As more and more financial advisors offer financial planning services to clients, it's becoming harder and harder to differentiate from the competition. And with the implementation of the Department of Labor fiduciary rule looming, even more advisors will likely be driven towards offering financial planning to substantiate their value proposition, which will just make the situation even worse.
In this week’s #OfficeHours with @MichaelKitces, my Tuesday 1PM EST broadcast via Periscope, we look at examples of how I have been able to grow my businesses by clearly differentiating in a crowded marketplace. The essence of the strategy is actually remarkably simple: be more specific than anyone else about who you work with, and what you do for them.
The challenge for most financial advisors is a fear that being more specific about who you work with will render you unable to work with most of the people you meet, who don't fit that description. And it's true, that by being more focused, you will not be able to work with as many potential prospects.
However, the whole point of differentiation and being specific about who you work with is that when you do meet someone who fits the description, an instant connection is made, because you've already identified yourself as the single best expert to solve the identified problem that the prospect is facing. And for those you can't work with, the reality is that by being clear and specific about who you do work with, you actually create more opportunities for referrals in the process as well.
In fact, if you look at the businesses that I've created, from New Planner Recruiting (which does recruiting of new financial planners), to FA Bean Counters (which does 'bean counting' bookkeeping services for financial advisors), to the XY Planning Network (helping financial planners serve Gen X and Gen Y clients through the monthly retainer business model), and more, you'll notice the common thread to all of them is being very clear and specific about who we work with, and what we do. The reality is that by doing so, 99% of you will not likely have any need for our services, because it's not a match. But for the other 1% of you, we're the perfect solution. And that's the point of differentiation!