One of the strategies that many financial planners use to differentiate themselves is to communicate that they are fiduciaries: legally bound to put their clients' interests before their own. In fact, as the debate about the fiduciary vs suitability standards has increased in recent years, more and more advisors who are subject to fiduciary regulation are promoting it as a differentiator in the marketplace. Yet in reality, most people generally assume that anyone they're doing business with will treat them fairly - at least until proven otherwise. Which means that claiming you're a fiduciary isn't necessarily a differentiator - unless you actually go so far as to bash your competition and accuse them, implicitly or explicitly, of being liars and cheaters. Could this be part of why the fiduciary message doesn't really connect in the marketplace? Because it's turning into a giant negative advertising campaign where you bash the competition instead focusing on the value you actually deliver?
There is a perception in the financial planning world that the process of acquiring a new client begins at the first meeting - the so-called "approach talk" - and therefore any firm that does a good job at converting prospects into new clients in those early meetings must have an effective business development process. Firms that want to grow more/better/faster are encouraged to refine their process, materials, and techniques used in the approach talk to improve the rate at which prospects convert into clients.
Yet the reality is that from the client's perspective, the process actually starts much earlier; and because the "pre-meeting" parts of the process are so ignored by most planners, the reality is that many (or even most!?) potential clients may be lost before you ever have a chance to meet them!Read More...
The Financial Planning Coalition is fighting the advocacy fight for a fiduciary standard for financial planning. While this certainly is a consumer-centric direction for financial planning, the firms today that practice financial planning may need to be careful about what they wish for. After all, for many firms, the fact that they operate as fiduciaries has become a central message of their marketing to prospective clients.
So what happens if the Coalition wins the fiduciary fight? If everyone who practices financial planning must operate as a fiduciary, do a number of currently successful firms lose their key marketing differentiator and have to rewrite a new marketing plan?
The practice management advice is almost ubiquitous - if you run a financial planning practice, you should eventually carve out a specialized niche for yourself. If you don't already have one, look through your book of clients for similarities, and use that common thread to expand on a niche you might have unwittingly already started. The ultimate goal: to have carved out some unique space for yourself, whether that's financial planning for fly-fisherman, working with public school teachers, or having a specialized skillset for doctors running a medical practice. Yet in reality, many (most?) planners seem to resist this advice; "if I specialize, don't I leave a whole lot of other business on the table?" is the most common objection. But focusing on the clients you won't get by specializing completely misses the point - which is significant increase in referrals you can generate by clearly defining a niche and conveying it to the clients and affiliated professionals who might refer you.
It seems that the common wisdom in the financial planning world to improve client referrals is either "ask more often for referrals" or "do a better job when you ask for referrals." However, it may be that the single greatest reason why most planners don't get very many referrals is simply because... well, they're not actually that referrable.