A Ground-Breaking Path to Differentiation
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“How are you different?”
Advisors tell me that is the most challenging questions prospects ask.
I know why.
You’re probably not different.
Efforts to differentiate
Many advisory firms have an obligatory menu on their web site entitled, Why We’re Different. Here’s how the “difference” is often described:
We provide individuals, families, retirement plan sponsors, trusts and endowments with sophisticated advice and personalized service. We cultivate client relationships with long-term strategies in all types of markets.
There are many variations on that theme.
Here’s the problem. These descriptions are no different than your competitors.
It gets worse when you provide more details.
If you’re an evidence-based or passively-oriented advisor, your investment philosophy (with nuanced exceptions) is very similar to other advisors espousing the same approach.
The fact that you “place clients first” makes you the same as every other registered investment advisor.
So does the fact you are transparent about fees, don’t earn commissions or accept payments from vendors. Your advice may well be objective, but that doesn’t differentiate you from thousands of RIAs who are also “fee only.”
You probably use the same custodian as other RIAs, so you can’t claim assets of your clients are any safer with you.
You are well-credentialed. So is everyone else.
You coordinate with attorneys and accountants. Many RIAs do. Some even do this work in-house (which does makes them “different”).
You tout your integrity, expertise and how much you “care.” No advisor has ever proclaimed they “don’t care.”
How to really differentiate
Here’s my recommended response to the question, “How are you different?”
I’m going to explain what we do and how we do it, and will answer any questions about our services. You can then decide whether we are a good fit, compared to your other options.
This response accomplishes several things. It transfers the burden of differentiation from you to the prospect, where it belongs.
It also avoids responding to a question you can’t answer. “Different” from what? You may not know what other firms your prospect is considering. How can you possibly differentiate your firm?
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A critical tenet of the Solin Process℠ is that it doesn’t involve persuading, justifying or selling. The question about differentiation is an effort by the prospect to make you justify why he or she should retain your firm and not another advisor. You can’t honestly answer that question because, if you knew all the facts, you might conclude the prospect would be better served by another firm.
You can apply this approach to other challenging questions, like, “How do you justify your fees?” or, ”How do you add value?”
Don’t fall into the trap of “justifying” anything. Explain what you do, offer to answer questions and tell the prospect they are the best ones to decide if you’re worth what you are charging or if the value you add to their unique situation warrants your fees.
Adopting this response to these commonly asked questions will really differentiate your firm.
Dan Solin is a New York Times best-selling author of the Smartest series of books. His latest book is The Smartest Sales Book You'll Ever Read. His sales coaching practice includes helping advisors convert prospects into clients and generating leads through videos and other elements of marketing. Dan is not affiliated with any advisory firm.
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