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Financial Planning > Behavioral Finance

Fix the Conference Exhibit Hall - Part One

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It’s a sad reality that at most financial planning conferences, many attendees go out of their way to avoid being in the exhibit hall, due to a combination of exhibitors that don’t feel relevant, poor salesmen, and especially the few bad apples that really make the experience uncomfortable. Yet financial planners actually should want to be in the exhibit hall – not only for the opportunity to find new vendors, service providers, and products for their businesses, but more importantly to do the requisite due diligence to ensure they are up to date on the latest products and services. In point of fact, doing such due diligence is arguably a key aspect of fulfilling one’s obligation as a fiduciary CFP certificant.

So how can the bad exhibit hall experience be fixed? The starting point is attracting a broader range of exhibitors than “just” insurance and investment companies, broker-dealers, and custodians, but also including software and technology companies, consultants, and more. From there, lay out the exhibit hall itself less like a random scattering of exhibitors and more like an efficient supermarket with aisles dedicated to certain types of companies, and wrap it up with an Ignite-style session built to allow a little bit of time for a lot of exhibitors to show what they have to offer.

Better Exhibitors

In most cases, the primary problem with the poor exhibit hall experience is simply that the majority of vendors and service providers in the exhibit hall are the wrong exhibitors…and on top of that, many of the right exhibitors are nowhere to be seen.

There are a few fundamental problems that have led to this issue. The first is that the manner by which financial planners, especially the independent-minded fiduciary CFP certificant, choose products and companies to work with has changed. While a great deal of business was once driven by a close relationship between a wholesaler and the advisor, where the advisor would then recommend and deliver the wholesaler’s products to his/her clients, that is no longer the case. Instead, the conversation for many products – especially in the realm of investments and insurance – tends to start with “show me which of your products and solutions are best-in-class in their category.” The mentality is pretty straightforward: “If your products and services aren’t best-in-class, I won’t deliver them to my clients, so don’t waste my time.” Of course, not every company is going to be best-in-class, and there’s nothing wrong with a little variety, but filling an exhibit hall full of vendors and providers who are not best-in-class just makes the exhibit hall a wasteful experience for the advisor. The bottom line: it’s time for better screening of which exhibitors are allowed to participate.

The second problem–perhaps even more insidious–is that the roots of the exhibit hall are the insurance and investment products that advisors deliver to clients; products that are typically produced by huge companies with billions (or tens of billions or hundreds of billions) of assets, who can afford to spend huge amounts of money on exhibit halls, especially since it just takes a couple of advisors and their client dollars to produce a good ROI for exhibiting.

The reason this is a problem is that the pricing for the entire exhibit hall tends to be based on this type of product provider, while financial planners are served by a far wider range of companies, products, and services. For instance, most companies that provide software solutions specifically for financial planners – from MoneyGuidePro to Junxure – are so small they would be a rounding error on the market capitalization of a major custodian, broker-dealer, or investment firm; yet all of them pay the same cost for a booth, regardless of whether they’re trying to get $100 million of AUM from the advisor or just a $500 software subscription. Similarly, the solo practitioner independent consultant, and the totally new start-up technology firm, also all pay the same rate as the large firms and the mega firms, despite the fact that their revenue might only be measured by the thousands or tens of thousands of dollars (not millions or billions) – which means, in practice, they are completely priced out of the exhibit hall, and instead have an inefficient experience as a conference participant hoping to meet enough people to make it worthwhile, or simply go to a smaller niche conference instead.

So what needs to happen instead? Financial planning conferences need to develop an effective tiered pricing structure, with different pricing depending on either the type of company/business/service, and/or the size of the company.

There’s no reason a start-up firm should be paying the same rate as an established multi-billion dollar company; doing so simply ensures that financial planners will never be exposed to any innovative new companies. Similarly, there’s no reason that an independent consultant to financial planners should be paying the same rate as a broker-dealer with 2,000 advisors; doing so simply ensures that financial planners will never be exposed to specialists who can help them with their specific problems. Instead, independent consultants should have a different pricing structure of their own, which should be different than technology companies, which should be different than insurance/investment product providers, which should be different than broker-dealers and investment custodians. Additional tiers might be made, such as a separate “start-up” pricing structure for technology firms with less than $500k of revenue (or $100k, or $1M, or whatever number seems appropriate).

The point here is not to make the big companies carry the small ones; the point is to make sure that the economics of the exhibit hall make sense for any and every provider of products or services to advisors, regardless of the size of the provider, because advisors need exhibitors of all types and sizes.

Better Organization and Layout

Another fundamental problem with the exhibit hall–especially at large conferences–is that it
is organized and laid out in a manner that makes it excruciatingly inconvenient to actually find whatever you’re looking for as an advisor. Companies that provide similar functions are scattered throughout the exhibit hall, ostensibly because the companies don’t want to be placed next to their competition.

Yet imagine what this would be like in another context, like a supermarket. How popular would a supermarket be if, due to the request of the product manufacturers, every kind of soda was placed in a different aisle (to avoid having to compete with other sodas on an adjacent shelf). It would be almost impossible to comparison shop and evaluate whether to buy product A or B when they’re placed at different ends of the store. And heaven forbid if you actually wanted to buy two different types of soda in one shopping trip – you’d be going all over the place just to fill your cart. And of course, that assumes you’d even be able to find the products you wanted to buy in the first place, as you would need a giant multi-page map of the entire store and some navigation software to even figure out what path to take to fill your cart with what you need, since there’s no way to even know in what aisles the soda, bread, soap, and other goods will be (never mind shopping for alternatives).

Sadly, though, this is exactly how the exhibit hall is organized at financial planning conferences. Mutual funds are scattered amongst broker-dealers which are scattered amongst technology firms (the few that are there) which are scattered amongst insurance companies. It’s virtually impossible to comparison shop, you don’t even know if you’ve seen all the companies in a category unless you spend time walking the entire exhibit hall, and it leads to a colossal waste of time between the walking, the searching, and being harassed by salespeople who invite you in to their booth even though you weren’t looking for their products or services in the first place.

Thus, simply put, exhibit halls need to adopt the supermarket model for efficiency, which is designed for the financial planner as the buyer to have a positive experience (and when planners have a more positive experience, they spend more time in the exhibit hall, they interact more, they buy more, and everyone wins). Companies, products, and services should be grouped together based upon what they offer or how they’re used by financial planners – the broker-dealers should be together, the investment custodians should be together, and the mutual funds should be together, along with a standalone section for all the technology companies that serve advisors (perhaps further grouped based on whether they’re CRM, financial planning software, portfolio management software, etc.), and also a section for “consultants row” that simply provides room for an array of consultants who are specialists in helping advisors with specific needs (and as noted above, at an appropriate price for their business model).

As with supermarkets, some pricing differences can exist amongst exhibitors/products in a category; just as some products pay for shelf space in the supermarket, so too can exhibitors pay for premium locations on their aisle – such as on the corner of their exhibitor aisle and the main aisle, which is more visible than being half way down the aisle–or even within the overall exhibit hall (large mega-custodians, broker-dealers, and investment firms can be in the most space up front, while consultants row might be buried in the back, just as the dairy aisle, bakery, and produce sections are all at different places in the supermarket).

But the bottom line is that this will make it far easier for financial planners to find what they’re looking for, and make their time productive by looking at all the companies they might do business with in one place.

In the second part of the post, we’ll look at better ways to pitch exhibitor products and services and whether or not any of this will actually happen.


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