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Standing Out From the Pack

If you don’t have a clear idea about how you create value, your clients (and any potential clients) won’t either.

Here’s a hard truth: To most investors, all financial advisors sound the same. In a survey conducted, more than 60 percent of investors said they think all advisors make the same promises, making it hard to tell the difference between them. That same report looked at the marketing materials for the top 100 financial advisors (in Barron’s 2017 list) and found that most used highly similar language. One in four of those firms used the phrase, “comprehensive portfolio management.”1

There’s nothing wrong with comprehensive portfolio management, of course, but that’s a little like a restaurant highlighting that it sells food. It’s a baseline requirement of the industry, and it doesn’t give customers enough information to make an informed decision. (Would any financial advisor offer non-comprehensive portfolio management?)

Instead, financial advisors need to get more specific in how they create and communicate their value to clients. That’s an age-old challenge for advisors, but it’s getting more important. The industry is growing faster than the average rate for other professions, meaning there are more advisors and more competition.2 Robo-advisors, and the rise of passive investing, are spurring clients to ask why they should pay high fees.3 A decade or so ago, advisors could get by with generic marketing materials, but today that’s no longer true.

The good news is that because most advisors lack a clear and differentiated means of creating value, it’s relatively easy to stand out from the pack without requiring a lot of time or money.4

Here are four ways to differentiate yourself in the value you offer to clients.

1. Identify a Target Market

The core of any value proposition is identifying who you serve and how you help those people with their specific financial challenges. For some advisors, this can come from their own personal background. If you’ve served in the military, you might want to work with military members and their families. After all, you’ve been in their shoes and have first-hand experience with the financial challenges they face (along with knowing how salary and benefits are structured in the military). And you’ll have more credibility than the average advisor.2 Similarly, if you’re a divorced woman, you might want to specialize in those clients, or if you built your firm up from scratch, you could work with small-business owners.

Notably, your target market doesn’t necessarily need to reflect something personal about you. Sometimes it might come through sheer geography — if you live in a town where one company is a dominant employee, you can focus on working with those people. (If that’s the case, you could get to know someone in the HR department to better understand the company’s package of benefits.) Either way, you should have a clear target market and a clear means of creating value by helping those people address their financial needs. Just as important, you should be able to rule out some potential clients if they don’t fit that profile.

2. Don’t Mistake Technology As a Differentiator

Technology is an amazing tool that has transformed financial services in the past decade, but it’s also essentially a leveler — not a differentiator. It becomes more accessible and less expensive over time, meaning that major Wall Street firms and small storefront advisors can now access the same kinds of tools.5 Instead trying to differentiate yourself based on technology, think about how you can use technology to deliver a better experience to your ideal target client — based on that client’s needs and expectations. In some cases, that may mean relying less on the latest digital tools. For example, if you work primarily with retirees, they may not be as comfortable with technology and would rather have phone calls or face-to-face conversations.2 Technology is fundamentally a means to help you execute a value proposition, not serve as a substitute for one.

3. Think in Terms of Opposites

To gauge whether your value proposition says something meaningful, assess whether another advisory firm could specialize in the opposite.3 For example, consider Firm A, which specializes in people in or near retirement. That’s a clear phase of life where many people need help with specific financial issues such as social security and estate planning.

Is there an opposite market? Yes, Firm B could specialize in younger people just starting their careers, who have different financial needs (typically things like budgeting, setting up retirement plans, and saving for big-ticket purchases like buying a home). In this case, both firms could succeed, meaning that both have clear value propositions.

And just for the record, even if you knew that a recession was coming tomorrow, that shouldn’t dramatically alter your clients’ investing strategies. The main reason is that you wouldn’t know when the recession is going to end. Trying to time the market by selling into and out of positions is virtually impossible and doing so is far more likely to reduce a portfolio’s value than increase it.

In contrast, if Firm A’s value proposition is that it’s “trustworthy” or offers “comprehensive advice” or lends “help with all financial needs,” that won’t work. It’s a generic message that has no successful opposite.

4. Factor in Behavioral Finance

Clients can often make irrational decisions that go against their own long-term interest, like panicking in a bear market and seeking to sell off stocks or trying to time the market to buy low and sell high. Those mistakes are pervasive because they tap into deeply engrained biases and mental shortcuts that affect just about everyone. They feel like they should work. But because these challenges are so common, you can create value by teaching clients some of the basics of behavioral finance. For example, you can show them the implications that those decisions would have had in the past — for example, the gains they would have missed out on if they’d sold off a portfolio at the bottom of the market in 2009.6

You can also tailor your approach by focusing on the biases that are more prevalent for your base of clients. For example, retirees could be more loss-averse than other types of investors, even though they might need to think about growth depending on their age. Entrepreneurs may have a higher risk tolerance and a greater willingness to focus on a small number of highly volatile investments. And at the end of the longest bull market in history, virtually all investors could suffer from recency bias: Given that most have experienced huge gains over the past few years, they may have conditioned themselves to believe that the market can’t go down.7

By talking to your clients about the specific biases they’re most likely to face, you’ll help turn them into smarter investors. (And, as a side benefit, you may find yourself needing to talk them out of fewer questionable decisions in the future.)

In sum, there’s a clear reason that most investors think financial advisors are all the same: Many of them say the same things. But by following these guidelines, you can demonstrate and communicate your value to clients in a way that they’ll understand and that will help you grow your business.

For more ideas on how to create value, read our past blog on, "Three Ways to Strengthen Your Firm’s Brand.”

1 “Advisor Value Propositions: How Advisors Showcase Their Value to Investors,” Pershing Advisors Solutions, 2018.
2 “5 Ways to Differentiate Yourself from Other Financial Advisors,” Axos Bank, April 23, 2019.
3 Amy Parvaneh, “Differentiating Your Advisory Firm’s Brand by Finding the Opposing Category in Your White Space,”, Oct. 28, 2019.
4 Patrick Brewer, “Building a Financial Advisor Value Proposition that Someone Will Buy,”, Aug. 13, 2019.
5 Ryan W. Neal, “How Can Advisers Continue to Differentiate in an Increasingly Digital World?” Investment News, April 9, 2019.
6 Samantha Lamas, “3 Key Conversations to Have With Clients to Prove Your Financial Advisor Value,” Morningstar, Jan. 14, 2020.
7 Mark Burgess, “Embracing Behavioural Finance,” Investment Executive, Jan. 21, 2019.



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