Many people think a financial advisor’s value comes down to the cost paid per transaction. Like “free shipping,” (which is not really free) they might assume advice and help is built into the price paid for those transactions. Looking at the big picture, what does the financial advisor bring to the table? How do they deliver value?

It is human nature to want to get the most value possible while paying the least cost. A good example is shopping for gas when your car needs a refill. The price of gasoline is posted at each service station. You often pick the provider with the lowest price because in your opinion, regular gas (87 octane) is a commodity. Another example is often common for doctors and lawyers who attend parties and events. People will ask for free advice in a social setting.

Meanwhile, many businesses seek to bring in the maximum revenue possible on each transaction. You have noticed Louis Vuitton and Hermes products never go on sale. Firms like LVMH own icon wine producers in the Champagne and Bordeaux regions of France. Supply of the finest wines is limited. In my opinion, they price their top wines at the highest price that will ensure the last bottle leaves the shelf in the hands of the customer willing to pay their price for an item in short supply.

What does a financial advisor bring to the client relationship? It is the advisor’s job to tell this story. Years ago, when asset-based pricing was in its early days, I asked an advisor how he answers the prospect’s question: “What do I get for my 1%?” He looked at me and said: “They get me.” That is true, but the advisor must explain in greater detail. It’s not the client’s job to arrive at the answer themselves.

1. The personalized, long-term relationship. Investing should not be transactional. An investor might know what they want to buy. They might ask for advice and be content to make the purchase, factoring in the value of that advice. They also need the answer to “when to sell.” This is part of the value of the long-term relationship.

2. Financial planning.  Most client relationships start with a financial plan. This aligns with the “know your customer” rule. It also acknowledges you cannot offer good advice without knowing what the client wants to achieve. People’s lives rarely move in a straight line. Neither does the stock market. The client’s financial plan can adapt to changes in their situation.

3. Periodic reviews. Many people have short attention spans. An investor can be keen on stocks, then lose interest when the stock market goes through a rough time. There have been times when some investors did not even bother to open their statements! A good advisor focuses a client’s attention on their portfolio on an agreed, regular basis.

4. Progress to goals. A good question to consider over and over is “Why do you invest?” You take a risk when you buy stocks, compared to keeping your money in an interest earning bank account, CD or U.S. Treasury Bill. What is the investor seeking to accomplish? That good advisor helps the client track progress to goals. This can bring retirement or financial independence closer.

5. Retirement planning. This is likely everyone’s #1 financial planning need. Your advisor should be able to look at the assets you have in tax deferred accounts established at the firm, but also do planning that includes retirement assets held away and assets within your company’s retirement plan.

6. Personalized service. When a client calls an advisor during business hours, they generally get the advisor, a team member or the advisor’s sales assistant. All these people have telephone coverage setup, so you get a live person, most likely someone who knows you by name. This is very different from the voicemail prompts and telephone trees the power, phone and credit card companies use.

7. Help with insurance needs. Your advisor is likely licensed for several insurance product areas. They have access to specialists. For the insurance areas where they are not licensed, they should have several trusted colleagues to whom they can refer you.

8. Lending services. People think of financial advisors helping with the asset side of the equation. Your advisor should be able to help with the liability side of the balance sheet. This can include finding good rates on consumer lending (credit cards), refinancing your home mortgage and finding solutions for less straightforward financing situations like rental properties.

9. Providing advice within the family. Sometimes referred to as “selling up and selling down,” a good advisor can help in situations where the client advises aging relatives on how to invest money. They can also provide general advice for relatives who might need help managing money yet do not qualify to become clients.

10. College planning. Although this would be grouped under “selling down” advisors can help project future education costs and develop ways to save towards that goal in tax efficient ways. By setting up dedicated college savings accounts, the advisor can provide a pathway for the client’s relatives to gift money, knowing it should not be used for other purposes.

11. Professional referrals. There are areas of expertise outside the advisor’s realm. This might include setting up trusts or finding an accountant skilled in addressing specific situations like theirs. A good advisor would provide three or more referrals in a given category, allowing the client to choose.

12. Philanthropy. Many people think of giving in terms of handing over cash or writing a check. A good advisor can help clients towards achieving their goals to support charities, both during and after their lifetime.

There are many other areas where a good advisor adds value. These are ones that take the advisor out of the “stockbroker” realm and into the “private banker” world.

Bryce Sanders is president of Perceptive Business Solutions Inc. He provides HNW client acquisition training for the financial services industry. His book Captivating the Wealthy Investor is available on Amazon.