The Financial Adviser Value Proposition: The Five Components

What can we do for our customers that they can’t do for themselves? What can help us manage their money better than them?

These are not always easy questions to answer as a financial advisor. But modesty aside, we need to be able to tell potential customers how we can help them and why it’s worth the cost. And once we convince them to make that decision, we have to show that we really lead the way.

It’s a two-part process: explaining our value and then continually demonstrating it in the months and years to come.

So what is our value proposition? For me, it boils down to five key contributions we can provide that many clients can’t get without an advisor.

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1. Management of emotions and control of bias

Even if the client is brilliant, a genius, and smarter than any advisor out there, they likely get excited about their money and have trouble staying focused and unbiased when managing the your own wealth the way advisors can.

They might hang on to a stock as it goes up and up with no strategy to protect themselves, only to watch it crash. Or they can panic and cash in if the Dow drops 3% for four days in a row without the discipline to recognize that they might miss the rally. A good advisor will have the discipline to stick to an investment philosophy and follow the data. Historical data shows that over the past 20 years, seven of the best days happened within just two weeks of the worst 10. As professionals, we need to help clients manage their expectations and emotions.

I’ve seen many clients insist on holding onto a stock simply because they “like it,” even though its earnings and profitability tell a different story. And I’ve seen so many customers try to bail them out at a bad time.

This is where we come in. Advisors are driven by objective factors, no emotions allowed. We provide the process, philosophy and discipline that clients often cannot exercise on their own.

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2. Resources

As advisors, we have resources that clients cannot access. This could be in the form of investment opportunities, proprietary research and expertise, or access to specialists who can help with more complex situations such as estate planning or liquidity events.

Everyone’s financial situation is different. Financial goals and investment timelines vary from person to person. Creating a financial strategy is not one-size-fits-all, which is why having a personalized investment strategy is so important. Advisors can sit down with a client and help them outline a personalized financial roadmap that fits their personal needs and goals. Some advisors also specialize in particular areas, which can help clients who are navigating unique situations.

3. Brainstorm and listen

As advisors, we answer and return our clients’ calls. We listen to their thoughts, whether it’s their worries and complaints or their hopes and dreams. This is important and it matters. We can serve as sounding boards, even if we don’t always have the answers.

Customers may have complex problems that we haven’t seen before. But simply talking about the pros and cons can be a great way to build a good client-advisor relationship. I had a client who fought to withdraw. She was so concerned about cash flow, but no longer enjoyed the expensive city she called home. We thought about what it would mean to retire somewhere with a lower cost of living. At first, he only mentioned it in passing, almost like a dream. It didn’t have much to do with their finances. Rather, he thought about missing his local friends but being closer to family as he got older. In the end, he went ahead with the plan. Now enjoy a stress-free life in retirement, with no cash flow problems. Our years of back and forth discussions went beyond numbers. I listened and made sure I heard their concerns clearly.

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4. Explain

Don’t underestimate how important and helpful it is to simply explain things to customers. We have to spend a lot of time here. Good advisors will describe to their clients, in clear and direct language, exactly what is happening in their investment portfolio, the portfolio they created, as well as the market and the broader economic picture. A good advisor knows how to communicate and breaks things down to an easy to understand level. We must not condescend and use big words and impenetrable jargon. We just have to be nice and polite and really stand behind what we’ve created so that the customer understands from start to finish.

I think to myself, “If I were a customer, what would I want to know?” And then I try to give those answers.

In every quarterly meeting with a client, I make sure to go over what I think is the obvious. How much money did the customer start with? How much is there now? What is the dollar increase, the percentage increase and how do these returns compare to the benchmark? What’s the right benchmark, anyway? What were the fees paid, down to the penny? What is the revenue estimate and what revenue was earned? How much can be extracted without touching the director?

In describing our relationship, we hope clients will say, “I meet with my advisor regularly and my money is explained to me clearly. I understand what’s going on. I even understand what’s happening in the markets.” I always shudder when I come on board a client who says, “I really have no idea what’s in my wallet.” Be the advisor who takes the time to explain himself, it’s invaluable.

5. Be close confidants

A good advisor functions as a trusted partner. I serve as a partner not only to my clients, but to the other advisors in their lives. For example, I work with clients’ tax and legal professionals to help them strategize to prepare for all life stages.

I have explained to clients what will happen when they die and what steps I will take to prepare their financial estate. I am dedicated to supporting my customers. I’m careful not to overdo it, but I don’t underestimate how important this role as an advisor really is.

Trust me, a good advisor is not an easy role to fill for clients. To do it successfully, to really prove our worth, we have to put our heart and soul into it. Remember: being a human supersedes being an advisor. Sometimes showing compassion can be the most important thing.

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All posts are the opinion of the author. Therefore, they should not be construed as investment advice, nor do the views expressed necessarily reflect the views of the CFA Institute or the author’s employer.

JP Morgan Wealth Management is a business of JPMorgan Chase & Co., which offers investment products and services through JP Morgan Securities LLC (JPMS), a registered broker-dealer and investment adviser, member FINRA and SIPC. Annuities are available through Chase Insurance Agency, Inc. (CIA), a licensed insurance agency, doing business as Chase Insurance Agency Services, Inc. in Florida Some custody and other services are provided by JPMorgan Chase Bank, NA (JPMCB). JPMS, CIA and JPMCB are affiliated companies under common control of JPMorgan Chase & Co. Products not available in all states.

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Galit Ben-Joseph

Galit Ben-Joseph, CFP®, is an executive director and wealth advisor at JP Morgan Wealth Management. It provides investment management services to a diverse client base, including high net worth individuals, professional services professionals, small business owners and foundations. Ben-Joseph was born in Israel and grew up in the New York City metropolitan area. She is passionate about education and holds several degrees, including a PhD in international management and economics from Pace University. Ben-Joseph also earned a Masters in Organizational Leadership from Columbia University, an MBA in Management from Baruch College, and a BA in English Literature from Rutgers University. He has taught at several institutions, most recently an introductory business course at Columbia University. Ben-Joseph lives in New York City and Connecticut with her husband, Neil, and their three children, Rachel, Joshua and Jacob. She is an active volunteer at her children’s schools. Having written his thesis on “The Effect of Family Responsibilities on Working Mothers”, Ben-Joseph has several female clients and serves as a role model for achieving a good work-life balance. She was honored by Forbes in 2021 as the state’s top wealth advisor, and in 2022, 2021 and 2020 as the top women’s wealth advisor. She was also recognized in 2020, 2019, 2018 and 2017 for working mother magazine as one of the top wealth advisor moms. Ben-Joseph has also obtained CFP® certification.

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