When you meet with a potential client, do you try to convince them of the value that they’ll receive from your financial advice? If so, do you find that you have difficulty in articulating that value?

In the second episode of my five-part interview series with John Page, RFP, CFP, RFC of Wealth Enhancement Academy, as well as Chairman and Chief Adjudicator of the PlanPlus Global Financial Planning Awards, we’ll be talking about the process of properly articulating the value of good financial planning. Tune in to hear John’s insights about communicating the value of financial advice to clients.

Topics Discussed in this Episode:

  • How peace of mind and time saved, while difficult to quantify, can provide great value to clients
  • Different ways that financial planners can help clients make the right decisions and avoid serious mistakes
  • How to make a presentation that demonstrates the value of financial advice
  • The importance of creating a sample financial plan that the client can relate to
  • Why you should use studies as a backup, rather than leading with them
  • What can go wrong in the process of articulating value
  • Tips that can help listeners more effectively communicate value to their clients

Quotes by John:

“There’s no question that good financial planning will provide huge peace of mind to people.”

“The way you convince someone is, in my way of thinking, you make a presentation to them which is all around the whole idea of what you would do for them.”

“The key is, you have to try to do it right the first time.”

Show notes:

  1. Alpha, Beta, and Now…Gamma
  2. Putting a value on your value: Quantifying Vanguard Advisor’s Alpha

Good financial planning can be transformative ‒ but you don’t need us to tell you that.

The trick, though, is demonstrating that value to prospects. Luckily, John Page has perfected that process and was willing to share it with us on the latest episode of the Growing your Financial Advisor Practice Podcast.

The value of great financial advice

There are 3 main ways in which financial planners provide value to their clients:

  1. Gaining peace of mind: In John’s view, “There’s no question that good financial planning will provide huge peace of mind to people.” Make sure you emphasize this value to clients early and often ‒ you can’t put a price on the comfort of knowing that their financial security is in good hands.
  2. Saving time: You can help clients make financial decisions more easily, so they can spend their time on other valuable things.

    For example, when it comes to renewing a mortgage, they can just ask you what term they should take instead of hemming and hawing their way through the decision. They don’t need to do the research and figure it out for themselves because you’ve already done it for them and know what’s in their best interest.
  3. Making the right decisions: Put another way, you help clients avoid serious mistakes. One example is when people have a lot of wealth and loved ones come to them for money.

John recalls a client whose brother-in-law wanted $200,000 to start a new business. Cleverly, John’s client told his brother-in-law that he couldn’t make any big financial decisions without speaking to his advisor first; he said that was just part of the deal with John.

It fell on John to break the news to the brother-in-law that it wasn’t smart to invest in the idea, and to explain why. This gave his client an easy way out and prevented him from being pressured into taking a huge risk with his money. The same goes for clients whose children often ask them for money.

Tip: Get your clients to check in with you anytime they’re thinking of making a big financial decision. That way, you can help run interference for them to help prevent unnecessary risk or even stop them from being taken advantage of.

How to demonstrate your value to prospective clients

The above benefits are all well and good, but they’re difficult to quantify. So how can you convince prospective clients to work with you?

According to John, “The way you convince someone is, in my way of thinking, you make a presentation to them which is all around the whole idea of what you would do for them.” He always has on hand a few sample financial plans. Every time he’s meeting with a prospective client for the first time, he picks the one that is closest to a particular prospect’s situation and walks them through it.

Using sample plans to articulate your value

If you have a good sample plan, your clients will easily see how it connects to their situation and how you can help them add value. You can even begin to quantify your value as you go through the plan.

John does this by including an action plan with his sample where he lists specific next steps that should be taken to fill any needs and to add value. He can then approximate how much that advice is actually worth to the client.

For example, you can demonstrate in the sample how someone paying off a non-deductible debt with interest could change that into a tax-deductible loan. That would allow you to show the exact value of the resulting tax deduction to the client ‒ the exact amount of money that stays in their pocket.

Tip: As you go through the sample plan with a client, show them concrete places where you can begin to add value, and quantify that value for them.

Using industry studies to back up your value

Now that you’ve articulated your value to clients through sample financial plans with concrete recommendations, you can also back up the less tangible values of peace of mind, saving time, and avoiding mistakes using leading industry studies.

Tip: If you aren’t aware of these studies, put in the time to read the two listed below. It’s crucial for you to understand them well, even if you never bring them up in a client meeting ‒ if you don’t even grasp your own value, how on earth can your clients?

The two major studies below were prepared by leading experts in the field over a number of years. Mentioning key evidence from these studies can be very powerful if included at the right moment:

Tip: Don’t start with the studies. They are quite complex and heavy, so John suggests leaving them for a second meeting, after your client has already seen the context-specific value in your sample action plan.

Three common mistakes to avoid when articulating value to clients

There are three big traps financial advisors can fall into when trying to articulate their value to a client:

  1. The mistake that most advisors make is that they don’t even try! It’s not that it’s difficult ‒ it’s just that they haven’t stopped to figure out how they can do it. If you missed our first episode, go back to Episode 1: How to Successfully Transition from Product-centric into an Advice-centric Practice to learn more about the importance of having a great process for your financial advising practice, as well as the five building blocks of John’s process.
  2. Another issue financial advisors have is that they try to demonstrate value in just one area. This happens most commonly in investments, where the advisor will show off the rate of return on a portfolio they’ve managed and leave it at that. A sharp client won’t be impressed by that and will need to see more context-specific value.
  3. Another issue is that advisors may use poor samples. For example, if your sample financial plan doesn’t relate to the client’s situation or doesn’t make sense to them ‒ whether that’s because it’s too simple or too complex ‒ you’ll lose their interest.

Since you’re just meeting the person and haven’t built up any trust yet, one mistake can completely ruin the relationship, and the prospect will decide to go elsewhere. As John puts it, “The key is you have to try to do it right the first time” because you can’t come back from a mistake in the very first meeting.

KEY TAKEAWAY: This is not the time to experiment. A proven process is absolutely crucial because there’s so little room for error.

To help you take the guesswork out of it, we’ll be going into this a lot more in depth in Episode 4: Conducting your First Client Meeting in a Way to Maximize Conversions and to Weed out Bad Clients. We’ll also show you how to avoid the clients that you don’t want, but who want to work with you because of your added value and great process.

Next time, we’ll talk fees and pricing in Episode 3: Pricing and Structuring your Service Offering to Make it Irresistible to Prospects.

Make sure you subscribe to the podcast on iTunes so you don’t miss the rest of our interview series with John, and sign up below to get notified every time a new episode goes live.