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What are the key Value proposition that a financial advisor can provide? While an INVESTMENT ADVISOR can offer Superior Investment Selection, better investment analysis, effective diversification and risk management, built on the foundation of a quality investment process, all in pursuit of the investment holy grail: alpha. Value proposition, would therefore be “Return On Investment" (ROI) in the form of higher returns over and above what was paid in fees. Value proposition- The process of evaluating an investment advisor. Whether he/she is delivering the desired ROI is rather straightforward. Investment results can be measured, quantified, benchmarked, and evaluated.

When it comes to financial planning, though, defining a value proposition becomes far more difficult. After all, trying to sell an intangible service is difficult, when prospective clients can’t see or feel it (as they could a tangible product). It becomes exceptionally difficult to differentiate an “invisible" service that the prospective client has never experienced in the first place. While some focus on traits like the expertise and experience of the advisor as the “value" of working with him/her, that’s really more about the traits of the advisor than the actual value to the client. For others, the value proposition may be defined in more client-centric terms – benefits like “we provide you [financial] peace of mind" – but it still leaves something to be desired. How much peace of mind can an advisor give, really? And how exactly do you measure that to substantiate a track record of success?

Client Centric!

Articulating the true client-centric value proposition of financial planning. Framing it in the context of an (admittedly still unmeasurable) goal of improving a client’s “Return On Life" (ROL, as opposed to the traditional approach of trying to improve the client’s portfolio ROI), •the six key value propositions of financial planning are that we provide:

Organization

  • We will help bring order to your financial life
  • Getting your financial house in order -at both the “macro" level of investments, insurance, estate, taxes,
  • The “micro" level of household cash flow.

Accountability

  • We will help you follow through on financial commitments
  • Prioritize your Goals
  • Show you the steps you need to take,
  • 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
  • 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
  • To be financially prepared for them
  • By regularly assessing any potential life transitions that might be coming
  • Creating the action plan necessary to address and manage them ahead of time.
  • 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.
  • 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
  • On your behalf (with your permission), and offer transparency around our own costs and compensation.
  • Clear Picture!
  • Hope you have got a clear picture of what the intangible service of financial planning is meant to provide,
  • Why it’s worthwhile for consumers to pay for a financial planner

Credit

Thanks for Michael Kites and Mitch Anthony
At AICPA Personal Financial Planning conference, one of the general sessions was led by financial life planning pioneer Mitch Anthony, who put forth what may be the best set of terminology I’ve ever heard for articulating the true client-centric value proposition of financial planning. Framing it in the context of an (admittedly still unmeasurable) goal of improving a client’s “Return On Life" (ROL, as opposed to the traditional approach of trying to improve the client’s portfolio ROI)

Source: https://www.kitces.com/blog/6-key-value-propositions-a-good-financial-planner-can-provide-for-clients-seeking-a-better-return-on-life/
https://youtu.be/ZuhF1meAlGc

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