The power of persuasion in the digital age of transparency can not be used to sell products in a vacuum to increase shareholder value.
Your gift is to persuade clients into doing the right thing for themselves.
You must be able to see your future through this lens or you risk irrelevance.
Sustainable organic growth comes from predictable recurring revenue… or at least the ability to create predictable recurring revenue when it is compounded by the catalyst of successful repetition. This is the magic formula or the “advisor value algorithm” that has enabled successful advisors to thrive (sometimes by default) by design. It is in your best interest (as well as the best interest of your clients) to discover your own personal advisor algorithm to create your own sustainable organic growth by design.
Inherent risk associated with default setup… (The issues associated with you not taking control of your advisor algorithm) What will happen to your business and your clients when you continue to ignore your own advisor algorithm…Options you have to discover your advisor algorithm… (really just one)
Successful outcomes of advisors who have discovered their advisor algorithm and the evolution of their businesses because of the proactive stance they have taken in owning their algorithm of value culture and growth…
The issues associated with not owning your advisor algorithm are numerous and compounding by nature. We can start this shortened summary of all risks inherent with not owning your own advisor algorithm… with the risk that you bring into your business by not having the framework for a successful business model in place to guide your daily actions. When you associate the success of your business with the success of tactical concepts that may have worked for other successful advisors you are tacking on additional risk (one step up risk). What initially might seem to be a hit with you and your clients is eventually exposed as the temporary fix that it is because you don’t have the same Advisor DNA as the advisor whose blueprint you have copied. These actions always lead to heartache and two steps back because of the additional work it takes to make up the difference in the perception of the value you have perpetuated and the actual authentic value that you can and should be offering your clients. Your authentic value (the value that you can actually control) must be made tangible to demonstrate its relevance. The relevance of your value is critical in uncovering (getting) and maintaining (keeping) ideal clients. When you turn you back on these critical components of the advisor algorithm you introduce one step up risk into your business… and you don’t need that. One Step Up or Copycat risk is incredibly toxic when it comes to building your business. The cleanup factor is enough to drive any serious advisor out of business… Your reputation will be forever sullied by the lack of authenticity you introduce into your business culture when you fall for One Step Up Risk.
Your business is far too valuable and your reputation is far too important to introduce this type of Copycat Risk into your business development model. When you discover and design your advisor algorithm you create a strategic foundation that makes you and your business culture far less susceptible to falling for One Step Up Risk. In fact it guarantees that you will never see tactical offerings as strategic solutions again.
(This should be enough to get you started down the path of building your business by design… if not, please continue reading to discover more risks associated with not taking ownership of your advisor algorithm.)
When you don’t own your advisor algorithm you open your business up to a multitude of cultural issues associated with lack of focus. Your trusted partners have earned the right to become part of your culture and they are indelibly tied to your reputation and the story of your authentic relevant value. A certain level of autonomy is required to create this culture of trust. If you do not acknowledge the importance of owning your advisor algorithm you will introduce chaos into your business model. Each member of your valued team must be able to have critical conversations that matter, with the confidence of the courage of their conviction. And in this era of 24/7 collaborative services, all conversations matter. You must prepare all trusted partners with the ability to converse with confidence. Without the ownership of the algorithm, which sets the tone for your culture, you are adding risk by default… this sounds confusing… design… default… what the hell man? Just let it be known that you are not doing yourself, your partners, your staff or your clients any favors in the ways of client experience and trust by ignoring your advisor algorithm. For sustainable growth to occur by design you must have a culture that is built (on purpose) from the fundamentals of your advisor algorithm which empowers you to exude your integrity and trust in a multitude of mediums twenty-four hours a day. Your predictable recurring revenue is at risk every minute that you are not able to exude the culture of integrity that you have created by design for the good of your ideal clients.
The value of the moving parts of your business when you cease to be there is considered by many to be the valuation of your business. There are many more variables associated with the value of your business in the inorganic perspective… there are buyers and sellers markets when it comes to valuations and the grey matter involved is beyond the scope of this article. Suffice it to say that you must be able to demonstrate your predictable recurring revenue and the ability to maintain that predictability and growth when you are not their holding the reigns. The other side of the coin is if you are acquiring another business and need to create your own specific variables for valuation… owning your advisor algorithm empowers you to go beyond the spectrum of third party evaluations of ROI into cultural details that can uncover cultural alignment which must not be ignored when there is so much at stake when it comes to potentially adding risk to your current client base if you do not have an ideal fit with the firm you are acquiring. This is a light summary of the possible risks inherent in the valuation of advisor businesses when it comes to inorganic acquisition. Sustainable organic growth is indelibly tied to inorganic acquisition regardless of which side you reside… both buyer and seller must verify the ability of the acquired business to generate predictable recurring revenue and sustainable growth…Simply not recognizing the opportunity (owning your algorithm) to create a stronger business model while reducing risks associated with valuations is just not acceptable. Your clients deserve better, so does your staff and you do too.
The advisor algorithm is a merely synonym for alpha or value by design… some advisors see things one way, some see it another.
To get all advisors exposed to the opportunity of tangible alpha I have designed multiple synonyms for tangible alpha… anyway, back to the point of this story…
The need to create sustainable organic growth is often undermined by risks that advisors unwittingly add to their businesses while trying to create predictable recurring revenue. It’s a kind of sabotage that advisors can’t see because they are often times too close to the business to see clearly the missteps they are taking. That’s why I feel it is my calling to enlighten and empower advisors with the wisdom I have been able to gather through my affiliation with one of the best advisor coaches that has ever walked the planet. I might be a little biased.
Anyway… on to the conclusion…
Keep It Tangible,
Grant
In a robo-world there simply isn’t enough time to compete in the arena of product sales for shrinking commissions.
You are not selling products in a vacuum behind a curtain of opacity surrounded by smoke and mirrors. The focus of the modern advisor must be on the services that he or she provides that are unique to the individual and relevant to his or her ideal audience. People can buy products from their smart phones Clients don’t need an advisor for that. They don’t need you to “sell” them anything anymore. What clients need is a trusted source of wisdom… which is what you are. Obviously, a trusted source of wisdom would never use anything as shady as a product sales funnel to convey their client-centered focus to their ideal audience. Because that would be impossible. Which leads us to why that would be impossible to pull off in the modern era of financial services… transparency… reason number three.
The same transparency that is killing the sales funnel and traditional lead generation can make you irreplaceable if you understand how to leverage it for the good of your clients and for yourself.
Be proactive… be responsible… be yourself.
1 Content leads to your unique value.
2 Questions lead to your value to filter.
3 Conversations are competent and add to your confidence.
Topics are derived from your purpose, principles, values, beliefs, opinions, experiences, expertise, promised behavior, behavior you expect from clients, your philosophy, and your processes…
Those disciplines of your alpha must be defined (by you) before you can create categories for content topics for engagement and questions that lead to your value.
The medium is the message. Your digital experience must flow seamlessly with your daily behavior if you want to survive in a robo world.
This is how to do exactly that… quickly.
If you are thinking about outsourcing your content to a third party, think differently.
You don’t need leads for a sales funnel.
You need to filter in prospects and keep clients with personalized topics.
Cookie cutter content will get you washed away.
Your value must become tangible for clients and prospects to see and hear.
Nobody wants to be placed in your sales funnel. Transparency lets prospective clients know exactly what you are up to.
Own the words. Design your topics. Get and keep ideal clients. In perpetuity.
Most advisors have never been afforded the opportunity to discover and define their authentic relevant value… they were hired to sell products. To remain relevant and become irreplaceable advisors are going to have to think differently about their job description. You are going to have to think differently about sales… you are going to have to think differently about service… you are going to have to think differently about your unique value.
The conversations of most advisors, up until recently, have been centered around either products or the trustworthiness of their firm. But now, the greatest opportunity in the history of financial services awaits you…
By owning your value you are creating opportunities to have conversations that matter 24/7
In order to engage in conversations that matter you must have a formalized process in place in which the client experience is never left to question. Your business must become designed to exude your value and leverage all of your resources to consistently improve your client experience while simultaneously engaging in (and improving) the conversations that matter. Essentially, the client experience and the conversations that matter dovetail to enhance the overall development of your business. Owning your Advisor Alpha creates this opportunity.
Once you define your value… you own your Advisor Alpha
Owning your Advisor Alpha and making it tangible nullifies the element of desperation inherent in a business where you can’t exude your value.
Lacking the courage of your conviction to have conversations of your value is the number one killer of all advisor client relationships… If you can’t put into words why your clients should be paying you, you will neglect them… and neglecting your clients is still the reigning champ of client defection.
They need to feel it… and you need to know how it makes them feel… Tangible Alpha.
If you don’t own the words that define your value you will be destined to attempt to become a version of “all things to all people.” This version of you fails eventually… and this version of you fails more rapidly in a robo-world.
You must first own your value before you can engage in conversations that matter.
Owning the words that define your value enable you to create a business in which your conversations fuel the client experience and the client experience fuels the conversations that matter. Owning your Advisor Alpha and making it tangible will drive the success of your business in the future… by design.
How can you escape the trap of client defection due to advisor neglect? How can you empower all trusted partners to have conversations with the courage of their conviction? How will you remain relevant and become irreplaceable?
This is why you may have to kill the messenger… if technology vendors don’t bring you opportunities to gather the metrics that matter to you rather than the data they want to collect for themselves (they call it critical feedback) disguised as ROI… You may want to kill the messenger and hide from technology. Before you run and hide or piss away your tech budget understand this, the endeavor of gathering quality ROI (Return on Investment) through omni-channels is entirely up to you… not the vendors.
To remain relevant you must have a consistent message of value across multiple mediums. This is now known as an omni-channel opportunity. (I wish I’d thought of that because it sounds cool.) To remain relevant and become irreplaceable your “omni-channel” message must be working for you in a tangible fashion to gather the feedback required for the sustainability of your business. It is up to you to have a designed system in place to gather the metrics that matter to you before you implement the tactical offerings of technology vendors. (Simplified: you need your metrics not their metrics) If you don’t have a defined strategic foundation in place (Tangible Alpha) you are likely to fall into the trappings of tactical rhetoric disguised as strategic solutions. These tactics bring with them vendor measurements of your ROI which are not consistent with measurements required by you for your success.
The advisor in the future will craft a message of value that resonates tangibly throughout multiple mediums. By doing so, the advisor places herself in position to leverage technology.
Technology should be empowering you but often times it is tying you down and holding you back… Building a strategic foundation through intentional value design (Tangible Alpha) allows you to implement tactical technology solutions that help you gather the metrics required by you to create a sustainable business. By owning the words that define your value and building your Advisor Alpha through the Tangible Alpha progr
ession you will be building a client-centered message of value that resonates throughout the omni-channels of our world. Build your strategic foundation first, then you can more securely introduce “technology as a solution” in such areas as “omni-channel” marketing. (I’m doing air quotes for those last two… try it it feels good.)
The catch phrase vs. Tangible Alpha (branding for financial advisors)
You can’t afford to be associated with a company catchphrase in the digital age of transparency… In the 7 seconds your clients and prospects are giving you to impress them, the catchphrase (Value Proposition) is an automatic bounce. The catchphrase is a client experience killer and a nail in your coffin when prospecting potential clients.
Consistency of the message of the advisor’s client-centered value throughout omni-channels (multiple mediums) is a priority ove
r the types of technology the advisor will use to create her/his digital portfolio (footprint)… all of the technology in the world will not fix your clusterf%ck of a message when it has no consistency throughout multiple mediums (omni-channel). Advisors in the future understand that omni-channel branding isn’t just for prospecting… it is also for the 24 hour client experience (to the pocket), which is why your message is the medium “the medium is the message” and you must be able to extract as much quality data from your medium (channel) as the amount and quality of information the medium is extracting from you (information you are putting in the medium). Otherwise… it’s simply a waste of your resources. “Get your shit together” and drop the catchphrases (total contradiction). But seriously, get your shit together. Because tech is only going to get faster and more exponential as time marches on.
The ROI on omni-channel marketing begins and ends with a consistent message of your value and that value begins and ends with a client-centered purpose.
~I said that
Without crafting a strategic foundation to implement tactical technology solutions that take you to the “next level” of omni-channel marketing, you will become hamstrung by the same vendors who are claiming to empower your business.
Without discovering defining and designing your Tangible Alpha, your ROI is no more than a wish… in which the metrics of success can only be measured by the vendor who sold you the pipe-dream. Build your own foundation… gather your own metrics of success… own your Tangible Alpha before you enter into any technological solution that claims to be a strategy. (Because technology is not a strategy… it’s simply a tactical concept keenly disguised as a strategic solution generally sold to advisors who have no idea what to expect in return.)
You must be able to walk the digital talk across all mediums and become more than a catchphrase… In the digital age of transparency you can and must do this by design.
~ I said that too
Vendors are going to try to sell you a Maserati with no engine… the engine (your Tangible Alpha) is an afterthought to the vendors of omni-channel tactical solutions… it’s not necessarily a bad thing… it’s just the way it is… there is a hot new buzzword that vendors will be selling you… they really have no clue how to make it work for you… and if you don’t get in now, you will miss this opportunity… but you are smart… you know fear of missing out is an unnecessary risk. There must be a solidified reason behind implementing technology for the purposes of omni-channel marketing in the digital age of transparency.
I find it off-putting when technology vendors want to sell us something for the sake of technology.
The reason is this, there has never been a greater opportunity in the history of the world to become a successful financial advisor. Omni-channel marketing and the technology that comes with it shouldn’t scare you away from the greatest opportunity available in the greatest business in the world.
Transparency is the friend of the advisor in the future… by empowering your business with Tangible Alpha you will be creating a business development foundation that allows you to develop sustainable growth by leveraging transparency. You will become an Advisor in the future by collecting the metrics that matter to you.
Omni-channel is the new buzzword for marketing and branding… don’t fear technology… you may want to kill the messenger but you don’t have to… make your advisor alpha tangible to build a strategic foundation in which you can leverage technology to gather the metrics that matter to you. Tangible Alpha isn’t the only way to accomplish success… it is the simplest, most effective, proven (40 years in the making) way for advisors to gather invaluable data for the sustainability of their businesses.
(If you are unfamiliar with the man in the picture you are missing out Marshall McLuhan)
Keep it Tangible,
Grant
by Grant Barger
The big data that gets reported from McKinsey has very little to do with the success or failure of your business as an entrepreneurial financial professional.
The title of this curated article (below) has it right, but the content of the article gets it wrong. This is digital noise.
McKinsey: Time to Manage Behavior, Not Just Portfolios
The low-hanging fruits in financial markets leading to easy investment profits are well picked over. Now advisors need to focus on blocking and tackling – the basics of wealth management.
At least that’s the insight many FAs glean from the latest market warnings from McKinsey & Co. After a fairly “stellar” era of investment performance across broad stock and bond asset classes over the past 30 years, the consultancy is forecasting “returns are likely to come back down to earth over the next 20 years.”
“Although we’re not necessarily in agreement with all of their numbers, we think that this latest market forecast by McKinsey is spot-on,” says Andy Kapyrin, a partner at RegentAtlantic in Morristown, N.J., which manages about $3 billion.
Still, Kapyrin is finding rather limited remedies in terms of portfolio moves. He’s tilting some clients towards small-cap domestic stocks and emerging markets. But only on the edges, he adds, making sure not to expose investors to greater portfolio volatility than they’re likely to feel comfortable accepting over time.
“A more fundamental solution we’re finding is to re-assess a common concern we’re hearing these days – that lower returns will leave couples short in meeting their retirement goals,” says Kapyrin.
So his staff has been analyzing spending patterns of the independent RIA’s 1,200-plus clients over longer periods. Supported by outside research from JPMorgan, among others, Kapyrin’s starting to share with his clients a reassuring message: Even in less rosy economic times, retirement might not be as scary as first imagined.
While expenses might go up shortly after leaving the workforce as couples take more trips and “celebrate retirement,” Kapyrin relates that most of his clients’ golden years are characterized by moves to downsize and live more simply.
Paul Bennett
“The McKinsey study is another good reminder of the need to lower investors’ expectations over the next few decades,” he says. “But what research like this leaves out is that most retirees aren’t likely to go on any extensive spending sprees that will bust their budgets.”
Taking emotions out of the process isn’t just a matter of developing more realistic views of what a family might need to save and spend going forward, points out Paul Bennett, an advisor in Great Falls, Va., with United Capital, which manages more than $15 billion.
“I’m readdressing with our clients the need to make sure they’re not falling into certain mental traps when making choices about how best to invest,” he says.
A major bias that Bennett is urging investors to watch out for is something he calls the myopia trap – when clients become so focused on one aspect of investing that they miss the bigger picture.
It’s a behavioral trait Bennett says he tries to avert by making sure investors aren’t creating “mental silos” where they’re “fixating” on a relatively small number of holdings or accounts.
Right now, he’s also finding many clients falling into what he refers to as the “confirming evidence” trap. This, he says, is where “people tend to remember things selectively and interpret information in a biased manner.”
For example, investors might emphasize one politician’s take on economics with relative zeal. The veteran FA isn’t trying to take sides, however. “In those situations, I think it’s important as an advisor to objectively point out that they’re effectively devaluing anything that might come along in the future that contradicts those preconceived notions,” says Bennett.
A good start is to make sure clients’ goals are put into proper order, suggests Michael Liersch, head of behavioral finance at Merrill Lynch.
“It’s common for people to have very implicit ideas about money,” he says.
During times of lower market expectations, FAs must strive to become even more articulate to flush out clients’ true bucket lists, recommends Liersch.
“The challenge is to refine your interviewing process so that a family’s goals are laid out in a more quantifiable way,” he says. “As an advisor, that’s going to allow you to align clients’ investment plans and track their progress in a more definitive manner.”
When someone uses the phrase “blocking and tackling” and they aren’t a football coach, you know they are dead behind the eyes. The basics of wealth management? Really? Because it’s so simple…
It’s ridiculous that financial services publications continue to equate conversations about investor behavior with lowering expectations. Conversations that matter about behavior have more to do with the actions of investors that correspond with the overall success or failure of their goals and dreams. Advisors must stop allowing themselves to be measured by the antiquated metrics of an industry that continues to publish tripe (like this) that only adds more confusion to their daily lives. Advisors must start designing the metrics that matter (to the advisor and the client).
This article is two years old… the financial services industry has been publishing shit like this for 40 years… you can find one just like it anywhere you turn these days. The point of this post is to help you see what you are reading… don’t just go through the motions with the same old assumptions.
Some Good Thoughts
If the words in the article are highlighted in green the concept is sound… you might think about how you might implement those words into meaningful conversations of your own.
This isn’t about destroying the author who is just doing his job by interviewing an advisor about how they do stuff. This is about rethinking the status quo.
The concept covered in the article is sound… you have to become more than a portfolio manager to add value to your clients. Holistic is a term some like to use… I don’t. You are managing Net Worth. The net worth of your valued clients requires you to get off of your ass (mentally) and be proactive about setting and maintaining expectations. If you are unable to set and maintain behavioral expectations with your ideal audience, your chances for survival in a robo-world are slim to none. It’s time for you to think outside the black box of industry defined value which is focused on ROI from capital markets… you must become more than a middle-man to your clients.
To remain relevant there is a progression you can follow that allows you to collect metrics that are germane to your existence. The progression is outlined throughout this website. Your unique data will help you thrive in a robo-world but you have to learn how to get that data in the most effective and efficient manner. Stop wasting your time on big data articles published by the industry and start discovering your own unique KPI. Then you will be able to filter through the noise (the stuff in red) with a more efficient outlook and highlight the stuff in green on your own.