In the business world, you must identify how you fit into the market — and how you stand out from the competition. What makes you unique? What do you offer that no one else does? What is your edge? Clients need to be wowed given all the competition in the market.
If you thought that clients were more do-it-yourselfers nowadays, think again: According to a poll conducted by Nationwide Advisory Solutions, 74 percent of investors surveyed said that they were more likely to work with an advisor now than they were before the 2008 economic downfall. So clients are out there — but how do you reach them? Answer: with a unique value proposition.
Defining your value proposition is crucial to growing your client base, but going about it isn’t easy. In order to identify your unique value proposition, you must ask yourself three questions: Am I offering unique opportunities? How fragmented is my client’s experience? Am I embracing a modern culture?
Answering these market-specific questions will help you understand your edge, ultimately enabling you to entice clients and keep them from seeking out other solutions and cookie-cutter opportunities.
Question 1: Are You Offering Unique Opportunities?
At times, it can seem as though the market is saturated with financial advising outlets. According to the U.S. Bureau of Labor Statistics, more than 200,000 personal financial advisors were in the workforce. Moreover, the number of financial services professionals is growing. So what makes you valuable?
Consider the rise in technology. Robo-advisors take a purely data-based approach to investing and allow clients to have a hands-off experience. Clients have turned toward these types of impersonal investing approaches after losing trust in financial institutions after the 2008 crash. Plus, the relatively low-risk/low-fee investments offered by robo-advisors are appealing, especially to individuals who are just starting an investment plan.
However, although robo-advisors offer clients an alternative to the traditional approach, the types of investments they use are not exactly unique or interesting. This is where you can get creative and attract clients by offering unique opportunities that can’t be found elsewhere.
Many advisors are challenged when it comes to offering these unique opportunities. If you’re part of a large firm, it could be tough to find unique opportunities because most of these alternatives don’t scale to the entire team. Or if you work with a broker-dealer, investment opportunities need to go through an approval process, which can be slow and tedious. Or maybe you’re locked into the investment opportunities that your B-D is pursuing, which halts the search for new, niche opportunities.
To combat this, make sure that you’re working with a B-D who has a philosophy that backs finding and offering unique investment opportunities. This will help you formulate a unique value proposition, as clients will see you as someone with enticing opportunities they haven’t seen before.
Question 2: How Fragmented Is Your Client’s Experience?
Clients typically seek out a handful of professionals to help address their financial health. They look to industry experts for property insurance, home insurance, mortgage services, taxes and more. They’re accustomed to hiring individual firms for each part of their overall finances. This results in a limited perspective and often vague picture of how everything fits together. For something so important, clients shouldn’t be spread so thin.
Also, when a client seeks out different services from numerous firms or individuals, the revenue gets dispersed. Sharing a client with other professionals means that you are missing out on money that could be yours if you offer more services. What today’s clients need is a more inclusive experience to help them visualize all of their investments and opportunities without having to piece together advice from their personal board of professionals.
If you offer clients a comprehensive snapshot of their financial health, it helps make their lives easier because 1) there are fewer hands in their portfolio, leading to fewer errors and less overlapping, and 2) you have more control of their assets, and can help improve their returns in multiple areas instead of just one.
Question 3: Do You Have A Modern Culture?
Culture is at the forefront of doing business because today’s clients want to know whether a firm or an individual advisor shares their core values. Culture doesn’t mean an eclectic set of hobbies or a feature-rich website. Instead, culture means pursuing (and showing your passion for) the goals and ethics that matter most to you while using emotional intelligence to understand your client base. If your culture resonates with your clients, it gives you a unique value proposition because you are more human, approachable and modern. This, in turn, can help you establish trust with clients.
A survey conducted by Practical Perspectives revealed that more than half of the advisors working today won’t be working full time in 10 years. With retirement in the near term, they have an overwhelming sense that they should stick with “doing things the old way” because it works. In turn, many advisors are hesitant to work toward developing a modern culture.
One status quo rationale embraces the mentality of “if it ain’t broke” — in other words, if the processes and methods worked before, why should they change? Another rationale that prevents change in insurance and financial services holds that millennials are not a viable market to pursue.
These advisors don’t see the need to take a more modern approach because they believe millennials aren’t investing. But the truth is that millennials are the ones who will end up inheriting their parents’ money — parents who likely work closely with an advisor.
Both of these rationales are keeping many advisors (and even the industry as a whole) from moving forward. That stagnation opens up opportunities for you.
In order to embrace a modern culture, you must be modern in your approach. Start by approaching clients where they want to meet — typically, this means on various channels. Today’s client is constantly connected thanks to the prevalence of smartphones and mobile apps, and you should use this to your advantage. Whether via SMS, an app or an online portal, connecting with your clients through new channels helps you modernize.
Embracing modern culture also means exercising emotional intelligence. This involves control over your emotions while understanding the emotions of others, and it takes a careful combination of empathy, control, authenticity and awareness. Clients value emotional intelligence because it brings a more human approach to doing business — and with it, a sense of trust and assurance. By understanding your clients’ emotions and their needs, you can better support their decision-making and benefit your long-term relationship.
Using these questions as a guide will help you identify your unique value proposition. By doing so, you can confidently approach clients knowing that you are a step ahead of the rest resulting from your unique opportunities, focus on integrated client services and modern culture.