Smart Money: Value propositions
William C. Fisher
Can you summarize what your investment advisor provides that adds value or helps better solve a problem? His or her value proposition should be easy to articulate and understand, and distinguishable from others. Here are four easy steps to determine if your investment advisor's value proposition is right for you:
Step 1: Know your customer. Does your advisor know your business, improvements you seek, and problems you need solved?
Step 2: Know your service. Does your advisor solve the problem or offer improvement through investment results or the investment process?
Step 3: Know your competitors. Does your advisor create more value than competing ones?
Step 4: Distill the proposition. Pull everything together and ask, “Why should I hire this advisor?” Answers might be “because he will …”, or, “The things I value most about the services are …” or, “It is better than competing advisory services because …”
Here is an example. Step 1: The senior living CFO wears many hats and does not have time nor interest in being a proper investment advisor. Step 2: The advisor offers years of investment management experience with good reporting, appropriate and measurable benchmarks, follows the investment policy statement, and has a solid understanding of the various assets the CFO oversees. Step 3: The advisor has other senior living clients, has a proven investment advisor history, and adds more value through understanding the industry. Step 4: The CFO should hire the advisor because of trust, reputation, industry knowledge and results.
How much the advisor helps you improve the investment process, increases the efficiency of reporting investment results and saves the CFO time makes the value proposition of your advisor an important consideration.