One of the biggest causes of adviser angst is ‘value’.
Lots of questions run through your mind on a repeat loop:
- “Do I add value to my clients?”
- “Am I really worth it?”
- “Can I justify the prices I charge?”
When you are scared of the FCA challenging your fees, you don’t understand your value.
When you think you need to be cheaper, you don’t understand your value.
When you think fees need to come down because investment returns are low, you don’t understand your value.
I could go on.
The great advisers have mostly put the value issue to bed. And I say ‘mostly’ because anyone who genuinely cares about their clients and the service they deliver will revisit this topic every so often, just to be sure they’re STILL getting everything right.
So how do you get yourself to that place?
You’ll often hear really unhelpful advice on this subject like, “Just have more confidence.”
That’s like a friend calling me up on the morning of the London marathon and asking me to run with them. When I explain that I’ve not done any training they say, “Brett, just be confident.”
To be confident on the starting line for a marathon, I need to have done the work. Lots of work and work of the right type.
The same is true if you want to feel confident about your ‘value’.
So let’s look at what the great advisers REALLY do to generate that confidence.
Telling is not selling
The trap that ordinary advisers fall into is believing there are things they can “tell” clients to help them magically see the value in the advice.
The truth is, while there are always great stories, one-liners and pictures you can draw for clients to help them understand concepts, when you’re ‘telling people how great you are’, it’s easy for them to disbelieve you.
Another approach I know some advisers use to justify their fees is explaining to clients that they’re taking on risk when they take on a client. I hate that approach. Even though it’s true, as a client I’ll be thinking to myself, “if you can’t stand the heat, get out of the kitchen.” I just won’t understand or appreciate your risk-based argument. It sounds like a moan.
Other advisers try the “compliance burden” argument with clients. They tell clients how much Professional Indemnity insurance and industry levies have gone up each year, using that as justification for their fees. I hate that too. “Not my problem”, is what I’ll be thinking as you tell me that one. Every industry has regulatory cost issues.
With brand new clients, you need to understand a key concept:
“Telling is not selling”
If you want better answers, ask better questions
The way you help clients to see and understand your value is by asking great questions. It’s the questions that allow the client to feel an emotional reaction in their body as they answer them.
When you ask “What does ‘good’ look like for you in retirement?”, the prospective client not only visualises what good looks like for them as they answer, they feel it in their gut too. It’s an emotional reaction.
That’s why asking great questions also works in a Zoom meeting because all the magic is happening inside the client’s body.
It goes without saying that you need to leave a lot of space for the client to answer and be a good listener. That’s a skill most advisers could work on.
What happens in a first meeting done well is that clients arrive thinking they have a pension or investment problem. However, by the end of the meeting, they realise they’ve got a “How much is enough problem?” or a “Will my money last as long as I do?” problem.
And you help them see that with your great questions, you don’t tell people that’s their real issue.
Only once the client sees their real issue can you explain the range of support you provide because now that explanation is being done in context.
What are some of the things advisers do that add value to clients?
- Saving them time
- Cutting through any jargon
- Providing a clearer understanding of their choices
- Calculating a financial target they can work towards
- Validating a target that they’ve come up with themselves
- Providing an expert second opinion
- Keeping them on track and aligned with their real life goals
- Removing the emotional pain or fear about a financial decision
- Or helping them manage their emotional baggage around money
It’s a pretty decent list.
The art in demonstrating value
Getting clear on your own value is a skill issue.
When you can master the art of asking interesting questions, you help clients generate interesting answers and now they’re engaged with their situation and with you.
Remember, value is perceived by the client, not created or dictated by the salesperson.
Great advisers help the client uncover the real challenges they’re facing and to discover how the adviser’s offering can help them resolve those challenges.
If you can learn how to do that, your value will no longer be in question.
If you’re looking for more help on understanding your value I did a webinar called Demonstrating Your Value To Clients for the PFS POWER website. You can listen to the replay here. It’s free.
It covers off other ways to demonstrate your value to clients in addition to asking great questions, including:
- How to demonstrate your value in cash
- Why great advisers add 3x – 3.5x their fees in value (and that’s based on a 1% pa AUM charging model)
- The three things successful flat fee advisers are really good at (the flat fees are not the magic)
Get access to the whole shebang here.
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