Practice Management

"What Do You Do?": Compelling Value Propositions for Financial Advisors As your advisory practice grows, you will find yourself having more and more conversations about what it is you do. These conversations are key to growing your network, your client base, and ultimately your business, so it’s important that you can describe your practice clearly, confidently, and concisely. If you can articulate the value you bring to the table, and if you can do so in a way that differentiates you from your competition, these conversations become much easier. Plus, it makes your marketing efforts more effective, from designing your business cards to writing your website copy. In this guide, we will look at examples of how to articulate your value proposition as a financial advisor (answering the question, “What do you do?”), as well as how to form your unique selling proposition (answering the question, “Why should I work with you, specifically?”). Value propositions for financial advisors A value proposition is a simple statement of what you provide to your clients. Most companies have a generic value proposition built into their business category. For example: Grocery stores provide value to consumers by giving them a single place to buy different types of packaged goods in consumer quantities. (Otherwise, people would have to create relationships with dairies, produce providers, and large CPG brands themselves.) Dentists provide value to patients by cleaning and inspecting mouths in ways that consumers wouldn’t otherwise have the means, equipment, and expertise to do. Law offices provide value to clients by renting out their knowledge of law and policy, saving clients the time and effort of learning to practice law (and avoiding the costs of accidentally handling things illegally). Likewise, in the financial advice space, the value you provide to your clients comes from several generic sources. These sources fall into two major buckets: financial value and extra-financial value. Financial value vs. extra-financial value Financial value is the most straightforward benefit you provide. It simply refers to the ROI that your clients realize through working with you. This includes generating returns, avoiding losses, managing and optimizing deposit limits, etc. Extra-financial value is more expansive. This refers to all the “extra” benefits that someone enjoys besides the ROI—it’s what some financial advisors have begun to refer to as ROL, or “return on life.” This includes value sources such as: Planning: objectively envisioning what your clients can accomplish. Your clients can be inspired to change their investing, spending, and saving habits simply because you helped them set a vision and make a plan to realize it. This can create feelings of confidence and security that could be difficult to come by otherwise. Organization: helping your clients know if they’re on track. By organizing your clients’ financial lives, you give them the assurance that at any point in time, they can quickly check in to see if they’re on track to meet their goals. You also make it much easier for them to access information they need for tax reporting, estate planning, and other wealth management activities. Accountability: keeping your clients on track. Just like a personal trainer holds their clients accountable for reaching their fitness goals, you’re the voice that reminds and encourages your clients to work toward their financial goals. Expertise: educating and counseling your clients. You’re the financial expert, so your clients don’t need to stay abreast of the stock market, monetary policy, fiscal policy, inflation, and the like if they don’t want to. Instead, you keep them informed on what they need to know, and you’re available to educate them on what they want to know. Almost every financial advisory practice will provide value through a blend of what we’ve listed above. However, that blend will vary from advisor to advisor. Some advisors will be stronger at building tailored plans, while others will focus more on client education. So while all advisors more or less provide value from the same sources, individual value propositions will vary from practice to practice. How to write your value proposition Writing a value proposition should be a simple process. The statement doesn’t need to be fancy, and it can be as long or brief as you want. But some criteria separate a useful value proposition from a useless one: It should be easy for your audience to understand. Unless your target market is the extremely financially literate, you should avoid technical in-speak. It should be easy for you to remember. Although you can use your value proposition for multiple marketing purposes (more on that later), your value proposition will help you most if it can simply answer the question, “What do you do?” As an RIA, you don’t want to come up with a new answer to that question every time someone asks it. Your value proposition should be your immediate, go-to response. It should sound natural. Don’t treat your value proposition like a composition assignment. Use words that you would use in a regular conversation. Instead of “I optimize and organize my clients’ portfolios so as to maximize return on investment and realize their financial goals,” you might try, “I help people set financial goals, get their finances in order, and keep them on track for reaching their goals.” It should be verifiable. If someone asks you if you have examples or if they ask how your offerings work, you should be able to naturally bring up real-life scenarios that explain or illustrate the value you provide. Example value propositions for financial advisors Your value proposition needs to communicate the benefit you provide to your clients and how you provide that value. Here are some example value propositions: “I help people get their financial lives in order: I manage their investments so that their money is working toward their long-term goals without them needing to worry about it.” “I’m like a counselor, but I focus on people’s finances. I keep my clients educated on how the market works and help them make objective decisions with their money.” “I keep people on track with their financial goals: my clients and I work together to set expectations and milestones, and I help them keep their eye on the long-term.” Ways to use your value proposition As we’ve discussed, your value proposition can be helpful primarily when describing what you do in conversations—especially in the early years of your practice. However, your value proposition will come in handy when: Creating marketing collateral. Your business cards, your letterhead, your email signature, bios and descriptions for community events and sponsorships, your Google My Business description—all the little bits of text you may need to write to describe your business become easier to create when you’ve already articulated what you do. Crafting your social profiles. Your LinkedIn profile, Facebook page, Instagram account—all the places where you describe yourself can benefit from already having articulated your value proposition. Onboarding clients. When you bring a new client in for that first meeting, your value proposition can function as an outline for the ground you need to cover. This will help you set expectations for your client and make sure they are aware of all the services you provide. Organizing your website. If you have articulated what you do, then deciding what pages and content you need on your website becomes much easier. A comprehensive value proposition can be a good starting point for mapping out the content and navigation for your website. Onboarding employees. If you’re ready to hire new talent, your value proposition can be a vital tool for giving new employees an idea of your firm’s goals and what they will be helping your clients accomplish. (Plus, it will help them answer the question, “What do you do?” when it comes up—amplifying your word-of-mouth marketing efforts.) Articulating a unique selling proposition. You’re not the only financial advisor in your market, and knowing what you do is the starting point for explaining why someone should choose to hire you instead of the competition. This last part is important, because a value proposition is just a start when it comes to communicating your value as a financial advisor. Once you have your value proposition articulated, you will want to move on to writing your unique selling proposition. Unique selling propositions for financial advisors While a value proposition describes how your practice creates value, the unique selling proposition makes the case for why you’re the right advisor for your target market. Value propositions are descriptive; unique selling propositions are persuasive. The unique selling proposition (which marketers usually shorten to “USP”) is typically a one-or two-sentence statement that should accomplish the following: Resonate with your target market’s emotions. The USP should involve an emotional appeal: you want to tap into how your most satisfied clients feel (or how you want your future clients to feel). Differentiate you from “the rest” of the financial advisors. This doesn’t need to be a unique product offering. But your unique flavor should be evident when people read or hear your USP. If you focus on helping… people in a certain profession (e.g., medical professionals), or people from a certain background (e.g., first- and second-generation immigrants), or people with certain like-minded values or practices (e.g., homeschooling families), or people facing certain challenges (e.g., newly divorced parents) … … then this should be evident in your USP. It could even come down to a different tone or energy that you bring to your client meetings (e.g., you might be the humorous, nerdy, and/or outdoorsy FA in your city). Plainly state how you help your clients. Your USP should highlight the value you bring to your target audience. This is much easier to do after you have developed your general value proposition. How to use your unique selling proposition Developing your USP can be beneficial for fleshing out your marketing strategy. It bridges the gap between what you do and why people choose to work with you. Once your USP is written, you can use it in various ways: Website homepage copy. It can be tough to figure out exactly what to say on the homepage of your website—but if you have already articulated your unique selling proposition, most of the work is done. Your website homepage is the perfect place for your USP to live: it immediately tells your website visitors who you serve, what they can expect, and why they should choose you. Networking with competitors. Unless you are the only financial advisor in your community, you will likely find yourself at networking events with other advisors. If you know what separates you from the rest of the pack, then networking becomes a bit easier. Not only can you naturally differentiate yourself from the other advisors, but you can also differentiate yourself to the other advisors. It’s easier to converse with and learn from other people in your field if they know you’re not chasing their target audience. Advertising copy. Should you start spending money on ads, your USP will help you target your spending on the right audience. It can also increase your return on ad spend, as you won’t be advertising generic services—you’ll be promoting something uniquely appealing. Grow your advisory business with Betterment Your value proposition and USP are two key tools you can use to grow your business. By articulating what you do and why people should choose you, you give yourself an advantage in both your everyday conversations and your marketing efforts. But this degree of intentionality can take time. And processing the demand that comes with effective communication takes even more time. One way to optimize your time as you grow your advisory practice is to invest in tools that reduce hours spent on investment management and back-office admin. If you’re looking for a better way to grow your business, Betterment for Advisors can help. Our platform helps you deliver personalized model portfolios to your clients and manage your entire practice—which means you can spend more time crafting your message, building relationships, and bringing in new clients.

How to Be a Successful Financial Advisor: 8 Tips Success doesn't happen overnight, but following these tips can help speed up the process (and avoid key pitfalls). Finding success in any profession is one of life's great joys. Yet, it can be hard to identify the necessary milestones in your own journey that add up to the definition of success. As we'll discuss in this article, "success" is the outcome of a million little decisions and actions over time. As an advisor, you can attest to the reality that most clients have financial baggage. If you were advising me, you'd see pretty quickly that my career in personal finance is a strong reaction to growing up without money. We all have something driving us and, for me, it’s a crippling fear of living without financial stability. Luckily, our past experience can be used for good if we acknowledge the role it plays in our decision-making. For me, that fear created an unwillingness to do the wrong thing once the right thing becomes obvious, which led me to co-founding and scaling a fee-only RIA before ultimately selling to a larger firm. Today, I bring that experience to Betterment for Advisors, where I consult with our clients about the ways that they can use our tools to make them more successful as they build and grow their practices. If there is one lesson that I would impart to a financial advisor who is asking themselves how to become more successful at what they do, the simplest and most succinct advice I can give is to have vision. In other words, the best place to start is with an articulated vision of your ideal future—from there, you can work backwards to identify your next step in that journey. But that can be easier said than done! So, let's consider a few ways to chip away at getting there with 8 day-to-day tips that'll set you down the right path. But first – what does it mean to be a successful financial advisor? When you ask yourself What does a successful financial advisor look like?, there might be a few categories that come to mind. We all know that financial advice is about merging qualitative with the quantitative and that's true when finding success, too! First, we consider marking success for an advisor by the science—AUM, the number of clients you serve, or even the size of your staff. But in reality, all of these are extrinsic motivators. Meaning, they are markers of success to others looking in. The other side of success, and perhaps the more important side, is more intrinsically motivated—because success only means something if you feel successful yourself. And often, as advisors, we find this in the relationships we build with our clients. To be a successful financial advisor, I believe a few key traits are required. Five traits of a successful financial advisor Be accountable The first trait of a successful financial advisor is accountability. In order to be a successful financial advisor, you have to be accountable to your clients and therefore, hold yourself accountable for their success. Anyone can make suggestions to a friend about what to do with their money, or anyone can read a Reddit thread about trends in personal finance. But the difference for a client working with a financial advisor is that they have a partner with whom they can entrust their financial futures and know they have their best interest at heart. Seek empathy The second most important trait is empathy. Advisors are often present for the most momentous times in a client's life—marriage, having a child, buying a house, caring for an ill or elderly family member, losing a loved one. So, practicing empathy and really meeting clients where they're at emotionally can mark the difference between a good and a great financial advisor. Advisors are people, too. Make a practice of sharing personal anecdotes and mistakes you've made in the past with your clients. This will give them permission to relax and trust you more quickly. Stay curious Curiosity is also key. Often, getting at a client's financial goals can be tough. Asking a simple question like What are your goals? can lead to simple answers, but when you dig in, every person's vision for their future or financial fears has a ton of nuance. Separately, staying curious when exploring new investment vehicles is also crucial. When, for example, Crypto became a newsworthy asset class, the curious advisor is more poised to look into and learn about the asset’s complexities in order to give the best advice to their clients. Be intentional A successful financial advisor is also intentional with their time and energy. Not only can you have various clients vying for your time and attention, but your personal life can also take a back seat when you build such strong and deeply personal relationships with your clients. Remember that burnout helps no one! To be in it for the long haul, advisors need to learn how to best dedicate their time to specific clients, tasks, and, ultimately, aspects of their lives. Teach! Finally, the best advisors are also teachers. Learning about the ins and outs of their money movements often brings clients comfort and ultimately establishes trust. Similarly, in order to scale a successful practice, a strong advisor needs to also impart their practices and philosophies onto their employees. The better an advisor can constantly be teaching (and learning!), the more successful they will be. I'm all of these things – what's next? So, you nailed the art of being a great advisor and you've found some success, but now you've got a firm that you are trying to scale and grow. Next up, let me share 8 tips for building a successful practice. Tips for building a successful practice Automate more processes to save time If you want to optimize the hours in your day, automate! Tolls on the road to success are paid with time, but there's never been a better time to build an efficient financial planning practice. With the right tools, data collection and analysis, portfolio management, and even scheduling can all be completely automated at a minimal cost. Anything that doesn't need to be done by a human should be done with technology. Craft a scheduling system that you can stick to Take being intentional with your time to the next level. Live and die by your calendar. Seriously. This is the most precious tool you have in your toolbelt. Make a habit of looking at your calendar every morning and filling every empty time slot with something intentional. Schedule time to read, schedule time to eat lunch, schedule time to write blogs or social media posts – and then actually do it. Don't waste the time you have or fall victim to distraction as a result of no direction. Avoid the temptation to hire help too early I've seen too many advisors (myself included!) find success early and hire too quickly because they believe their time is too valuable for mundane tasks. Well, it is, but hiring someone shouldn't be your first instinct because… technology! Spend some valuable time researching technology solutions that cost less than a full-time person and increase efficiencies before hiring help. Your time is certainly worth money, but make sure that you are truly out of time before you buy more. Plus, hiring, onboarding, and training can often take up more of your time for at least six months before that investment pays off. As you hire, make sure you have enough time to make that person successful and, if you don't, see how technology might be able to help instead. Embrace rejection Timing is everything. "No" often has nothing to do with you and everything to do with that prospect's individual circumstances or past experiences. The key isn't just about getting "yesses," but getting a "yes" or "no" from every prospect as quickly as possible. And you will hear "no" more than "yes"—that's just the nature of our business. But nothing is worse than ambivalence or inaction. Don’t focus on the decision the prospect makes, but rather your ability to bring them to a resolution. Remember that you are an expert Even if you're just getting started in your career, recognize that the prospect or client is seeking your counsel because they know less about financial planning than you do. Let that empower you, because you just might be the most important voice in their financial life. Look to industry leaders and peers you admire for advice Once you know what success looks like for you, find people who are already there and kindly ask for some of their time. The best thing you can do is learn from those who have the things you want. In addition, schedule time to read and avoid the temptation to use that time for other things. This is an area where social media can be a great networking tool. While Twitter, for instance, can certainly be a black hole of distractions, there are an exceptional number of amazing business leaders sharing information on the platform every day. Avoid decision paralysis when you can As advisors, it's our nature to analyze every decision. But when it comes to building a business, you'll find that the formula is actually "ready, fire, aim." Today is about action—you'll have plenty of time to refine your practice tomorrow. Think of your practice as a "daily driver" Identify your ideal client's needs, and structure your tech stack, client service model and fee structure, in such a way that it gets you from point A to point B with that ideal client as quickly and efficiently as possible. Do not waste time building solutions for the 10% of clients who do not fit your focus. Now, go out there and go get 'em! Unfortunately, there is no repeatable recipe for success. Not only does success look different for everyone, but getting there is an undeniable combination of hard work, good timing, and a little bit of luck. What you can do is focus on the things you can control—your actions and commitment to the process.

4 Ways to Wow Your Clients in their First 90 Days We've compiled some top practices that can help you craft a delightful experience for new clients, every time. Onboarding is a critical moment in your advisor-client relationship. It’s the time for you to ensure that your new client feels comfortable and confident in their decision to work with you. It’s also a key inflection point for ensuring long term client retention. Advisors often lose the trust of their clients by overpromising during onboarding and, over time, advisors’ communication style impacts whether clients stick around. Post-pandemic, nearly 9 out of every 10 clients consider their advisors’ communication frequency and style when deciding whether to retain their services (and when making referrals to friends and family). We've compiled some best practices for firms looking to better communicate with clients and create a delightfully smooth onboarding experience, every time. #1: Lead with your clients' values. At the very beginning of your relationship, it’s essential that you take time to understand your client’s unique financial goals. Building a goals-based financial plan is now an industry standard practice. In fact, helping “maximize a client’s potential for meeting life goals” is at the core of the CFP® Board’s definition of financial planning. It can be critical, though, to also put in extra work to understand your client’s individual values. Whether it’s prioritizing environmental sustainability, supporting extended family, or charitable giving, financial decisions can be incredibly emotional. Communicate to your client that you’re there to help guide them and to make sure their money is aligned with their core principles and beliefs. Taking the extra time necessary to discuss and nail down your client’s values—and what they hope to get out of their work with you—can help you foster a deeper relationship early on. Clients can often have a difficult time identifying their financial goals, let alone clearly defining, prioritizing, and saving towards them. Nick Holeman, Director of Financial Planning at Betterment, recommends doing a little research about your clients in advance: “Having these data points on hand will help you get your clients thinking in the right direction. It also demonstrates to your clients the personalized experience of working with you.” #2: Prioritize transparency. Committing to transparency can help you impress new customers and drive brand loyalty in the long run. According to recent consumer surveys, 88 percent of consumers say that authenticity is a key factor when deciding what brands they support, and 46 percent of consumers say that they would pay more to purchase from brands they trust. Companies may shy away from being transparent to achieve some perceived benefit in the short-term. If you hope to earn long-term client loyalty though, it’s important to pursue transparency with your clients as often and early as possible. Of course, as a business offering paid services, you should make sure the following information is clear and readily accessible: Your fees (What you charge): Whether you leverage an asset-based, tiered, or fixed fee pricing model, your client should have a solid understanding of your service fees. In any conversation around fees, it’s important to first make sure your value proposition is clear and that your clients understand what you bring to the table. Your billing cadence: Communicate what payment schedule your client can expect (monthly, quarterly, etc.). But don't overlook these other key questions: How often will you meet or check in with your client? What communication methods do you and your clients prefer? Between video calls, text, and email, define what works best for this relationship. What services will you offer (and what will you not offer)? It’s important to provide an accurate summary of the scope of your services upfront. Outline areas where you and your team might not be spending time to avoid creating false service expectations. By setting clear expectations from the start, you can ease client skepticism and start to build credibility. #3: Cut out paper and manual workflows. It’s 2023 and clients expect seamless experiences across digital channels. (In fact, 40% of investors say digital access has become a greater priority following COVID-19.) Paper-heavy processes requiring wet ink, multiple rounds of back-and-forth, and hand-carried mail no longer cut it. Going paperless becomes particularly relevant at the onboarding moment. If your firm is taking advantage of software to handle sending and collecting electronic agreements during the account opening process, that’s a great first step. Too often, though, these services still involve multiple email touchpoints that can feel disjointed and overwhelming to a new client. Explore solutions that can help you open new accounts across channels as possible. At Betterment, our technology offers built-in digital client onboarding to help advisors open accounts completely online, with minimal lift required from your client. At account opening, clients receive one email touchpoint with all information they need to approve your firm’s set up—a process that takes just minutes. Firms can leverage digital onboarding to impress clients who otherwise may be used to clunky or paper-heavy experiences with other wealth managers. Digital, minimal effort account opening can even help firms reach entirely new client segments. Matt Lohrius, lead advisor at Ritholz’s Liftoff Invest business, believes going paperless is critical to meeting demand from accumulation phase investors: “For Liftoff, it’s just huge from a technology standpoint: opening accounts, transferring money from other custodians, depositing money, linking a bank account. Everything is so easy and intuitive for the client.” Non-paid client of Betterment. Views may not be representative, see more reviews at the App Store and Google Play Store. The bottom line: Replacing manual onboarding tasks can help you spend less time on routine logistics and more time personalizing advice. When you free up more mental energy to focus on better service, your clients will take note. #4: Over communicate. Onboarding a client is more than a one-and-done touchpoint. For many clients, onboarding presents a lot of change and uncertainty—especially if this is their first time working with an advisor. Over the course of your client’s first 90 days, consider setting up a series of onboarding meetings. A schedule can help create structure, demonstrate your confidence, and convey to your client that you value their input. (Tip: As you hire and expand your team, it can be helpful to standardize this client onboarding meeting framework across your firm). The series might look like: Initial get to know you: Time for you to learn about your client and their family, likes/dislikes, values, and ambitions. The end of this introductory meeting is a great time to send a client questionnaire. A deeper evaluation of their financial state: Time for you to collect more detailed information on the clients savings, current investments, debts, income, risk tolerance. The financial plan: A meeting to present your proposal for your client’s unique financial plan. Follow up meeting: Check in with your client 30 to 45 days after the initial plan conversation. Progress meetings: After the initial follow-up, set a couple future dates to discuss progress made toward goals. The importance of the fifth step above cannot be overstated. In fact, the key to growing a loyal client base is consistent communication. Staying connected regularly can help you gain a more thorough understanding of how your client’s objectives may have shifted over time. Conversely, lack of communication sends the wrong signal to clients—and, overtime, might lead to losing the client relationship as their perception of your service value declines. When it comes to effective communication, attitude is everything. Make sure you bring positivity to each interaction and illustrate why you love what you do. Being genuine and ready to engage in small talk beyond finances (and, of course, listening more than you speak) can help you and your client get the most out of these meetings. Frequent communication is not limited to in-person interactions. Your firm’s online presence and branding are also an important arena for exceeding customer expectations and rivaling your competitors. Some steps to consider taking: Connect with new clients on social media. If you have a newsletter program, set up a system to routinely add new customers to the list. Invest in a website that speaks to both prospective and existing clients. Writing a weekly blog is a great way to distribute updates and market commentary regularly. Consider hosting webinars or an annual virtual event. Come holiday time, make sure you have a budget for a client gift or handwritten happy new year card—it’ll be a great cue to get them thinking about the year to come and your goals together.