It's now been more than 35 years since the laws changed with respect to accountants and the offering of financial planning services. At the time, the noise was mainly about contingent fees and commissions. Today, most progressive accounting firms have ditched their securities and insurance licenses and act as pure fiduciaries, offering advice and sometimes asset management for a fee.
The wealth management space is crowded. When I shut down the satellite radio in the car for streaming, I tuned into the good old news radio for giggles. I was blown away that most of the ads were dominated by financial advisors. Some were plain old advertisers and others were promoting their show (which is generally undisclosed paid advertising) or their free report showing you how to conquer the financial world. It's clear to me that radio stations are less interested in quality programming to boost their ratings and more preoccupied with selling their time to promoters who see that as the best way to convince an unknowing public they are the ones to entrust their family fortune to.
Top that off with the huge budgets that the large international firms have for golf events, pro sports and primetime TV, and your clients see nothing but a huge come-on from hungry financial firms looking to be your clients' go-to person. Whether they believe it or not is unknown, but have you noticed that clients will sometimes ask a question that was ripped off directly from an ad they may have seen?
The ball is in your court to shape the view that your clients have of you. Have you ever surveyed your clients to see what they think you do for them? How they feel about your firm? What would they like to see more of and what they'd like to see added to your suite of services? Probably not. Progressive wealth management firms do, so why wouldn't you? Especially when you know that they are direct competition, every day, to your firm's wealth management practice.
Before you can assess your competition, you need to know who you are. And not from your perspective, but from the perspective of your clients. To that end, as you may have guessed from the previous paragraph, I suggest you hire an outside firm to assess the view that your clients have of your firm. This initiative should not be inexpensive if done right. This is the first invaluable step when beginning to shape the view of your firm by your clients and the outside world in general. If you don't do this, literally everyone who calls themselves a financial advisor is indeed your competition. If you do survey your clients, and then implement actionable steps to promote that brand and the deliverables you provide, none of them will ever effectively compete with you.
Beating the comparisons
Allow me to give you examples of where your clients are comparing you to others that they've worked with or that they have heard of through their own promotional campaigns.
Have you ever been in a vibrant discussion with your clients over performance of investments? Don't get me wrong. We all have that conversation occasionally. But if that conversation for your firm is more regular than an isolated situation, you've got a problem. If your clients hear the BS slung by large firm advisors that their investment research is second to none and that they have offices and resources all over the world to corroborate data and make the best decisions for them, how can you compete with that? You can't. So come up with a better answer.
Some of those answers are straight-up honesty. Something like this: "You know we do not have offices and resources all over the world. But what we do have is great technology. For a fee I can access the research of any firm that I want."
But taking it a step further, it is not likely that your firm really does intense market research, so come up with an honest answer that really reflects how your firm would manage client portfolios. If you haven't taken the training offered by dimensional fund advisors, take it. It is the best training I've ever seen on the history of markets and what makes for a successful portfolio over time.
For our firm, this is simple. We use the research of a few good sources and a hard dose of reality. The reality is what really shows how authentic you are, and that reality is this: Markets go up and markets go down. All markets do not act in lockstep, although they may at any specific point in time. Our research has led us to conclude that no investment manager in the world actually outperforms their benchmark every year or throughout a full market cycle. So rather than chasing winners and losers, we establish a diversified portfolio covering many bases. We will occasionally overweight or underweight certain areas when it appears clear that a specific sector or asset class should be ignored or embraced.
Follow up your process with setting expectations. Show them how this collection of investments has fared in the past — stating, of course, that past performance is no guarantee of future results (good or bad) and that you are targeting to reproduce the long-term results from the portfolio constructed. Some of the research firms or product manufacturers have wonderful educational material illustrating this. These trainings can be used for your staff as well as clients.
With market performance looking pretty good lately, a lot of promoters' dollars are talking about guarantees and trying to scare the crap out of people who lost money in 2022. When a financial advisor uses the phrase "guarantees," you and I know that is code for annuities. But your clients do not know that, and they may be listening.
Communicate, communicate, communicate
You can figure out how to best position your firm for prospects or from clients questioning your services or results. This is best done from an offensive position rather than one of defense. Do not wait to be grilled; instead, be on the offensive and have your branding campaign address the benefits of working with your firm in every moment a client is thinking of you.
That brand, however, must include a proactive and holistic approach, or else you still run the risk of sounding like everyone else. I'm blown away by how many new clients we meet that are happy to rid themselves of their current CPA and financial advisor relationships because of a lack of communication and a less-than-holistic approach.
Integrate your proactive and holistic services into your firm's marketing and communications plan. Many accounting firms with wealth management divisions actually send a newsletter that reeks of an accounting firm. Articles about new tax laws, rules for financial reporting and other traditional A&A services, and nary a word about wealth management or family matters. This is not optimal if you are trying to compete with others who are only wealth managers or only CPAs.
Your newsletters should not be tax- or accounting-focused, but client-focused. The subjects contained in your newsletter can talk about all the above, but if your clients don't get the feeling that you are writing to help their financial future, you're going to lose them. They are interested in reading about their financial future and not so interested in reading about the stuff that they hire you to do for them.
Your website also needs to support the firm you want to be and not the ones your clients see you as. Keep that website current, frequently publish new content through it, and make sure your wealth management services have a prominent place on the site. Many of your existing clients may not even use your website, but they could with a little effort on your part. Prospective clients will only find your firm if the website is current, and you occupy a good spot in the search engine ratings. Ranking high in search is not my specialty, but I know that current content helps that greatly.
A key feature on your site is your portal, the secure place for uploading and viewing important information. This should be easily accessed through your website and can also contain details about their financial situation, such as a balance sheet, the portfolio and important documents. Your homepage should also be the place where your newsletter is housed, making it easy for clients to jump around if they'd like.
The last part of helping to shape the vision of your firm is the easiest. It is the reinforcement of your written words when you are face-to-face with your best clients. All the marketing consultants and search engine optimization in the world won't do a bit of good unless those messages are reinforced with face-to-face meetings. To do this, staff must be trained, and partners' communications should be intentional.
To make sure this happens, insist that all members of the firm include an agenda item for all appropriate meetings regarding something relevant to wealth management. Don't be shocked when the client looks you in the eye and says, "Why doesn't my advisor talk to me about that?"
When you hear those words from your clients, the wealth management engagement is yours to lose.
