The August "Efficient Practice" column entitled "Embracing Differentiation" apparently caught the imagination of many people, financial advisors and otherwise. The article focused on a concept developed in the book Blue Ocean Strategy by W. Chan Kim and Renee Mauborgne (Harvard Business School Press, 2005). The concept here was that you can render competition irrelevant by creating uncontested market space. This powerful idea has raised interest among advisors who fear they might be "wallowing in a sea of sameness."

In this case, the sea is a red ocean. According to the book, in the red oceans, as the market space gets crowded, the prospects for profits and growth significantly decline over time. Products become commodities or niches, and cutthroat competition turns the
ocean bloody.

In the blue ocean, meanwhile, demand for services is created rather than fought over, thus the opportunity for rapid growth and expansion of market share is greater because there is no dilution in the market due to competition.

The question posed by advisors is: How do they create uncontested market space? They also want to know what truly creates differentiation in the financial services profession when products and services look, sound and feel similar. To answer these questions, advisors must address one of the key value curve questions posed in the book: "Which product/service offering should be created that the profession has never offered before?" Creating a product, of course, is difficult because of regulatory issues and the overabundance of items already on the market. In the case of service, however, there is much that can be done.

We can look at two areas of practice operations, for example, that would benefit from a Blue Ocean approach: 1) Web site and client deliverables; and 2) professional credentials and the 30-second elevator speech.

In the first area, many financial advisors use what could be called a brochure Web site. This is a fairly simple Internet presence that focuses on the financial advisor and lists the products and services offered by the firm. A site using Blue Ocean techniques, on the other hand, might take the focus off the business and its products and focus instead on the client and the lifestyle he seeks to achieve, results he could associate with the advisory firm. If the site were a simple brochure, it might say "Smith Financial Advisors, offering financial planning and asset management for over 20 years." In the Blue Ocean type site, by contrast, it might say "Explore, share, indulge, live ... it is your future! Let us help you afford it." This would be accompanied by photos of similar types of clients (retirees for instance) enjoying an active retirement lifestyle. The idea is to create a compelling brand statement that redefines the relationship and paints a picture of the life they want rather than a dry, uninteresting list of services.

Service offerings can also take on a new significance when examined through the lens of the Blue Ocean strategy. Two companies in particular are now offering ways to enhance clients' experience when they visit your Web site: Advisor Products Inc. and CRM Software.

Advisor Products, makers of Advisor Sites (a Web site hosting service), has introduced the Client Portal Platform (, which offers a way for clients to view and/or download information on their accounts, accessible directly from the firm's Web site. The portals can be highly customized to push content relevant to individual clients. They can post calendars showing appointments, reminders, etc. They can host blogs. And they can capture client investment reporting and statements from a large variety of sources, information that can be made available to clients (and, more importantly, can be controlled by the advisor).

The portal can be customized to have the same look and feel of the rest of the firm's Web site.

CRM Software, meanwhile, offers the Web site service Junxure ClientView for those firms that use Junxure as their client relationship management program. ClientView ( is a portal, accessible from most Web sites, that offers private Web pages enabling your clients to receive, store and share important documents such as account information, trusts, wills, tax information, etc. ClientView can generate electronic files and build batch performance reports from Schwab's Portfolio Center and dbCams along with custom Junxure reports such as net-worth statements, insurance summaries, etc.

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