As an advisor, are you the equivalent of an “economic good” or a “free good?”
As you learned in Economics 101, an economic good is something that is useful to people but scarce relative to its demand. For example, the iPad is an economic good because it is in high demand and people have to make an effort to purchase one.
By contrast, a free good is something that is freely available and requires no effort to obtain --even if it is quite useful. Air is perhaps the best example of a free good. It’s quite valuable and we can’t live without it, but, it’s freely available and requires no effort to secure.
Advisors who want to succeed in the future must make sure they are an “economic good” type of advisor and not a “free good” advisor.
Economic good advisors understand that prospects ultimately look them in the eye and say to themselves, “Do I trust that this person will always be a good steward of my money, will always be looking out for my best interests and will always be a valued partner in my financial situation?”
These advisors realize that delivering this type of value is multi-dimensional.
It encompasses a variety of areas such as service, results relative to expectations, trustworthiness, competence and caring.
It involves figuring out how to make their clients’ lives easier and less stressful.
It involves knowing their clients better than their clients know themselves, i.e., they know their clients so well that they contact them about doing things well before the client even knows they have a need.
The bad news is we operate in such a competitive environment that if an advisor comes up with a great, value-adding idea or strategy, it quickly gets cloned. Consequently, the real trick is not just to add value (that’s a minimum for all advisors), but to create sustainable value. The way to create sustainable value is to deliver what will always be scarce and useful.
And the three things that will always be scarce and useful are…time, trust and relationships.
As Jim Croce so poignantly sang back in 1975, “There never seems to be enough time to do the things you want to do, once you find them.” We’re so busy with the “stuff” that there’s little time left for what brings us true joy in life. But the fact is, we've always had 24 hours in a day and that's never going to change, yet every year there are more and more things that compete for our time. For example, five years ago, nobody heard of Facebook. Today, people are addicted to it.
You can create sustainable value by handling the financial aspect of your clients’ lives so they don’t have to worry about it. By helping them achieve their financial goals, your clients will not only have the time, but they’ll also have the means to do the things they really want to do. And don’t be shy in pointing out how you’re helping your clients achieve their dreams.
If you want extra credit, become a True Wealth Consultant and help your clients figure out what brings true joy in their lives. Click here for more information.
Few things are more personal than a person’s money. Yet, finding an advisor who is trustworthy in the full sense of the word—competent, dependable, honest, caring, a good steward—is difficult for many consumers. Trust will never go out of style. It’s a fundamental component of building a close, long-term personal relationship with your clients.
You can create sustainable value by always doing what’s in your client’s best interest, by always doing what you say you’ll do and by always being transparent. These can’t be just words. Your actions have to backup up what comes out of your mouth and what is written on your mission statement.
If all of your clients were lined up in a row, could you walk down the line and greet each one by their first and last name? Would you feel comfortable hugging them? For many advisors, the answer is no. The reason is advisors often have too many accounts—and not enough relationships. Getting more accounts will not move you to million-dollar production. Getting more relationships will.
Prior to its breakup in the early 1980s, AT&T had a popular advertising slogan. It was simply, “Reach Out and Touch Someone.” Notice they did not say, “Reach Out and Text Someone” or “Reach Out and Post on Someone’s Wall” or “Reach Out and Tweet to Your Followers.” They specifically used the word “touch” which for a high-tech company was a brilliant move. AT&T realized they were not in the telecommunications business. They were in the business of connecting people.
At its core, most technology is about enabling relationships. Look at cars. They’re not simply a mode of transportation. They enable people that are in different locations to come together. They enable people to share good times by getting them from one location to another location. Airplanes do the same thing. And the list goes on.
When you look at the business you’re in, it’s not about products. It’s about people. When you focus on the people first, you develop a relationship that transcends business to consumer. You end up connecting with people, understanding their needs at a core level, and then you can develop and deliver solutions that fit and work.
You can create sustainable value by connecting with your very best clients at a deep, genuine and meaningful level.
Take some time to reflect on what real, sustainable value you provide to your clients. Take out a piece of paper and make a list. Then examine the list. Are the items on your list scarce and useful?
If you’re not working on adding sustainable value to your clients’ lives, you’ll be passed by those who are.
Steve Sanduski, CFP, is the managing partner of Peak Advisor Alliance, a financial advisor coaching and practice management resources organization. He is also a New York Times Bestselling author and co-author of Tested in the Trenches: A 9 Step Plan for Building and Sustaining a Million-Dollar Financial Services Practice. For more from Sanduski, visit his blog. Also visit here for more information on where Sanduski will be presenting live content to advisors.