Creating a value proposition in the area of investing advising is quite simple. As part of their pursuit of the investing holy grail known as alpha, advisors can provide improved investment selection, better investment analysis, efficient diversification, and risk management. By definition, creating alpha entails enhancing the client's risk-adjusted returns and, as a result, enabling the client who pays the advisor's fee to generate a "Return On Investment" (ROI) in the form of greater returns above and above the fees paid.
Creating a value proposition for financial planning becomes much more challenging. Since potential customers cannot see or feel an intangible service, selling it might be challenging. Additionally, it becomes extremely challenging to distinguish between an "invisible" service that the potential client has never used before. While some people emphasize qualities like the advisor's knowledge and experience as the "value" of working with them, it says more about the advisor's qualities than the value the client will receive.
Others may phrase their value proposition in more client-focused words, such as "we provide you peace of mind," but it still falls short. How much mental calm can an adviser truly provide? And just how can you quantify that to support a successful track record?
More and more advisers are providing financial planning and wealth management services to their customers as the demands of commoditization on investment advice continue to rise. However, it is far more challenging to communicate the value proposition of an intangible long-term service like financial planning compared to the world of investment, where an advisor's value proposition can be easily expressed and evaluated in dollars and cents. Identifying if a portfolio adviser produced a solid Return On Investment is one thing, but how would you define how a portfolio advisor works to improve a client's "Return On Life"?
Financial life planning pioneer Mitch Anthony summarizes the fundamental value propositions that financial planners offer in six words, which may be one of their finest unambiguous definitions: "We give organization, accountability, objectivity, proactivity, education, and partnership." Although the terms themselves may not be particularly fresh or original, Anthony's method of combining them into a Return-On-Life value proposition for clients is.
The catch, of course, is that just asserting to customers that you can deliver on their value propositions is one thing; really doing so is quite another. But as a result, Mitch Anthony's paradigm for a financial planner's worth undoubtedly offers a reasonable definition for customers and a benchmark for advisers about where they should concentrate their efforts. Learn more about the Private Wealth Proposition today only from Complete Circle Capital.