If as an independent financial advisor you are feeling competitive pressure from all sides, you are not alone. From institutions with giant ad budgets (who had the power to write the traditional definition of wealth management), to robo advisors (who are rewriting the script and recreating the financial marketplace)--and other independent advisors, including the young ones (who seem to be nipping at your heels), I am here to tell you the threats are real.
But look what happened: The Internet took over and some business models collapsed. Case in point: Now, when you encounter a printed newspaper or magazine in someone’s home, it actually seems anachronistic and kind of sweet. The ranks of journalists who can earn a professional-level wage have shriveled—much like those of full-service travel agencies, which are essentially a thing of the past. It seems that everyone goes online for virtually everything—at least as a starting point for information and options.
Technological advances and digital realities are changing everything.
So I would suggest that, if there was ever a time to do some work on figuring out your real value to clients, and how to maximize it and make it your brand, that time is now.
WHO ARE YOU REALLY? (FOR YOUR CLIENTS, THAT IS)
Matt Lynch, managing partner of Strategy & Resources, believes that many advisors hang on to outdated value propositions. The idea of being your clients’ counselor, for instance, was once important and special. But today it’s become the subject of marketing campaigns from a slew of financial firms—ads in which advisors participate in clients’ childrens’ weddings and college graduations, for example—and suddenly this incredibly important aspect of the client relationship has been made to seem generic. So, who are you, really, and how are you unique?
Advisors have been told over and over that they need to be clear about their unique value proposition and communicate it to strategic partners, clients and prospects. And most advisors struggle to find clarity about what that value proposition is, precisely. It is a difficult process, made more so because the aspects of their work that advisors value most may not be the things that are most meaningful to clients.
When I talk to advisors about what makes them special, the most common answer I hear is, “I really listen to my clients and know them.” When I ask what that means, I get a lot of “um”s and “uh”s. This tells me that they lack conviction about their unique abilities—they don’t know how to explain what makes them great, so they feel awkward and tongue-tied.
The thing is, listening to clients is just the beginning. Clients and prospects expect it—that’s why they’re talking to you. It’s what advisors do with what they hear that counts, and that’s where the true value proposition lies.
In a recent survey by Cambridge Investment Research and Investment News, 54% of investors said that, in the next five years, they would need more “direct, personalized and professional advice.” In addition, when asked what they valued most about a financial advisor, the most popular answer was the “ability to translate my personal needs into a strategy.” (In second place: “understanding of investment/financial environment.”)
So, if I may be so bold, here is your unique value proposition: you start by listening, but then move into crafting and helping to implement a financial plan that reflects the individuality of each client—their needs, dreams, fears and timelines. As you know, this has less to do with investments and understanding the markets than it does with understanding people and what makes them tick. And that is what makes you truly special.
People will always need people—and trusted partners—when they have big decisions and challenges to face. Today, “tribes” are what matter. Watch this TED Talk by Seth Godin, one of today’s best marketing minds, and let me know what you think after watching this great video clip and reflecting on what I have said above.
Every single person you meet is silently thinking to themselves (whether they know it or not), “Who are you, really? And why should I care?” Let’s all get clear on the answer and how that will or will not resonate as we enter the 3rd Wave of the financial advisory profession.
Keep on Sparking!