Value exchange runs deeper for independent wealth managers

Margaret was on the fence. A wealth management client since shortly before her husband passed away, still in his mid-50s, at the end of 2014, and now on the verge of retirement, she wondered whether her financial advisor was doing anything to prepare her for that.

In short, Margaret wasn’t sure her advisor was giving her sufficient value for her money. Retirement is a big step, and it requires money. Did she have enough? She expected answers, a strategy — especially in light of the pandemic, which was raging at the time.

She was mulling an exit plan when her advisor surprised her with an email congratulating Margaret on her imminent retirement, providing a broad plan on several different timelines, and suggesting ways to maximize her income while minimizing her tax bill. The advisor also emphasized her availability for a series of Zoom meetings with Margaret over the next few weeks.

A COMPLETE TURNAROUND

Margaret welcomed the gesture. She was impressed her advisor had taken the time to reach out with a (more or less) timely reminder that they had work to do — together — to prepare for the post-work phase of her life. In fact, she marks that outreach as the real start of a relationship she now considers vital to her financial well-being.

Margaret’s story is a lesson to wealth managers. The message her advisor imparted at the eleventh hour did the trick, but was an unnecessarily close call. While advisor-client relationships thrive where advisors can establish trust, communicate mission and values, provide financial insights, and stay generally engaged, those positives are diminished where that effort isn’t grafted into every aspect of the advisor’s marketing and client communication efforts.

We’re talking about “value-exchange” marketing.  

In wealth management, trust is vital for attracting and keeping clients. So, a successful value exchange requires more than just trading sound planning and good advice for money. It requires that wealth managers demonstrate their value as a matter of consistent policy and procedure to build the trust needed to improve the client’s present and future financial well-being.

In other realms, the value exchange in marketing can be as basic and overtly transactional as swapping an email address for access to content, free trials, discounts and other incentives offered by organizations in hopes of establishing engagement with consumers.

STANDING OUT, FOR GOOD

But in wealth management, the value exchange runs deeper. Instead of an obvious quid pro quo — “this for that” in English — wealth managers must provide incentives in the form of life-changing improvement. While that’s hard enough, it must also be backed by messaging that states and restates the enduring value of this outcome.

Value-exchange marketing can also help wealth management firms underline their competitive advantages over rivals. Providing singular and standout services, content and outcomes is great, of course. But highlighting that work in ways that inform all types of outreach, from ad campaigns and social media posts to emails and phone calls, is a must — especially in a marketplace prone to distractions from “shiny objects” like AI, digitalization and other effects of technology.

And as more advisors opt for independence in RIAs, firms that can demonstrate their value will stand out from the crowd.

WHAT CAN YOU DO?

Here are four practical steps wealth management firms can enact to create a strong value-exchange strategy.

1. Establish trust through transparency. Be honest and specific about who you are, what you offer and how much you charge in plain language that clients can understand. Avoid technical jargon and legal terms as much as possible to build a genuine connection with your clients.

2. Be clear about your mission and values. Clearly articulate your firm's mission and values to align with clients' beliefs and values. Prospects and clients will find emotional value in understanding and aligning with your brand's mission, and it can establish common ground for a strong relationship.

3. Create interest with unique offers. Stand out from the competition by providing unique and differentiated offers such as specialized focus areas, timely perspectives on managing specific situations, or ways to drive new investment opportunities.

4. Deliver value at every stage of the client’s journey with your firm. Provide personalized touches throughout the client journey, from sharing perspectives to providing product and service updates. Don’t forget personal notes on life events and proactive reminders of milestones to come. Together, these reminders can help convey your mission and values over time, while lowering client attrition and building trust in your brand.

Margaret's story highlights the importance of value-exchange marketing in wealth management by showing how attracting and retaining clients depends on effective outreach. Advisors have to do more than just provide useful services: They must consistently demonstrate the value of those services to establish and maintain bonds of trust between client and brand.

Creating a strong value-exchange strategy requires a smart and practical plan that goes beyond monetary value. It requires incorporating social and psychological value into your brand's mission and values, offering unique and differentiated services, and delivering value throughout the entire client journey. With the help of a marketing team, wealth management firms can tailor their value exchange to their specific mission, values and ideal client profile, creating a compelling and long-lasting connection with clients and prospects.

Gordon Abel is Dynasty Financial Partners’ chief marketing officer and head of diversity and inclusion.