Get the growth boost your business needs… with Focus Partners
Because the Financial Advisory business has become commoditized in many ways and competition has blurred the lines between firms, firms and brands are much less delineated, diminishing historical loyalties. In addition, a rapidly changing marketplace as well as technology have made having the best product or price unsustainable. Today’s dynamic environment has made the acquisition of new clients and business more and more challenging.
Alpha is often referred to as “excess return", the excess return of an investment relative to the return of a benchmark index is the investment’s alpha. How can you add alpha to your own practice and separate yourself from the competition? What we are discussing however is the “excess return” your client gets by working specially with you and your firm.
You need to figure out how you are going to “Beat the Benchmark” in four key areas of your financial advisory business, your “practice alpha”:
The question you must answer is why should an investor choose to work with you and trust you more than any of the other 300,000 to 400,000 other registered financial advisors in America?
If no one knows who you are, they will not pay attention to your products and services. So, brands are designed to get your target audience to know who you are while differentiating you from your peers. A brand serves as the identity for you and your firm. It represents your values, your personality, and your own traits like service and reputation. Brands can distinguish your business from others if it is captivating, likeable, memorable, and relatable. A strong brand provides you with greater control over your future because it gives you the power to communicate with your target audience. Even beyond clients, strong brands attract talent and motivate staff, giving them something to believe in and to stand behind.
Brands therefore must quickly convey what you do, for whom, and why I should keep paying attention to your message.
The short version of blah, blah, blah, might start, “I offer financial solutions for high net worth individuals and business owners. My goal is to understand my clients’ financial priorities so that I can earn their trust. I do this by listening to my clients to fully understand their current situation and future objectives, as well as potential concerns blah, blah, blah, as in who doesn’t? What’s special about what you do and WIIFM, What’s In It For Me?
Here’s a short form of what we mean.
Your website, social media profiles, podcasts, blog posts, advertising, etc. can all be important parts of your branding. However, given you don’t need to be as well-known as Coca Cola or Apple, your branding needs your personal attention like public speaking, educational events, intimate and targeted roundtables, advisory boards, etc., where you can learn about your prospects and they can learn about you. Branding alpha is “out there marketing.”
This is your infrastructure, your operations, and processes. Some of these areas are “behind the scenes” efforts that clients and prospects may not see but should experience the results or outcomes.
In many organizations today, staffs have no clear delineation of roles and responsibilities. At times different steps are done at different times by different people, for different people. Outcomes can be inconsistent and ineffective as well as inefficient. If processes exist, they may not be documented and managed, so the organization is operating by instinct rather than planned logic and experiential knowledge. This is commonly known as “flying by the seat of your pants.”
In the successful advisory practices with whom we work, roles and responsibilities and well defined, the strengths, weaknesses, and interests of the team are identified, cross-training and accountabilities are established, and duplication is eliminated.
We establish a well-defined onboarding process, and client focused processes for:
The objective of such a well-designed set of processes is that nothing falls through the cracks and clients know they are with the right advisors.
While in some firms, contact plans are unstructured or ad hoc and services are basic, limited, and undifferentiated, our relationship alpha approach begins above with client focused processes and spending the time to get to know our prospective clients and their family in depth. This includes knowing their “story” and any history that has shaped and remains shaping their experiences about their lives as well as their investments and money. Their money philosophies, along with their principles, values, and the beliefs that drive their lives and their “desired future state” are critically important.
We focus on those elements that begin the process of fostering long term relationships built on trust, integrity, and honest communications. We carry this approach throughout each of the processes we help advisory practices implement.
The relationship alpha is all about developing the WOW factor and a family office feel throughout the lifetime of the client family and advisory team relationship. This approach is designed to create raving fans. Everything and anything are done to elevate that relationship, every day, in every way.
In the ideal practice all communications are personalized based on client data and in-depth client knowledge and customized to achieve the client’s preferred experiences. This is reflected in the design of our facilities, and where, when, and how we meet with our clients whether via telephone, on-line or in person meetings, or in the client’s home where desired and appropriate. It goes all the way to the refreshments we serve in our offices to the way we greet and say goodbye to our client’s visits.
We spoke about some of this in “Branding Alpha”. That is, Business Development, and getting in front of the people you want to build relationships with. The strategies we mentioned include “Outbound Marketing” incorporating tactics like public speaking, client and/or prospect educational events, intimate and targeted roundtables with clients and people they work or play with, advisory boards with key clients.
In addition to a strategy of “Outbound Marketing”, other strategies will include:
Tactics for working with COIs are quite different from the standard benchmark. This is another area where strategy is mandatory. We only work with a very limited number of “Strategic Partners.” “Strategic Partners” are those who allow us to know them as well as we know our best clients and with whom we share ourselves openly. We fully understand them, and their business model and they understand ours. The fit is obvious, or we find another firm who has the same “Strategic Partner” philosophy and with whom we share common beliefs and values. We partner with openness as appropriate about our clients and we “joint” market as if one firm. We understand our ideal clients, ask the right questions, and find COI’s that are just as desirous of partnering as we are. We both understand introductions and relationships develop over time and we are committed to that belief.
When we seek introductions, we always remember that we see introductions as a service we provide to our clients. We communicate to our clients that we will be pleased to make ourselves available to act as a sounding board for their friends and family members who have some apprehension or anxiety about their future and the track they are currently on. Introductions are not a favor clients do for us nor a favor from us, it is a value-added service for those people they care about.
In sum, we see the “Four Alphas” as being a quarterback, or Personal Financial Officer in our client’s lives. We liken that value to a health advisor. If you are in your late 50’s and older, you have probably encountered gastroenterologists, pulmonologists, dermatologists, podiatrists, cardiologists, ophthalmologists, proctologists, urologists, nephrologists, internists, among other specialists. What would it be worth to have a health coordinator who understands each of these specialties and could coordinate the delivery of health services to you? Your primary care physician refers and helps but doesn’t provide this depth of coordination, though concierge doctors may provide improved coordination.
That level of service is what you can do and where you can provide tremendous alpha. As a financial services provider, you are the equivalent of a concierge provider by being a single source for investment advice, insurance, mortgage, banking, financial planning, estate planning, accounting and taxes, and other services. We call it alpha-ing your financial advisory practice.
Don’t be a commodity. If you are not adapting and changing, you run the risk of not staying relevant. Think about how you can create alpha in your practice… and not just matching the benchmark. Focus on the one or two key things that can start that flywheel turning and act.
And, we have just scratched the surface…
Try It, You’ll Like It.
Schedule a 45-minute, no cost, no obligation telephone meeting with me by booking my calendar at www.calendly.com/davidileo. After our meeting you will get a personalized and detailed discussion with my understanding of:
Bill Gates has said, "Everyone needs a coach” and “A coach supports a learner or client in achieving a specific personal or professional goal by providing training and guidance.”
Your life, business, career, relationship, etc., is already good, but you want it to be better. Coaching isn't a crisis intervention. Nor is it a substitute for psychotherapy, or advice from a professional such as an attorney, accountant, physician, etc. If things are basically good, but you know they could be a lot better and you're ready for that to happen, that's a great time for you to hire a coach.
You want YOU to be much, much better.
I look forward to being of service to you. David
David I. Leo
David Leo is Founder of Street Smart Research Group LLC. He is an author, speaker, coach, consultant, and trainer to financial professionals. David is an experienced business manager who works solely with Financial Advisors, Planners and firms who want to organize, structure & grow their businesses by attracting, servicing, and retaining affluent clients.
If you would like additional details or have any questions about his articles or an interest in coaching schedule a free 45 Minute Strategy Session @ https://calendly.com/davidileo or contact him @ David@CoachDavidLeo.com. Call 212-598-4229 (Office) or 917-379-1249 (Cell) and visit @ www.CoachDavidLeo.com