With the growth of financial planning and the CFP certification over the past decade, just doing comprehensive financial planing is not the differentiator it once was. As technology commoditized first investment transactions, and now increasingly the basic elements of diversified portfolio construction, advisors are forced in the direction of providing more holistic financial advice to add value to the relationship. While this is ultimately a plus for consumers, it also mean that providing financial planning services to consumers is a much more crowded, competitive space than it was just a few years ago.
In response to a more challenging environment, many advisors have doubled down on their efforts to be generalists, seeking to cast a wider and wider marketing net in the hopes of attracting more prospects to become clients. Yet unfortunately, it's not clear whether such efforts really result in more clients, or simply more marketing work for the same - or even inferior - results. After all, it only takes a few advisors becoming specialists to attract away key potential new clients, to the point where while each specialist may only be able to grow within his/her niche, the generalists can't grow at all. And the end result is that the advisor sees even more prospective clients, but gets fewer actual clients.
Accordingly, the real key to turning around the trap of the wider marketing net is to recognize that for a business that is already undifferentiated and struggling to grow, casting an ever-wider net will not result in more clients and business. Instead, the key to differentiation is to turn around 180 degrees, and become more focused and specialized, to truly become the best-in-class for a particular type of clientele that can be served effectively and profitably. While that might result in fewer prospects, real differentiation ultimately results in more actual clients, allowing advisors to grow their businesses smarter, instead of just working harder.