5 Ways Financial Advisors Can Differentiate in a Crowded Marketplace

Your credentials are meaningful. You worked hard to earn them, and they clearly indicate a level of expertise and knowledge. But, the Financial Industry Regulatory Authority’s (FINRA) website lists a total of 235 credentials for advisors in 2023. Because there are so many, they can often confuse investors. They’re not sure what they mean, which ones align best with their needs, and what the requirements are to achieve them.

So yes, put them in your email signature, on your business card, and across your other materials – but don’t expect your credentials alone to attract prospects or close business. Instead, take the time to explain what you’ve achieved, and more importantly, what it means for a prospect if they become a client.

For instance, do you hold the Certified Financial Planner (CFP) designation? This designation signifies your expertise in crafting comprehensive financial plans. By mentioning your CFP credentials, you’re not just showcasing your expertise, you’re directly addressing a prospect or client’s financial peace of mind. This approach underlines that your qualifications go beyond acronyms – they signify your ability to navigate the complexities of their unique financial landscape. This helps establish confidence in your ability to guide them efficiently and effectively toward their financial aspirations.

Many financial advisors, when asked why a prospect should work with them or what makes them different from a competitor, tend to say the same thing:

• I offer holistic financial planning, focused on the big picture of your total wealth.
• My services are personalized, tailored to your unique values and goals.
• I care about your short- and long-term finances.
• I’m your committed and trusted partner.

You get the idea. Most of these things tend to be true, but they aren’t differentiators. Instead, spend some time really thinking about your target audience – their wants, needs, challenges, aspirations. Then consider (or ask!) why your current clients choose to work with you. Build your value proposition from that starting point and with a real focus on what truly sets you apart from others in the industry.

Storytelling can be a powerful tool to illustrate your value proposition. Share real-life examples where you’ve helped clients overcome specific financial challenges or guided them towards achieving their unique goals. You’re not just telling potential clients what you can do – you’re showing them. This enables prospects to more easily envision how your expertise might align with their own financial journey, making your value more tangible and compelling.

Reinforce your differentiators wherever you can, highlighting them in conversations and across your written materials (website, brochure, etc.) so they’re clear, easy to find, and easy to remember.

The cost of doing business with you is typically a significant factor in whether or not an investor opts to move forward or find an alternative option. While commission- or AUM-based pricing is common, you could consider alternatives.

With so many of today’s investors accustomed to subscription pricing (e.g., streaming services, grocery delivery, meal plans, etc.), they may be more open to a transparent monthly or quarterly fee for your services. There could also be opportunities to bundle certain services at a reduced rate. So, if a client currently works with you for financial planning and investment management, you could offer a bundled package for the addition of estate and succession planning. This can increase your ability to cross-sell, while also making it more appealing for the client or prospect. Finally, perhaps there are some services you could offer for a one-time flat fee.

Of course, you’ll have to run the numbers and understand what will work best for your business, and you may have to reach out to any affiliated firms or home office partners to explore your options, but a unique pricing strategy can definitely set you apart from the crowd!

If you’re well-connected in the community, make it known! Having access to a broad network of trusted professionals can help you stand out as a go-to resource for both prospects and clients.

Certainly focus on the more finance-related needs that may come up in your conversations – taxes, accounting, health insurance/Medicare, real estate, etc. But be ready to offer assistance with almost anything! Keep a list of vetted providers for things like tutoring, lawn services, house cleaning, childcare, plumbers, roofers – and more!

You can build your network over time based on your own experiences and by talking to your clients (friends, neighbors, etc.), taking note when they’ve had a positive experience. This could also create a new pipeline of potential clients for you, as these providers may refer people back to you in turn.

Building relationships with prospects and clients requires trust. One of the best ways to facilitate trust is by being open, authentic, and personable. Let your personality shine through – “bedside manner” and charisma really do make a difference compared to a flat, overly scripted one-on-one interaction.

When you’re willing to share your values and personal interests, you can more easily connect and engage. You can even go a step further and weave your personality throughout your firm, from the office design, to your branding, to the client appreciation events you host. Social media also offers a platform for your personality to shine. Share articles you find interesting (and that your clients may enjoy), offer up some humor with a clever meme, and give some behind-the-scenes details about your values, your working style, your weekend, your family, and more – whatever feels comfortable and best communicates who you are. (Interested in getting more active on LinkedIn? We’ve got 10 tips for you.)

Your clients want to know they’re working with a real person, so show them who you are! Your personality in conjunction with your expertise could win over a prospect and keep a client coming back for more.