One of the most important issues among advisors today is the way in which we differentiate ourselves from the competition. In this post, I’d like to share some of my thoughts on the matter.
The first point is to remember that we need to approach this from the client’s point of view. If a prospective client were to ask what makes you different from the rest of the advisory community, what would you say? Moreover, how would you explain the way you fit into their financial life from the standpoint of the products and services you offer? These are two of the most important questions you’ll face. Even if a client doesn’t ask, they all want to know the answers.
Beginning with the second question, let’s start from the premise of what constitutes the optimal framework of advisors for a given client. For instance, any client that has a modest amount of wealth, or the potential to accumulate it, needs a good CPA and an estate attorney. Personally, I’ve earned a Certified Tax Specialist designation, but do not consider myself to be an “expert” on taxes. Although I may know more about it than 98% of clients, because I don’t spend all my time in this area, a full-time CPA should know more about the subject than me. Moreover, I am an Accredited Estate Planner and have a “Board Certified in Estate Planning” designation, but the same holds true on the estate planning front. Therefore, it’s important to discuss the clients “big” picture to see where you fit in, and communicate this to the client. The bottom line is this: the least amount of overlap the better and making sure all areas are covered is crucial.
The second question (the first listed above) has to do with how you separate yourself from the pack. Do you consider the tools that you use to be an integral part of this? Perhaps it’s an intangible such as your character? Although the intangibles are critical they cannot be demonstrated in one meeting. Essentially, intangibles are proven over a period of time. And the tools? You may be able to show a client how your new cool tool works and explain why it sets you apart, but many times this will confuse them. After all, to fully grasp it, a client would need to possess a high level of technical ability. Even so, it still may be over their head. Tools are important. Just be careful how you present them.
To me, processes are important and easy to convey. For example, how often do you proactively schedule reviews?
In summary, it may be best to have a heart-to-heart conversation with prospects and let your personality shine through. If you are an ethical person who is truly interested in helping them, and you are able to effectively communicate this, you have a better chance of converting prospects into new clients. It’s far more important to “be the right kind of person” than it is to be a great salesperson.