In the consulting work with our advisory firms, we use the following VP Grid™ to map their current value propositions and the transition path to their new Next Generation Value Propositions.
In reality, not all their current clients want or need advice. Nor does every advice client want the same level of advice. But every advice firm we’ve worked with has a different transition plan that initially proves and then broadens their evolving value proposition for their advice clients.
The core of the VP Grid is the horizontal axis.
The motivation of the value propositions in the left hand quadrants (i.e. Product/Services Specialists or Suppliers) is the desire to excel in the provision of a specific product or service. Hence, their focus on the “what” – the product or service.
In this grid, the Product/Service Specialists are those advisers that position their value as SMSF specialists, as investment gurus, as leasing gurus, CGT experts, private bank advisers or specialist stock brokers. At its core, this value proposition is often based upon the adviser’s ability to ‘beat the competition and/or market’, or ‘save costs’ or ‘be the service or product expert’. We refer to this value proposition as the “Warren Buffet” proposition.
The Product/Service Suppliers are the retail advisers and manufacturers with retail advice ‘shop-fronts’. These include the generalist financial planner working for large financial services groups such as AMP Financial Planning, Professional Investment Services, and Count Wealth. The focus of excellence for these advisers is the technical skill exemplified in their Statements of Advice (SOA, i.e. the client engagement and re-engagement document). Advisers who ‘manage’ books of clients consisting of more than 250 active clients are generally in this category of value proposition. They can include tax agents, insurance providers, bank financial planners and compliance-based accountants. We refer to this value proposition as the “Walmart” proposition.
Financial Carers are also retail advisers (like Product/Service Suppliers) who are trained and compliant in technical skills but have been trained in client engagement skills beyond the product fact find. These retail advisers are not remunerated on product brokerage (unlike the Product/Service Suppliers) but client referral rates, dollar-based client retainer agreements and client satisfaction levels. They too manage larger ‘books’ of active clients (e.g. more than 250 active clients for each adviser) and they maintain consistent revenue flows regardless of market or legislative circumstances. Importantly, their motivation lies in the achievement of their clients’ personal outcome, not the means by which they are achieved. We refer to this value proposition as the “Nelson Mandela” proposition (i.e. a leader who exemplifies the achievement of a greater good for a great many).
Financial Consultants are the advisers that are continually developing their project management, client management and strategic management skills ON TOP OF their inherent technical skills, but aim to be the consultant on retainer for their allocated client base. These advisers, year in year out, focus on best achieving the outcomes important to their clients whilst navigating ongoing financial challenges arising from the behavioural, marketplace, legislative, and competitive influences in their clients’ lives. Again, the “raison d’etre” of their work is their understanding of the client’s personal ambitions. Being rugby league fans, we refer to this value proposition as the “Wayne Bennett” proposition (i.e. a leader in his field who exemplifies the achievement of excellence for a selected few).
Obviously firms can deliver multiple value propositions. Advisers may focus on the ‘financial consultancy’ proposition whilst also supporting other areas of the firm deliver the ‘financial care’ proposition or even be required for some clients as a Product/Service Specialist.