We have reached a point in the financial services industry where it is time for providers to figure out what business they are really involved in. Tony Hallada, a managing principal at CliftonLarsonAllen Wealth Advisors LLC, recently told me that planners and advisors need to make up their minds about how they want to compete. Do they want to beat their competition on price, on performance or in relationships?

If you decide to compete on price, good luck. Commoditization alone will ground your ship. If you decide to compete on performance, double good luck, as markets, black swan events, euro crises and other gathering storms threaten to capsize your boat.

The best choice is to compete in relationships, which put you in better stead because you are in control of the factors that determine success and failure.

To do this, you must understand the type of value that you can deliver--and what people are willing to pay for. Being amicable and enjoyable to talk to and engaging in pleasant conversation are part of that value, but they are not going to command a premium. The greatest thing you can do in a relationship is transfer wisdom.

If you help your clients avoid mistakes, understand the bigger picture, prepare for the inevitable and exercise prudence and patience amid chaos, you have transferred wisdom. Being a great person who is pleasant to talk to just isn't going to cut it. There must be substantive-albeit intangible--value transferred in your conversations with clients.

To develop as a merchant of wisdom, you must first recognize that wisdom is your stock in trade. The second step is to comprehend the type of products you now deliver: instructive insight and actionable advice, strategies for confronting challenges and a calm prudence in a world gone mad.

I've created the illustration at right (See Figure 1) for wisdom merchants to use in explaining to clients and prospects what they are paying for. The central value is coaching and guidance. Excellent coaching is accomplished with an amalgam of strategy and inspiration. Good coaches not only teach the basics but they work toward inspiring the "players" to reach their potential. The inspiration side of coaching includes the value of helping people realize how well they could do--and what they could be--if they exercise discipline and stay the course. It is important that advisors define exactly what they mean or intend to accomplish as they "coach" their clients.

The wisdom merchant starts with the client's unique situation and explores the story that makes it unique. Using past experiences, present transitions and future possibilities, the wisdom merchant crafts a strategic plan, designed specifically for the client at hand. Ultimately, financial tools are used for that strategy, but only to help the client make progress.

Most of your competition is either selling financial investment advice and/or investment products or putting together financial plans and strategies. Both approaches have become highly commoditized. The core value of financial coaching hinges on how well we understand what makes each client unique and how skilled we become at transferring wisdom.

For example, Dan Lempe, John DuPriest and their group of advisors just opened America's Retirement Store in the Denver area. They conduct monthly seminars to educate clients and prospective clients about the complexities they face in their financial and retirement decisions. Their focus is not on products or investment choices but on making wise choices. Lempe states it this way, "Our goal is very straightforward: to help people understand the financial choices they have in today's confusing and at times dangerous investment environment. We know that a well-informed investor makes better decisions."

Simply stated, they are in the wisdom business and do a terrific job of explaining that value proposition to clients and seekers.

I recently spoke to a group of almost 500 of these clients and prospects and was deeply impressed at the genuine desire of these advisors to help people's lives move forward and to spare them the pain of poor financial decisions. They advertise these events with the header "Healthy, Wealthy, and Wise." Perfect. Wisdom is in great demand, but in short supply. It is a monumentally opportune time for those firms that can figure out how to communicate this value to their market.

There is so much that consumers don't know and need to know about Social Security, their retirement age (if they can retire), about estate preparation and beneficiary designations, risk management and income creation. The list goes on and on. The most valuable conversation with the consumer today is the informative one that does not surreptitiously lead to a particular product or fund. If you want to compete in the arenas of products, funds and ROI, again I wish you the best of luck, because luck has more to do with it than most of us would like to admit. You will be one more person banging a gong in a cacophony of cymbals.

Position yourself instead in the wisdom market: as a coach, as a guide, as an interpreter and advocate. Help clients sort through the clutter and the noise and assist them in making decisions that will calm their lives rather than add to the consternation and confusion. The conversations you engage clients in daily must reflect this value of acting wisely. Conversations that are centered on what's happening in the markets must take a back seat to conversations about what is happening in each client's specific situation.

Wisdom is an idiosyncratic and personal value that adapts to each person's unique situation. If you want your value proposition to evolve, then the conversation must evolve as well.

Becoming a merchant of wisdom requires rounding out your capabilities. In my next column, I will describe how you can transform yourself into what the marketplace is yearning to find--a wise financial professional.