How Financial Advisors Can Stay Ahead of Industry Commoditization
In our second in a series of Critical Issues Facing Financial Advisors Right Now, we focus on perhaps the most significant threat to advisor success, much less survival—the commoditization of the advisory industry. The threat is significant because most advisors don’t even know it’s happening to them. In this extremely cluttered and highly competitive advisory landscape, advisors who don’t find ways to stand out in the crowd get swallowed by a sea of mediocrity, where clients dare not go.
Sound overly dramatic? In fact, it might be understating what is happening. Striving to be a knowledgeable, client-focused, and trusted advisor is no longer enough because that is what clients expect. Advisors must work each day at providing their clients with the unexpected. Otherwise, why should they choose you over any other typical financial advisor? Equally important is why should they stay with you when they can find so many others like you from which to choose?
The commoditization of the industry—brought about fierce competition, new entrants into the field, new technologies, and a race to the bottom in fees charged—is your greatest threat because it can make you invisible to your market, making it exceedingly difficult to build your book of business.
Here are three ways you can embrace the commoditization happening around you by standing head and shoulders above your competition.
#1. Strive to become a thought leader
I say “strive” because it’s difficult to become a thought leader overnight. But it’s well worth it. Clients want to be around people viewed as an authority and influential in their field. They gravitate towards people who can walk in a room and command an audience or whose social media posts are well-traveled. It takes time to create that aura, but each day you work at it, you can benefit from your efforts.
Thought leaders are published. They get their ideas and insights out there. It starts with a blog where you communicate a unique voice and compelling thoughts about what you do. You cross wire your blog with your social media sites to attract a wider audience and build influence. Your posts get shared. You repurpose your posts into podcasts or videos that grab an even larger audience.
You then make friends in the local media who are always on the lookout for a local spin on all things financial. You become involved in your local community—staying away from politics. Offer to sponsor a charity event or a youth sports team. Become active in community affairs. All of this begins to create a swirl of buzz around you that builds on itself as you continue to climb the media and social influence ladder. It’s a process. It takes time. You need to work at it every day. But there is absolutely no better way to market yourself.
#2. Create a memorable client experience
We’ve discussed here how vital it is to create an exceptional client experience. This gets talked about so much it’s now almost cliché. But “exceptional” is now becoming the standard. You need to take your client service and support to the next level by making it a memorable experience—one they’ll want to talk about to others. We’re talking about providing concierge-level service. High-net-worth clients expect that when they travel so, why wouldn’t they expect that from their financial advisor?
Everything you do for your clients and prospects should be about the value-add—what you can do to make their lives easier, better—from the onboarding process to the personal touch on every communication to being available the moment they need you. It should be a culture you create that is recognized as different and memorable. Spend a few days working on all the ways you can build that culture.
#3. Understand what your clients really want
When clients see you, do they perceive you as a knowledgeable and skilled financial advisor? Of course, they do, just as they view other advisors who have worked hard, obtained the credentials, and put in their time. There’s no differentiation with that. Clients today want more out of their advisory relationship. They want to know their advisor is riding shotgun with them on their journey. They value the personal connection with their advisor almost as much as they value their skills and knowledge.
You can provide the latter in your sleep. But you have to work consciously and deliberately to ensure they know you care about them. That’s where trust and loyalty come from. Take the first fifteen minutes of your meetings or calls to catch up with what’s going on in your clients’ lives. Share what’s going on with you and your family. Insert yourself in their lives by asking how you can help.
Your clients and prospects aren’t necessarily looking for a new best friend. But they appreciate that the person who has intimate knowledge about their finances takes an interest in their personal well-being.
Watch this 3-minute video to learn how our workshop can help you connect with prospects and clients so you become the obvious choice!
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