You Are Not The Solution

Peter Montoya became famous for preaching that your brand is you.  David Grau now has research showing how that approach backfires.

Montoya has contributed a lot to advisor marketing. As much as I agree with a lot of what he has published, I have always disagreed with one of his precepts: that the brand is you.

The Breakthrough Company is the result of research into small companies that successfully became big companies.  The first principle of success they explain is to “crown the company” meaning put the interests and image of the company before yours as CEO. When you put the interests of the practice before your own, you recognize the shortcoming of putting the spotlight on yourself.

People are interested in how they can benefit from working with your firm.  When you say “I work with retirees with gobs of money to invest” or “I specialize in people who have just come into a lot of money through inheritance or selling a business” you talk about yourself, not about what’s in it for the client. You also limit both the growth potential of your firm and its value when it comes time for your own liquidity event.

It is this latter point that Grau has now documented.  And it makes sense.  If you have spent decades promoting yourself as the most valuable aspect of your business, a buyer will have to start all over again if they buy your practice.  The buyer risks losing clients during the transition to a new value proposition.

It can also cause you problems as your business grows.  I am working with an advisor now who faces this challenge.  For the past 20 years, she was the person the clients came to – it was her wisdom that people perceived as the value of the practice.  For the last 10 years, she has had a fully qualified advisor working for her.  It was the principal’s belief that either of them could (and did) provide good service and advice. Yet, she had a terrible challenge managing her time because all the clients insisted on talking to her.  When we conducted an advisory board meeting, we asked about the clients’ perception of roles in the practice. To her surprise, people thought the other advisor was her assistant – some actually referred to her as secretary. It will take a long time to adjust that perspective, get clients agreeable to taking advice from the other advisor, and give the principal back a little more control of her time.

It is much more productive to define your business in terms of a solution or experience clients seek. It may be one person or a team, but it is the business delivering the value. That opens up the opportunity to delegate or add partners smoothly. Avoid the ego gratification of naming your practice for yourself, and identifying your own attributes and skills as the primary value the business has to offer. Let people seek the firm to find what they are looking for, and you will realize it gets easier to run now and easier to sell later.

How Do Your Clients Describe You?

There has been a lot of ink devoted to the importance of a financial advisor’s value proposition. But there may be something more important than how well it is written and how well it differentiates you.

As discussed in the Art Of The Referral, client referrals actually happen when a client's friend asks for a referral or has a financial need. This is the moment of truth. When a friend, acquaintance, or business associate of a client expresses a need for your services, will you spring into your clients mind?

It is important that your value proposition describe what you do in a way that distinguishes you from other advisors and is meaningful and compelling to the people in your target market. It is just as important (maybe more important) how your client describes your unique value. At the moment of truth, will your client put together their friends need with the problems you are especially skilled at solving, and remember to refer them to you?

You know that I advocate engaging your best clients through an advisory board to discuss what they most value about your services. That's the best way to know how they describe you and to get their guidance in refining a value proposition. But there are other ways to find out how they describe your value. You can uncover it in a client survey, or by incorporating a question or two into your client meeting agendas.

Once you uncover how your clients describe your most important value to them, you may need to work with a few select clients adjusting it. While you want it to remain in their words, you may want to emphasize specific services or an investment style. Continue to work with your clients so that you project the right message, and any adjustments continue to ring true to them.

Finally, the polished value proposition needs to be communicated back to clients. You can publish it in a client newsletter.  You can incorporate it into a brief discussion of the clarified statement at the end of appointments:  “We have been working to focus on providing [type of services] to [type of clients].  If you have any suggestions on how we can do that better, we would appreciate your help.” 

Devote some attention to educating clients on how to describe your value, and referrals will come much more naturally.



The Top Three Reasons Clients Choose You

Critical to attracting clients and receiving referrals is a financial advisor's competitive advantage, a strategic differentiator, a unique value proposition, something that enables people to understand why they should choose you, or send you a referral, over all other financial advisors.

You must be known for something.

Here is one simple marketing exercise to help determine whether there is something about your practice that separates you from the competition: List the top three reasons clients should choose you over other advisors. Go ahead, take out a piece of paper and write them down. Come back when you're done.

So, what did you write? Are they three things other financial advisors would not write, or that other advisors could not claim?

Probably not, and don't take offense. For most of our careers, we have been trained and encouraged to use the same clichéd terms. This part is hard. I have worked with hundreds of advisors, and reviewed hundreds of advisor websites, and practically all of them say essentially the same thing. Many say EXACTLY the same thing! Here is a list of things that will not differentiate you:

• Trust
• Experience
• Good customer service
• Financial planning
• Retirement planning
• Individualized recommendations

Even people who speak and consult in our field frequently get it wrong. At FPA Denver 2010, Vern Hayden, in his talk "Differentiate Or Die" gave a partial list of potential differentiators. But, these, too, will not differentiate you:

• Fee-only
• Objectivity
• Being a CFP

Some of these are "table stakes." Things that must be true, or that you at least must claim, to earn the right to talk to a potential client at all. Some of these may be strengths; an aspect of your practice that will increase client satisfaction but not necessarily separate you from many other advisors.

And let's get this out of the way right now – I know, everybody says it but you actually do it. Got it. I know you are vastly better at whatever it is than the half-million other advisors in the country. Even so, here is the hard truth: when everyone else says the same thing, how is a prospective client to know?

Here is a simple test to help determine whether what you are saying will differentiate you. Ask "could an advisor say the opposite and still be credible?" For example, if you say one of your top three reasons is because you provide great customer service, could an advisor say to a client "I do not provide great customer service" and still be in business? Probably not. On the other hand, if one of your top three reasons people in your target market should come to you (assuming for the moment your target market is obstetricians) is "I know the particulars of planning and risk management for obstetricians," could an advisor say to a potential client "I do not know the particulars of planning and risk management for obstetricians?" Assuming the advisor is not targeting obstetricians, sure.  In fact, most should say it, because that is a legitimate specialty.

This is not a perfect test, but it is one way to evaluate whether what you claim has the potential to separate you from the competition.

Your differentiator, your niche, your unique value proposition, may be the hardest marketing question to answer. But answer it you must, or your business development and referral programs will never come close to their potential.