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One certain thing for advice businesses is that there is a huge amount of uncertainty. Practice owners have had a lot of “alone time” in the last couple of years quietly contemplating the road ahead and trying to figure out what do they have to do to prepare, or adapt.
Some of the changes coming at advisory firms is pretty predictable of course – there is perhaps only a question of “when” – and some things are entirely unpredictable.
Despite that, advisers can take charge and to a large degree lay their own road ahead if they grasp 4 essential concepts that define a true “advice” business.
The future for a standalone and commercially successful professional services firm is being the valued source of advice – which is something beyond a product focus, or just being great at managing relationships.
That may seem a little self-evident and a little simplistic on the surface because surely all financial advisers business are in the business of giving advice, right? Except we know that just isn’t the case.
Less than one-quarter of consumers in this country actually turn to financial advisers as their primary source of financial advice. Read that again slowly….and then ponder the massive opportunity that lies within the more than 75% of consumers that do NOT yet see a financial adviser as being their most reliable source of financial advice. Yet, a large proportion of those same consumers have financial products already which they have sourced through other channels. So, a massive chunk of the population is not buying their financial products via advises, and nor are they taking advice from those advisers. There has to be an opportunity for advisers in that.
There are a few advice areas that we KNOW are valued by consumers, and which present genuine opportunity for professionals looking ahead. They might even be seen to define “an advice business”.
1. An advice business would be positioned at the leading edge of industry and consumer trends. It knows the issues, problems and key trends that will affect its clientele before they do.
The beauty of being in the “advice” business is that you can “create” offers, and ideas and concepts and value-added information incredibly fast. Within just hours. Being able to understand consequences and implications of economic and political decisions and market trends and then being able to guide people accordingly is something advice businesses would focus upon doing. Marketing that by talking publicly and showing thought leadership and expertise would be a key element of positioning and promoting a true advice business.
2. An advice business would never link its value proposition to product or market performance.
These are factors which the adviser cannot actually influence in any meaningful way. The advice business links its value proposition to client outcomes – not portfolio or product outcomes. It is focussed upon helping clients achieve their goals and objectives. The value proposition must be linked to how advice positively changes customers lives and future.
3. An advice business would leverage its knowledge and be engaged with a wider market.
Success would no longer be defined simply by chargeable hours, commissions generated or clients gathered into the CRM. These things contribute to commercial success of course, but true success as an advice business would be reflected by the influence of the business. That is; how many lives they can reach and change. That may be achieved through social media, delivery of seminars, workshops, courses or books, or it may be through creating practical apps that consumers can benefit from using.
Naturally these tactics of influence should in themselves contribute to commercial success of the practice, but their importance to a true advice-business is the ability to market the thought leadership and continually reinforce the professional positioning of the practice beyond just its own clientele.
Finally, a potentially contentious thought:
A true advice business only applies and delivers what its clients want. It does not get consumed with its own processes, technical prowess or sense of ethical superiority….it is focused on those things the client actually values: peace of mind; understanding their choices & the consequences; convenience; results….
This means that an advice business which is in tune with its clients “wants” would not deliver its services to clients in a bland prescribed format designed by lawyers and bureaucrats. Of course it will ensure the compliance functions are fulfilled, but it does not lead with compliance. It provides creative solutions to its clients problems and delivers the advice in the manner the clients want and value, and then figures out how to wrap compliance requirements around that.
That is advice which is valued by consumers – and focussing upon that is the way ahead for financial advisers.
Related: Innovation, Not Originality, Is the Key to Better Business