Why Your Clients Can’t Distinguish You from Other Advisors – and What to Do About It

In EY’s 2014 wealth management survey “Closing the Gap,” the authors suggested that while “holistic goals-based planning” ranked  as the number one trend influencing where clients invest today, the key factors of where clients actually did invest were based more on firm/advisor reputation, experience around servicing similar clients, and in some cases, the depth of the advisors’ product set. The authors suggested that while goals-based planning is important, the clients are not seeing any real differences in the offerings from wealth management firms. It is also interesting to note that advisors felt that their goals-based offering was the second most important reason that clients hired them. Talk about a disconnect!

It is always about fees and value
Since the release of our white paper, “Next Wave of Financial Planning,” I have spent a lot of time debating (defending?) one of our major premises: fees are coming to a fork in the road. Our paper suggests that more educated clients, clients looking for transparency, direct to fund companies (and custodians), and even robo-advisors are going to push fees more out in the open and advisors will have to evolve their pricing structure or develop a stronger value proposition to justify their worth.

My colleague and co-author, Raef Lee, suggests that this trend is coming, but will not happen until consumers really begin to push. My belief is that the groundswell is happening now – and over the next few years, it will really hit full force. No matter who is right in this discussion (I am), we both believe that it is important for advisors to develop a more clear value proposition and really differentiate themselves and their firms around planning. It is clear that clients want holistic planning, but how do you show real value and justify your fees for something that happens over 10-30 years of planning?

Looking at it from both sides
When I think of my own experience with financial plans, I think I can empathize with both advisors and their clients. In fact, I may be in a unique position to look at both sides. As a financial service professional with almost 30 years of experience, I know the hard work, hours, and  attention to detail that’s put into a plan. I see advisors using technology to review assumptions, monitor accounts, and educate themselves so that they can be prepared for investment trends or estate and tax law changes that will affect their clients’ lives.  As a 50+ year old father of two who is concerned about sending our kids to college, funding a retirement for my wife and me and fulfilling a few other goals, I can really see the value of our comprehensive plan. Today, I am more organized than ever before and feel confident in the plan. In short, we have peace of mind. But do I value the plan more because I know the work involved?

How do you communicate or show your value and efforts to all of your clients? Especially when they value the holistic goals-based planning they are not finding out there with your competition?

Show them the way
I’ve said it before, but I think it bears repeating. Price is only questioned when value is not perceived. If you have clients who are asking what they are getting for their fees, you need to show them.  A couple of ideas for you to consider/implement:

  • Create a roadmap. This tells clients what they can expect from you and your firm. Think about your processes, from discovery/data gathering to implication to service meetings, and map it out on a piece of paper. Show the progress from the early stages of the relationship and what will happen in quarterly or semiannual meetings. Show them how you will evaluate progress (especially progress to goals).


  • Create a “year in the life.” This takes a little more work, but can really demonstrate your commitment to the client. Take a sheet of paper and write out, by month, all the contacts you will have with that client. In other words, show them what they will experience when working with you. Draw a horizontal line about ¼ down under the monthly activities and underneath begin to write down all the things you do on behalf of the client. Write down activities like creating consolidated reports, estate plan reviews and beneficiary checkups, regularly scheduled meetings and phone calls with estate and tax professionals. Think about adding portfolio reviews, rebalancing, monthly investment committee meetings and even include preparation for client meetings (and include follow-up).

Clients are asking for goals-based planning, but not finding true differentiation of the services that are out there. To me, it means that we are still not communicating the difference between real planning and investment advice. Real planning takes time, focuses on goals, and reports on progress to goals. It also takes communication of the short term and long term benefits. Can your client clearly articulate your process? Can you show them?

John Anderson is a contributor for Practically Speaking and also serves as a managing director for the SEI Advisor Network. www.seic.com


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