Human decision-making is complex and sometimes convoluted. But it can also be Pavlovian, which is to say, predictable. The limbic system of the brain, which governs behavior, motivations and emotions, controls buying decisions. That’s important because, as any good marketer knows, the “heart” more often than not rules the “head” when it comes to parting with dollars. It’s a good lesson for 401(k) financial advisors to keep in mind when articulating their value to clients. Yet, research by MassMutual shows that few advisors communicate an effective value proposition, especially those in the retirement plans marketplace.
Employers that sponsor 401(k) retirement plans, meanwhile, say they are most attracted to advisors who can articulate specific values and connect to the employer’s needs.
People are emotional creatures and therefore need to feel good about someone before they do business with him or her, especially as it relates to money matters. Shared values help establish and cement connections with people and, ultimately, attract people to the larger purpose.
One of the most effective ways to create a positive emotional connection is to start by explaining the underlying reasons that drive what we do. It’s a strategy espoused by Simon Sinek, author, speaker and marketing guru. He recommends focusing on inspiration rather than perspiration, articulating “why” before “what.”
“All of the greater inspirational leaders and organizations of the world – whether it’s Apple or Martin Luther King or the Wright brothers – they all think and act and communicate the same exact way and it’s the complete opposite of everyone else,” Sinek says.
People and organizations that make the tightest, quickest and most enduring connections focus on the underlying reasons of what they do. They talk about their cause, their purpose, their beliefs. “People don’t buy what you do,” Sinek explains, “people buy why you do it.”
A great value proposition focuses on clients’ needs and connects to the advisor’s values: “I define my success as helping you to achieve financial success … My No. 1 goal is to help you realize your financial dreams … Nothing motivates me more than helping people retire on their own terms.”
Admittedly, once clients’ limbic systems come to terms with an advisor’s “why,” most will then also want to understand the “what” and “how” of the practice. It’s then a good time for advisors to articulate their three “Rs”: resumes, resources and recognition.
Resume: Advisors need to review their background, explaining why they’re qualified to serve a client’s needs, from meeting a client’s personal financial planning goals, supporting an employer’s retirement savings plan, or both. Don’t just list professional designations but explain what they mean and what it takes to obtain them. Take care to explain “why” a client should care.
Experience is obviously a big plus, especially if an advisor has devoted several years or even decades serving a community. Being a member of the local Chamber of Commerce, Rotary Club or other civic organizations gives clients – especially prospective clients – a sense that their advisor is connected, accepted and trustworthy.
Resources: One of the biggest advantages of working with an advisor is that clients can benefit from not just a single person’s expertise but the capabilities and resources of the practice, broker-dealer, and other investment and financial services firms that the advisor can bring to bear on a problem or goal.
Depending upon a client’s objectives, advisors can tap into insight and planning tools on retirement income, insurance protection, employee benefits, estate planning, charitable giving and trusts, to name a few. Today’s advisors are the quarterbacks for an entire support team of financial professionals to serve any client, no matter the financial situation.
Recognition: Awards, publicity and referrals can all help set advisors apart. Industry accolades help highlight not only competence but mastery. Everyone likes a winner, especially when the “winner” is working for you.
Writing articles on financial topics for community and trade journals is a good way for an advisor to publicize his or her expertise and serve as another form of recognition. Many articles on specific financial planning topics, if compliance-approved, can also be used as educational pieces for clients and prospects.
Perhaps the most discreet yet most effective form of recognition is referrals from existing clients. In the retirement plans marketplace, for instance, employers would rather work with an advisor who has helped other businesses effectively run their 401(k) or other retirement savings plan. It’s the same for clients with individual financial concerns.
Once advisors describe their financial practice and capabilities, there is typically little reason to remind clients about it. However, the need to reaffirm the client’s reasons for being there – the shared goals and values – never stops. The limbic system’s need for reinforcement is continuous and so therefore so is the need to continue connecting with the “why.”
Thomas Foster Jr. is Assistant Vice President, Strategy and Relationships, for MassMutual Retirement Services, a division of Massachusetts Mutual Life Insurance Co.
With more than 20 years serving financial markets, John Sullivan is the former editor-in-chief of Investment Advisor magazine and retirement editor of ThinkAdvisor.com. Sullivan is also the former editor of Boomer Market Advisor and Bank Advisor magazines, and has a background in the insurance and investment industries in addition to his journalism roots.
