Communicating your value
Invesco Consulting has been working to understand the language of value, cost and their intrinsic link in financial advice for more than two decades. Our extensive research conducted in conjunction with political consultants and word specialists Maslansky + Partners, illustrates how language plays a vital role in effectively communicating an advisers’ value to current and potential clients.
Conveying value through conversation
Establishing a sense of value, clarity and respect is critical when building a connection and advisers need to respond to the ‘cries’ of their clients, who want to understand if what they are paying for will provide value. Advisers need to bridge the gap between cost verses value in the eyes of their client.
Clients are asking and assessing their advisers based on a few overarching questions – ‘Will you be smart with my money?’, ‘What can you help me with in addition to just managing my money’ and ‘Show me my progress and make me feel I’m on track to achieve my goals’. The interplay between cost and value is crucial, as price is only an issue in the absence of perceived value. Research shows that there are three steps when it comes to talking about cost with clients.
The first step
Acknowledge and show respect for whatever a client’s paying or what you are asking the client to pay. Advisers often don’t acknowledge a client for paying what they pay, and they don’t always show respect for that because advisers understand what it is that the client is paying for and what the result will be. However, the client may not understand, know, or feel satisfied early on in a relationship. It is important that all advisers recognise exactly what a client is paying, and they do not take for granted the power of acknowledging this. Of course, advisers don’t need to say it out loud, but research shows that emotional engagement from the client is extremely high when there is a verbal appreciation of the client’s outgoing costs for financial advice.
The second step
Use the acknowledgement of the clients’ costs to transition into your statement about value. A framework for this transition statement might be, ‘You may be wondering what you’re getting for this cost. Let me explain…’. There is the chance to communicate and provide a personalised statement of value. It is imperative to use this opportunity to show that you have listened to the client’s goals and aspirations and repeat them back to the client. Personalise this message specially for the client by using the pronouns ‘you’ and ‘your’ and make the client feel the message is tailored for them.
The third step
An effective cost conversation finishes with the simple, straightforward disclosure of the actual costs. It may seem obvious however, it is vital that the client knows that you know exactly where every cent is going. If you have done the first two steps correctly, this step is much easier.
Clients want to know that their adviser is cost efficient and not cost indifferent, and it is up to the adviser to demonstrate this for their clients and prospects. Focusing on building a framework for more effective conversations about price, will give advisers the confidence to deliver their message authentically and consistently every time.
Invesco Global Consulting is a unique resource that exists to help advisers in the three areas all advisers consistently focus on – winning new business, retaining existing clients and growing their wallet and market share. We focus solely on the importance of the client relationship, methodically researching the language of our industry and the emotions associated with it to create actionable and implementable practice management and business strategy programs, assisting advisers across Australia.