April 2016, Boston. According to new research from global analytics firm Cerulli Associates, a well-defined value proposition can set advisors apart and spur growth in the United States.
“Advisors need to identify their ideal target market and define a value proposition that is compelling to that audience-the same as any business venture in any industry,” comments Kenton Shirk, associate director at Cerulli. “For example, an advisor with a defined value proposition might specialize in working with corporate executives who are concerned about planning needs such as managing concentrated stock exposure, minimizing taxes, protecting assets, and maximizing tax-deferred savings in retirement plans.”
These findings and more are from the 2Q 2016 issue of The Cerulli Edge – Advisor Edition, which examines business development and the value of strategic alliances and advisor events.
“An investor considering a new relationship with a financial advisor wants to understand the value that a potential advisor can offer before committing to a long-term professional relationship,” Shirk explains. “Given the difficulties many investors face when evaluating potential advisor relationships, they frequently seek recommendations from trusted family members, friends, and professional providers who can vouch for an advisor’s trustworthiness, expertise, and ultimate value. Advisors need to articulate a compelling value proposition to not only prospective clients, but also to their referral sources. Because referral sources are the largest source of new business for advisors, it is critical that they understand the advisor’s ideal client profile and the value proposition that should be communicated to them.”
“Defining and communicating a value proposition may be increasingly important as conversations about low-cost digital advice offerings gain awareness among mainstream investors,” Shirk explains. “As the ‘robo’ threat stirs conversations about the cost of advice, it is more important than ever for advisors to articulate their value.”
“Advisors who take the time to define their practice’s value proposition often feel more confidence and conviction when communicating that message,” Shirk adds. “This confidence, in turn, injects more passion and enthusiasm into conversations with prospects, making the message more compelling.”