Close More Prospects – Talk to Less People

Close More Prospects – Talk to Less PeopleHow do the industry’s top advisors define themselves? Are they successful at creating distinct, recognizable brands? Are advisors’ messages really getting through to investors?

A new research study from Pershing entitled, What Do Top Advisors Say — and What Do Investors Really Think? A Study of Advisor Value Propositions, provides a data-driven perspective on unique value propositions — clear statements which explain to clients and prospects what you offer, and why it is unique and valuable. In other words, the critical question is, “Why should I choose you?”

An effective value proposition strengthens audience connections and fosters growth, yet the study finds many advisors have had little objective guidance in formulating such statements. The study says most advisor value propositions are not actually unique, nor are they necessarily delivered in a very compelling manner. In fact, 60 percent of investors say all advisors make the same promises, making it difficult to distinguish between them and some talk about issues investors don’t care about – like simplicity.

Promises advisors make are considered “table stakes”, which every advisor has to address. After this, however, different promises appeal to different market segments, so it’s important to know your audience.

Words matter. Investors strongly prefer certain themes, such as “tailored solutions which meet your needs,” “work in your best interests,” and “experienced investment managers.” These claims are said to be the cost of entry for engaging investors, but you need to add something unique.

The strongest value propositions incorporate four key elements: attributes of the advisor; benefits for the investor; a rational explanation of how the firm’s attributes benefit the client; and language which evokes emotion.

“Developing an effective value proposition can have larger implications on an advisor’s overall business than they may realize,” says Kim Dellarocca, managing director at Pershing. “In many instances, the value proposition is the first impression potential clients experience and can be the catalyst for a future relationship. It is also an opportunity for advisors to promote business growth by using language which differentiates them and targets their ideal client base by articulating attributes and features which appeal to specific demographics. Of course, the real test is delivering on what you promise.”

Choosing the right language can make a big difference for investors. The study found investors prefer value statements which incorporate “comprehensive” over “holistic” by a ratio of seven to one. Additionally, two topics which investors care about most – conservative investment approaches and trust – are under-represented in most value propositions.

Pershing has identified key takeaways for advisors to consider, when creating a value proposition of their own.  They are:

  • Include core promises, but add more. Investors found three themes to be the most compelling among advisors’ value propositions: tailored solutions to meet their needs, advisors working for the investors’ best interest, and experienced investment managers. An advisor’s website and marketing materials should include these top promises. Advisors who do not mention these in their value propositions risk being excluded from consideration by potential clients. Successful advisors also need to include something extra to differentiate themselves, such as why investors should choose them over other advisors or unusual client benefits like building a family legacy or understanding personal aspirations.
  • Don’t oversell simplicity. Many websites promise to simplify investing and relieve clients of the burden of managing wealth, but according to Pershing’s study, most investors accept the need to take an active role in managing their own finances.
  • Give conservative approaches more prominence. If advisors’ money management approaches place special emphasis on preservation of capital, it should be a highly visible component of their value proposition.
  • Work hard to establish trust. Trust remains a much bigger concern for investors than the financial industry realizes. Advisors must ensure their value propositions include a message on why investors should trust in them and include themes like trust, accountability, integrity and fiduciary responsibility.
  • Tailor the message to the ideal client profile. Different market segments place higher emphasis on different attributes. Advisors should know who their ideal client base is and what is most important to them in an advisor and make sure their value propositions exhibit those points. For instance, investors under 40 place higher importance on advisors who will provide guidance through life’s major events and relieve the burden of managing finances.
  • Watch your language. Investors dislike jargon and favor words with emotional connotations. How the value proposition is formulated is just as important as the message it is trying to portray. For example, when judging between near-synonyms, investors prefer words with an emotional punch, such as “unwavering” and “passionate” rather than “committed” and “dedicated.”

To succeed, financial advisors need to stop resting on their laurels. They need to provide customized, individual, personal financial advice and solutions to meet the needs of each individual client.

For more information on Summit Brokerage Services, visit www.joinsummit.com or contact us at (800) 354-5528.

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