When prospective clients ask why they should choose your advice firm over another, are you able to provide them with a compelling reason that clearly makes you stand out from the competition?
If you struggle to define the qualities that set your business apart, you run the risk of competing on price alone. This can be a precarious position, especially when pitted against new low-cost entrants, such industry super funds, banks and DIY robo-investment solutions.
Fickle customers, combined with skyrocketing compliance-related costs that eat into profits are compelling advisers to reassess how to run a successful financial planning business.
Given the changes to the industry past, and future, there has never been a more important time to take stock of your business and how you want to build into the new year.
The value proposition of every business is the vital starting position to creating a compelling reason to buy your services. For financial advisers, the relative similarity of most advice firms amplifies the need to be different.
If you have a value proposition that is both different from competitors and taps into the emotional and rational needs of the client, it provides a powerful competitive advantage. It's a reason for your business to be preferred and in demand. It's a simple law of economics that demand creates the potential for higher prices and profits. The aim is to create a distinctive offering that meets the needs of today's clients.
For advisers, the primary areas of differentiation come from:
- Clearly showing that you are client-centric
- Having an investment philosophy that clients understand
- Providing the best client experience
Today's consumers have low trust in business and institutions, so they need to understand how the advice services add value to their lives today and in the future. They clearly expect to be understood and for services to be tailored to their needs and circumstances. Clients who understand their financial plan and are confident in achieving their goals are more likely to be satisfied with their financial adviser. Put simply, when your business demonstrates a commitment to clients they appreciate your unique services, they are far more likely to be referral sources for future growth.
Advisers are increasingly talking more overtly about Goals Based Advice – and then matching that with Goals Based Investment portfolios. An opportunity to differentiate exists here because the most common practice is to funnel clients into a standard set of products based on their risk profile, but it is clear that this approach does not necessarily match up with the financial needs of each client. Under a Goals Based Investment philosophy capital is dynamically managed by investing in assets that are most suitable to achieve targeted outcomes. This helps improve the likelihood that their investment plan is delivered within the specified timeframe. Under this investment philosophy, investors can see a clear link between their financial goals and the investment aims and trajectory.
Goals Based Investments are usually best implemented via a Managed Account structure where the investment manager has the capability to dynamically adjust clients' portfolios to capitalise on emerging and distinct opportunities and move away from poor investments to avoid significant capital losses. The combination of these efficient, transparent managed account solutions is a better customer experience. What’s more, this more efficient structure compounds the benefits to an advice firm because advisers can spend more time with the client directly helping to further strengthen the relationship.
Meanwhile, Goals Based Investing using a Dynamic Asset Allocation approach provides a strong point of differentiation for your advice business, helping cement your firm's value proposition.
Dynamic Asset is a ready built, plug-and-play solution for advice firms that aspire to differentiate their advice business by implementing a client-centric managed account service using Goals Based Investment portfolios. Dynamic Asset partner's with advice firms to deliver simple to implement business solutions that helps differentiation and helps boost the firm's profitability through the efficiencies and scale that managed accounts deliver. Dynamic Asset's whole-of-business Managed Account solutions are available for super and non-super clients.
For the year ahead, providing an excellent experience for clients is more critical than ever. To start your journey contact us at Dynamic Asset and we can share our thoughts and experiences with you to help you realise the business you want.