Which category do you and your firm fit into? Once you determine this, then you can start to get a better understanding of your distinctive value proposition, i.e. your competitive advantage, and determine how to differentiate yourself, your brand, your processes, your efficiencies, etc. Ask yourself, “Where do I fall in the spectrum? What am I good at? What should I focus on?”

Additionally, think about where you could improve, and how you can round out your practice to better serve clients or attract a new type of client—whether by outsourcing, taking on a new partner or incorporating better technology. For example, if you realize you are a relationship builder and are less focused on investments, then you can decide whether you need a third-party investment manager to help you manage assets.


Knowing And Identifying Your Clients And Your Prospects

An advisor is a business owner, much like a doctor. The toughest part is balancing serving your clients while building your business at the same time. How do you do both? It’s a challenge. When it comes identifying your clients and your prospects, “Advisor Authority” defines two predominant investor profiles:

  1. The Return Seeker – Prefers active investing strategies with a low-touch engagement from their advisor.

  2. The Relationship Seeker – Prefers passive investing strategies with high-touch engagement from their advisor.

The vast majority (73 percent) of return seekers are millennials. Among these millennial return seekers, 69 percent have $1 million or more in investable assets. They prefer active investing strategies with a low-touch engagement from their advisors. Relationship seekers are on the opposite side of the spectrum compared to return seekers. In addition to preferring passive investing strategies with high-touch engagement, they are likely to be older and less affluent. Half of relationship seekers are boomers, and among these boomer relationship seekers, 69 percent have less than $1 million in investable assets. Relationship seekers rated years of experience (74 percent) as their top factor for selecting an advisor.

You cannot be everything to everyone. Instead, you should focus on fine-tuning who you serve. Ask yourself, “Given my competitive edge, which type of clients can I serve best?” and “Where should I spend time prospecting?”  Whether your client is a return seeker or relationship seeker, those who you align with on investing strategies and engagement preferences—and who require your area of expertise— are the investors you should be prospecting. The most successful advisors and the most successful firms are built on strong relationships.