Actionable Ideas for You and Your Practice

As Financial Advisors, we face the challenge of demonstrating value during this pandemic. Over several months, I have researched and thought about actionable ideas you can take now to help clients.

To start, consider changing your value promise. The value proposition most Financial Advisors have promoted for years is to create investment plans and give counsel to clients on how to build wealth.  However, awareness of our mortality has suddenly been thrust into our lives by the COVID-19 pandemic, which has killed more than 200,000 Americans. In addition to building wealth, advisors encourage clients to use the wealth they now have to enjoy life in the present while balancing that with the need to prepare for the “rainy day” and future aspirational goals. Investing and spending are not binary choices for taking action!

Make changes to your business model by creating innovative products and service sets. You already have a plethora of different products and services; combine them in new ways.  Think of your business as a platform of products and services that can be configured in unlimited ways to deliver customized solutions at any scale.  You will not only help your clients solve their “jobs to be done” but also create potential new streams of revenue for yourself.

Stop trying to sell clients “things you can do” and instead offer them solutions to the “jobs” in their life they are trying to get done. (To learn more about Jobs-to-Be-Done methodology click here).

One way to do this is to take each High-Net-Worth/Ultra-High-Net-Worth (HNW/UHNW) client you have and identify the many issues of their personal finances that need attention.  Armed with this analysis, you have a great reason to have a consultation with them. By doing this work, you assure your clients that you are capable of helping them in many areas and thus make their lives a bit easier.

A useful example is the client’s “job” of managing personal and financial risks.  A solution to help them accomplish this ”job” is offering a complete insurance review of all policies your clients own or should own. Be thorough in your risk management assessment by reviewing life, health, disability, long term care, automotive, homeowners, and specialty wealth areas like collectibles, rental, and vacation properties. If the client is a business owner, don’t forget the many business protection strategies available.

HNW/UHNW clients have complex insurance needs and often don’t realize it. Remember, building wealth can take years, and clients don’t pause and recognize that given the wealth they have accumulated, their insurance policies may no longer offer them the protection they need which means they need help to do their “job” of managing risk.

You can’t give expert opinions on insurance you aren’t licensed to sell, but you can certainly point out issues your clients should discuss with their various insurance agents.  To help advisors, Cannon experts have written detailed articles on every type of insurance required by wealthy clients. You can find this information by typing the name of the insurance product you want to learn about into the search box at the center top of our home page.

Understand your costs of delivery at a granular level for each product and service. Doing so is critical so you can price appropriately and profitably. You’re in the financial advisory business, and you need to establish a profit margin on your costs. Every successful business owner does this, and you need to as well.  Many Financial Advisors who research and advise clients on complex issues of every type don’t realize the additional profit that can come from these activities. When you bundle investment management and financial advice under one fee structure, you incur an unintentional loss of revenue. Charging just one fee makes it difficult for clients to perceive the value in the additional advice you gave them because, in their minds, you gave it for free.

Don’t be afraid to charge for your advice. Why not provide the option of financial advice and investment management by allowing your client to choose what “jobs” they must get done. Once they have chosen, you can discuss what you will charge to do these “jobs,” and they can decide if they want to pay you for some or all of these jobs.

Endeavor to get a grip on building business models that can be successful and are relevant today and reflect what innovative companies are doing to attract and retain today’s wealthy clients.  

Resources:

Jobs-to-be-Done https://jobs-to-be-done.com/jobs-to-be-done-a-framework-for-customer-needs-c883cbf61c90

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Contributing Writer: Subject Matter Expert Charles McCain