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It used to be, in the not so distant past, that using words like “client-focused”, “trusted”, “comprehensive”, and “knowledgeable” was enough for financial advisors to separate themselves from the pack . But today these are just the table stakes clients expect their advisors to bring to the table. After all, how many clients do you know who don’t expect their advisor to be knowledgeable, trusted, and client-focused?In fact, in a highly muddled and fiercely competitive advisory landscape, there is very little to differentiate most advisors from each other, which causes them to disappear among the multitude of “average” advisors. Needless to say, clients today aren’t looking for average when it comes to financial advice.A case in point is the massive amount of attention the eighty million baby boomers are receiving from the financial services industry – and rightly so because trillions of dollars of assets are at stake. So naturally, they would attract a lot of competition. But, since the entire industry is developing strategies targeting retiring boomers, it’s more difficult for advisors to differentiate themselves. Unless they can delve much more deeply to create a strategy that uniquely positions them in the market , financial advisors will appear as a homogeneous blur to baby boomers.If, as in this example, a retirement planning strategy is the cost of entry into the baby boomer market, advisors will find it difficult to differentiate themselves because most advisors can claim the same expertise. The whole purpose of differentiation is not just to look different; rather it is to eliminate the competition by actually being different.If you haven’t considered the reasons why it’s important to truly differentiate yourself , here’s some food for thought.
Clients don’t want average, they want excellence.
The internet has fundamentally changed clients’ attitudes and behavior. It has emboldened them to become more participatory in the process, and it has elevated their expectation of transparency and objective advice that is responsive to their needs. They are asking more questions and expecting much more in the way of personalized attention, communication, and assurance that their interests are at the forefront of their advisory relationship. Advisors who don’t measure up will be passed over in favor of those who can clearly demonstrate their excellence in these areas.
You can’t get referrals if you’re not referable.
If you don’t stand out in a crowded field, you make it difficult for your clients to be enthusiastic about talking with their friends and colleagues about you. If asked for a referral, your clients want to be able to share a unique experience, something that makes them more interesting to people they approach. Why would a client refer someone to you if you’re no different than any other advisor? What is it about you that your clients can share that will spark the interest of other people?
Technology is commoditizing the industry.
It used to be that offering comprehensive financial planning was a way for advisors to differentiate themselves. Due to robo-technology, the costs and other barriers to accessing investment management services have dropped significantly, forcing more financial advisors to offer comprehensive financial planning as a differentiator. Now almost every financial advisor offers financial planning in some form or another. Oh-hum.
You can no longer be all things to all people.
Many advisors continue to generalize their practice in the hopes of capturing as many clients as possible, leading them to spend too many hours on low-production activities that yield mediocre income. In trying to cast a wide net to find new clients, you become less unique and less appealing to the clients you really want to attract. Through specialization, you can focus squarely on what you are passionate about, working with clients who value your expertise and specialized service. You gain notoriety as an expert in your field while becoming much more referable among your clients.
Sharpening your differentiation message.
Regardless of how you differentiate yourself, you need to start by developing a message – a compelling narrative that clearly explains what you aim to achieve and why you are uniquely qualified to do so. Put yourself in your clients’ and prospects’ shoes and ask yourself what value you provide that they can’t get from any other advisor. That’s differentiation.