Why do people engage a financial adviser? The most common answers to that question include to receive advice on investment, asset allocation, insurance, estate and retirement planning. And those answers are usually ‘wrong’.
By Paul Turner, regional director, financial adviser services, Dimensional Australia
The real reasons for which people seek out a financial adviser are to gain peace of mind, to build a sense of confidence about their post-working lives and to give them greater comfort that their families will be looked after, now and in the future.
This gap – between the perceptions of advisers of what they offer and the often unexpressed needs of their potential clients – lies at the heart of the difficulty many professionals have in establishing and articulating their value propositions.
The problem is that many advisers think their value is all about their technical ability or tertiary qualifications or media profile or forecasting record. But many of these things can be commoditised. Others are simply not sustainable.
The client might not need to know what’s going to happen to interest rates next year. But they do want to feel confident that their income will be sufficient to take a trip across the country to see their new grandchildren.
So, the challenge for advisers is to articulate to prospective clients what they can do for them in ways that are meaningful to them, not in the jargon of the industry. This is what distinguishes a trusted counsel from a salesperson or facilitator.
In my role working with advisers around the country, I frequently hear that establishing and maintaining a strong value proposition has become more difficult in the face of the volatile and uncertain markets of recent years.
What’s ironic is that it’s these times when good advice is most needed and most valuable. It is when times are toughest that many people can feel tempted to lose discipline or be drawn to quick-fix solutions where the risks and costs are hidden.
The most successful advisers I see are those adept at recognising their clients’ sense of discomfort as legitimate, all the while gently drawing them back to the messages articulated and accepted in their initial planning meetings.
By the way, none of these services – maintaining discipline, understanding values, providing ongoing education and managing expectations – are likely to appear on anyone’s business card. But, rest assured, they are hugely valuable to the client.
What’s more, if the client can understand and articulate what you have brought to the table, they are more likely to refer you on to others. The problems arise when they feel distant from the service you offer. And this tends to happen when the value proposition is not clearly communicated in the first place.
So, discovering your value proposition begins with putting yourself in the client’s shoes. Why should they do business with you and not someone else? Why should they pay you a fee? And, most importantly, why should they seek ongoing services from you?
Having talked to hundreds of advisers around the country over the years, it seems most people are looking primarily for a level of certainty in an uncertain world. So the adviser becomes a partner for them, helping them to focus on elements within their control.
Framing the value proposition in this way – that good advice is not about a crystal ball or making predictions – frees the adviser to deal with areas like strategy, diversification, costs, taxes and, most importantly, investor behaviour. These are areas where the adviser can make a real and ongoing difference.
The message – concise and delivered in simple language – is one of calm reassurance. Yes, there will always be a level of uncertainty in the world, but the adviser has the tools to give the client the comfort he or she needs to get on with life without worrying unduly.
The technical skills of any profession can be learned with enough patience and application. But in the end, what makes any adviser stand out are the personal attributes of attentive listening, empathy and clear communication.
Building a strong value proposition around those areas will help you win and retain clients in all market conditions.
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