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: This will probably be old news by the time this podcast episode comes out, but CNBC just reported that artificial intelligence can now pass the hardest level of the CFA exam. Ooh, this is the same test that takes human beings about 1,000 hours of studying over several years, and it can do it in minutes.
Before I dig into the rest of the episode, big disclaimer here. I love financial advisors. I don't think artificial intelligence is going to take financial advisors’ jobs overnight. I do think some financial advisors are going to be impacted, and that's what this episode will be about. [01:04.7]
You and I both know financial advisors bring something more to the table than exam taking skills. Financial advisors bring judgment and empathy, and context and nuance, all things a machine cannot replicate. I obviously love working with financial advisors. I've been doing it for a long time. Why else would I record 300-plus podcast episodes? I have a tremendous amount of respect for financial advisors. I think they're some of the greatest people on Planet Earth. I think they provide far more value to consumers than artificial intelligence, but here's the problem—my opinion doesn't matter. Lil old James does not matter. Your opinion doesn't matter either. The only opinion that matters is the marketplace's opinion.
This is true in every freaking business. I personally believe I have the greatest marketing resources ever created for financial advisors. I email every single day. I've got thousands and thousands and thousands of people on my email list, and guess what? Many of them reject me when I offer something in those emails, because they don't deem it worthy enough of their time, energy and money, and that's okay. That's how the capitalistic marketplace must work. [02:11.7]
If I run a Ford dealership, not everybody is going to want to buy a Ford, I get it. If I sell shoes, not everybody is going to want this particular size and color of shoe, I understand. That is what it is. It's the perception. Now, if someone woke up and said, “Oh, no, I actually want to wear a size-13 shoe, even though my foot is only big enough for a 10,” then I guess I make the sale, because the perception has changed. That is what you need to focus on. The only opinion that matters is that of the marketplace.
Think about what that means. The financial advice industry has always built itself on credibility and trust. That's what it is, and getting credentials, it doesn't matter if it's the CFA. It could be the CFP. It doesn't matter, okay? It's just credentials. Machines can replicate those credentials instantly. They can get those signals of competence, and to make matters worse, the marketplace is largely unforgiving, because people pay for results. [03:14.2]
When you hire a plumber, do you care if the plumber has certain credentials or not? Do you care if he graduated at the top of his trade school class? Probably not. You only care if he can fix your leaky pipes. I understand some people are going to make arguments, like, “I want to make sure my surgeon went to medical school.” Yeah, I understand that, okay? But you are not your market.
If the perception is that AI is smarter and faster and cheaper, then guess where the trust is going to flow? It flows to wherever people believe they'll get the results they need with the least friction. That is it. Perception rules. This is a huge problem for financial advisors where it's not necessarily that big of a problem for other industries, because clients and prospective clients already have a screwed up perception of what financial advice actually entails. [04:05.4]
They know what a surgeon does. They know what shoes are supposed to feel like. They know what leaky pipes are supposed to not do. They're not supposed to leak. They know what the results are, but they don't know what good financial advice is. They already believe weird things about financial advisors. They already believe that financial advice is just made up of things like investment management and making budgets and lowering fees.
That is the problem, because consumers already believe that financial advice consists of the things that AI can do. They already believe that. That is the problem. If people perceive that AI can do the exact same thing as financial advisors, then rightly or wrongly, they are going to gravitate toward AI to get something faster, cheaper, and in their eyes, just as good. Again, you and I both know that financial advice encompasses far more than that stuff, but again, I cannot stress this enough—it does not matter. [05:03.6]
I'll give you a real world example. I imagine that when the iPhone started being sold as a camera in your pocket, camera manufacturers coped the same way I see financial advisors coping right now. They probably said things like, Oh, we'll be okay because our cameras have better sensors, or our dynamic range is superior. Our lenses have better glass. Those silly iPhones can't replicate what we do. We are far better.
All of those things may have been true. The cameras may have had better glass and lenses and things, but since the consumers perceived their iPhone cameras as being good enough for their needs, the camera industry basically collapsed, and this is a real statistic—global shipments of cameras with built-in lenses fell from roughly 109 million in 2010 to about 1.7 million in 2023. That is a 98% collapse. [05:57.5]
Do you think that the people who are coping are still in business, that the camera manufacturers just say, “Oh, well, we're good. We have a superior product. We know what we bring to the table”? It doesn't matter. It only matters what the consumer perceives.
I'm not saying the financial advice industry will collapse like the camera industry did. I actually think segments of the financial advice industry will get stronger thanks to AI. Nonetheless, coping is not the answer. Adapting is. Right now I'm seeing advisors fall into two groups.
Group No. 1 is the “cope” group. They are coping and coping and just breathing that copium. There are so many things that they're coping with and they're doing it by shouting into the void. In other words, they are talking about a whole bunch of things that consumers do not care about. These advisors are way too focused on what they think is important instead of what their market thinks is important. [06:48.3]
Picture a car salesman trying to sell a pregnant woman with three children a two-seat sports car, simply because he thinks it's cool. This pregnant woman comes in. She's got this big stroller, all these baby things, and she says, “I need a vehicle for my family.” The car salesman says, “I absolutely love Corvettes. Corvettes are amazing. They've got this super powerful engine and all this horsepower, and they're so beautiful,” and the salesman absolutely loves Corvettes and thinks that the Corvette is the best car of all time.
That is 100% irrelevant to what the woman wants, and in that situation, it's obvious for you to see that the only opinion that matters is the woman's. If she thinks a car is cool, then that car is cool. Do you understand that? Until she is presented with something she deems as worthy, she will not budge.
But financial advisors don't see that with their own business. The “cope” group, they cope. That's what they do. They say silly stuff like, “I was told robo-advisors would take my job, but I'm still here.” Oh my goodness, I've been told that so many times over the past few weeks, and this blatantly ignores the fact that the robo-advice industry legitimately has over a trillion dollars in assets under management. A trillion, okay? [08:06.8]
Betterment and Wealthfront have $100 billion in management alone. Don't quote me on that, but it's something like that. Then you have Schwab, Ally, and Vanguard, and all of the other ones out there. I'm forgetting a ton of them. It's not that they're coming out and outright replacing advisors. It's not like a robo-advisor came out one day, and then on the second day, jobs were eliminated and businesses just fell completely to the ground. They're not doing that. That's not how this works. But they are chipping away market share. This is not up for debate. Robo-advisors have already taken away market share from financial advisors.
You are an absolute goofy goober if you believe that a premise or a concept of robo-advisors that already has a trillion dollars of assets under management, if you believe that that has not impacted the financial advice industry, then I just don't know what to tell you. [08:53.6]
Artificial-intelligence tools have already taken away market share as well. There was recently an article in The New York Times titled, How People Are Using ChatGPT for Financial Advice, so you can verify everything I'm telling you here by looking at that article for yourself, and it found that two thirds of adults who have used AI said they used it for financial advice, and around 80% of those people acted on the advice. In other words, they did what the thing told them to do, what ChatGPT, in this case, told them to do.
Here's what cope sounds like to prospective clients. When a financial advisor says, “People want relationships,” people hear, “I don't know how to articulate value, so I'm hoping the warm fuzzies carry me.” When financial advisors talk about service, all people hear is that they respond to emails. That's what they think. “Oh, good service means you will pick up the phone and respond to my emails.” That's not true service. If you are in the “cope” group, then, yeah, AI will probably end up replacing you, simply because you're not focused on giving your market what it wants. But that has been true for forever. [09:57.6]
When people do not give their marketplace what it wants, then they don't get value from the marketplace. In a capitalistic society, we make money through value exchange. I get $1 by giving you $1 or more worth of value. I mean, in theory, it has to be more than $1 in order to get you to exchange it, so at least $1 is worth of value, right? And I get that $1. That has been true for forever. In order to get the $1 from a consumer, I have to get the consumer to perceive that I'm going to give him or her more than $1 worth of value, right?
This has not changed and it's not going to change with AI, but the financial advisors who just dig in their heels and say, “Everything's going to be fine. We offer a ton of value. We know our worth,” and they never adapt to the consumer, they're going to get wrecked.
So, Group No. 1 is the “cope” group. Group No. 2 is the “adapt” group. These advisors accept the perception problem that I'm talking about and they engineer a new perception around their offer. They don't argue about what advice is. They design how advice feels and shows up so prospects conclude that they can't get it from AI. [11:06.0]
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.
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Here are some of my predictions. First, I predict that a lot of differentiation will have to occur in an advisor’s discovery meeting, to be specific. Yes, it is possible to shift perception in other marketing materials, like emails and social media, and presentations and podcast episodes, and YouTube videos. I'll talk more about that in a second. But there's something special about having a meeting one on one with another human being where you can let your values shine, because here's a takeaway for you—AI can answer questions. You can change what the questions mean, and that is huge.
Second, I predict that some of the most successful marketing that advisors do will point out what AI cannot do. In other words, advisors should point out AI's flaws. This happens in all markets, too. This is why I think being a marketer has given me such an incredible advantage in business, not just with financial advisors, but in business in general, because I see multiple markets, right? I study marketing and advertisements, from cars and perfumes, and courses and self-help, books and movie advertisements. I study it all and I see what happens across industries, because human psychology does not change. [13:18.3]
I just had a water heater company send me an email about why tank water heaters are bad and why tankless water heaters are good. Tesla will tell you why gas cars are bad. Waymo will tell you how Uber and Lyft are unsafe because human drivers can't be trusted. Advisors need to do the same.
I'm not going to go into too much detail on this because I plan on discussing it in an Inner Circle Newsletter issue, but I will say this. A lot of successful marketing shows tradeoffs so buyers can make a clean decision. Advisors need to run the same play. One of the best examples of this is the old Mac versus PC campaign that ran years ago. It was all over the place. If you don't know what I'm talking about, just Google it. Or DuckDuckGo it. Remember? [14:01.5]
Hey, here's an example. DuckDuckGo shows the tradeoffs between you using Google and you using DuckDuckGo—and if you're not familiar, DuckDuckGo is all about privacy, and they say, Google is not private. They leak your information and you're going to be hounded by retargeting ads, but if you use us, then you won't be.
But back to the Mac and PC. Mac was positioned as hip and cool. PC was positioned as clunky and prone to viruses, and just that god awful, who in the world, the dumbest people in the world use PC is basically what this advertisement said. Mac was everything there they wished their competitors could be and the PC was just awful.
Cell phone companies do the same thing. Years ago, Verizon ran these ads where all they did was show nationwide coverage compared to other carriers, and it was super effective. They showed the map of the United States. Then they put a bunch of red on it, and people looked at it and said, “Oh, wow, look at all that red. Verizon covers everywhere,” and they basically said to you, the consumer, “Why even bother with these other carriers like AT&T and Sprint and T-Mobile?” I don't even know anymore. I remember I had a singular phone, okay? I'm dating myself a little bit here, but I had singular. You don't even know what that is, but I had one. [15:17.0]
The people looked at these commercials that Verizon put out and these people who had never left their hometowns in their entire lives saw these ads and thought, Oh, my goodness, if I end up traveling to Kansas for some reason, I want to make sure I have service out there, and they switched to Verizon. All they did was just point out what the difference was. Okay? They pointed out what AT&T could not do. They said, “AT&T does not have service here, but we have service here. Therefore, you should choose us.”
Southwest did it with their whole “bags fly free” campaign. I don't even know if they let bags fly free anymore. I haven't flown Southwest in a long, long time. They didn't give you some dissertation about yield management or bagging handling efficiency. They just put a clean line in the sand and said, “If you fly with us, we won't nickel and dime you at the gate”—and this is exactly the posture advisors need to take with AI. [16:08.8]
You don't have to pretend the chat bot is dumb. You don't have to point out all the stuff that you think in your private thoughts, right? You just have to point out how it fails the marketplace in real life. Verizon never said AT&T was dumb or bad, or anything like that. It simply pointed out that AT&T and T-Mobile and Sprint lacked certain coverage in certain areas. Southwest did not attack other airlines, but it did keep pointing out they had free bags while the other guys didn't.
My third prediction is that the advisors who lean into differentiation will win. Advisors who refuse to differentiate at this point are just succumbing to AI and saying, “Yeah, go ahead, wreck my entire life.” I don't know what to tell these advisors. If you're not differentiating by now, oh my gosh, you are just begging to have your entire life wrecked. [16:59.4]
But seriously, if you keep presenting yourself as a generic collection of planning task, then you are going to be compared to AI, and AI is going to win, because when you invite that comparison—and that's what you're doing, you're just inviting it—AI will always look faster, cheaper and good enough to people who don't know what real advice is.
Again, I want to make sure that you actually get this. The consumer already doesn't understand what financial advice entails. They don't know what a financial plan looks like. They just have no idea. Remember my iPhone and camera example. Cameras still sell to this day. I can walk into a Best Buy, if that still exists, or I can go to Amazon and search for a fancy digital camera. I can buy one. There are people out there who still want these cameras, but the overwhelming majority of the population saw the iPhone and perceived the iPhone as good enough. Is it actually good enough? I don't know. That's not for me to decide. It's up to the marketplace to decide. The good news is that in the financial advice industry, financial advisors can explain to people how they are superior to AI by pointing out what they don't know. [18:06.8]
I'll give you a cheat code. This is something that can help you decimate AI when you're compared to it. You should proactively bring up the stuff that you know in advance AI cannot solve for people. That's how you rig the game in your favor. You can hardwire this into your first meeting. When I talk about the discovery meeting being a differentiator and helping financial advisors convert people into clients, this is one of the things I'm talking about.
Instead of asking for the data that the client expects, like if you ask about income and assets and risk tolerance, ask for the things they didn't expect you to know. When your RSUs vest, who in HR actually releases the shares, and what's their turnaround time if we need to adjust withholding? That's an absolute banger of a strategy. If you ask that question to the right person, oh my goodness, you'll be so much better off and I can't believe I just gave it to you for free. [19:00.5]
I've done this in my personal life. I've done this with my Inner Circle, although unintentionally. I'd be a hundred percent candid with you and tell you that I never intended to do this. It just happened because of the way I set it up. I started writing the Inner Circle long before artificial intelligence tools even existed, and I was fortunate because I was talking about stuff you couldn't find online anyway. That's always been on my sales page. The signup page for the Inner Circle specifically talks about stuff in the Inner Circle where you cannot find it online, and since AI gets all of its information from the internet, I completely bypassed all the AI stuff. I talk about things in the Inner Circle that artificial intelligence legitimately and genuinely cannot help with, because it can't find the material. The material is not on the internet.
That's why my Inner Circle content has always been hard for people to imitate. It's always been hard for artificial intelligence, the other consultants and coaches and gurus who try to be Pollard Lite. It's not because I'm hoarding some secret formula. It's because I write about the things that don't exist as tiny, searchable, crawlable facts on the internet. [20:04.0]
I write about the awkward client conversations, the positioning lines that stop a meeting from going sideways, the pricing pivots that save a relationship, the campaign that works in March but not in August because the market changes. That's exactly what you want. That's the posture you want in your practice.
Talk about reality, what happens in the real world, not online, not in some theory. Talk about a level of granularity that the internet never sees, because the moment you do that, then you are the one who's framing the comparison, and if you're framing the comparison, then you call the shots.
I have marketer colleagues who are being eaten alive by ChatGPT right now because they never differentiated themselves. They spent years talking about content marketing and funnels and stuff like that, which is just another way of saying they sold commodities with a bow on top. When a tool showed up that could produce a pretty good blog post in 30 seconds, their value proposition collapsed overnight. [21:02.8]
Their clients didn't fire them because AI was perfect. They fired them because of their perception that AI was good enough for what those marketers did. The AI was the iPhone. The marketers were the cameras. Do you understand that? If my colleagues were actually good marketers instead of just pretending to be, they would have positioned themselves differently in the marketplace. Instead, they just hid behind deliverables and fluff because that's easy to invoice.
The uncomfortable truth is that the market isn't going to punish people because AI is amazing. We all know AI kind of sucks at some things. It makes mistakes. It can hallucinate. It can give weird answers. The market is going to punish people because they insist on playing a game that AI can also play. If you have a shallow offer, then you will be undercut. If your offer is good and it's deep, and it's rooted in all the good stuff AI can't do, then you will win. AI can even be your friend in that scenario instead of a competitor you fear. That distinction is everything. [22:05.2]
Now, before I wrap up this podcast episode, I want to go back and touch on this idea of AI passing the CFA exam, because when headlines say machines can do things in minutes that once took a human years, it plants the seed of doubt in your prospects’ minds. It changes their perception. They start asking questions like, “Why should I pay a human advisor?” or, “If AI is this advanced, then isn't it smarter and cheaper than human financial advisors?” or “What makes human financial advisors different?” That doubt, that perception, kills trust before you really even get a chance to speak.
The advisors who survive this shift won't be the ones with the most letters after their names and credentials. They will be the ones who know how to market themselves to win the battle for people's attention and trust. You can no longer rely on credentials alone. [22:55.8]
Years and years and years and years ago, I wrote an email about why your credentials don't matter, and I got absolutely flamed for it. I plan on taking that email and dressing it up a little bit and sending her out again, because your credentials definitely don't matter as much anymore. You need marketing leverage. It was something I've been preaching about for years. You need positioning. You need strategies that make your value obvious, no matter what AI can or cannot do.
This also means how you present your value has never been more important, because when prospects are silently asking themselves if you're worth it, then your pricing and how you deliver your value proposition is answering that question before you even realize it. If your fees look uncertain or misaligned, then you will lose even if you're a better advisor. Better has got nothing to do with it, okay? It's all perception. [23:46.1]
If your fees are positioned with clarity and confidence, then clients will feel really happy and reassured that they finally found the right person, and that's exactly what my Profitable Pricing Blueprint training helps you do. It is 57 minutes long . . . short, 57 minutes short, and if you watch it, then you will figure out how to communicate your value in such a way that cuts through doubt—and that doubt will only grow as more headlines like this make their way to the public, where they see, Oh, AI can pass this exam. AI is better than human financial advisors. Those headlines are coming. If you're not prepared for them, then you're going to lose.
If you want to check out that “Profitable Pricing Blueprint” for yourself, go to TheAdvisorCoach.com/pricing. Once again, “TheAdvisorCoach.com/pricing.” Even though the title of it is the “Profitable Pricing Blueprint,” I really should have named it something like “The Best Financial Advisor Value Proposition” or “Value Propositions and Pricing,” or something like that.
You can see why I didn't name it that, because that's an awful name, but I hope you heed my warnings here to adapt your business. If not, if you ignore me, good luck to you. I hope things work out for you. Either way, I will catch you next week. [25:01.8]
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