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Thirteen True Differentiators for Financial Advisors

NEW YORK CITY — “I don’t mean to sound cynical, but this is New York and people don’t fall for B.S.,” Josh professed as he segued into his real question, “Let’s face it, we’re all just stockbrokers, with similar platforms and similar products. How in the world can you really differentiate yourself from the thousands of advisors in the metropolitan area?”

Cynical might be an understatement. Yet there’s more than a kernel of truth in Josh’s narrative. According to the Bureau of Labor Statistics, there are 249,400 “personal financial advisors” working in the United States. On top of that, the profession is predicted to grow 30 percent from 2014 to 2024, which is much faster than the average for other occupations.

So as far as differentiation, where does a serious, client-centric financial advisor begin? As I explained to Josh, differentiating yourself is not a simple exercise. Differentiators must be:

  • Legitimate — This isn’t the time for hyperbole, stretching the truth, or attempting to position yourself as something other than what you truly are as a financial advisor.
  • High value — Clients and prospects must be able to see clearly that what you offer, your financial advisory services, are what they need.
  • Quantifiable — The proof is in the pudding. You must be able to communicate, demonstrate and quantify your value.

The following questions should help you peel back the onion and uncover your differentiators. And yes, you can have multiple differentiators, but don’t get overwhelmed—all you need are two or three.    

  1. Do you specialize in a specific niche or demographic? I know a financial advisor who specializes in serving physicians and medical practices. He attends their conferences, knows their challenges with receivables, insurance reimbursements, staffing, etc., while handling their 401(k) and the personal accounts of most physicians and a number of their staff. Your niche might be C-suite executives, business owners, self-employed professionals, socially responsible investors, alternative investments or family generational planning.
  2. Do you specialize in working with a particular firm? Do you know the ins and outs of the retirement and benefit options for executives of a major company? For instance, one of our coaching clients did a lot of work with Caterpillar executives, and their differentiator was simply: “No one knows Caterpillar retirement and benefit options like we do.”
  3. Do you solve a specific financial challenge? Whether it’s organizing and coordinating all the various financial and investment vehicles, generational planning, vetting and organizing outside experts, succession planning, retirement lifestyle planning, etc.
  4. Does your team have many credentials? Having a CFP on your team makes sense if you’re developing financial plans for your clients. If you’re a portfolio manager, a CFA on the team is befitting. Even if you have credentials that many firms don’t allow on business cards (CPA, JD and MBA come to mind), these credentials differentiate you as well educated, an indicator of both brains and discipline.
  5. Do you have a high-powered Rolodex? Being able to “open doors” for clients, whether it’s the top orthopedic surgeon in town, local politicians, a journalist, or other movers-and-shakers, having access to these people is a key differentiator.
  6. Are Your Clients the Who’s-Who of Town? Since personal introductions, socializing in affluent circles and word-of-mouth influence are the highest-impact affluent marketing activities, having an impressive client list is always a differentiator. Be sure to get their permission to reference their name occasionally. And simply being introduced by a prominent client to someone in their sphere of influence serves the purpose.
  7. Do you have a specific geographic footprint? Whether it’s local, “We handle the finances for a handful of families in Scarsdale,” or it’s bifurcated, “We handle the finances for a group of families here in Scarsdale and in Palm Beach,” either way works, as it differentiates you as someone who works closely, face-to-face, with extremely affluent clients.
  8. Does your team size relative to number of clients scream “exclusive!”? I’ll always remember when one of our coaching clients was asked by a wealthy prospect as they sat courtside at a Lakers game, “How many clients do you have?” His response of “About 400” to a simple question put an abrupt end to romancing this wealthy prospect into a client. Upon hearing the tale, I asked one of the partners another simple question, “How many clients do you personally handle?” Without hesitation, “About 35 families,” was his reply. One differentiates, the other commoditizes.
  9. Is your service unique? I recognize that everyone brags about their service, but we all know, especially today’s affluent, that talk is cheap. But what if you can explain how you meet with the entire family, have a personalized communication agreement in writing for each client, undergo an annual service review where each client assesses your services? Ah, now you’re differentiating.  
  10. Do you have one big-time success story? This typically goes beyond performance of the portfolio. It can be solving a complex estate or insurance issue, your team leading the fundraiser for the new hospital wing, etc. Whatever your success story, it’s best if it involves your entire team, and it needs to relate to your financial acumen. Arrogance doesn’t differentiate, it alienates.
  11. Is your cost structure unique? If you charge for your services like everyone else, ignore this. But if you are adopting a new “retainer model” approach to fees, this is truly unique and different.
  12. Does your team and office stand apart from your competitors? The offices of most financial advisors look alike, especially those in branch offices of major firms. Don’t let that be your excuse for blending in rather than standing out. Get creative, think warmth combined with professionalism, consider your entire team, and think outside of the box. I know an advisor who transformed his office into a living room and swore his closing ratio skyrocketed as a result.   
  13. Are one or more of your team members thought leaders in the industry? What awards or special recognition has your firm received? For instance, if you were rated (from a credible source) as one of the Top 10 Financial Planning firms in North Carolina, that’s special. Or if you’ve made the Barron’s Top 100 or Wealth Management’s Top 100, you’ve got serious thought leader credibility. Are you communicating this to clients, prospects and COIs?  

I explained to Josh that by simply working to develop his key differentiators, he will raise his game as a professional. Possessing a few differentiators that every team member can articulate serves as high octane fuel for growth. And you’ll never again be stumped by the question, “What makes you different?”

Check out Wealth Management’s Top 100 Advisors from Wirehouses & RIAs.

Matt Oechsli is author of Building a Successful 21st Century Financial Practice: Attracting, Servicing & Retaining Affluent

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