How to Build Advisory Value – via Control or Vulnerability?

“Advisers often use value as a drunk uses a lamppost — for support rather than illumination” paraphrasing poet A.E. Housman

What is the value of advice?

It depends on whom advisers are serving – themselves or their clients?

The client’s common beliefs about the value of advice are evident by any quick scan of advice firm websites – the value promises include combinations of confidence, security, control, and freedom.

The confirmation for advice teams that are delivering on their promises is the feedback from satisfied clients, the retention of clients and the referrals from clients.

But where do the client’s greater feelings of confidence, security, control and freedom come from?

Is it knowing their superannuation or investments are secure and productive knowing the custodian of their savings are experts using world-class research by Noble Prize-winning economists?

When the theories supporting a team’s investment philosophies are well researched, presented or award-winning, it follows for clients to cite these aspects as being of value to them – especially at times when the research conflicts with other investment trends in newer or less studied investment categories.

Or is a client’s sense of the value of their advice built due to the experience and reputation of an adviser?

When a client receives advice from an adviser with ten, twenty, or even thirty years of, say, pre-retiree advice conversations, that experience speaks for itself when it comes to providing a client with the context for value.

The education credentials of advisers can serve in a similar manner to experience as a natural context for value. For good reason, lecturers, professors, academics and published experts quoting specific studies, or roles with prestigious organisations are sought after for quotes and opinions by the media seeking clarity about recent headlines. Credentials can provide a default value.

Sentiment can also carry value as a wave carries surfers.

While the energy behind sentiment is less visible than education, experience or research, the effect can be as strong. Students of heuristics appreciate the strength of the bias that makes mountains from molehills whether built upon well-tested foundations, ignorance or the fake news that can be pervasive and predictable as the weather.


There’s a problem here isn’t there?

There is little doubt that advisory firms are at a unique point in the evolution of the advice market space.

For firms serious about building a productive growth path towards the needed new brands of financial advice in the post-Covid, post-institutional market, the wrong proposition in the next few years could be as lethal as believing the environmental movement is a passing fad.

The problem with the value propositions built upon adviser education, experience, reputation, or upon the quality or cost of products and their research, or sentiment is these are all propositions built upon uncontrollable ‘inputs’.

The inputs to advisory propositions are essential, but they are not the same thing as client value.

We can send our kids to the best schools, but that may not make them ‘successful’ in post-school life.

We can buy the best golf clubs, but that may not improve our scores.

We can fly first-class again soon, but that doesn’t guarantee a great holiday.

We can be operated upon by the best surgeons, but that may not mean a restoration to former health and function.

Building great inputs is essential for every advisory firm. But thriving requires something else.

Thriving in the future of advice requires a value proposition built upon what an advisory firm’s quality inputs (i.e. reputations, experience, education, niches, quality processes, products et al) allow the firm’s clients to achieve the unique outputs that are of value to them.

This takes a vulnerability on behalf of advisory teams to let go of value associated with what they bring to an advisory relationship and thus allow their propositions and value to be based upon what their clients experience as a consequence of their advisory relationship.

If you are interested in the topic of fostering team vulnerability, the work of Brene Brown is worth your time.

The replacement of familiar scaffolds of valuable products, reputations, research, past experiences, makes the future more uncertain.

But it’s also the path to greater prosperity for our clients and the firms brave enough to lead them there.

The path beyond the light cast by product-based lamp-posts is a more vulnerable one. Building propositions upon what clients value is not easy – but it is the future of financial advice.

What do you reckon?




Photo by Egor Kamelev from Pexels



For over 30 years, Jim has influenced, coached, and consulted advisory firms across Australia. His firm, Certainty Advice Group coaches, trains and is building a growing group of advisory firms delivering comprehensive, unconflicted advice, priced on value. The community of advisory firms aligns with Australia’s highest and only ACCC/IP Australia Certification Mark standard of comprehensive, unconflicted advice – Certainty Advice. He has authored four books regarding financial advice with his latest – What Price Value – available now in pre-release for launch in March 2022.

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