Slideshow 12 Steps to Stand Out

  • October 18 2013, 5:44pm EDT
13 Images Total

12 Steps to Stand Out

by Eric Sheikowitz

One of the most challenging questions I get from individuals and teams I coach is: How do I differentiate myself? I’ve discussed this with hundreds of financial advisors and considered many elements of potential differentiation.

However, after speaking to one nationally recognized advisor, it appears it is in part even more basic than one might imagine. She said:
•tYou don’t come in the office from 8:15AM and leave at 4:15PM every day except Friday, when you take off.
•tYou don’t send out portfolio management reports by email with a note saying if you have any questions, call me.
•tYou care about your client’s wealth more than your own and you care about who they and their family really are.

This certainly speaks to part of the differentiation question. Regardless of what you offer as solutions that are different than your competitors, you must work hard and execute well.

Pure and simple, the purpose of differentiation is to gain a sustainable edge over your competition. Differentiation does not have to be in absolute terms, but performance relative to competitors.

Most financial advisors will state they are focused on the client and have the expertise, experience, education, integrity, and performance standards to help their clients succeed. These characteristics however are barely the entry price for a quality financial advisor or wealth manager. Products, pricing, investment strategy and planning including asset allocation, risk assessment, performance monitoring and reporting, are for the most part, commodities and one can rarely gain more than a short lived competitive advantage from a solution or process in these areas.

So, back to the key question, How do you differentiate yourself? Here are a eleven concepts, that if delivered holistically and consistently, can help you stand out.

Read the single-page version of this story here.

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1. Personalization of Service

You must prove that your work focuses on the client from your initial meeting. It’s always about the client or prospect. Your first meeting with the prospect is all about the prospect. It’s not about you, your company, or your investment approaches. It’s all about learning about the prospect and what makes them tick. Get to know them personally…and then professionally.

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2. Your Service Commitment

Have a written service level agreement with your clients. The purpose of the agreement is to ensure that the proper elements, commitments and reminders are in place to provide consistent service, support, and delivery to the client by you and your team. The agreement provides accountability and responsibilities of the team and presents a clear, concise and measurable description of service provision to the client. The agreement provides the client and advisor matched perceptions of expected service with actual service support and delivery.

It’s my opinion that many, if not most, clients don’t know the extent of services advisors provide on their behalf. The service level agreement functions as a written reminder, an informal “contract.” Don’t forget the service commitments also become a two-way agreement so the client knows exactly what to expect and can measure you on living up to the plan –a unique experience in most cases.

3. Summary Letters

After each quarterly portfolio review send a letter to the client. Components of the letter should include the following:

- A thank you for being our client

- A meeting summary which would follow the agenda you used as well as any follow-up responsibilities of both your team and the client.

- A summary of the service feedback you received and comments as to what actions you are planning.

- When your next meeting will be.

- Optionally, an offer of service to friends, family, etc. based on the meeting.

4. Hold Clients Accountable

You are a financial planning based practice. In addition to developing a plan with the client, you are holding them accountable to the plan for their actions (spending, saving, investing, other) to make sure they stay on track for their goals.

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5. Certifications

Your certifications are important, especially the external ones from the College for Financial Planning and/or Investment Management Consultants Association. It’s important to be able to say, the Certified Financial Planner (CFP) designation is a professional certification mark for financial planners conferred by the Certified Financial Planner Board of Standards. Of perhaps 400,000 or more advisors, only about 68,600 are certified in the U.S.

Consider other designations such as the CIMA, CRPC, CPWA, etc. There are only a total of 6504 CIMA Certificants and 644 CPWA Certificants (as of June 2013). Imagine the differentiation you have with multiple designations.

6. Customized Portfolios

You have enough money management expertise to know the markets and prepare asset allocations that are not solely in the context of models, but in the context of the individual client, their wants, needs, temperament, risk tolerance, family, etc. That makes this a customized, personal portfolio. Some advisors farm out all money management, and while that works for some, or many, advisors, it doesn’t allow them to be as involved with customizing as some HNW and UHNW clients appreciate.

7. Team

You are a team of professionals (real and virtual) who know the individual, a team of investment specialists, a team of business people who understand markets and solutions, and a team of operations who service clients. The team has a sole focus on the client and brings the resources of many heads to each client’s wants and needs. If 2 heads are better than 1, perhaps thousands of heads are many, many times better than that. There is not only the wisdom of many but the service and support and the continuity of the many who work as a team.

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8. Investing Competently: Have What It Takes

Financial theorist William Bernstein says to invest competently, you need four faculties:

- An interest in investing.

- The horsepower to do the math.

- The knowledge base.

- The emotional discipline to execute faithfully

Bernstein says, I expect no more than 10% of the population passes muster on each of the above points…to succeed you need to string all four together. Thus, in a state of nature, just 0.01% of investors have what it takes.

The fact that you have the interests, facilities, knowledge, and discipline --and time--can be a differentiating factor.

9. Consultative Process

Bernstein also suggests that success is dependent on:

- Defining goals and executing and adhering to a long-term investment plan

- An ability to properly allocate and diversify the client’s assets

- Developing an investment strategy and selecting appropriate investment managers

- An ability to monitor and make adjustments as necessary.

It can be a differentiating factor as you conduct your business in this manner. You follow a consultative process and have a buy and sell discipline that takes the emotion out of the process.

10. Know yourself

Explain What makes you, you, and your firm, your firm? Many decades ago, I heard a sales trainer say, when all else is the same, I make the difference. Good advice. Let the client know who you are, your values and belief system, and that of your firm. This is your value and your challenge, know yourself, be proud of what you do, care about yourself, your family, your firm, and mostly your client, and that will come across.

In addition, business strategist Kenichi Ohmae states, If you are fighting with a competitor who has equal qualifications, effective and persistent execution in critical functional areas may be the only differentiating factor.

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11. A Giving Approach

Have a giving approach to clients. Look for opportunities to be giving and make sure you recognize them. Be cognizant of your client’s lives, the events in their lives, their occasions, their need for help and react to each and every situation.

12. Consistency and Constancy

Remember, this is not about doing the right thing today; it’s about doing the right thing every day, day after day with consistency and constancy. It’s not about which of the above you will execute. In my view, you need to do them all.

I also recognize that you have many clients and time and affordability can be a concern. However, these things are only mandatory for the clients you want to retain. It’s like dentists say, you only have to floss the teeth you want to keep.

Your challenge: What is it about you that makes you a difference maker?