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?
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:
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)