Posts Tagged ‘specialize’

Wirehouse Brokers/Captive Agents Wake Up Call

Monday, April 25th, 2011

The ultimate defense against discount stockbrokers, on-line insurance and the Internet.

It’s time for a wake up call or your business will be swallowed by entities with more money than you who know how to use technology to take your business.  If you manage money or sell investments, there are already many sophisticated tools on the Web that can replace your advice.    If you sell insurance, anyone can get term insurance on the web in about 10 minutes and they do not need you.

Your hands are especially tied working for a large firm because you cannot use the Internet as a powerful tool to fuel your business.  You cannot have a web site, you likely cannot have a blog, you cannot build a personal reputation.  You are a sitting duck.

Sorry if you are affronted, but I want to help you protect your business and that means facing the truth.

If you think, “Well I’ll just offer term insurance on the web too,” realize that there are thousands of agents on the web who already do this.  There’s no reason to come to your site as this product has been made into a commodity.  If you think, “I will offer stock advice on my site,” join the other thousands of sites that can do this better than you.  In the long run, the Internet is not your friend.

The solution to this is to make sure you are NOT doing the same thing as everyone else.  You can differentiate any commodity and carve out a protected niche.

This may require that you learn something new.  For example, I cannot find advice on the web about where to find high yielding, yet safe preferred stocks.  That’s a specialty. To become such an expert, means you need an education in that arena.  How many sites are called “Term Insurance for Physicians?”  That can be made into a specialty and requires that you really understand the needs of physicians and how they differ form others.

The public is getting smarter all the time.  Ten years ago you could exist as a financial planning generalist.  As people get smarter they will realize they can fill out some forms on the web and get the same financial plan you handed them.  As they get more sophisticated , so must you.  Financial advisors must be one step ahead of the prospect, or you’ve got nothing of value to offer.

Please do not ignore the threat of commoditization of financial planning.  It’s happening slowly.  Schwab and Fidelity are offering your clients planning services.  These efforts will expand.  Insurance companies are turning their captive agents into financial planners.   And as mentioned, web sites already provide financial planning to your clients.

The good news is that the process of the public learning how to be their own planner is a slow one.  There’s also a segment of the public, the affluent, that has more complex problems that they will always need a professional (which requires that you understand and have solutions for those problems).  Additionally, seniors have not adopted the web as quickly and remain a viable market for personal service and like the attention of a human.  Last, there are certain personality types (a ripe area for you to study) that will always be more responsive to getting assistance than doing it themselves.  Targeting these people is wise.

What should you do.

Pick a specialty.  Some arena of your work that fascinates you or you see as a lucrative growing area.  Become an expert.  You do this by studying everything you can find and learning from any experts that already exist.  You may need to subscribe to new publications and attend specific seminars or workshops.  It’s an investment of your time and money. (The key to success in any business in this century is being a self-teacher). You will also need a marketing system to communicate your expertise to the target market that value’s it.  The benefit to you will be a business that has staying power.

Some examples of specialization:

  • Specialist in preferred stock
  • Specialist in stocks of (name an industry)
  • Specialist in working with (name a profession or segment of the population)
  • Specialist in tax reduction
  • Stock options specialist
  • 401k specialist
  • Specialist in insuring sub-standard cases

Pick a niche and protect yourself. Read more on niche marketing at Brokerville.

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Work less Hours, Earn 50% More

Friday, August 8th, 2008
Here’s what they teach at Harvard Business School—focus, focus, focus. Notice that every great company of today (Intel, Cisco, Microsoft, Sun, Oracle, Home Depot) does only one thing and does it really well. If you deviate from this principle, your business will only be a fraction of what it could be. A recent study by Cerrulli Associates found that 75% of financial advisors offer the same products and services and are indistinguishable from one another. Those that carve out a niche earn 50% more.

Start with the triangle above and build your business from any corner. Many financial advisors think that focus means selecting a target market. That’s only one way to succeed—by selecting a group of homogeneous prospects (e.g. people over age 60 who are retired who live in zip codes 94556, 94559 and 94563, prospects with stock options from technology companies, owners of business with revenues less than $5 million).
You can also build your business around being a product specialist. Let’s say you are a wizard at selecting utility stocks. You can succeed very well with such a product specialty or you could succeed with a marketing specialty. Maybe you have a skill at developing direct mail. Maybe you have a skill at giving seminars. Start at one point on the triangle and then build your business around that to get focus.
Let’s say you want to do seminars as your sole marketing technique and build your business around that. That will dictate that you can only do business with people who will come to seminars. People in their 40s and corporate executives are too busy. So, you must focus on retirees and small business owners because that’s who you can get to come to seminars. Notice that these types of prospects will then dictate the products and services you offer. You would not offer investments in stock options for these two groups but you would offer estate planning. Because you choose to build your business by marketing with seminars, your business must be with local prospects. People must be close enough to you to attend a seminar (therefore, you will not be doing business with prospects who live more than 20-30 miles away).
Seminars lead to face-to-face appointments so you will either need a nice office near your prospects or be ready to go to their homes and offices. This also a need for a nice wardrobe.
Notice that the initial choice upon which you build your business dictates everything else, such as office location, how you dress, the types of people you prospect. The truly successful business builds everything around the initial choice. Its amazing how many financial advisors have an incongruous business where the pieces don’t fit together.
Let’s take another example. Assume your business is insurance solutions for business owners (key man insurance, deferred comp, disability). Clearly, you have identified both your products and your target market in one shot. However, you’ll get even more traction and expand your business faster if you specialize in specific business owners, e.g. those with business revenues of $5 million to $15 million or those business owners with a manufacturing business or a supplier to a manufacturing business. By adding more focus, you can get more referrals from owners who know each other (birds of a feather flock together), you get much clearer about the needs of a homogeneous market and in a short period, you position yourself as a specialist.
Focusing entails turning away business. For example, when your business owner client asks if you can help his son with his 401k choices, you say no, and promptly refer him to a colleague that works with employees.
Here’s an example from one advisor’s business. His target market is seniors. Therefore, he markets with seminars because seniors like to meet people face-to-face in a non-intimidating venue. Here’s what he says, “I manage a lot of blue chip stocks, sell annuities and provide estate planning—the services that seniors want. My office is close to where they live. I prospect in only THREE zip codes with a high senior population and my office is right in the middle. I’m in an elevator building so they don’t need to walk up stairs. My building has parking because they come to see me. My business name is Senior Resources. I wear light colored shirts and dark ties (same as they do). Notice that everything I do is built around my initial focus for my business.”
By dealing with one type of client, a narrow set of products and services, you become much more efficient, you work fewer hours and you get the benefits of higher income that accrue to a specialist. You build a better referral network of homogeneous prospects and you gain insight into your market that other advisors do not gain.
Before you turn your attention to finding a better prospecting system or hiring a new assistant to increase business, first consider that lack of focus is the source of less-than-desired economic success. When your business is unfocused and you take any client with a few bucks to invest, you can never build a business of value.
Annuity Leads for Financial Advisor Marketing
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