Taking on the Goliaths

Much like a modern day version of David and Goliath, independent advisors face overwhelming odds against the representatives of corporate giants who come to the field backed by overwhelming manpower and deep pockets for advertising and public relations support. Not content with their huge market share, today’s Goliaths don’t rely on passive referrals; they use proactive techniques to attract new clients. Staffed with highly trained serfs, their well-funded marketing departments study your customers’ and prospects’ buying habits and motivations. They don’t have to develop a relationship, build a superior product, or provide personal service. They’ve blitzed the market with such overwhelming media power that most prospects never consider any alternatives.

The Wall Street Goliaths’ mission is to build brand and sell product. Their strategy is to promote the advantages of their size and the comfort level associated with tradition. Trying to fight the industry giants head-on with more services or lower costs is a waste of your time. They will easily win those battles.

But don’t despair, you can prevail. The secret to defeating the Goliaths is to go deep behind their lines and attack them where they are most vulnerable.

I will be your guide in this struggle. This monthly column sets aside complicated and ineffective marketing strategies and turns battle-tested tactics into practical action steps. These steps aren’t designed to add to your workload, but will convert your current everyday activities into purposeful communication of your credibility to hold and gain ground in your market. Plus, you can cease wasting time and money on marketing activities that don’t work.

Most advisors unnecessarily spend substantial dollars on a great-looking bro-chure, Web site, or advertising with little or no return. They attempt to defend their client base with something akin to scattershot. I’ll show you a different path. I’ll tell you about professionals just like you who have outwitted the giant in their territory by precisely targeting their position.

Whether you acknowledge it or not, you are engaged in a marketing battle. Every day that you ignore it is ground lost. Unless you become proactive, you run the risk of your business becoming another casualty of brand-name aggression. Even friendly forces are acting in ways that will infringe on your territory. Consider, for example, Schwab’s recent announcement that its 350 retail offices will proactively sell and close business, or Wall Street’s continuing aversion to fiduciary responsibility. Tim Hatton, an independent RIA in Scottsdale, Arizona, put it to me this way: “Wall Street has spent tens of millions of dollars lobbying Congress” to differentiate investment education, which is really just touting past performance or the features and benefits of a product, from investment advice, the application of investing strategies, in order to absolve themselves of any fiduciary responsibility, i.e., liability. Hatton notes that even though these firms may solicit the purchase of a specific investment product, “their legal department argues that it still remains the investor’s decision.”

Goliath wants your clients, but he doesn’t want your liability. The unsuspecting prospect doesn’t know the difference of the scope of your services and defaults to the brand name.

So consider this column an ongoing invitation to arm yourself for the independent advisors’ marketing war.

Defining Mission Objectives

Yours is a heroic mission. Your efforts have the power to liberate countless victims from the grasp of the Goliaths’ propaganda machinery. Your battlefield lies in the prospects’ mental resistance anchored by complacence, denial, and rationalization.

As history demonstrates, whenever United States forces enter an oppressed nation suffering from decades of misinformation, corruption, and economic abuse, we encounter a population that has learned to function at that level and is resistant to change. Strategist B.H. Liddell Hart said, “The only thing harder than getting a new idea into the mind is getting an old one out.”

Today’s high net worth prospect has an existing brokerage relationship that they will not readily abandon–no matter how detrimental you are able to show them it might be to their financial well-being. Functioning under Wall Street’s marketing hypnosis, your prospects most likely don’t know what their needs are or why these giants’ strategies have consistently left them exposed to market trends, substantial losses, and high commissions.

The primary objective of your marketing mission should be to divert the attention of prospects and clients away from the industry giants by showcasing how you are different. Think for just a minute about your business model and all the functions you perform that the giants do not: benchmark reporting, avoiding conflict of interests, customization, broad range of investment options, open architecture, transparent pricing, local presence, and fee basis.

Goliath’s firms are working hard to blur the line between you and them but are only providing an illusion of your services. What can you do about that? Stand back and take a breath. Focus your time on communications with your clients. Encourage referrals. Make sure your expertise is as sharply utilized as it can be and take every opportunity to clarify your differentiation because prospects won’t easily see it.