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How to Prove Your Value as an Advisor

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How to Prove Your Value as an Advisor

Value is in the eye of the beholder. The problem is, the beholder – your client or prospect – may not know the value you are delivering.

Most of the advisors I have worked with over the years are providing significant value through investment advice, investment selection, planning for the future, retirement income planning, advice, guidance, and above-and-beyond service. So, what’s the catch?

I believe advisors need to message their value more succinctly, more often, and in a more memorable way.

Perhaps advisors should use outside research to prove their value?

According to independent studies by Russell Investments, Envestnet, Vanguard and others, a fiduciary advisory relationship can be expected to add an average 3% per year (see links to these studies at the end of this blog). Most of these research reports are for “Advisor Use Only” however the essence of their conclusions are powerful and should be discussed.

In addition to relying on outside studies, proving value should be front and center at firms today.

What does a client really receive? What are advisors doing for their fee? For instance, many advisors implement Goals-Based Planning. But the key to the value of any type of service requires proving it. Is the client really reaching their goals? Are they okay, with respect to their goals, when the market drops? The “valuable” advisor will measure progress to these goals each quarter and share it with the client (hence reminding and proving value).

In the face of negative media and low-cost providers, if you want to be perceived as being a valuable resource, you have to consistently remind people of the work that is being done on their behalf. If we don’t lead the conversation, by the time clients start heading for the door, it just may be too late.

Here are the studies: 

“What am I Paying Fees For?” Russell Investments, 2018.

“Capital Sigma: The Advisor Advantage,” Envestnet, 2019.

“Vanguard Advisor’s Alpha,” Vanguard Research, 2018

Related: How to Give Your Prospects a Clue About Who You Really Are

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