Most talks at this week’s Inside ETFs conference focused on financial products and returns.
But Joe Duran, CEO and founding partner of the RIA United Capital, zoomed in on the client experience. “We are a financial-life management company,” he told the crowd assembled near Miami on Tuesday. (He did add that United Capital has about $22 billion in assets.)
“I’m not here to talk investments — let’s talk about we get paid and how we earn what we get paid,” he told several thousand advisors and other financial professionals.
“I have a couple ideas to make you more competitive … in a rapidly changing world,” the popular speaker said. “We’ve built the business by answering the industry’s own question: What problem are you getting paid to solve?”
The correct answer isn’t making sure your employees and clients “don’t run out of money,” according to Duran, “but how can you help them live rich?”
The value of advisors isn’t to impact “average clients, because they don’t exist,” he said. “All of us live once-in-a-lifetime experiences.”
Financial lives and expectations change constantly due to illness, kids and grandchildren, and so on.
“Think about what you do in terms of the client experience and deliver it” accordingly, said Duran, pointing to firms who excel at this like Starbucks, Apple and Southwest Airlines.
He showed, via photos and slides, the power of client experience in delivering a shot of tequila. A shot of a premium brand — say, Don Julio 1942 — is $6.80 at Costco, but at a fancy beach resort it’s $45.
“Value is perception, not reality,” said Duran. “Price is fact. Value is perception 100%. And it’s driven by how [that value] delivered, how it’s explained to you and how it’s experienced.”
When your clients ask themselves if your work as an advisor is worth the fee, they reflect on the client experience. Their view? “They must feel it’s worth it, which is what great brands understand.”
A quote from John Dewey reinforces this view: “The deepest urge in human nature is the desire to feel important.”
And, Duran said, “It’s the same with firms like Apple and Tiffany. The unifying factor favoring a premium brand is the level of importance you feel when you consume it. Great brands make us feel special.”
Drawing on the work by branding guru Graham Robertson, the speaker pointed to the importance of the “winning zone” — where your business delivers beyond your rivals’ capabilities.
“You must expand the winning zone and change the marketplace in your direction,” he said. “Be different, like In-N-Out Burger or Apple, the first tech company to say, ‘You do not have to be a techie to use this.’”
In other words, Duran continued, win by “identifying an area of ground that no one else has and in which competitors can’t catch up to you,” like Amazon.
Financial advisors and planners are “almost all doing the same thing,” he said, and that means they are in “the losing, risky zone.”
Today, big players like Vanguard are giving advice, planning and investments away for free (or nearly free).
“Disruptors are empowering consumers and making geography and time obsolete with their direct-to-consumer offerings,” Duran explained. “Now, you can have a dedicated planner on your phone.”