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"What Do You Do?": Compelling Value Propositions for Financial Advisors
As your advisory practice grows, you will find yourself having more and more conversations ...
"What Do You Do?": Compelling Value Propositions for Financial Advisors As your advisory practice grows, you will find yourself having more and more conversations about what it is you do. These conversations are key to growing your network, your client base, and ultimately your business, so it’s important that you can describe your practice clearly, confidently, and concisely. If you can articulate the value you bring to the table, and if you can do so in a way that differentiates you from your competition, these conversations become much easier. Plus, it makes your marketing efforts more effective, from designing your business cards to writing your website copy. In this guide, we will look at examples of how to articulate your value proposition as a financial advisor (answering the question, “What do you do?”), as well as how to form your unique selling proposition (answering the question, “Why should I work with you, specifically?”). Value propositions for financial advisors A value proposition is a simple statement of what you provide to your clients. Most companies have a generic value proposition built into their business category. For example: Grocery stores provide value to consumers by giving them a single place to buy different types of packaged goods in consumer quantities. (Otherwise, people would have to create relationships with dairies, produce providers, and large CPG brands themselves.) Dentists provide value to patients by cleaning and inspecting mouths in ways that consumers wouldn’t otherwise have the means, equipment, and expertise to do. Law offices provide value to clients by renting out their knowledge of law and policy, saving clients the time and effort of learning to practice law (and avoiding the costs of accidentally handling things illegally). Likewise, in the financial advice space, the value you provide to your clients comes from several generic sources. These sources fall into two major buckets: financial value and extra-financial value. Financial value vs. extra-financial value Financial value is the most straightforward benefit you provide. It simply refers to the ROI that your clients realize through working with you. This includes generating returns, avoiding losses, managing and optimizing deposit limits, etc. Extra-financial value is more expansive. This refers to all the “extra” benefits that someone enjoys besides the ROI—it’s what some financial advisors have begun to refer to as ROL, or “return on life.” This includes value sources such as: Planning: objectively envisioning what your clients can accomplish. Your clients can be inspired to change their investing, spending, and saving habits simply because you helped them set a vision and make a plan to realize it. This can create feelings of confidence and security that could be difficult to come by otherwise. Organization: helping your clients know if they’re on track. By organizing your clients’ financial lives, you give them the assurance that at any point in time, they can quickly check in to see if they’re on track to meet their goals. You also make it much easier for them to access information they need for tax reporting, estate planning, and other wealth management activities. Accountability: keeping your clients on track. Just like a personal trainer holds their clients accountable for reaching their fitness goals, you’re the voice that reminds and encourages your clients to work toward their financial goals. Expertise: educating and counseling your clients. You’re the financial expert, so your clients don’t need to stay abreast of the stock market, monetary policy, fiscal policy, inflation, and the like if they don’t want to. Instead, you keep them informed on what they need to know, and you’re available to educate them on what they want to know. Almost every financial advisory practice will provide value through a blend of what we’ve listed above. However, that blend will vary from advisor to advisor. Some advisors will be stronger at building tailored plans, while others will focus more on client education. So while all advisors more or less provide value from the same sources, individual value propositions will vary from practice to practice. How to write your value proposition Writing a value proposition should be a simple process. The statement doesn’t need to be fancy, and it can be as long or brief as you want. But some criteria separate a useful value proposition from a useless one: It should be easy for your audience to understand. Unless your target market is the extremely financially literate, you should avoid technical in-speak. It should be easy for you to remember. Although you can use your value proposition for multiple marketing purposes (more on that later), your value proposition will help you most if it can simply answer the question, “What do you do?” As an RIA, you don’t want to come up with a new answer to that question every time someone asks it. Your value proposition should be your immediate, go-to response. It should sound natural. Don’t treat your value proposition like a composition assignment. Use words that you would use in a regular conversation. Instead of “I optimize and organize my clients’ portfolios so as to maximize return on investment and realize their financial goals,” you might try, “I help people set financial goals, get their finances in order, and keep them on track for reaching their goals.” It should be verifiable. If someone asks you if you have examples or if they ask how your offerings work, you should be able to naturally bring up real-life scenarios that explain or illustrate the value you provide. Example value propositions for financial advisors Your value proposition needs to communicate the benefit you provide to your clients and how you provide that value. Here are some example value propositions: “I help people get their financial lives in order: I manage their investments so that their money is working toward their long-term goals without them needing to worry about it.” “I’m like a counselor, but I focus on people’s finances. I keep my clients educated on how the market works and help them make objective decisions with their money.” “I keep people on track with their financial goals: my clients and I work together to set expectations and milestones, and I help them keep their eye on the long-term.” Ways to use your value proposition As we’ve discussed, your value proposition can be helpful primarily when describing what you do in conversations—especially in the early years of your practice. However, your value proposition will come in handy when: Creating marketing collateral. Your business cards, your letterhead, your email signature, bios and descriptions for community events and sponsorships, your Google My Business description—all the little bits of text you may need to write to describe your business become easier to create when you’ve already articulated what you do. Crafting your social profiles. Your LinkedIn profile, Facebook page, Instagram account—all the places where you describe yourself can benefit from already having articulated your value proposition. Onboarding clients. When you bring a new client in for that first meeting, your value proposition can function as an outline for the ground you need to cover. This will help you set expectations for your client and make sure they are aware of all the services you provide. Organizing your website. If you have articulated what you do, then deciding what pages and content you need on your website becomes much easier. A comprehensive value proposition can be a good starting point for mapping out the content and navigation for your website. Onboarding employees. If you’re ready to hire new talent, your value proposition can be a vital tool for giving new employees an idea of your firm’s goals and what they will be helping your clients accomplish. (Plus, it will help them answer the question, “What do you do?” when it comes up—amplifying your word-of-mouth marketing efforts.) Articulating a unique selling proposition. You’re not the only financial advisor in your market, and knowing what you do is the starting point for explaining why someone should choose to hire you instead of the competition. This last part is important, because a value proposition is just a start when it comes to communicating your value as a financial advisor. Once you have your value proposition articulated, you will want to move on to writing your unique selling proposition. Unique selling propositions for financial advisors While a value proposition describes how your practice creates value, the unique selling proposition makes the case for why you’re the right advisor for your target market. Value propositions are descriptive; unique selling propositions are persuasive. The unique selling proposition (which marketers usually shorten to “USP”) is typically a one-or two-sentence statement that should accomplish the following: Resonate with your target market’s emotions. The USP should involve an emotional appeal: you want to tap into how your most satisfied clients feel (or how you want your future clients to feel). Differentiate you from “the rest” of the financial advisors. This doesn’t need to be a unique product offering. But your unique flavor should be evident when people read or hear your USP. If you focus on helping… people in a certain profession (e.g., medical professionals), or people from a certain background (e.g., first- and second-generation immigrants), or people with certain like-minded values or practices (e.g., homeschooling families), or people facing certain challenges (e.g., newly divorced parents) … … then this should be evident in your USP. It could even come down to a different tone or energy that you bring to your client meetings (e.g., you might be the humorous, nerdy, and/or outdoorsy FA in your city). Plainly state how you help your clients. Your USP should highlight the value you bring to your target audience. This is much easier to do after you have developed your general value proposition. How to use your unique selling proposition Developing your USP can be beneficial for fleshing out your marketing strategy. It bridges the gap between what you do and why people choose to work with you. Once your USP is written, you can use it in various ways: Website homepage copy. It can be tough to figure out exactly what to say on the homepage of your website—but if you have already articulated your unique selling proposition, most of the work is done. Your website homepage is the perfect place for your USP to live: it immediately tells your website visitors who you serve, what they can expect, and why they should choose you. Networking with competitors. Unless you are the only financial advisor in your community, you will likely find yourself at networking events with other advisors. If you know what separates you from the rest of the pack, then networking becomes a bit easier. Not only can you naturally differentiate yourself from the other advisors, but you can also differentiate yourself to the other advisors. It’s easier to converse with and learn from other people in your field if they know you’re not chasing their target audience. Advertising copy. Should you start spending money on ads, your USP will help you target your spending on the right audience. It can also increase your return on ad spend, as you won’t be advertising generic services—you’ll be promoting something uniquely appealing. Grow your advisory business with Betterment Your value proposition and USP are two key tools you can use to grow your business. By articulating what you do and why people should choose you, you give yourself an advantage in both your everyday conversations and your marketing efforts. But this degree of intentionality can take time. And processing the demand that comes with effective communication takes even more time. One way to optimize your time as you grow your advisory practice is to invest in tools that reduce hours spent on investment management and back-office admin. If you’re looking for a better way to grow your business, Betterment for Advisors can help. Our platform helps you deliver personalized model portfolios to your clients and manage your entire practice—which means you can spend more time crafting your message, building relationships, and bringing in new clients. -
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How to Start an RIA (A Guide to Going Independent)
The process of becoming a registered independent advisor can be daunting. Here’s what you ...
How to Start an RIA (A Guide to Going Independent) The process of becoming a registered independent advisor can be daunting. Here’s what you should know as you start your own advisory practice. Congrats, you’ve decided to start your own RIA! This exciting step can grant you the freedom to create a practice that better aligns with your vision, for both your business and your clients. Whether your goal is to provide personalized investment management or to expand your client base and increase profitability, we’ve got the details to help you get started. In this guide, we’ll cover how long it can take to get set up, key questions to determine if you’re truly ready, and the three phases of launching your firm. How long does it take to start an RIA? While it can take a few months to register as an RIA, the bulk of the transition work will take longer. We recommend allowing four to six months for implementing your plan to transition to an independent RIA. This process, however, could take more or less time depending on the complexity of your firm. Are you ready to go independent? At the outset, we recommend taking a thoughtful approach to answering the following questions: 1. How will your current job influence your transition to independence? 2. Are you prepared to cover the costs of launching and running your new firm? 3. Are you committed to the time requirements for starting a new firm? The next three sections in this article provide a more detailed roadmap, broken down into three phases, to fully assess your readiness to make the transition to being an independent RIA. We’ll review how to leave your current job, along with the steps involved in starting a successful firm. Please note that this content is meant to serve as general guidance, and is not legal advice. Phase 1: Leaving your job and laying the groundwork This first phase is all about building the foundation for your success. As a new business owner, you have a critical advantage: your desire to leave your current role and venture into your own firm. This motivation will give you a head start and can lead to a shorter gap between your last paycheck and your new firm’s first client invoice. Obtain legal counsel and tax guidance Throughout the entire transition process, your legal counsel can help provide guidance on specific subject matter. From reviewing your non-compete agreements with your current employer to helping you set up your business entity, your attorney will help protect your interests. If hiring an attorney for certain steps, such as establishing a legal entity, is too expensive, you may want to consider leveraging affordable services such as LegalZoom. Additionally, having access to a tax advisor early on will be convenient for addressing your tax-related questions. Consult with other RIAs who have taken this path Gaining insight from peers who have started their own RIA can help boost your confidence and better plan ahead for unexpected issues. If possible, speaking to RIAs who transitioned from your current firm can provide even greater insight. (Read how Jason Hamilton, founder of Keep It Simple Financial Planning, launched and built his $40 million firm.) Non-paid client of Betterment. Views may not be representative, see more reviews at the App Store and Google Play Store. Obtain necessary certifications You’ll most likely need a Series 65, or similar license from FINRA, to work as an Investment Advisor Representative. However, some states may waive the Series 65 if you hold another designation such as a CFP® or CFA. Find your office space It’s best to think about your office space early on to avoid potential delays later in the process. Before selecting your office space, whether it be a home office, coworking space, or a standalone physical office, remember to examine your firm’s needs. To help determine what is best for your firm, consider your own work preferences, potential growth for your team, and your clients’ desired working style. Budget for personal income and spending As you transition from your current employer to building your own firm, you’ll most likely experience a decrease in income until you rebuild your book of business. Make sure to plan ahead for personal and business expenses. Identify prospective clients While you likely can’t tell your clients that you’re leaving your existing job or starting your own firm, you can start planning. Think carefully about the types of clients you’d like to work with at your new firm. It may be helpful to select a niche you would like to serve. One way to identify a niche is by segmenting prospective clients based on factors such as their profession, age, and interests. By targeting clients who align with your existing book of business or your new firm’s vision, you can more effectively reach your ideal customers. Create a business plan A business plan will serve as a guide for your firm and should, at the very least, explain your target market, outline the unique services you will offer, define your strategies for reaching your key audience, and establish metrics to evaluate the success of your plan. Additional areas to consider including in your business plan are financial projections, competitive analysis, risk management, and a tech stack strategy. Plan your business branding It’s important to choose your firm’s name early on, as you will need it for obtaining a website, registering your business, and developing a marketing plan. Consider whether you want to use your personal name in the firm’s name or choose a new, branded name. Be sure to conduct thorough research on your preferred name to avoid any potential trademark conflicts. If you are a small firm and you are the face of the brand, your personal name can work well. However, opting for a branded name may be a strategic choice if you have a smaller niche in mind, plan to grow into a larger firm, or desire to differentiate yourself from competitors. Use your current job’s benefits While you are still employed, plan to take advantage of all the employee benefits you will miss when you are self-employed. You will have to replace some benefits, like health insurance, but some you may outright lose unless you can afford to pay for them. Maximize your current benefits by fully utilizing your healthcare plan, participating in employee-sponsored training, and acquiring certifications covered by your employer. Phase 2: Starting your business and getting your first client This phase is when the heavy lifting to get your firm up and running kicks in. From legally registering your firm to launching your first marketing campaign, you’ll end this phase with your first few clients, ready to grow. Register your business entity You’ll need to formally create a company by registering in the state where you are located or in a favorable state such as Delaware. RIAs commonly choose to establish their business as either a corporation or a limited liability company (LLC). However, your attorney and tax advisor can help determine the best option for your firm. Set up a business bank account and credit card To set up your bank account, you’ll need to get your EIN from the IRS website. With your EIN, you can go to the bank of your choice and open a business bank account and credit card. While we can’t recommend a bank, a good starting point would be your own personal bank or seeking a referral from a trusted small business. One tip: Avoid fees whenever you can. It’s worth shopping around for a bank account if your current options impose high fees. Select an RIA compliance consultant You’ll need a Chief Compliance Officer for your firm. You can serve in the role yourself, hire internally, or outsource the function to a consultant. Outsourcing can help manage risk and save time upfront during your firm’s registration. A compliance consultant can streamline the registration process with the SEC or state authorities. We recommend working with RIA in a Box, a preferred partner in the Betterment for Advisors’ RIA Tech Suite for new firms. Register your firm with the SEC or state regulators Depending on which state your firm is in and your starting AUM, you may have to register with the SEC or your state regulatory authority. Typically, if your RIA manages more than $110 million in AUM, it is required to register with the SEC. If your AUM is between $100 million and $110 million you may still be eligible to register with the SEC, depending on your state's rules. And if your RIA manages up to $100 million in AUM (or up to $110 million in some cases), it generally needs to be registered with the state securities regulators where you operate or have clients. It's important to note that states have their own specific regulations, so consult with your attorney or compliance consultant to make sure you register correctly and file all necessary forms and documents. Obtain relevant insurance You’ll want to obtain insurance to protect your firm against common risks. Common types of insurance include directors and officers liability, professional indemnity, errors & omissions (E&O), fiduciary liability, cyber liability, employment practices liability, and health/dental/vision insurance. The larger and more complex your firm becomes, the more insurance you may need. Choose an RIA custodian There are many custodian options available for your firm to choose from. If you select Betterment for Advisors, you’ll have access to a vertically integrated solution that allows you to Custody assets Build and manage custom model portfolios Open new client accounts in minutes Control billing Streamline your practice’s back-office operations with cutting-edge features Within portfolio management at Betterment for Advisors, utilize automated trading, rebalancing, tax-loss harvesting, asset location, and more. Set up your tech stack Your tech stack will include many different and often integrated softwares. The four essential pieces of software for RIAs are wealth management, financial planning, CRM, and compliance. In addition, you may also require other tools for tasks such as accounting and invoicing, file management, email marketing, and video conferencing. Create a website and email address While you can use online tools to create your own website, it may be more efficient and produce better results to hire a small, affordable web design agency. In addition to logo and website design, agencies can also provide help with setting up email accounts using Google or Microsoft, if needed. Create a marketing plan and launch your firm Launching your firm is a one-time opportunity, making it crucial to thoroughly plan your marketing strategy for both your current network and your desired target audience. You can leverage a marketing agency, hire freelancers, or choose to market yourself if you have the necessary skills and resources. As part of this initial go-to-market campaign, you’ll also want to incorporate a plan to message your current clients and introduce them to your new firm. Consult with your attorney on all marketing communications to ensure you are compliant. Phase 3: Establishing yourself in your first year Now that you’ve launched your new RIA, your first year is about establishing your firm as a leader within your financial planning niche. Establish your client pipeline Now is the time to implement your marketing strategy to grow your pipeline. Common marketing activities include networking, sharing thought leadership content on a blog or social media, attending events, and utilizing email marketing. Additionally, implementing a robust sales process, can help you move prospects from cold leads to warm opportunities and eventually, active clients. Establish your client experience The initial experience your clients have with your firm is critical. First impressions help drive future client retention and referrals. Ensure that your onboarding processes for new clients are clear and enjoyable, while also building trust both as an advisor and (more importantly) as a person. As a client’s tenure with your firm increases, it’s important to strategize tactics such as video calls, in-person meetings, newsletters, performance reports, and webinars to continue to build a strong client relationship. Establish your operations As a business owner, your operations will need to be evaluated on an ongoing basis. After implementing your tech stack, the next step is to establish processes to efficiently run your business. During your first year, it is beneficial to have monthly or quarterly process reviews to ensure that you are maximizing the potential of your tech stack. Besides managing daily business operations, it is important to plan for accounting tasks, tax filing, and other reporting requirements. Your firm’s long-term success It takes confidence and leadership to start an independent RIA. It’s very hard work. But it can be truly rewarding, and we’re here to support you. Betterment for Advisors is ready to be your end-to-end custodian, supporting your firm with our cutting-edge technology. We’re here to help you grow—you have a dedicated relationship manager who pairs with our operations and customer service teams to help scale your practice. Our platform streamlines onboarding, billing, portfolio management, and reporting to help you deliver a high-quality, personalized client experience. Ready to learn more? Get a demo today. -
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How to Be a Successful Financial Advisor: 8 Tips
Success doesn't happen overnight, but following these tips can help speed up the process (and ...
How to Be a Successful Financial Advisor: 8 Tips Success doesn't happen overnight, but following these tips can help speed up the process (and avoid key pitfalls). Finding success in any profession is one of life's great joys. Yet, it can be hard to identify the necessary milestones in your own journey that add up to the definition of success. As we'll discuss in this article, "success" is the outcome of a million little decisions and actions over time. As an advisor, you can attest to the reality that most clients have financial baggage. If you were advising me, you'd see pretty quickly that my career in personal finance is a strong reaction to growing up without money. We all have something driving us and, for me, it’s a crippling fear of living without financial stability. Luckily, our past experience can be used for good if we acknowledge the role it plays in our decision-making. For me, that fear created an unwillingness to do the wrong thing once the right thing becomes obvious, which led me to co-founding and scaling a fee-only RIA before ultimately selling to a larger firm. Today, I bring that experience to Betterment for Advisors, where I consult with our clients about the ways that they can use our tools to make them more successful as they build and grow their practices. If there is one lesson that I would impart to a financial advisor who is asking themselves how to become more successful at what they do, the simplest and most succinct advice I can give is to have vision. In other words, the best place to start is with an articulated vision of your ideal future—from there, you can work backwards to identify your next step in that journey. But that can be easier said than done! So, let's consider a few ways to chip away at getting there with 8 day-to-day tips that'll set you down the right path. But first – what does it mean to be a successful financial advisor? When you ask yourself What does a successful financial advisor look like?, there might be a few categories that come to mind. We all know that financial advice is about merging qualitative with the quantitative and that's true when finding success, too! First, we consider marking success for an advisor by the science—AUM, the number of clients you serve, or even the size of your staff. But in reality, all of these are extrinsic motivators. Meaning, they are markers of success to others looking in. The other side of success, and perhaps the more important side, is more intrinsically motivated—because success only means something if you feel successful yourself. And often, as advisors, we find this in the relationships we build with our clients. To be a successful financial advisor, I believe a few key traits are required. Five traits of a successful financial advisor Be accountable The first trait of a successful financial advisor is accountability. In order to be a successful financial advisor, you have to be accountable to your clients and therefore, hold yourself accountable for their success. Anyone can make suggestions to a friend about what to do with their money, or anyone can read a Reddit thread about trends in personal finance. But the difference for a client working with a financial advisor is that they have a partner with whom they can entrust their financial futures and know they have their best interest at heart. Seek empathy The second most important trait is empathy. Advisors are often present for the most momentous times in a client's life—marriage, having a child, buying a house, caring for an ill or elderly family member, losing a loved one. So, practicing empathy and really meeting clients where they're at emotionally can mark the difference between a good and a great financial advisor. Advisors are people, too. Make a practice of sharing personal anecdotes and mistakes you've made in the past with your clients. This will give them permission to relax and trust you more quickly. Stay curious Curiosity is also key. Often, getting at a client's financial goals can be tough. Asking a simple question like What are your goals? can lead to simple answers, but when you dig in, every person's vision for their future or financial fears has a ton of nuance. Separately, staying curious when exploring new investment vehicles is also crucial. When, for example, Crypto became a newsworthy asset class, the curious advisor is more poised to look into and learn about the asset’s complexities in order to give the best advice to their clients. Be intentional A successful financial advisor is also intentional with their time and energy. Not only can you have various clients vying for your time and attention, but your personal life can also take a back seat when you build such strong and deeply personal relationships with your clients. Remember that burnout helps no one! To be in it for the long haul, advisors need to learn how to best dedicate their time to specific clients, tasks, and, ultimately, aspects of their lives. Teach! Finally, the best advisors are also teachers. Learning about the ins and outs of their money movements often brings clients comfort and ultimately establishes trust. Similarly, in order to scale a successful practice, a strong advisor needs to also impart their practices and philosophies onto their employees. The better an advisor can constantly be teaching (and learning!), the more successful they will be. I'm all of these things – what's next? So, you nailed the art of being a great advisor and you've found some success, but now you've got a firm that you are trying to scale and grow. Next up, let me share 8 tips for building a successful practice. Tips for building a successful practice Automate more processes to save time If you want to optimize the hours in your day, automate! Tolls on the road to success are paid with time, but there's never been a better time to build an efficient financial planning practice. With the right tools, data collection and analysis, portfolio management, and even scheduling can all be completely automated at a minimal cost. Anything that doesn't need to be done by a human should be done with technology. Craft a scheduling system that you can stick to Take being intentional with your time to the next level. Live and die by your calendar. Seriously. This is the most precious tool you have in your toolbelt. Make a habit of looking at your calendar every morning and filling every empty time slot with something intentional. Schedule time to read, schedule time to eat lunch, schedule time to write blogs or social media posts – and then actually do it. Don't waste the time you have or fall victim to distraction as a result of no direction. Avoid the temptation to hire help too early I've seen too many advisors (myself included!) find success early and hire too quickly because they believe their time is too valuable for mundane tasks. Well, it is, but hiring someone shouldn't be your first instinct because… technology! Spend some valuable time researching technology solutions that cost less than a full-time person and increase efficiencies before hiring help. Your time is certainly worth money, but make sure that you are truly out of time before you buy more. Plus, hiring, onboarding, and training can often take up more of your time for at least six months before that investment pays off. As you hire, make sure you have enough time to make that person successful and, if you don't, see how technology might be able to help instead. Embrace rejection Timing is everything. "No" often has nothing to do with you and everything to do with that prospect's individual circumstances or past experiences. The key isn't just about getting "yesses," but getting a "yes" or "no" from every prospect as quickly as possible. And you will hear "no" more than "yes"—that's just the nature of our business. But nothing is worse than ambivalence or inaction. Don’t focus on the decision the prospect makes, but rather your ability to bring them to a resolution. Remember that you are an expert Even if you're just getting started in your career, recognize that the prospect or client is seeking your counsel because they know less about financial planning than you do. Let that empower you, because you just might be the most important voice in their financial life. Look to industry leaders and peers you admire for advice Once you know what success looks like for you, find people who are already there and kindly ask for some of their time. The best thing you can do is learn from those who have the things you want. In addition, schedule time to read and avoid the temptation to use that time for other things. This is an area where social media can be a great networking tool. While Twitter, for instance, can certainly be a black hole of distractions, there are an exceptional number of amazing business leaders sharing information on the platform every day. Avoid decision paralysis when you can As advisors, it's our nature to analyze every decision. But when it comes to building a business, you'll find that the formula is actually "ready, fire, aim." Today is about action—you'll have plenty of time to refine your practice tomorrow. Think of your practice as a "daily driver" Identify your ideal client's needs, and structure your tech stack, client service model and fee structure, in such a way that it gets you from point A to point B with that ideal client as quickly and efficiently as possible. Do not waste time building solutions for the 10% of clients who do not fit your focus. Now, go out there and go get 'em! Unfortunately, there is no repeatable recipe for success. Not only does success look different for everyone, but getting there is an undeniable combination of hard work, good timing, and a little bit of luck. What you can do is focus on the things you can control—your actions and commitment to the process.
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5 Ways Financial Advisors Can Use Cash Management to Help Boost Business
5 Ways Financial Advisors Can Use Cash Management to Help Boost Business Mar 25, 2024 5:40:45 PM At Betterment for Advisors, we’ve identified five benefits for financial advisors who offer a cash management solution to clients. The numbers don’t lie. Cash makes up a large percentage of total investable assets, whether you manage it or not. Research from Capgemini reports that cash and cash equivalents have made up about 25% of high-net-worth portfolios from 2018 to 2022. In the wake of a turbulent market, that number increased to 34% in 2023. A survey by Allianz Life found that 61% of Americans would rather have their money sit in cash than have it endure market swings. Yet, 82% of Americans are saving in low-rate savings and checking accounts, missing out on high yield that can help combat inflation. If you’re not managing your clients' cash, you’re missing out on seeing their full financial picture. And seeing that entire picture is key when your firm’s success depends on providing the best, fulsome financial guidance to clients. At Betterment for Advisors, we’ve identified five benefits of bringing cash into focus and offering clients an all-in-one cash management solution. Cash management can: Help you provide better planning services and advice Bring assets into your orbit, serving as a pathway to investing Strengthen your client relationships Decrease risk for your clients (and your firm) Turn your client experience into a competitive advantage The 5 key benefits of bringing cash into focus Let’s explore how a modern cash management solution can help boost your firm’s bottom line and provide your clients peace of mind. 1. Cash management can lead to better advice Gaining visibility into your clients’ held-away cash can help you uplevel and personalize your financial plans. By understanding your clients’ needs outside their investing portfolio, you can better help them reach both short- and long-term goals. Clients may be holding cash for many reasons. They could be saving to buy a home, planning to fund educational expenses, or may simply be worried about the economy. Knowing your client’s goals—and worries—can help you provide better advice to manage their cash and investments. For example, you may be able to advise them to open a 529 account for education expenses or move cash into a high-yield cash account for a mortgage down payment. If you find your client is holding more cash than expected, you can use this as an entry point to discussing why, and exploring your client’s unique needs. You also could be better equipped to respond to sudden influxes of cash such as: Annual bonuses or raises Lump sums in low-rate savings accounts Cash gifts, inheritances, or profits from selling assets These large sums of cash often end up sitting in a checking or savings account earning little interest. You’re in the perfect seat to coach clients on how to make the most of large sums of cash. As your clients’ advisor, you’re committed to your fiduciary obligations, and managing their cash can put you in a better position to serve them. 2. Cash management can be a path to responsible investing Picture this: The stock market starts to rise. Your client has $20,000 that you are unaware of sitting in a savings account at a bank. They get the urge to buy so they don’t miss out. In a hurry, they open a brokerage account one evening and buy some tech stocks. Now what? If you are managing your clients cash, not only will you have more assets under management, but you’ll be able to advise them on responsible investing, helping them manage risk through approaches such as dollar cost averaging. The path from cash to investing can look like this: Understand your clients’ total cash available and their goals for that cash Understand what they are earning on their cash When the time is right, you can invest either the earnings from your clients’ cash or larger portions of the cash While your clients' cash isn’t invested, there is an opportunity to increase their portfolio’s overall yield. With the federal funds rate at its highest point since before the Great Recession and with only 18% of consumers taking advantage of high-yield cash accounts, now is the time to help your clients make sure their uninvested cash earns the highest return possible. By keeping a pulse on your clients’ cash, you can avoid having your clients keep cash at other institutions and potentially make poor investment choices. Most importantly, you can create a streamlined approach to investing clients’ cash at the appropriate time. 3. Cash management can strengthen your client relationships Frequent and strategic conversations about cash with your clients can bolster your relationship. We recommend having “cash conversations” at these three pre-planned moments: Client onboarding: Provide your clients with an intro to cash management, explaining the benefits like the potential for higher yield and more holistic advice. Use it as an opportunity to show how you can bring additional value and how cash management can help your clients reach their short-term and long-term goals. Quarterly or biannual cash reviews: Schedule time when you have your regular meetings with clients to review cash. Make sure you focus on the cash you manage and the cash in external accounts. Ad hoc new cash situations: Coach your clients to contact you when they have increased their cash holdings. This allows you to advise them on what to do with the newfound cash. We recommend the following “Cash Questions” to begin discussing the importance of cash with your clients: Do you have cash at other or new institutions? What rate(s) is your cash earning? What are your goals for the cash? Knowing the answers to these questions can help you in providing options for your clients’ held-away cash that prioritize their financial well-being. 4. Cash management can decrease risk for your clients (and your firm) By offering cash management, your firm can decrease the risk of losing clients to a competing firm, where cash management is provided. By decreasing that risk, you potentially gain: The ability to increase your AUM as you move cash into investments The possibility of additional revenue streams via cash management services Your clients benefit from a decrease in the risk of making uninformed decisions without your holistic advice. Reducing that risk positions your clients to benefit from: Earning potentially higher interest rates to keep up with inflation Your guidance to “stay the course” and take the appropriate amount of risk Bringing cash management under your roof can help demonstrate your value in volatile market conditions, mitigating risk for you and your clients. 5. Cash management can create a competitive advantage with modern technology As we know, people have cash needs. Why not meet those needs while creating a competitive advantage at the same time? New cash management platforms may offer: Modern technology for you and your client to manage and automate savings Higher yields compared to traditional bank savings accounts to earn more from your client’s cash Additional FDIC insurance if covered by multiple program banks Recurring / automated transfers into investing, which can create dollar-cost averaging opportunities Whether your clients hold their cash at banks or other wealth management firms, a modern platform can give your RIA an edge in a world where liquidity, yield, and security are valued by investors. We’ve built a modern cash management solution for advisors At Betterment for Advisors, our high-yield Cash Reserve account lets you offer your clients a competitive cash management solution on our easy-to-use platform. Your clients can set savings goals and use automated tools, all while you guide their financial plan. -
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Marketing for Financial Advisors: Help Grow Your Practice by Growing Your Audience
Marketing for Financial Advisors: Help Grow Your Practice by Growing Your Audience Feb 15, 2024 5:51:44 PM A no-nonsense, practical guide to navigating the world of marketing as a financial advisor. The RIA industry is competitive. There are thousands of firms competing for the same pool of clients. An effective marketing plan can be the difference between a growing and a dwindling firm. But as a leader of an independent RIA, the role of marketing falls on you. We’re here to help. This is your no-nonsense guide to building a marketing plan that can evolve with your firm. We’ll cover basics to consider from social media marketing to pricing strategies. Plus, you’ll learn what might be the most important part of any RIA’s marketing plan. Let's dive in. First, let’s cover marketing 101 What is marketing? It’s more than simply advertising. A framework traditionally taught in business schools called the “4 Ps” can give us a starting point for building a marketing plan. The 4 Ps consist of: Product: What unique good or service are you selling? Price: How much do you charge for your product or service? Place: What distribution channels do you use to make the product or service available to customers? Promotion: How do you communicate your product’s or service's value to your target audience? A fifth P is commonly added: People. This emphasizes the cruciality of the roles the people on your team play in marketing your firm and the importance of understanding the people you serve, your clients. A comprehensive marketing plan balances all 5 Ps, both to attract new clients and retain existing clients. You don’t need to be a marketing expert, but you do need to have a full understanding of what you’re selling, for how much, to whom, and where—all while being very clear in how you communicate the value your RIA firm can deliver. Next, we’ll dive into how you can put all the Ps together to create your own marketing strategy. How to position your product Your product is an intangible service. It’s more than simply the wealth management expertise and advice you provide. It’s the entire differentiated experience that you offer clients. That experience is what sets you apart from the advisor down the street who provides similar advice but fails to engage with clients and build trust. The question is: How do you clearly communicate your differentiated service to the world? The answer is: Write a value proposition. A value proposition is a short statement that conveys the unique benefits of your service to your target market. The statement highlights the problem(s) you solve, the benefits you offer, and how you’re different from the competition. Your value proposition serves as a guiding piece of communication for all of your marketing efforts. In addition to a value proposition, having the following resources will help you communicate and show your value to prospects and clients: Client stories and testimonials: Being able to explain how you’ve helped others in similar situations will build trust with clients. Educational resources: Communication resources like a well-written monthly newsletter or weekly blog can position you as an expert and grow relationships over time. Simple tools: Easy-to-use tools like retirement calculators or a simple online client portal that helps your clients understand their investing plans can position your services as convenient and tech-savvy. The perfect price The reality is that pricing is never perfect. It’s something you should revisit annually to make sure your pricing strategy fits your business strategy. If you’re interested in running a fee-based planning practice, the following fee structures can be applied to meet both the needs of your clients and your business model: Hourly fees: Charging by the hour is typically a good option for investors looking for introductory or circumstantial planning advice, or for those who may not have enough capital for you to consider in an asset-based fee structure. Flat fees: Fees are a flat percentage of the total value of the AUM on a certain date each year. The percentage charged can decrease as the AUM increases. Tiered fees: Charging varying fees as a percentage based on different levels of the portfolio. For example, charging 1.50% for the first $1 million, 1.25% for the next $4 million, and 1.00% for amounts above $5 million. Asset class fees: Charging different fees as a percentage of AUM for different asset classes. For example, charging 1.75% on equities, 1.00% on bonds, and 0.00% on cash. As your firm grows or if you serve different target markets, you may want to evaluate your fee structure to ensure it supports the growth of your business. It’s also wise to research how your competitors are charging to remain competitive while maintaining your margins. How to be in the right place for the right people This may be the most important part of your marketing plan: Identifying your target market and learning where you can reach them. Understanding who you serve, also known as your target market, dictates the development of your strategy. If you don’t know who you plan to serve, you can’t write a compelling value proposition, set appropriate prices, or invest in effective marketing channels. (Stay tuned—we’ll cover marketing channels in the next section.) To begin identifying your target market, consider the following questions: If you have existing clients, who are your best clients? Clients that you enjoy working with and are profitable clients over many years. If you’re just starting out, who would be an ideal client in your network? Many of your clients will come from existing relationships, so understanding who in your network would be ideal to work with may be the easiest place to start. Don’t be afraid to be specific and carve out a niche within your target market. The following data points can be helpful to analyze to determine if your target market is big enough to serve: Geography Age Interests and affiliations Career Once you have a profile of what your ideal client looks like, you can then tailor all of your efforts to their needs. Your target market will drive the creation of your value proposition and pricing to ensure it aligns with their needs. Knowing your target market will allow you to determine how to best “distribute” your services, whether that’s using digital communication tools or holding in-person meetings with clients, or a combination of both. To select marketing channels, you’ll need to research where your target market frequents, whether that’s in-person locations or online platforms such as LinkedIn or Facebook. How to promote your firm For many, paid advertising is the first thing that comes to mind when they think of promotions. However, you can leverage more marketing channels than only paid ads to connect with prospective clients. A marketing channel is any communication method or means of distribution used to get your firm’s services in front of the right people at the right time. Common channels for RIAs include: Social media Platforms like Facebook, TikTok, Youtube, and LinkedIn can be convenient ways to connect with prospective and current clients. As we experience the great wealth transfer from Baby Boomers to their heirs, social media can be an ideal channel to reach a younger audience. Examples of typical social media content may include educational videos and articles, information on events your firm is holding, or photos and stories of your firm’s community involvement. It’s crucial to be genuine and connect on a human level on social platforms. There is a saying about social media that “people follow people, not brands” and that is true for your firm too. Make your content personal by featuring your staff, allowing people to build a digital relationship with your advisors. Events Event marketing provides a wide range of options to get in front of your target audience. You can speak or host a booth at conferences, host a local in-person educational event, or plan a virtual event. An example of a virtual event is a webinar on the topic of inheritance and estate planning. You can even partner with other professionals like estate planning attorneys to expand your networks and increase event attendance. A valuable aspect of virtual events is that the recording can be distributed afterward or even streamed on social media platforms. The key with any event is to make sure you are reaching the right audience or you risk wasting your time. For example, you may want to avoid having a booth at a local expo that has a large, broad audience, and instead opt for smaller events with your ideal prospects in attendance. Email Email may be considered an older technology, but it is still an ideal channel to help acquire and retain clients. To successfully incorporate email into your marketing plan, consider making your messages personalized and relevant using data collected from your prospects and clients. For example, for promotional messages, rather than sending the same email to everyone in your database, take the time to automate campaigns that target specific subgroups with specific relevant messages. In addition to promotional emails, you can leverage emails to promote your events, send surveys to collect client feedback, or send an educational newsletter. If you’re consistent and send valuable content, email can be an affordable channel to build trust with your audience. Word-of-mouth Referrals from word-of-mouth are the holy grail of client acquisition. This results in clients that are so happy with your service, they go out of their way to send you likely qualified business. But how do you go about getting referrals? You have to combine being exceptional at managing your clients’ finances with being exceptional at connecting with them emotionally. They need to trust you and trust that if they refer someone they know to you, you’ll provide the same level of personal service. Once you have proved that you are an expert at managing finances and have a client’s best interest at heart, you can genuinely create opportunities for word-of-mouth business. For example, you can send your client shareable bakery items to their office or invite them to bring guests to a local event. Be creative, thinking of ways that are unique and genuine to your firm that could help put clients in a natural position to refer business. Paid advertising The options for paid advertising have grown tremendously over the last few decades. Before engaging in any form of paid advertising, it is important to understand who you will be targeting with your ads, the cost of running those ads, and the estimated number of clients the ads will drive to your firm. This will allow you to estimate the return on investment of your advertising spend before running ads and compare that to the actual outcome. It can be easy to run untargeted ads that end up costing far more than your firm can afford to bring in one client. Examples of paid advertising channels include print ads in local publications, billboards, website banner ads, and social media advertising. One potential strategy is to combine coordinated organic social posts with paid social media advertising, resulting in an integrated effort between all of your social media content. Before you do any form of marketing, it’s important to remember that all materials should follow your firm’s compliance procedures and be archived, including social media content. Take an inventory of your marketing capabilities As you dive into creating a marketing plan, knowing your strengths and weaknesses will position you for success. Focus first on the areas that you know you are capable of implementing. Use this list of questions to assess your firm’s ability to implement each marketing activity: Communications Writing - Are you able to write a blog or newsletter? Contact list - How large is your email list? Public speaking - Does your firm have the talent to present at events? In-person conversation and sales - Does your firm have the interpersonal skills to have successful 1:1 conversations? Camera presence - Does your firm have the talent to present to a camera for webinars, TV interviews, or social media feeds? Communication norms - Does your firm understand the jargon or “groupspeak” used by different target audiences or used on different marketing channels? Advertising Do you have the budget and/or talent for ad placements, graphic design, and website management? Which marketing channels do you understand or have you used in the past? What channels allow you to reach your target market? How will you measure the success of paid advertising? Do you have a marketing compliance strategy in place? Social media Which social media channels are you or your staff currently active on? Which social media channels are your prospects and clients active on? Who will create your social media content? Word-of-mouth Are you able to create opportunities to position your current clients to send you referrals? If you are already receiving referrals, which clients are sending you business and why? Pricing Does your current pricing structure support the ideal growth of your firm? Do your current systems support the ability for you to easily change your pricing or add a new offering? When assessing the list above, keep in mind your time. The more time you spend on a marketing activity is less time with prospects or clients. You don’t need to become a full-time marketer to be successful. Rather, finding the few marketing initiatives that work best for your firm will allow you to grow and maintain a high level of service for your clients. You don’t need to try to do everything. Steps for creating your marketing strategy The following steps provide a simple guide to get your marketing up and running: Calculate your revenue and client growth goals. Identify the gaps between your goals and where you are today. Research and talk to other successful small business owners to learn what works and to set expectations for what success looks like from your marketing plan. Research your competitors' marketing activities to understand how you’ll stack up in the market. Research and identify your target market. Analyze and determine your pricing strategy. Determine your marketing budget for activities like content production, website management, email marketing, and paid advertising. Write your value proposition to be used across your marketing communications. Select and implement two to three marketing activities that are most likely to succeed in achieving your goal. Review results monthly and quarterly to determine what’s working and what’s not — make adjustments as needed. The steps above can be repeated annually or even bi-annually, allowing you to recalibrate your marketing efforts as your business evolves. Marketing pitfalls to avoid Marketing isn’t easy, but it is easy to make it harder on yourself, especially for smaller businesses with fewer resources. Avoid these common pitfalls to position yourself for success. Don’t focus only on lead generation. Lead generation is the process of generating prospects and turning them into clients. This is important, but if sales becomes your sole focus you lose the brand value that comes with providing educational content and building your brand as a trusted financial expert. Don’t hire family or interns to save money. As we said, marketing isn’t easy. Just like financial advice, not all marketing advice and output is equal. It’s worth investing in a professional to make sure your firm is well-positioned in the market. Don’t lose focus and try too many things. Start small and test what you think will work best. Running too many marketing efforts at once can result in watered-down budgets and difficult-to-measure results. Now you’re ready There you have it, a framework to get your firm’s marketing plan off the ground. Do your research, start small, and remember to evolve your marketing as you learn what works and what doesn’t. We understand that as an RIA, you have a lot on your plate from marketing to every other aspect of your firm. Betterment for Advisors frees you up by providing you with tools to help streamline front-and-back office operations and the investment process. To learn more about how our automated workflows can accelerate your ability to serve existing clients and to engage with prospective clients, get in touch with a member of our team today. -
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Considering a switch from TD Ameritrade to Betterment for Advisors? Here's what you need to know.
Considering a switch from TD Ameritrade to Betterment for Advisors? Here's what you need to know. Jul 28, 2023 1:32:31 PM The custodial landscape is changing. We’ve compiled answers to the most common questions we get from RIAs who are considering making the switch to Betterment for Advisors. We've supported many RIAs considering moving their client accounts to Betterment for Advisors. Here are the most common questions we receive about making the transition. How do I know if making a move is worth it? How can small RIAs evaluate a custodian's service model? What does a transition to Betterment for Advisors look like? How does Betterment for Advisors support RIAs through a transition? What type of firm is a good fit for Betterment for Advisors? What is the experience like for my clients? How long has Betterment been around and what does the future look like? What's next for the Betterment for Advisors platform? How do I know if making a move is worth it? The decision to migrate your practice and client accounts to a new custodian can be challenging. Evaluating if, and when, a switch is worthwhile often comes down to assessing a potential partner’s technology and service. Betterment for Advisors’ custodial technology can make a big difference for small firms trying to scale efficiently. It can not only help you craft a better client experience, but it can free you up from routine, administrative tasks to focus on more high-value work. Getting a feel for technology is relatively simple—advisors can request a demo to see most platforms' features in action. A custodial partner's approach to service, though, can be more challenging to nail down. How can small RIAs evaluate a custodian's service model? When considering different service models, think about who your support team will be and how easy it is to reach them. The support channels available to you should be aligned with your preferred way of doing business—whether it's for typical day-to-day inquiries, urgent requests, or more strategic discussions about how to grow your practice. For many custodians, the definition of a "small RIA" seems to be getting bigger.* Our dedication to service for firms of all sizes sets us apart. We know that quality service makes all the difference for an independent advisor, regardless of their AUM or number of clients, so we intentionally built a support team that’s accessible for all. And because some questions are best addressed on the phone, you can reach a live person fast—our advisor servicing team aims to answer calls in under two minutes.** Betterment for Advisors also prioritizes offering comprehensive support for firms, beyond transactional questions. Every firm on the Betterment for Advisors platform will partner with a dedicated relationship manager who serves as their go-to resource for training, 1-1 consulting, practice management questions, transition support, and more. What does a transition to Betterment for Advisors look like? Our vertically integrated technology aims to make the repapering process as seamless as possible via intelligent automation. You'll also have an experienced team on your side to help make the move easy. For each transition, we start by discussing your firm's current set-up, including client service model, current custodian(s), portfolios used, and your existing tech stack. This helps us understand the key pieces of the transition and any pain points or limitations we can help address. From there, we'll work together to create an implementation plan that’s tailored to your firm. It will combine your unique situation with best practices gleaned from other transitions we’ve managed and tips about how to make the most of the Betterment for Advisors platform (so you can take full advantage of our billing tools, portfolio options, integrations, and more). The plan will also include an account migration strategy that considers your clients' current models and holdings (so they can benefit from features like our tax smart transition technology if needed). Once the plan is in place and you know exactly what to expect, we'll hit the ground running. How does Betterment for Advisors support RIAs through a transition? Betterment for Advisors is dedicated to providing hands-on support. Your relationship manager will work with you on the entire process and be your go-to liasion for our in-house team. Throughout the transition you’ll have regular check-ins to monitor progress and address any questions. White-glove transition support reduces the operational burden that typically comes with repapering, while reducing disruption to client service. Our team can help manage transitions for you from start to finish, from assistance in drafting client communications, to sending out client invites and ACATS requests on your behalf. Excellent support doesn't end with the transition. You will always have a dedicated relationship manager for practice management support and growth initiatives, as well as access to a fast, knowledgeable advisor support team for the day-to-day questions. What type of firm is a good fit for Betterment for Advisors? Betterment for Advisors works with independent RIAs of all sizes—especially those just breaking away or focused on scaling an already established practice. Because we have no AUM minimums, an efficient, scalable pricing model, and dedicated support for all firms, we are uniquely suited to partner with small-and-medium sized RIAs that are often overlooked by legacy custodians. What do all of our advisor partners have in common? They recognize the opportunity that automation can unlock for their business. Our cutting-edge technology helps planning-focused advisors create more operational efficiency, so they can cultivate stronger client relationships and take their businesses to the next level. The efficiencies unlocked with Betterment for Advisors' technology enable our advisors to serve significantly more clients than at legacy custodians. What is the experience like for my clients? Simple. An easy, paperless client onboarding workflow differentiates Betterment for Advisors from legacy custodians and helps advisors impress clients from day one. With digital client onboarding, advisors can collect household signatures from clients on all new accounts in one simple, paperless package. From there, clients need only approve ACATS requests to transfer their assets to Betterment for Advisors. Your clients will have access to Betterment for Advisors' intuitive goals-based portal, which is white-labeled for your firm. The platform is designed to be flexible for advisors, so you have the tools to manage tasks on behalf of your clients, but your clients will also have a variety of easy, self-directed tools within the portal. Tasks like updating their address or setting up an auto-deposit can be done with a few simple clicks. How long has Betterment been around and what does the future look like? Betterment launched in 2010 as a pioneer in the digital investing space. 13 years later, we are the largest independent digital advisor with over $38 billion in AUM. All client assets are protected with industry-standard insurance and rigorous account security. Like many financial services companies, we've achieved scale and sustained growth by diversifying across three complementary lines of business: direct-to-consumer, Betterment for Advisors, and Betterment at Work. Betterment for Advisors has been doing things differently from the very beginning. How? By building an RIA custodian from the ground up. Our status as an independent, vertically-integrated solution is vital. It has allowed us to create bleeding-edge automation and to own the user experience for advisors and investors from end to end. We remain committed to that independence. The desire to do things differently also underpins Betterment's pricing. Instead of the traditional custodial model, we charge a transparent platform fee based on client assets that scales as your firm grows on the platform. This model is intentional—it allows us to work with RIAs of any size and offer every firm the quality, sustained support they need for the long term. With recent consolidation in the RIA custody industry, advisors may feel their options are more limited today than in the past. We believe that there is a gap for small-and-medium sized RIAs when it comes to technology and service at legacy providers. And we're here to solve that. What's next for the Betterment for Advisors platform? Betterment for Advisors is the custodian of the future for planning-focused independent advisors. We have a culture of continuous iteration and are always looking to build tools that can make advisors’ lives easier—and help them deliver more value to clients. Your feedback matters to us. As we're building an all-in-one solution where advisors can run their whole practice, we'll keep adding products and features that enable advisors to build the business they've always envisioned. If you have input, questions, or something you'd like us to build, please let us know. -
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4 Ways to Wow Your Clients in their First 90 Days
4 Ways to Wow Your Clients in their First 90 Days Feb 21, 2023 1:35:42 PM We've compiled some top practices that can help you craft a delightful experience for new clients, every time. Onboarding is a critical moment in your advisor-client relationship. It’s the time for you to ensure that your new client feels comfortable and confident in their decision to work with you. It’s also a key inflection point for ensuring long term client retention. Advisors often lose the trust of their clients by overpromising during onboarding and, over time, advisors’ communication style impacts whether clients stick around. Post-pandemic, nearly 9 out of every 10 clients consider their advisors’ communication frequency and style when deciding whether to retain their services (and when making referrals to friends and family). We've compiled some best practices for firms looking to better communicate with clients and create a delightfully smooth onboarding experience, every time. #1: Lead with your clients' values. At the very beginning of your relationship, it’s essential that you take time to understand your client’s unique financial goals. Building a goals-based financial plan is now an industry standard practice. In fact, helping “maximize a client’s potential for meeting life goals” is at the core of the CFP® Board’s definition of financial planning. It can be critical, though, to also put in extra work to understand your client’s individual values. Whether it’s prioritizing environmental sustainability, supporting extended family, or charitable giving, financial decisions can be incredibly emotional. Communicate to your client that you’re there to help guide them and to make sure their money is aligned with their core principles and beliefs. Taking the extra time necessary to discuss and nail down your client’s values—and what they hope to get out of their work with you—can help you foster a deeper relationship early on. Clients can often have a difficult time identifying their financial goals, let alone clearly defining, prioritizing, and saving towards them. Nick Holeman, Director of Financial Planning at Betterment, recommends doing a little research about your clients in advance: “Having these data points on hand will help you get your clients thinking in the right direction. It also demonstrates to your clients the personalized experience of working with you.” #2: Prioritize transparency. Committing to transparency can help you impress new customers and drive brand loyalty in the long run. According to a 2023 consumer survey, 88 percent of consumers say that authenticity is a key factor when deciding what brands they support, and 46 percent of consumers say that they would pay more to purchase from brands they trust. Companies may shy away from being transparent to achieve some perceived benefit in the short-term. If you hope to earn long-term client loyalty though, it’s important to pursue transparency with your clients as often and early as possible. Of course, as a business offering paid services, you should make sure the following information is clear and readily accessible: Your fees (What you charge): Whether you leverage an asset-based, tiered, or fixed fee pricing model, your client should have a solid understanding of your service fees. In any conversation around fees, it’s important to first make sure your value proposition is clear and that your clients understand what you bring to the table. Your billing cadence: Communicate what payment schedule your client can expect (monthly, quarterly, etc.). But don't overlook these other key questions: How often will you meet or check in with your client? What communication methods do you and your clients prefer? Between video calls, text, and email, define what works best for this relationship. What services will you offer (and what will you not offer)? It’s important to provide an accurate summary of the scope of your services upfront. Outline areas where you and your team might not be spending time to avoid creating false service expectations. By setting clear expectations from the start, you can ease client skepticism and start to build credibility. #3: Cut out paper and manual workflows. In today’s tech-driven world, clients have come to expect a seamless experience across digital platforms. (In fact, 40% of investors say digital access has become a greater priority following COVID-19.) Paper-heavy processes requiring wet ink, multiple rounds of back-and-forth, and hand-carried mail no longer cut it. Going paperless becomes particularly relevant at the onboarding moment. If your firm is taking advantage of software to handle sending and collecting electronic agreements during the account opening process, that’s a great first step. Too often, though, these services still involve multiple email touchpoints that can feel disjointed and overwhelming to a new client. Explore solutions that can help you open new accounts across channels as possible. At Betterment, our technology offers built-in digital client onboarding to help advisors open accounts completely online, with minimal lift required from your client. At account opening, clients receive one email touchpoint with all information they need to approve your firm’s set up—a process that takes just minutes. Firms can leverage digital onboarding to impress clients who otherwise may be used to clunky or paper-heavy experiences with other wealth managers. Digital, minimal effort account opening can even help firms reach entirely new client segments. Matt Lohrius, lead advisor at Ritholz’s Liftoff Invest business, believes going paperless is critical to meeting demand from accumulation phase investors: “For Liftoff, it’s just huge from a technology standpoint: opening accounts, transferring money from other custodians, depositing money, linking a bank account. Everything is so easy and intuitive for the client.” Non-paid client of Betterment. Views may not be representative, see more reviews at the App Store and Google Play Store. The bottom line: Replacing manual onboarding tasks can help you spend less time on routine logistics and more time personalizing advice. When you free up more mental energy to focus on better service, your clients will take note. #4: Over communicate. Onboarding a client is more than a one-and-done touchpoint. For many clients, onboarding presents a lot of change and uncertainty—especially if this is their first time working with an advisor. Over the course of your client’s first 90 days, consider setting up a series of onboarding meetings. A schedule can help create structure, demonstrate your confidence, and convey to your client that you value their input. (Tip: As you hire and expand your team, it can be helpful to standardize this client onboarding meeting framework across your firm). The series might look like: Initial get to know you: Time for you to learn about your client and their family, likes/dislikes, values, and ambitions. The end of this introductory meeting is a great time to send a client questionnaire. A deeper evaluation of their financial state: Time for you to collect more detailed information on the clients savings, current investments, debts, income, risk tolerance. The financial plan: A meeting to present your proposal for your client’s unique financial plan. Follow up meeting: Check in with your client 30 to 45 days after the initial plan conversation. Progress meetings: After the initial follow-up, set a couple future dates to discuss progress made toward goals. The importance of the fifth step above cannot be overstated. In fact, the key to growing a loyal client base is consistent communication. Staying connected regularly can help you gain a more thorough understanding of how your client’s objectives may have shifted over time. Conversely, lack of communication sends the wrong signal to clients—and, overtime, might lead to losing the client relationship as their perception of your service value declines. When it comes to effective communication, attitude is everything. Make sure you bring positivity to each interaction and illustrate why you love what you do. Being genuine and ready to engage in small talk beyond finances (and, of course, listening more than you speak) can help you and your client get the most out of these meetings. Frequent communication is not limited to in-person interactions. Your firm’s online presence and branding are also an important arena for exceeding customer expectations and rivaling your competitors. Some steps to consider taking: Connect with new clients on social media. If you have a newsletter program, set up a system to routinely add new customers to the list. Invest in a website that speaks to both prospective and existing clients. Writing a weekly blog is a great way to distribute updates and market commentary regularly. Consider hosting webinars or an annual virtual event. Come holiday time, make sure you have a budget for a client gift or handwritten happy new year card—it’ll be a great cue to get them thinking about the year to come and your goals together.
