The day you wake up and decide to manage your financial advisor business intentionally is the day that you will begin to make progress with your business growth.
I know it’s very easy to go through the year running your business day-to-day, bringing in new clients, investing their assets, managing your staff, and making short term business decisions. The challenge comes not in the day-to-day but in the big picture of where you want to go with your business.
Today were talking about the premium business model for financial advisors.
The premium business model is the concept of presenting a high-end service attractive to a select group of discriminating buyers. Your financial advisor brand image is a vital aspect of the premium business model, however quality is often a matter of personal opinion.
The premium business model pursues a higher profit margin on a lower sales volume. In other words, fewer financial planning clients who pay more, and it follows that when you have fewer clients, you will deliver better service.
The success of the financial advisor premium business model is dependent upon two things:
1.Effective target market selection
2.Quality branding and imagery
The year-end is always a great time to redirect your energies and reposition your firm so today we’ll be looking at these two business model components in detail to decide if it makes sense to update your investment firm strategy in the coming year.
1. Effective Target Market Selection
After working with advisors for many years (since 2004) I’ve noticed that very few proactively target one or more niche markets. This lack of strategic direction leads to unfocused branding and confusion in the eyes of potential clients. Since most prospective clients are seeking an advisor who understands their unique challenges, when they run across an advisor who has a focus and a target market they are much more inclined to contact the advisor.
Secret Shopper Syndrome keeps potential clients from engaging an advisor because they simply can’t “feel the love” due lack of focus and lackluster branding, and therefore they keep looking for an advisor who can move them in some way. By doing deeper work into the needs of their target clients advisors can create brand engagement which will help them develop a more sincere approach in their branding.
By effectively targeting a market, financial advisors can base their marketing strategy around their ideal clients with a marketing message that will appeal to these clients. By focusing on providing value to your target market and branding your service model, you can create distinctive space for your firm in the marketplace.
Questions to ask when developing your target market might include how large is this market and is it worth pursuing? What is the expected growth of this market and is it increasing or decreasing. How much competition exists in this market and can you create your space fairly easily? What is the cost to reach this target market and where do they hang out? Is this market compatible with your vision and values?
Having a target market focus can allow your firm to be more distinctive, encourage referrals from clients and centers of influence, and decrease marketing costs because you’re not out there spending money in too many locations.
2. Quality Branding and Imagery
The second element in the premium business model is financial advisor branding. The more expensive your services, the more you will benefit from a quality brand. And let’s face it, financial advice is not inexpensive. It is however wonderful value for the money, plus the wealthy can afford it more so than the average wager earner, so investing in your brand will provide you a high return on investment. The key is to position your firm as offering value, which you can do by conveying a great message through your Value Proposition.
There are many elements to a successful brand that will be the subject of a future post, but in the meantime, here’s a brand checklist:
- Your Company Name
- Elevator Speech
- Value Proposition
- Branded Process
- Client Service Experience
- Business Corporate Identity
- Ideal Client Profile
- Downloadable Brochure
- Branded Business Cards
- Custom Website
To understand the importance of branding you have to understand how the human mind processes information. Humans are emotional beings and financial planning deals with numbers. In order to create brand engagement advisors need to connect the left-brain which focuses on the numbers with the right-brain which focuses on the emotions.
This means creating your brand Mark (or logo) and your website visuals so that they connect the two and allow people to see the possibilities of what working with you can do for them.
Financial firms are in a unique position to use the premium business model as a growth strategy. What’s needed is a little forethought, some work around target markets, and strategizing brand positioning. Contact me for a consultation to learn more!