Nearly all financial services and products are becoming commodities. Think about this: What financial services and products can you provide that another capable wealth manager cannot? Do you offer anything that is inherently unique? If you do indeed have a unique offering, how long will it be before it is duplicated?
Another significant obstacle to your success is the growing range of professionals who are now delivering financial advisory services and products. More financial professionals out there means more noise and more clutter, making it ever more difficult for you to stand apart from the competition on the basis of your offering alone.
What, then, can you do to counter commoditization? How can you set yourself truly apart from other wealth managers? The answer is to become a thought leader.
Thought leadership is increasingly becoming a requirement for wealth managers who want to build very successful practices serving high-net-worth clients. Thought leadership plays a critical role in the three most important areas of business development:
1. Maximizing client relationships: Thought leadership positions you as a leading authority and reinforces and strengthens your relationships with your clients. Not only will this help you retain clients over the long term, but it also can result in clients feeling more comfortable about giving you more assets you manage, and clients referring friends, colleagues and family members to you because they are confident in your abilities.
2. Attracting affluent prospects: The wealthy—and all prospects, for that matter—almost universally prefer working with thought leaders. There is no question that affluent individuals take professional brands into account when selecting their wealth managers. By becoming a thought leader, you will dramatically improve your ability to source new high-net-worth prospects and convert them into clients.
3. Garnering referrals from centers of influence: Clients are generally incapable of evaluating the knowledge and capabilities of wealth managers. This means that they frequently rely on the opinions of their professional advisors, such as attorneys and accountants, to choose a wealth manager. And to whom do these centers of influence prefer to introduce their affluent clients? Thought leaders.
Making introductions to wealth managers can be a high-risk endeavor for centers of influence. Simply put, if the referral does not work out well, the credibility and judgment of the center of influence comes into question. As professional services are all about credibility and judgment, the center of influence can come out a very big loser. But making an introduction to a thought leader dramatically mitigates that risk.
It is abundantly clear that thought leadership conveys a plethora of benefits to wealth managers.
Russ Alan Prince, president of R.A. Prince & Associates, is a consultant to family offices, the ultra-wealthy and select professionals.