Train your clients to think about value before fees, and they’ll learn to appreciate what you bring to the table.
That was a central message behind a breakout session at the opening day of the NAPA 401(k) Summit at Caesar’s Palace in Las Vegas, titled “Worth ‘Whiles’: A Value Ad for Your Value Add.”
With fee compression and constant attacks on a client base, 401k advisors must be able to showcase their value in a way the client can understand, articulate, and ultimately reaffirm their decision to engage the advisor’s services. CPAs and Attorneys showcase the details of their work, and so should 401k advisors, the panelists argued.
Panelist Brad Davis, business development director, 401k Advisors Intermountain, told the audience “fees are irrelevant once we add value,” and asked the audience what they do to communicate the value they add to the client.
“You have to have an explanation of what you’ve done to help your client discern their value,” Davis said, noting that two-thirds of advisors are not tracking their hours. “How do you communicate that work doesn’t begin and end with committee meetings?”
Panelist Tom Small, investment portfolio specialist, The Mahoney Group at Raymond James, said he makes a point of being sure to speak to clients in between committee meetings, which in addition to helping him provide better service also serves to remind committee members who he is. “It really can be that simple,” Small said.
Davis added that it is helpful to know who the committee members are, and to follow them on LinkedIn. If one of them leaves it’s a red flag that should alert you to find the new committee member and proactively reach out to them to help them understand the plan and your role.
Panelist Nate White, founder, Teros Advisors, said using a CRM can be critical in tracking tasks. “Sometimes we forget how often we touch a client,” White said. “When you can sit down and articulate all those touch points, it is incredible and I think the client appreciates it.”
When they do start with fees, Craig Rosenthal, senior vice president, advisor sales and service with Fiduciary Benchmarks, said, “Say, ‘I’ll get back to you after I talk about what I’ve done for you in the last year.’”
Davis added that benefits sell plans, not lower fees.
“If we sell a plan on fees, you’re just waiting for the next guy to come in 10 basis points lower,” he said. But if you sell it on value, the client gets past fees.
He brought up a car sales analogy–as in: “Features don’t sell cars, benefits do.”
If you tell a prospective buyer that a car has a backup camera, they might yawn.
“But if you tell them that the backup camera is going to prevent them from running over their kid’s bike, then they see the value in it.”
The 2019 NAPA 401(k) Summit continues through Tuesday.
Veteran financial services industry journalist Brian Anderson joined 401(k) Specialist as Managing Editor in January 2019. He has led editorial content for a variety of well-known properties including Insurance Forums, Life Insurance Selling, National Underwriter Life & Health, and Senior Market Advisor. He has always maintained a focus on providing readers with timely, useful information intended to help them build their business.
