the 4S Framework. It’s scripts, storytelling, sketches, and supplements, or supporting materials. Each of these can be very effective in engaging a client and communicating with them.
Being an advisor is a very rewarding career, but we need to set proper expectations around the time it takes to develop the necessary skills and knowledge. It takes time to reach the point where you are able to consistently deliver on the experience an organization expects for its clients.
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