You're listening to “Financial Advisor Marketing”: the best show on the planet for financial advisors who want to get more clients, without all the stress. You're about to get the real scoop on everything from lead generation to closing the deal.
James is the founder of TheAdvisorCoach.com, where you can find an entire suite of products designed to help financial advisors grow their businesses more rapidly than ever before. Now, here is your host, James Pollard.
James: I'm going to get back to basics in this episode and I'm going to talk about something that is so fundamental to a financial advisor's success, yet so many advisors completely miss it. It's the concept of value exchange.
See, we live in a capitalistic society, and that means we exchange money for goods and services that make our lives better. This morning, I spent $4.09 on a large Dunkin’ iced coffee because I believe the coffee will improve my life more than the $4.09 I spent on it. [01:02.7]
Last night, I bought this relatively expensive CeraVe cream. It was 20 bucks or something, I don't really remember, but I've been getting these bumps on my arm and it's supposed to help with that. I think what's happening is I've been spending a lot of time outside and I'll sweat, and my T-shirt sleeve will rub on my arm and irritate it.
I spent the money because I believe the value I will receive will be greater than the money I spent. Clear, healthy skin is more valuable to me than the $20 I paid for it, or I guess getting rid of the irritation is more valuable than the money I paid for it. All value exchange is like this. It doesn't matter if it's food or drinks, or software or household appliances, or services. It does not matter one bit, and here's the thing, you have to realize this if you want to sell high-ticket financial planning services and financial advice. [01:52.3]
Nobody buys a financial plan. People buy what they believe the financial plan will do for them. I guess, in some sense, they do buy the financial plan if and when they believe the value is greater than what they're giving up, and in order to do that, you need to justify it. That is the game, because the plan itself is just a piece of paper or a PDF or a big binder until it's positioned as something that lowers their taxes and protects their family, or grows their retirement nest egg or sends their kids to college debt-free, or just gives some peace of mind that they're not going to run out of money.
Your real job isn't to sell the thing. It's not to sell the document. It's to sell the future that they believe the document or the thing creates. You cannot sell a $100 financial plan if it doesn't create at least $100 worth of value in the eyes of the prospective clients. Likewise, you can easily sell $10,000 financial plans if there's enough value there, and if you communicate it effectively to justify it. [01:52.3]
Now, there are actually two levels of value that you need to sell here, and if you're someone who takes notes for podcast and you're someone who really wants, quote-unquote, “nuggets” or takeaways, this is one of the most valuable things I've ever shared in any podcast episode. There are two levels of value that you need to sell/justify/explain, in order to market your services effectively.
Level 1 is the value of the plan itself, the advice itself. Level 2 is the value of working with you. Lots of advisors struggle to get more clients because they're so focused on Level 1, which is the part where you sell the thing, where you get people to accept the idea that the thing is the thing that they need. They completely forget about Level 2. They completely ignore Level 2. They spend all of this time and energy selling the idea of financial advice and financial planning, which is good, don't get me wrong, that they fail to sell themselves. [03:49.7]
They fail to convince prospective clients that they should work with them specifically, because in the real world, you're not the only person selling financial planning and financial advice. Alternatives exist, lots of these amateur marketers and gurus and coaches and consultants. They don't understand this. They only operate in the world of theory. I operate in the real world where you need practical advice and you need things that actually work, because anybody can say stuff like, “Just raise your prices. Supply and demand. Just raise your prices. Raise your prices. Charge more. Justify more,” and, yes, that's part of the equation, but again, in the real world, alternatives exist. You are not the only person selling the thing, and when alternatives exist, you need to differentiate yourself from those alternatives.
I'll give you a really silly example, just so I can hammer this point home. Let's say you love waffles. You love blueberry waffles and chocolate-chip waffles and Belgian waffles and any waffle. You've never met a waffle that you didn't like. You just go hog wild. You go, nom, nom, nom. When you see a waffle, you can't control yourself. You lose all control. [04:53.0]
There are two waffle spots in your town. They both make delicious, fluffy, golden waffles, and they taste exactly the same, and they're just delicious, right? If I haven't, if I haven't gotten that point across yet, they are absolutely phenomenal waffles. They taste exactly the same, and they're the same price. That is Level 1. The quality of the waffles, the idea of selling the thing, is Level 1, and the thing in this case are these delicious buttermilk golden waffles that you love. You're sold on those.
Now, how do you decide where you're going to eat from these two waffle spots? Let's say that you find out that one of the waffle restaurant owners uses the money that he gets to fund an organization that you despise. The owner is diametrically opposed to everything you believe in, and not only that, he actively fights against your beliefs. If you believe A, then he champions against A and just absolutely hates it. If you believe in B, he champions against B. He doesn't want to see people like you in the world. He just hates, hates, hates. Interesting. [06:01.5]
Now, let's say that the other waffle restaurant owner is just like you. He believes everything you do. He advocates for your beliefs. He has a lifestyle similar to yours. He believes in the things that you do, obviously, and he is a champion for the things you believe. If you believe in A, he advocates for A. He wants more A in the world. Given that information and knowing that the waffles are the exact same price with the exact same taste, which one would you choose?
Obviously, the one that you jive with, you would choose the second person, and that is Level 2. Level 2 is all about the relationship, the alignment, the emotional connection, all the stuff beyond the product itself, and when it comes to selling “expensive” financial plans—“expensive is relative, right? I put it in air quotes—when you sell expensive financial plans, Level 2 matters just as much as Level 1, maybe even more, because the truth is, a lot of advisors can create good financial plans, because you're not competing against bad advisors. At that level, you're competing against other competent ones, and in that environment, your edge isn't just the plan you create. Your edge is you. [07:12.8]
It's your story, your experience, your process, your communication, your confidence, your values, your energy, everything, because people aren't just buying the plan. They're not just buying the advice. They're buying the person behind it. They're buying the person they trust to create the plan and give the advice.
So, here’s the big lesson: if you want to sell expensive financial plans, then you need to sell two things simultaneously. You need to sell the transformational value of the plan itself—that's Level 1—and you need to sell the unique value of working with you specifically—that's Level 2—and most advisors are asleep at the wheel when it comes to Level 2, because they say things like, “I offer comprehensive financial planning.” So does everyone else. They say things like, “I help you grow and protect your wealth.” That's table stakes, too. You need to go deeper. [08:00.7]
You need to answer questions that your prospects have, like, why you? Why your approach? Why your philosophy? Why your process? Why now with you instead of everyone else out there, and instead of waiting, instead of doing nothing, or instead of going out and trying to do everything myself? Because here's something a lot of people don't realize—when the value is high and differentiation is clear, price resistance disappears. People will happily spend $10,000 not because the plan is 10 times better than a $1,000 plan in raw technical terms, but because they believe the total experience, the confidence and the outcome they're buying through you—again, through you—is worth far more.
But let's go back and spend time on Level 1, which is the actual value of the plan itself, because if you don't get Level 1 right, then nothing else matters. You can have the best personal story, the strongest emotional connection and the slickest marketing, but if the plan itself doesn't really deliver transformational value, you're eventually going to lose trust. You have to have a thing that people want. [09:05.6]
One of the bedrocks of good business building is having an offer and having an offer that people want. I can have the most amazing gadget and widget and Gizmo, but if nobody wants it, if I can't communicate that, the value of the thing that I'm offering, that it does not matter. You have to build financial plans and give financial advice that solve expensive problems and create meaningful improvements in your clients’ lives. That's what Level 1 is about. It's about tangible, measurable and meaningful outcomes. Here's how you do it. This is not the end all, be all. I'm just going to give you a couple of examples, but if I had to pick only a few ways to do it, this is what I would do. [09:40.8]
Listen up, financial advisors. This is something special I'm doing exclusively for people who listen to this podcast. If you subscribe to the Inner Circle Newsletter over at TheAdvisorCoach.com/coaching, I will send you a collection of seven copyright-free emails, personally written by me, that you can use right away to begin getting more clients.
I call these my “objection-busting” emails, because they are designed to overcome the biggest objections financial advisors face. All you have to do is send me an email letting me know you’ve subscribed and I will reply with a link where you can download them for free.
I originally offered these in the May 2024 Inner Circle Newsletter issue, and it was one of the most popular bonuses I've ever given away. Today, these seven objection-busting, copyright-free emails are only available to listeners of this podcast, because I'm not mentioning them anywhere else. Go to TheAdvisorCoach.com/coaching to subscribe today. Now, back to the show.
First, I would identify expensive problems, that's key, and attach your plan to solving them. I do this all the time. It is very expensive for financial advisors to acquire and keep clients. It just is. I mean, depending on the study that you read, financial advisors spend a few thousand dollars per client and that is super-duper expensive. [10:59.0]
Let's say that you're a financial advisor and you spend an average of $2,500 to acquire a client. If I can help you get that down to $1,500 and you onboard an average of 12 new clients per year, guess what? I have legitimately put $12,000 back in your pocket. That is a tremendous savings to you, and if I charge something like, let's just say, the Inner Circle Newsletter, which works out to be $2,388 per year, if you give me $2,388 and I give you back $12,000, is that a good deal or what? Yeah, absolutely, it's a great deal.
It works because I solve the expensive problems that financial advisors face, and the same is true in almost every single business because people don't pay for these minor tweaks, or at least they don't pay a ton of money. The Dunkin’ iced coffee that I bought for $4.09, not an expensive thing. I could buy that all day long, doesn't make a difference, won't impact me one bit. I won't even feel it. But if you were to ask me to go out and spend $200,000 on a business tool, I would have to dig deep into, what would it do for me? How confident am I that I'm going to get a payback? I would have to dig into more of these details. [12:07.7]
People pay to solve expensive, painful problems. This could be things like tax inefficiency. People are spending tens of thousands of dollars over their lifetime on taxes that they don't need to pay. It could be retirement income gaps that threaten their standard of living. It could be bad estate planning that could cost their heirs of fortune. It could be business exit strategies that could mean a difference of seven figures, quite literally, in the exit of their business. You must connect your plan to solving problems that have real dollar amounts attached.
So, ask yourself, “How much money am I helping my clients save, protect, grow? What expensive mistakes am I helping them avoid?” because when you frame your plans and your advice this way, then your fee looks like a fraction of the value you're delivering. I just gave you an example of this with the newsletter, right? If you gave me $2,388 a year, because it's $199 per month, and I help you just lower your marketing cost—I don't get you any new clients. I don't help you retain any clients. I don't help you become more productive whatsoever. All I do is just reduce your marketing costs—that's the only thing I do for you and you onboard 12 new clients, and I save you $1,000 per client and your cost of acquisition, then that would be a phenomenal deal. [13:22.1]
No.2, this is closely related to the second thing that I want to talk about on how to master Level 1, this is all about quantifying value at every opportunity. You should use numbers. It sounds so obvious, but use numbers. Use projections. Use simple math whenever you can.
Let’s say you say something like this, “By reallocating your investments properly, you could boost your after tax returns by an extra 0.05% annually.” Okay, that doesn't really mean anything. It's all vague and abstract. But then you say, “On a $1 million portfolio, that's $5,000 a year. That's $50,000 over 10 years,” and actually even more if you compound it, but, hey, I'm keeping it simple for this show. [14:04.2]
So, $50,000 over 10 years is $5,000 a year. Wait a minute, that gives people something concrete to hold onto. It lets them do the math themselves and realize that your plan, your advice, that's an investment. It's not an expense.
Then the third thing that I want to share with you. This is something that is incredible. I absolutely love this. It's building a value stack. Instead of selling one big benefit, what you want to do is you want to stack multiple smaller wins. Actually, they don't even have to be smaller, they can be big wins, but you want to stack multiple wins together.
For example, if you know that you can help people save on taxes, stack that on top of earning extra retirement benefits. Stack that on top of the estate-planning benefits. Stack that on top of optimizing their investments and reallocating properly, and making sure that they have the right investments in their Roth versus their regular 401(k) versus their brokerage account. Make sure you stack all of those things, because even if they're small benefits, right, the individual benefits might not feel life changing, but when you do that value stack and you put them together, they create a mountain of value that justifies any reasonable fee. [15:14.6]
This is so wickedly effective that I actually use it in my own marketing. This is so good that I do it myself. I eat my own cooking, because right on the sign-up page for the Inner Circle Newsletter, I have my version of a value stack where I literally list 10 ways the Inner Circle Newsletter can pay for itself, and I say things like this. I'm just going to tell you so you get an idea of how this value stack works.
I say things like, “It can help you land high-net-worth clients,” because let's say that you add just one high-net-worth client worth $10,000 in annual fees from applying one strategy you learned, if you just get one extra client, that's $10,000 from the $2,238, and that gives you a 4.19x ROI with just one client over the course of an entire year. [16:00.0]
I also say it can help you get more referrals. Suppose you normally get three referrals per year. After implementing a referral strategy from the newsletter, you increase that to six referrals, still not a lot, but it is noticeable in your business. If half of those convert into clients worth $5,000 each, that's an additional $15,000 in revenue. If you calculate that out, it's a 6.28x ROI.
Then I say it can help you improve client retention. Increasing client retention by just 10% based on the study that you read—the Harvard Business Review did a very detailed article on this—increasing client retention by 10% can increase your profits by up to 25%. If you retain three more clients per year, each paying you $4,000, then you're keeping $12,000 in your business that would have otherwise left, and that gives you a 5.03x ROI.
Then I give seven more ways and I'm not going to list them off here, because we don't really have time for that and it's not really what you're here for, but I basically explain that it can pay for itself many times over—and the real magic is when you do several of them at once, which you should. You should get more clients. You should get more referrals. You should keep your clients longer. You should do all of those things, and when you stack all of them on top of each other, the value is insane. [17:16.3]
So, don't sleep on the value stack as a marketing technique, because when you stack multiple sources of value, your prospects stop looking at the cost of what you're offering and start looking at the cost of not taking action, and that's where you want them. That's the psychological tipping point that turns a $10,000 financial plan from a scary number into an absolute no brainer, because now it's not “I'm spending $10,000.” It's “If I don't do this, I could lose $50,000, $100,000, maybe more,” and that's how professionals sell expensive financial plans. That's how I try to get financial advisors to think about my products and services. If the financial advisor doesn't work with me, the financial advisor is missing out on the stuff that I could have done for him or her. [17:59.2]
They don't just list features. They don't think about comprehensive financial planning or fiduciary duty and all of these things, and just leave it at that. They engineer the conversation so the client builds the case for the plan in the client's own mind, because the client can now see how it saves money. It reduces stress. It saves mistakes. It saves taxes. It reduces lost opportunities, all of the good stuff, and it doesn't have to be a $10,000 financial plan either. I realize most financial advisors don't charge anywhere near that much, although they should charge a lot more.
That's why I created this brand new 57-minute video training program called “The Profitable Pricing Blueprint: How Financial Advisors Can Charge More, Justify Every Penny, and Make Clients Happy to Pay.” You can check that out over at TheAdvisorCoach.com/pricing. If you want to sell a $2,500 financial plan, then you have to justify it like it's worth $5,000 or $10,000. If you want to sell a $10,000 financial plan, you have to justify it like it's worth a lot more, like $20,000 or $40,000, and so on, because people don't buy based on price. They buy based on perceived value. They ask themselves, “Am I getting more than I'm giving up?” [19:15.7]
That's how capitalism works, by the way. People exchange money for goods and services because they expect to get more value in return. It's even more obvious in the business world, because successful business owners invest their money based on ROI. If you're able to justify the investment someone is making in you and your business, then your fee, no matter what it is, can feel like a steal, because it's all about justification.
Here's what happens instead, though. Many financial advisors try to explain their plans and their advice. They start listing deliverables like cash flow analysis, retirement projections, Monte Carlo analysis, investment strategy, all fine and good, but they're very weak justifications because they're features. They're not outcomes. [19:59.0]
So, here's the key. If you want someone to believe that your financial plan is worth $10,000, then you have to market it like it's worth $40,000, and you’d better be able to justify it properly. That means positioning yourself as someone who helps achieve transformations, not just get little benefits. It means telling better stories, and, yes, stories sell plans. I have been helping financial advisors do it with things like email marketing for years at this point.
It means speaking to the real problems that clients are afraid to admit, and this has been one of the biggest things I've been helping Inner Circle members with lately. It's just a killer strategy. If you can dig deep into the mind of your prospective client, then you can be unstoppable. It means painting a vision of your client's future with your plan and without your plan, very powerful. When you can do that or those things, pricing, really, I mean, it almost becomes a non-issue. [20:52.2]
Will people still be hung up on the price? Will some people refuse to pay no matter what? Absolutely, because there are segments of the market out there that just are so fixated on price, they plug their ears and close their eyes and they say, “La, la, la, I'm not going to listen to anything you say, la, la, la. I'm not going to listen to any justification.” But for the people who are at least willing to listen, who are willing to see what you're offering, you stand a much better chance of converting them if you can justify your price.
Again, I talk about this in more detail in “The Profitable Pricing Blueprint” over at TheAdvisorCoach.com/pricing. In it, I outline several psychological principles that influence how people respond when they see your fees, and when you understand them, you'll realize the trick to converting more prospective clients is not necessarily about charging less and no way is it about discounting. It's about justifying more. So, you can sell a $10,000 financial plan if you're able to justify it.
This is one of those episodes that you probably want to listen to three or four times, because I dropped some serious gems in this one. As always, thank you so much for listening. I truly appreciate you, and I will catch you next week. [22:03.6]
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