I have recently had several conversations with financial planners regarding client review meetings in these times of volatile investment markets and higher probability of negative returns.
Most financial planners I work with do not hold themselves out to be investment advisers specifically, though it is through this lens that some clients view their financial planner. The conversations I have typically move on to talk about their broader value proposition and how they articulate and present & deliver on this to clients.
Communicating the broader value seems to be the hardest part for many.
How do we quantify the value of non financial services? How to you adequately communicate value and benefits of such an intangible?
There is a very interesting article from well known US based financial planner Michael Kitces that may help us.
How do you describe the ways a financial planner can articulate the “Return on Life” (ROL) rather than the typical “Return on Investment” used for their portfolio?
In a 2015 blog post Michael Kitces wrote about what pioneer financial planner Mitch Antony had “put forth what may be the best set of terminology heard for articulating the true client-centric value proposition of financial planning.” The terminology is contained in the following “six key value propositions of financial planning” that advisory businesses can use to articulate the ROL value they offer to clients.
Mitch Antony boils it down to 6 key phrases that financial planners provide:
Organisation, Accountability, Objectivity, Proactivity, Education and Partnership.
- Organisation. We will help bring order to your financial life, by assisting you in getting your financial house in order (at both the ‘macro’ level of investments, insurance, estate, taxes, etc, and also the ‘micro’ level of household cash flow).
- Accountability. We will help you follow through on financial commitments, by working with you to prioritise your goals, show you the steps you need to take, and regularly review your progress towards achieving them.
- Objectivity. We bring insight from the outside to help you avoid emotionally driven decisions in important money matters, by being available to consult with you at key moments of decision-making, doing the research necessary to ensure you have all the information, and managing and disclosing any of our own potential conflicts of interest.
- Proactivity. We work with you to anticipate your life transitions and to be financially prepared for them, by regularly assessing any potential life transitions that might be coming, and creating the action plan necessary to address and manage them ahead of time.
- Education. We will explore what specific knowledge will be needed to succeed in your situation, by first thoroughly understanding your situation, then providing the necessary resources to facilitate your decisions, and explaining the options and risks associated with each choice.
- Partnership. We attempt to help you achieve the best life possible but will work in concert with you, not just for you, to make this possible, by taking the time to clearly understand your background, philosophy, needs and objectives, work collaboratively with you and on your behalf (with your permission), and offer transparency around our own costs and compensation
Mitch Antony has created a well articulated framework for a client value proposition that would suit many financial planners’ business model.
Word of caution – whilst it is easy to publish these phrases on a website or in other collateral it is another matter to be able to deliver on these value components. It would be sensible to conduct a review of your internal processes to ensure you have the capability to deliver on your promises.
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