A Clear and Unique Value is Critical Because Everyone Wants to Eat Your Lunch

Wednesday, April 11th, 2012

Finan­cial advi­sors are fac­ing more com­pe­ti­tion from more direc­tions than ever. With so much choice, there are more rea­sons now than at any point in the past why you must rep­re­sent some­thing spe­cific your tar­get clients want if you hope to attract refer­rals.

In an arti­cle on Reg​is​tere​dRep​.com last week, Kris­ten French enu­mer­ated some of the ways every­one is eat­ing your lunch. E*Trade and Charles Schwab are adding man­aged account solu­tions to com­pete for wealth­ier clients’ port­fo­lios. Pri­vate banks are going down­stream from the ultra afflu­ent to the mass afflu­ent. Pri­vate client groups at banks have already grabbed 47 per­cent of the high net worth mar­ket, accord­ing to Cerulli, and their share is growing.

Andrew Gluck has writ­ten about free finan­cial appli­ca­tions that are attract­ing young pro­fes­sion­als before they ever show up on our radar, increas­ing the like­li­hood that they will per­ceive less need for an advi­sor once they do show up. He has also writ­ten about Wealth­front, a com­pany that started out by try­ing to attract clients advi­sors do not want, but with plans to move into the demo­graph­ics advi­sors want badly.

All these devel­op­ments should set off alarm bells if you can­not eas­ily artic­u­late why your tar­get clients are pow­er­fully drawn to do busi­ness with you (and air raid sirens if you can­not suc­cinctly describe who your tar­get client is with­out resort­ing to tired and inef­fec­tive old pseudo­cat­e­gories like “pre-retirees and retirees with more than a mil­lion dol­lars to invest”).

In this envi­ron­ment of increas­ing com­pe­ti­tion and fee com­pres­sion, it will become dif­fi­cult or impos­si­ble to pros­per unless you rep­re­sent a spe­cific solu­tion or expe­ri­ence your tar­get client is look­ing for. Some­thing a large insti­tu­tion or com­puter pro­gram can­not pro­vide. Ser­vice won’t do it – banks can cred­i­bly pro­vide that. A good invest­ment process won’t do it – Finan­cial Engines Advi­sors has Bill Sharpe’s wis­dom embed­ded in its code (and $37 bil­lion under man­age­ment) and you don’t have a Nobel.

To suc­cess­fully attract and retain an ongo­ing stream of clients, it is becom­ing ever more impor­tant to pro­vide some­thing that makes you eas­ily and clearly dif­fer­ent from other advi­sors, insti­tu­tions and apps. Some­thing your clients want that other firms do not or can­not pro­vide (or can­not articulate).

    Lat­est Advi­so­r­An­a­lyst Prac­tice Growth Sto­ries

Tags: Affluent, Air Raid Sirens, Alarm Bells, Bill Sharpe, Cerulli, Charles Schwab, Client Groups, Computer Program, E Trade, Financial Advisors, Financial Applications, Financial Engines, Gluck, Likelihood, Private Banks, Private Client, Specific Solution, Target Client, Target Clients, Young Professionals
Posted in My Practice | Comments Off

Don’t Ask For Referrals – Ask For Advice

Wednesday, December 21st, 2011

Let me intro­duce you to the most pow­er­ful busi­ness build­ing ques­tion I ever learned.

The ques­tion was taught to me by Bruce Peters, my coach and men­tor and my pre­de­ces­sor in doing client advi­sory boards for finan­cial advi­sors. I have used it in many sce­nar­ios regard­ing many ser­vices. I have used it in sales pre­sen­ta­tions and per­for­mance eval­u­a­tions. I fre­quently ask it on behalf of advi­sors at their client advi­sory board meet­ings. It is a pow­er­ful ques­tion. Here it is:

If you were in my posi­tion, try­ing to do what I am try­ing to accom­plish, what would you do?

Let’s exam­ine the value of this ques­tion in the con­text of get­ting refer­rals. Peo­ple are com­ple­mented by being asked for advice. It gets their cre­ative juices flow­ing. It elic­its the kind of infor­ma­tion you want while strength­en­ing the rela­tion­ship rather than dete­ri­o­rat­ing it, which is what hap­pens when you ask directly for referrals.

For exam­ple, how does a typ­i­cal client feel when asked “who do you know the can use my ser­vices?” Now, how do you sup­pose the client would feel if, after pro­vid­ing a descrip­tion of your tar­get client, you ask “if you were look­ing for other peo­ple like this, what would you do?”

First, this puts a lot more con­text around the request. It is a lot eas­ier to recall peo­ple of a cer­tain descrip­tion than it is to think of peo­ple “who could poten­tially use our ser­vices.” It engages their cre­ativ­ity. If any­one comes to mind, there is a good chance your client will offer their names. If not, they have a grace­ful way out. There is no wrong answer. You may even get some good mar­ket­ing ideas from them.

As I men­tioned, this ques­tion can be used in all kinds of sit­u­a­tions. If you had to describe the value of these ser­vices to other peo­ple like you, how would you do it? If you are try­ing to pro­vide the ideal ser­vices to busi­ness own­ers like your­self, what ser­vices would you offer? If you were try­ing to con­nect with your trade asso­ci­a­tion, how would you do it? If you had to fill the posi­tion of recep­tion­ist like I need to, where would you look to find the best can­di­date? If you were try­ing to improve your per­for­mance in this one par­tic­u­lar area, what do you sup­pose you would try first?

Learn how to uti­lize this ques­tion and you will find your­self receiv­ing much more use­ful feed­back from clients and cen­ters of influence.

    Lat­est Advi­so­r­An­a­lyst Prac­tice Growth Sto­ries

Tags: Advisory Board Meetings, Advisory Boards, Business Building, Business Owners, Creative Juices, Creativity, Financial Advisors, Good Chance, Good Marketing, Marketing Ideas, Mentor, Performance Evaluations, Predecessor, Referrals, Relationship, Sales Presentations, Scenarios, Target Client, Typical Client, Wrong Answer
Posted in My Practice | Comments Off

To Connect, Communicate Solutions, NOT Methods

Wednesday, November 30th, 2011

Peo­ple care less about what you do and more about what they get.

When I asked advi­sors what they do, or what value they rep­re­sent, too many describe the process they uti­lize and not enough describe solu­tion they deliver. Peo­ple won’t send you a refer­ral because you have a cus­tomized finan­cial plan­ning process and eval­u­ate indi­vid­ual goals and gen­er­ate rec­om­men­da­tions tai­lored to client spe­cific needs, and they won’t send you a refer­ral because you care­fully mon­i­tor rela­tion­ships between mar­kets and rebal­ance port­fo­lios based on pro­pri­etary pro­to­cols. They will pro­vide a refer­ral beause you pro­vide a solu­tion to a prob­lem their friend has. Peo­ple care less about what you do and more about what they get.

I believe the most pow­er­ful descrip­tions of the value advi­sors offer encap­su­late the ben­e­fit a tar­get prospect real­izes by work­ing with them. This requires, first, that you have a prac­ti­cal and well defined tar­get mar­ket, but that’s another post. Con­sider describ­ing what you do worded as a solu­tion from the client’s point of view. Com­plete this sen­tence “Peo­ple like [describe tar­get prospect] come to me for [solu­tion that tar­get mar­ket requires]. Con­sider these possibilities:

Cor­po­rate exec­u­tives fac­ing retire­ment in the next three years come to me because I show them the right choice on their retire­ment plan distributions.

Sin­gle pro­fes­sional moth­ers come to me to learn how to bal­ance the demands of rais­ing kids with the abil­ity to afford college.

Peo­ple who have saved enough to take care of them­selves and want to use their sav­ings to leave a mark on the world come to us to plan their legacy.

You can teach your clients state­ments of value like these, and they will repeat them to oth­ers when pro­vid­ing you a referral.

Don’t worry about answer­ing the ques­tion “What do you do” with a sen­tence that starts out by describ­ing your tar­get client. You may think the per­son who asked you the ques­tion wants you to be the sub­ject of the sen­tence, but you can much more effec­tively get their atten­tion by describ­ing the per­son you spe­cial­ize in – espe­cially if it is them.

When I ask advi­sors what they do, most often I hear ver­sions of “I help peo­ple reach their finan­cial goals” or “I man­age people’s port­fo­lios to help reduce risk.”  Or “I give peo­ple peace of mind”. These are usu­ally too gen­eral to be use­ful. And the big­ger prob­lem is that I don’t think of my prob­lems in those terms. I have just started a new busi­ness with one child in col­lege, and am newly mar­ried, work­ing on con­sol­i­dat­ing two house­holds and have a three-year-old in the house for the first time in 14 years. You are NOT going to give me peace of mind.

Peo­ple will come to get a solu­tion, not to get a process. And peo­ple will remem­ber to refer you because a friend men­tions a prob­lem that your client can plug your solu­tion into, not because they like your process or because you have pro­vided them returns to keep up with the mar­ket (even if it’s with lower volatility).

If you stand for process you are a tech­ni­cian. If you rep­re­sent a solu­tion, you will attract clients and refer­rals who need a prob­lem solved.

    Lat­est Advi­so­r­An­a­lyst Prac­tice Growth Sto­ries

Tags: Answering The Question, Benefit, Corporate Executives, Financial Planning, Legacy, People, Point Of View, Portfolios, Possibilities, Proprietary Protocols, Raising Kids, Referral, Relationships, Retirement Plan Distributions, Right Choice, Target Client, Target Market, Worry
Posted in My Practice | Comments Off

To Get Referrals, Your Clients Must Understand Your Target Market

Wednesday, November 16th, 2011

by Stephen Wer­sh­ing, Advi​sor​Check​list​.com

When Andrew Sul­li­van, of Sul­li­van and Schlie­man in Atlanta, formed his client advi­sory board, one of their top rec­om­men­da­tions was to give each of them a card list­ing his ser­vices and accom­plish­ments. Their request was “tell us how to sell you.”

In a recent client advi­sory board I facil­i­tated, the par­tic­i­pants told the advi­sor “tell us who your ideal client is, so we know who to refer.” It is not the first time I have heard that kind of feed­back from clients.

Expe­ri­ences like this raise two crit­i­cally impor­tant points. First, there is clearly a strong will­ing­ness, even an enthu­si­asm, on the part of clients to make refer­rals. This is not really sur­pris­ing – Julie Littlechild’s research has shown that as much as 91% of our clients are will­ing to refer. (It also demon­strates why par­tic­i­pants on an advi­sory board tend to be a firm’s best refer­ral sources!)

Sec­ond, it is the strongest proof I can imag­ine that advi­sors must clearly define what they do and for whom. They must be able to describe their niche, their tar­get mar­ket. Remem­ber, these advi­sory boards are com­posed of the advi­sors’ best clients – the ones who should know best what they have to offer.  And yet, they asked for guid­ance on what kind of clients the advi­sor hoped to attract.

If you believe you have defined your tar­get client, here is how you can test how well you have done. Try this exper­i­ment – next time you talk to a cou­ple clients you are on par­tic­u­larly good terms with, and who would be will­ing to take a minute for a lit­tle thought exper­i­ment, ask them this ques­tion: If I sent you into a cock­tail party in the next room full of all kinds of peo­ple, and I asked you to refer a cou­ple of them to me as prospec­tive clients, how would you fig­ure out who would be the best ones to send to me?

I sus­pect that most clients would answer “I don’t know.” And if that’s the response, you will know why you aren’t get­ting more refer­rals. Your clients are not sure who you’re look­ing for. And what­ever you have done so far to define and com­mu­ni­cate your tar­get mar­ket, your value propo­si­tion, and your ideal client, you still have work to do.

Defin­ing who you want as clients and what unique solu­tions and expe­ri­ences you pro­vide to peo­ple like them are the foun­da­tion of refer­ral mar­ket­ing. Get those two things right, and attract­ing new clients becomes much easier.

Copy­right © Advi​sor​Check​list​.com

    Lat­est Advi­so­r­An­a­lyst Prac­tice Growth Sto­ries

Tags: Advisory Board, Advisory Boards, Andrew Sullivan, Cocktail Party, Experiences, Feedback, Guidance, Ideal, Imagine, Julie Littlechild, Niche Market, Participants, Proof, Prospective Clients, Referral Sources, Referrals, Target Client, Target Market, Thought Experiment, Willingness
Posted in My Practice | Comments Off

To Connect With Prospects And Attract Referrals, Communicate Solutions – Not Methods

Wednesday, October 12th, 2011

Peo­ple care less about what you do and more about what they get.

When I asked advi­sors what they do, or what value they rep­re­sent, too many describe the process they uti­lize and not enough describe solu­tion they deliver. Peo­ple won’t send you a refer­ral because you have a cus­tomized finan­cial plan­ning process and eval­u­ate indi­vid­ual goals and gen­er­ate rec­om­men­da­tions tai­lored to client spe­cific needs, and they won’t send you a refer­ral because you care­fully mon­i­tor rela­tion­ships between mar­kets and rebal­ance port­fo­lios based on pro­pri­etary pro­to­cols. They will pro­vide a refer­ral beause you pro­vide a solu­tion to a prob­lem their friend has. Peo­ple care less about what you do and more about what they get.

I believe the most pow­er­ful descrip­tions of the value advi­sors offer encap­su­late the ben­e­fit a tar­get prospect real­izes by work­ing with them. This requires, first, that you have a prac­ti­cal and well defined tar­get mar­ket, but that’s another post. Con­sider describ­ing what you do worded as a solu­tion from the client’s point of view. Com­plete this sen­tence “Peo­ple like [describe tar­get prospect] come to me for [solu­tion that tar­get mar­ket requires]. Con­sider these possibilities:

Cor­po­rate exec­u­tives fac­ing retire­ment in the next three years come to me because I show them the right choice on their retire­ment plan distributions.

Sin­gle pro­fes­sional moth­ers come to me to learn how to bal­ance the demands of rais­ing kids with the abil­ity to afford college.

Peo­ple who have saved enough to take care of them­selves and want to use their sav­ings to leave a mark on the world come to us to plan their legacy.

You can teach your clients state­ments of value like these, and they will repeat them to oth­ers when pro­vid­ing you a referral.

Don’t worry about answer­ing the ques­tion “What do you do” with a sen­tence that starts out by describ­ing your tar­get client. You may think the per­son who asked you the ques­tion wants you to be the sub­ject of the sen­tence, but you can much more effec­tively get their atten­tion by describ­ing the per­son you spe­cial­ize in – espe­cially if it is them.

When I ask advi­sors what they do, most often I hear ver­sions of “I help peo­ple reach their finan­cial goals” or “I man­age people’s port­fo­lios to help reduce risk.”  Or “I give peo­ple peace of mind”. These are usu­ally too gen­eral to be use­ful. And the big­ger prob­lem is that I don’t think of my prob­lems in those terms. I have just started a new busi­ness with one child in col­lege, and am newly mar­ried, work­ing on con­sol­i­dat­ing two house­holds and have a three-year-old in the house for the first time in 14 years. You are NOT going to give me peace of mind.

Peo­ple will come to get a solu­tion, not to get a process. And peo­ple will remem­ber to refer you because a friend men­tions a prob­lem that your client can plug your solu­tion into, not because they like your process or because you have pro­vided them returns to keep up with the mar­ket (even if it’s with lower volatility).

If you stand for process you are a tech­ni­cian. If you rep­re­sent a solu­tion, you will attract clients and refer­rals who need a prob­lem solved.

    Lat­est Advi­so­r­An­a­lyst Prac­tice Growth Sto­ries

Tags: Answering The Question, Benefit, Corporate Executives, Financial Planning, Legacy, People, Point Of View, Portfolios, Possibilities, Proprietary Protocols, Prospects, Raising Kids, Referral, Referrals, Relationships, Retirement Plan Distributions, Right Choice, Target Client, Target Market, Worry
Posted in My Practice | Comments Off