What is a Client Value Proposition?

OK, let’s start by stating that there’s no science behind the answer to this question, there’s no right or wrong answer. What I’m going to set out is my view of what an effective Client Value Proposition is and what it should contain. So let’s start at the beginning.

What is a Client Value Proposition (CVP)?

The best answer I’ve seen to this question is a definition that I found online which states that “A client value proposition is a clear, concise and compelling articulation of how the factors that are important to the client are satisfied by the company.” The key words in this are “important to the client” because this is where the CVP begins and ends. If you don’t place the client at the very core of your thinking, unfortunately you’re going to miss the mark. Yes, what you do, and in particular what you do well are important. But unless these activities are going to positively impact the client experience, they don’t belong in your CVP.

I’m also a strong believer that a CVP is not a glossy document. Instead I see it strictly as an internal document and not for client eyes at all. If developed fully and successfully however, it is the single document that will guide everything that you do with your clients – how you speak to them, how you write to them, the content you write for your client presentation, website, brochure and newsletters and the services that you provide to clients. It can certainly be classed as one of the most, if not the most important documents that you develop for your business.

This document then becomes the guidebook for you, your staff and your future staff. If a team member cannot or is not willing to deliver this proposition to clients, you need to seriously consider their place on your team…

What should your Client Value Proposition contain?

It certainly is not a wishy-washy statement of how good a financial planner you are. Remember it’s all about the value as experienced by the client. I think an effective CVP contains the following – if you can articulate all of these points, you will have a very powerful document to guide you.

Why you’re a financial adviser / planner: This is really important as it articulates your values and whether your set of values are important to a client or not. If a client recognises that they share the same values as you, this is a really compelling magnet to pull them in your direction.
Who your target markets are: These are important, as your clients need to know whether you have the required expertise and experience to meet their specific needs,
What makes you different: This is where you identify the points that you believe make you different to other financial advisers & planners, and how these points of difference translate into an enhanced experience for your clients.
The outcomes and benefits that a client will experience: Clients want to understand what the end results will look like when dealing with your business. It’s important to think about both the emotional benefits that a client will experience from having you as their financial planner, along with the rational / tangible outcomes they will experience from being a client of yours.
What you don’t do: Some clients may come to you with pre-conceived and unrealistic or indeed incorrect expectations of what you do. As far as you can, it’s very useful to set out for clients what you don’t do in order to manage those expectations.
How you work with clients: This sets out how you actually deliver your advice to clients, what the actual steps that you go through with clients, the reason for each step and how it will positively impact your clients. This is a really important piece as this is the nub of how you work with clients and allows you to demonstrate what they can expect and how it will help them to achieve their desired outcomes. Get this piece right and it offers you a further opportunity to really stand apart from your competitors.
The ongoing services that clients can expect: The previous point will most likely focus on the initial engagements with people as they become a client of your business. This section then sets out what a client can expect from you year after year, the importance of your ongoing service proposition and how it will help them on their financial journey.
Your review meeting process: As this is the most important ongoing interaction you’ll have with your clients, you need to spend time thinking through how you add value to clients at these important junctures each year. Mapping out these important meetings is a crucial step.
What it all costs: You can argue whether this belongs in your CVP or not, but from experience this piece becomes far more straightforward after all of the above is done. If the CVP is strong enough, clients will see the value and will then want and expect clarity of what it’s going to cost them. You can also now communicate your pricing transparently and with confidence.

Developing your CVP is not easy. It requires time out of the business, deep internal reflection, time and concentration. However if done well, it will be the single most valuable piece of work you do in developing long-term relationships with your clients.

5 myths about financial planning businesses

I’m finding that more and more of my time is being spent helping advice firms reposition themselves as true financial planning businesses in the eyes of their clients. It’s extremely interesting work, as it always results in the adviser taking a really deep look at their business, as we carefully then figure out how the business will look differently in the future, and the steps that need to be taken to get there.


I’ve noticed as I’m doing this work that there are a number of myths that seem to crop up regularly and make the change quite daunting, that need to be gently taken apart and pretty much discarded! So here goes with the 5 myths that raise their heads most frequently.



Myth #1: My biggest challenge is how much to charge

This pricing challenge is where the conversation between the adviser and me often begins, along the lines of, “I know what I want to do going forwards, but I just don’t know how much to charge and if I can get this piece right, I’m grand!” You actually have a far bigger challenge in identifying how and where you add lots of value to your clients, and then being able to communicate this effectively and in an engaging way. The prize though for doing this work is that when you are crystal clear on the value that you’re providing, and you can get this across to your clients, you suddenly get a new-found confidence in the whole area of pricing, which then pretty much falls into place – trust me!



Myth #2: Commission is bad, fees are good

Now this is certainly not going to be a strident defence of commission. Because in my eyes, that simply is not needed. Commission is a method of payment that can and should be used to remunerate an adviser for the advice that they give. As are fees – an alternative method of payment. Both commission and fees have their advantages and their drawbacks. They both have their place, each suiting different scenarios.


Where commission has earned itself a bad name in the past is around the (lack of) transparency with it. This has been addressed somewhat with commission disclosure and indeed more recent regulations. But when you think about it, this is more an issue of adviser behaviour that a flaw in the payment system. When you are completely transparent with your client about the level of commission you are earning on products, it is an effective means of being remunerated.



Myth #3: Niches are not a viable strategy

I’m not a financial planner but I think I can talk from experience on this one… When I set up on my own and told friends and colleagues that my business was going to be aimed solely at financial advice firms, I was told I needed my head examined! “Having a target market of only about 1500 firms is just too small” (no it’s not) and “advisers won’t pay for outsourced services” (oh yes they do) were probably the 2 most common refrains.


Niche strategies bring challenges in being able to demonstrate expertise in your chosen niche and you also need to be able to reach your chosen market. But they also make life very easy… Imagine if I was trying to write this article to appeal to financial advises…. and accountants, lawyers, shopkeepers and rock stars! Suddenly it becomes very difficult to actually demonstrate your engagement with their specific issues. So if you have a specific customer / market expertise or a product area advantage, it may well be a viable strategy to become the kingpin in that market segment. Don’t rule it out!



Myth #4: There’s still a strong future for product-led advice

A bit of a tricky one, because there probably IS still a future for product-led advice. But it’s likely to become a steeper and steeper climb in the future. The winds of change just don’t auger well for advisers who position themselves as “product solvers” rather than providing comprehensive financial planning and advice.


It is very hard to demonstrate real value when simply picking a product or fund etc., you are always at the mercy of new competitors seriously disrupting the pitch (think Vanguard in the USA & UK) and it’s very hard to build long-term trusted relationships based on product picking alone. Technology has the potential to significantly disrupt product-led advice and your price will be constantly under pressure from commission transparency (a good thing!) and possibly future regulation. So while there may be some road left for advisers whose business model revolves solely around product selling, I think it’s likely to be a tough road.



Myth #5: It’s too hard to change direction

Well the proof is in the pudding! We only have to look around and see the financial advice firms that have completely reinvented themselves in all four corners of Ireland. There are many firms who have worked extremely hard on building their proposition, have developed a multi-channel range of tools to communicate this proposition in a comprehensive and engaging way and are now reaping the rewards of stronger client relationships and higher income streams that they can more easily seek and justify.


Yes the work takes structure and focus, and requires thoughtful analysis of your own capabilities, market opportunities and client segments. But when done well, this work is also hugely rewarding and insightful. And this in turn leaves you with a business that you are extremely proud of and re-invigorated to reap the full potential of your hard work.


So if you’re transitioning your business to a full lifestyle financial planning business, don’t believe the myths and instead continue to work on building that future-proofed business that you want.