Executive Summary
For many financial advisors, having the ability to effectively and efficiently provide solutions to new clients doesn’t always translate into prospects making the choice to engage in a planning agreement with the advisor. Sometimes, this can be caused by overlooking what many prospects truly value most, which is the path to the solution (i.e., how the advisor will implement a strategy) instead of the solution itself!
But making a simple change from focusing on what the solution is, to how it will be implemented, can have a profound effect on how prospects and clients perceive the advisor’s value. As while all financial advisors can provide a financial plan, the methods they use to implement the strategies, and that help clients realize the goals in their plan, are what really conveys the unique value that prospects seek from their advisor in the first place!
As while clients aren’t necessarily concerned about the fact that they will get a plan or have their assets managed by the advisor – they already know and expect that this is the case – what they do care about is the process the advisor will implement to deliver those services. This is where the advisor’s differentiating value is found for many prospects.
Accordingly, learning to talk about how services will be provided, with less emphasis on the specific services themselves, is important but can be a difficult shift for advisors to make. By creating a chart that clearly identifies not just the services the advisor offers (the advisor’s “whats”), but the processes they use to provide those services (the advisor’s “hows”) can be used as a reference tool for the advisor exclusively internally as they learn to focus on processes versus services. Alternatively, the chart can be created as a way to facilitate conversations with clients and prospects during meetings to explore not just their financial planning priorities but also the expectations they have of their advisor.
Ultimately, while financial advisors may find it difficult to articulate their value in ways that are most meaningful to prospects, identifying how to switch to focus on language that highlights the “how” of an advisor’s services instead of just which services are actually provided, can be a good opportunity to showcase value that will resonate with the prospect most.
Processes That Solve Problems Can Matter More Than The Solutions Themselves
Consider the following scenario: A prospect comes to an advisor with some questions about their estate plan. In the discussion that follows, the advisor might help the client identify what they need to get done – perhaps beneficiaries need to be identified and updated in light of the SECURE Act’s new 10-year rule for inherited retirement accounts, maybe the current plan needs to be updated because of new circumstances in the client’s life, or maybe a trust needs to be created or revised by an estate planning attorney.
Yet while they may be meeting with their advisor because of estate plan concerns they have had, the clients are already very likely aware of the fact that there is work to be done ahead. In fact, the tasks, to-dos, and appointments that an advisor might recommend may not even be new to the prospect. Thus, while the suggestions an advisor may make during the meeting may be very valid, and can serve to reaffirm what the prospect suspected they needed to do, the fact remains that the client still has not accomplished any of the tasks they know they need to get done.
Instead, the value of the advisor is often more about the support and guidance they can give the client to ensure they actually do accomplish what they need to do on that to-do list. As while financial planning recommendations are important, the recommendations made themselves don’t actually create the most value. Rather, it is the service a prospect will receive as a client – that leads them to ultimately execute the recommendations – that is the true value of what a financial advisor can offer.
Which is important not only for delivering value, but because it means that the advisor’s ability to support the implementation process will often determine whether or not a prospect may engage as a client!
In other words, prospects may not be as interested in what tasks need to be done, as they are in finding out about how the advisor will help them accomplish those tasks. How will the advisor work together with the client? How will recommendations be made, and how will tasks be assigned? How will roadblocks be confronted? These are the ‘how’ issues prospects want – and need! – to hear.
Help Prospects Better Understand Value By Showcasing The How
Language can be an extremely nuanced tool, and thus can often be easily misunderstood. Communication, although we use it all the time, is actually a skill that most individuals are just mediocre at using effectively. Thus, even when prospects come in and ask the financial advisor, “What do I do?” or “Where do I start?”… the truth is that usually what they really mean is, “How do I do these things?”
Consider the following example:
Example 1: Pearl has questions about retirement and charitable giving, and is considering the services of a financial advisor. She makes an appointment with a financial advisor, Alana, whose website states that she specializes in working with single women who are charitably inclined.
Pearl has decided to interview Alana to see if she is equipped to meet her needs. Her conversation with Alana goes like this:
Alana: Hello Pearl! Thank you for coming in today. How can I help?
Pearl: Well, I need a retirement plan and I would like to be more judicious about my charitable giving for tax planning purposes. Your website led me to believe that you have experience in both areas, so tell me, what do I need to do?
Alana: Yes. I can help with both of those things. For retirement questions, we will put together a financial plan for you. We can run multiple scenarios.
In terms of charitable giving, as part of the financial plan we can be sure to address that area in greater detail. There are a number of techniques, from donor-advised funds to charitable remainder trusts, that may be helpful to achieve your goals in a tax-advantaged manner.
So, to answer your question more directly about what you need to do, you will need to provide us with your financial statements, and to answer a few other questions via our data gathering forms to get started.
In the above scenario, Alana the financial advisor has not done anything wrong; she has correctly explained the firm’s services to Pearl, while highlighting a few potential planning strategies, and explained the next steps to move forward. And, at least for the time being, Pearl is hearing that she will get her questions answered in due time.
The caveat, though, is that Alana’s strategy is focused on identifying planning techniques to use (the “what”) and creating a task list for Pearl to follow… but isn’t really articulating how Alana helps make it all happen.
Example 2: Pearl, from Example 1, has decided she wants to interview another advisor to make sure she finds the best possible firm to help her with her needs. Andrew, the second financial advisor Pearl has decided to interview (who does read the Nerd’s Eye View blog!), has a very different conversation, which goes like this:
Andrew: Hi Pearl! Thank you for being here today. How can I help?
Pearl: Well, I need a retirement plan and I would like to be more judicious about my charitable giving for tax planning purposes. Your website led me to believe that you have experience in both areas, so tell me, what do I need to do?
Andrew: Wonderful. We can absolutely work on those two areas together. For your retirement questions, we will ultimately deliver a financial plan. The fun part of getting your plan done will involve us meeting a few times so we can delve into your needs, goals, and values.
Our retirement planning process is an opportunity for us to get to know you and really build a plan specifically for you. We accomplish this over a series of 3 meetings, where we create your plan with you in real-time on the big monitor on the wall, culminating in a final meeting where we finalize the plan and discuss the next action steps to take. And every six months, we’ll meet again to revisit your goals and situation, pull the current plan up on the screen, review together your current progress, and make updates to the plan as we need to.
Charitable giving has a similar process, depending on how you want to change or adjust your current giving. I absolutely hear you when you say taxes; we will work together to decide what is best for you – but there are many options: trusts, outright giving, or even starting your own charity. But we will not only model these options for you as part of the planning process, and talk through each with you, but we typically meet jointly with our clients’ CPAs to work together as a team to evaluate all of these options.
So, to answer your question more directly about what you need to do, you will need to start by gathering financial documents. But we will work on that together as well; you can even just bring your box of documents in, and we’ll go through them with you to help you get it all organized. In addition, we have a client portal for all of our clients, and we can help you scan any documents you need to store so we can ensure all of your documents are stored safely as we go through the planning process.
Even though Alana and Andrew, the two advisors that Pearl interviewed, offer the same services, Andrew is more likely to get the business over Alana. While Alana would probably do many, if not all, of the same things that Andrew would do, Andrew gives Pearl a better sense of not only what but also how things will be done. This helps her understand the added value she will get from Andrew, relative to Alana, that she may not have even realized she was looking for (e.g., getting her financial documents more organized in a digital vault) when she first considered the services of a financial advisor.
Moreover, the above examples demonstrate that discussing how things will get done gives the prospect better insight into what they can expect from the advisor-client relationship. When only addressing what the client needs to do (versus how the advisor will help them get those things done), the advisor doesn’t really help the prospect or client see that they are about to engage in a collaborative and supportive relationship; instead, it can simply feel a lot like getting homework that they have to do all by themselves… which probably doesn’t make anyone want to get started.
Furthermore, many clients see their advisor because they want affirmation of what needs to be done, and have resolved their own question of “What do I need to do?” simply by meeting with the advisor. However, and perhaps unbeknownst to the client, they are really there because they believe that meeting with their advisor is how their problems will get solved. What they truly want help with is not so much identifying what the problems are, but how they will be addressed.
So for financial advisors who want to differentiate themselves and better promote where they can truly offer value to prospects, consider the impact of communicating how prospects-turned-clients will be guided and supported through the financial planning process, and how they will work together with the advisor as they learn to use the tools and strategies available to them – these are opportunities to differentiate and sell value.
Demonstrating Value By Talking More About How Than About What
One strategy that financial advisors can use to focus prospect meetings on the ‘how’ processes that will be used, versus ‘what’ tasks need to be done, is to clearly associate a ‘how’ with each ‘what’ that is offered as a service.
To do this, create a table that includes three columns: “Services”, “What”, and “How”. In the first column, labeled “Services”, list all of the services that are provided to clients. In the next column, labeled “What”, include a description of the outcome of the service. For example, for a firm’s estate planning service, the ‘What’ outcome would be a review of the will or trust. The third and last column, labeled “How”, should describe how the process happens or the way the ‘What’ outcome is derived.
Advisors do not necessarily need to identify a specific ‘How’ for everything that they do (although they can). The key point is more that the advisor should be able to explain the process of ‘How’ the ‘What’ gets done when they meet with prospects to discuss their services.
Click image to download an editable Word document
When fully implemented across the full breadth of the advisory firm’s services, the end result is an articulated value proposition that can be described primarily in terms of how the firm helps its clients, and not simply what the firm does.
For instance, the menu of services below, developed by researchers Grubman and Jaffee, demonstrates how an advisory firm focused on ultra-high-net-worth clientele might describe its value proposition by identifying the ‘Hows’ associated with the ‘Whats’ that the firm offers.
Articulating The ‘How’-Based Value Proposition
Once you have a list of your services and their associated ‘Whats’ and ‘Hows’ in place, start practicing how you will talk about your services from a ‘How’ standpoint, versus simply a description of the ‘What’ outcome. Talk to current clients, a partner, another advisor at your firm, or a colleague advisor at another firm, and think about articulating hypothetical timelines and working relationships.
After all, one of the best ways to figure out whether your (newly updated) value proposition really resonates with the prospects you want to reach is simply to ask them! Ask for feedback about what you have written down (e.g., with some current clients that will give you constructive feedback), and see what resonates with your reviewers (and what does not). By refining the list further with feedback, advisors can create a resource that will guide them in how to describe their services from a ‘How’ point of view, in a manner that will be more compelling to prospects and help them better identify the true value-add of the advisor’s services.
In other words, treat the list of ‘Whats’ and ‘Hows’ as a cheat sheet. Keep it close by and easily accessible in prospect meetings, making it easily referenced when an advisor feels tempted to default into talking only about the ‘whats’. (Fortunately, the more this is practiced, the easier it will become!)
In fact, advisors can consider making their “how”-based value proposition a presentable document that can be shared with the prospect as a tool to guide a deeper conversation that walks through the firm’s ‘hows’ during the very first prospect meeting!
Example 3: Andrew knows that prospects really want to understand How his services are offered, and while he knows he is pretty good at talking about this, he wonders what would happen if he has a deeper discussion about what the prospect sees as valuable within the broader ‘how’.
Andrew decides to give this a try in his meeting today with Tara, a new prospect interested in talking about a recent inheritance.
Andrew: Welcome. Thank you for coming in. Tell me, what is on your mind about money?
Tara: Well, to put it plainly, I just inherited a large sum of money, and I don’t really know what to do with it. I don’t really need the money, so I have thought about doing some charitable work with it, or at least some of it. I just don’t know much about any of that, though. There are some charities I’ve been involved with over the years, and I know I want to give them more, but I am not totally sure how to get started beyond just starting to write some checks.
Andrew: Awesome, charitable work is one of my favorite areas to work on with clients. Yet, as you point out, there can be more to giving than just writing a check. This is definitely something that we can help you with.
[Andrew slides the what/how value matrix across the desk.]
This is a list of all the services we provide. You can think of it as the ‘whats’ that we will be creating together; in your case, the ‘what’ can be a financial plan or a charitable trust. This list also highlights the ‘how’, though. Because it’s not just about what we can make or build, but also how we will actually do it together.
Given your interest in philanthropy, let’s start with charitable giving options and tax considerations and discuss what we do and how we do it.
[Tara scans the document Andrew has shared.]
Tara: Okay, charitable giving. Oh, hmm. This mentions a ‘Values Meeting’. What is a 'values' meeting?
Andrew: The values meeting is pretty cool. We will find a time that is convenient for both of us, and we’ll go through exercises and thought experiments to get a handle on what values are really most important to you. Because again, philanthropy is more than just writing a check, and hoping the charity does something good with it. This meeting helps us to ensure we identify your values, and that your giving strategy supports those values.
Tara: Don’t get me wrong, that sounds pretty neat, but…do we really need a whole hour just to do that? There are a lot of services and other things we can do on this list. Do you have any that take less time?
Andrew: Correct me if I am wrong, but I am hearing that another important consideration we need to pay attention to for your plans and our work together is your schedule. I take it that you are very busy, and so shortening or doubling-up or maybe even removing altogether a certain meeting or activity to get started quicker would be best. Is that correct?
Tara: Yes, these services sound great. I like how interactive this process can be. I can really see how we’ll be working together in the future.
In the above example, Andrew the financial advisor was able to discuss not just ‘What’ services the firm could provide to her, but also the hypothetical timelines, processes involved (the ‘Hows’), and maybe even what ‘done’ looked like with Tara. And through that conversation, it was very easy for Andrew to glean where Tara saw value… and even where to shift attention based on how Tara wanted to engage (and learning that how quickly Tara was able to engage in the process was most important to her). In other words, sharing and discussing the ‘What/How’ document created the opportunity to uncover what is really most valuable to the prospect – whether that consists of What, How, time saved, or something else entirely.
As while we won’t always know what a prospect will consider most valuable – be it time, support, flexibility, or creativity – giving more details about how work will get done creates more clarity for both the prospect and the advisor. In the above scenario, Tara may have also noticed other services that called to her that would have prompted her to switch directions altogether. While she initially stated she was interested in giving to charity, what if she also read something about Dynasty 529 plans and found the idea of giving to the educational needs of her own family more appealing?
The key point, though, is simply that better understanding the prospect’s values not only makes it easier for the advisor to explain how they can address those values, but also a lot more likely that the prospect will become a client!
Although they may not fully articulate it, prospects care not only about what you do, but also about how you do it. Yet, it is not always easy to articulate the ‘how’ when we are generally conditioned to discuss only the ‘what’. Furthermore, it can often be difficult to identify what specifically the prospect values most, as well as the factors they consider when deciding whether to sign on as a client.
By assessing the specific outcomes their services are intended to produce (‘what’ will be provided), along with the processes they use to achieve those outcomes (‘how’ it will be done), advisors will find it easier to communicate their value and will be better equipped to help prospects understand the true value they can provide. As explaining not only the varied services that are offered, but also how the outcomes will be achieved through working together, can be a real game-changer for advisors in terms of speaking the language that will help a prospect ultimately sign on as a client!
I really liked this article, Dr. Lurtz! In addition to explaining ‘how’, something I’ve been thinking about lately is being clear about all the ‘why’s’; why we use that process, why working towards that goal is important to them, why we’re passionate about working on that too. Either way, getting away from purely ‘what’ is advantageous.
Such an informative article. Thanks for sharing.
Great article!!! It’s amazing how much more collaborative the process felt, even as a reader, when describing the conversation where the advisor shared the how not just the what. Another excellent bit of wisdom from you Dr. Lurtz
It is great article, thanks for sharing it.
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Very important to make those connections Meghaan…it can be taken a step further to connect the WHAT and HOW to the WHY for that person and make it really easy for them to see the value of the What and How. The Andrew example above gets to that driven by the prospective client.
When we proactively ask them questions about what they see as most valuable, their opinion on the How for their situation, the timeframe important to them, the challenges they see in getting started and implementing, etc. we will get their WHY and then can connect to that Why as the sales conversation goes forward and a decision is asked for.