Here’s a question that will tell you a lot about your firm’s positioning and pricing approach.
When a qualified prospect meets your team for the first time, where do those vital initial conversations focus?
If the answer is the prospect’s specific technical issue or the adviser’s technical expertise, or fact-finding into their superannuation, or how they are structured, or how much money they think they need in retirement, or about specific investments, property, risk or tax issues, your team is positioning themselves as specialists.
And that’s not wrong.
Those services are crucial.
But it can create a problem that will get worse every year.
The specialist adviser prices and positions themselves on their expertise.
The initial fee reflects the complexity of the work required.
That’s understandable.
But what happens in subsequent years for specialist advice teams who justify and position their original fees on a complexity that becomes less of an issue?
And now the client – consciously or not – is reassessing ongoing fees against a diminishing need for specialist advice.
This is a difficult fee conversation, especially when most specialist teams delegate ongoing relationship management to junior trainee specialists with less experience to justify ongoing fees.
The client’s logic is sound.
If you and your team position your advice on specialist expertise, the team’s ongoing value will be measured against how much specialist advice is still required.
That’s a retreating tide.
PRINCIPAL ADVICE
The Principal Advice team operates differently.
Particularly in the engine room of all advice relationships – the initial and annual engagement conversations.
The analysts and coaches on my Certainty Advice team can quickly identify whether they’re reviewing the client conversations of a specialist team or a principal team within the first few pages of a client discovery transcript.
The specialist team’s transcripts focus on what is pressing for the client.
What they want to address.
Their specific issue, digging into the details, facilitating discussions about various options.
The principal team, however, acknowledge the pressing issues and park them for later as they focus and position the conversations on what is of value to the client.
The principal teams focus on the outcomes clients hope to achieve, what progress looks like for them, what complexities are stopping them, and the consequences of not getting the right advice.
Principal advice teams get very clear on the value clients seek before returning to determine which expertise or capability is required to deliver it.
This distinction is everything when it comes to positioning and pricing the value of advice.
When teams position themselves on what clients value rather than what advisers do, the fees, both initial and ongoing, are anchored to client outcomes, not to the technical work required.
The ongoing conversation shifts from “what did you do for me this year?” to “are we still on track to achieve what is of value to me?”
That conversation doesn’t diminish in value over the years.
They deepen.
BUILDING PRINCIPAL TEAMS
Here’s what makes this even more significant for firms building teams.
The skills required to deliver principal advice are not the same skills required to be a technical specialist.
Positioning, probing, controlling conversations, deep listening, and teamwork – these are the skills of agile advice teams that drive principal advice relationships.
They can be developed, coached, and mastered by team members who may never have the years of technical experience needed to become technical specialists. Which means a team’s ability to deliver valuable, premium-fee advice doesn’t have to depend on one or two senior technical experts.
It can be built across an advisory team.
Jim