Would you hire a lawyer or doctor who advertised on TV or a billboard?
Chances are you probably wouldn’t. Conventional wisdom suggests that if they were that good, they wouldn’t need to promote themselves so blatantly. Not to mention it comes across as slick and unprofessional.
So why does Wall Street continue to do just the opposite and advertise everywhere? Because they’re selling a dream that many investors, after the financial crisis, are having trouble believing.
Despite the profit squeeze on Wall Street, firms continue to spend liberally to sell dreams – the dream of Wall Street’s superiority in financial advice and their clubby access to the best investment opportunities.
Back To The Future
What’s a financial advisor to do if his or her firm is a purveyor of grandiose dreams?
Many Wall Street advisors are adjusting their practice to protect their clients from their firm – surreal as that may seem. In addition, advisors should also follow the tried-and-true model of exceptional doctors and lawyers: Spend time developing a practice with a reputation for personal excellence. The business will follow.
Doctors know there’s no substitute for a good bedside manner and the competent application of medicine. Likewise, every world-class attorney builds a business based on expert knowledge of the law and equally expert skill in networking for clients.
Many financial advisors would do well to follow that model. One reason the independent wealth management business is growing so rapidly – largely without advertising – is that advisors provide independent advice and don’t need to peddle “dreamy” products. Clients are genuinely happy with them, and word-of-mouth referrals are resulting in a steady source of new business, just like they do for doctors and lawyers.
The good news is that it’s never been easier or more cost effective for advisors to let people know about their unique expertise. Social media provides a terrific communication platform that can reach a large audience without a Super Bowl-like ad budget.
Better still, social media gives your clients the opportunity to express their appreciation of your work so others can see. Nothing is more powerful than client testimonials that go viral online.
Getting Back to the Basics
The financial crisis and the heavy hand of Dodd-Frank are prompting many Wall Street firms to revert to their original business model of being a corporate advisor, not a product manufacturer. It’s also putting the focus back on clients and what’s good for them.
That’s where we all need to return. Wealth advisors need to get back to the business of having a real relationship with their clients based on a foundation of realistic advice.
All would do better if the focus were on selling reality, not a mirage with a snappy jingle.