Guest Post: Why Fiduciary Financial Advisors Need to Embrace the Concept of Sales

By Gretchen Halpin

It’s no secret that historically, investment advisors were seen as salespeople, with the commission-based model almost always putting the best interest of the client second. Over time, the financial services industry offered better options for financial planners and registered investment advisors, and with these options came the fiduciary standard of care. The skies cleared and the commission-based approach was looked at in distain, with any mention of sales becoming taboo. The shift from salesperson to fiduciary is ultimately great for the investor/client, but the industry failed to consider the necessity of prospecting to build a client base and grow a business – a new and modern form of sales in its own right.

Fiduciary advisors need to embrace that “sales skills” are important. For the sake of this article, let’s refer to it as ‘relationship building’, ‘active listening’, or ‘discovery’, but at the end of the day, sales means being able to recognize a need and offer a solution. As a financial advisor, that means being able to identify your clients’ needs and objectives (by listening and asking questions) and present a plan and/or solution that you feel is better than those of your competitors. This is at once the simplest and hardest concept. If you cannot build a trusting relationship through listening and then differentiating your firm’s solution, you will find it very hard to grow your client base.

Long-standing methods (think pushy car salesman) can be seen as old-fashioned, uncouth, and stuffy, creating a desire for something fresh and new. Modern business development doesn’t have to (and shouldn’t) follow suit of such worn-out tactics. By combining elements of twenty-first century ingenuity with these long-standing pillars of a fiduciary financial practice, the new growth approach can be seen as something creative and exciting. Utilizing tactics such as creating thoughtful branding and messaging, carving out a hyper-specific niche within the market, and developing an impactful client experience can help you attract an increasing number of potential clients through brand awareness and referrals.

Whether or not we want to believe it, financial advisors who get more clients in the door earn more compensation. This is true whether or not you’re a fiduciary, and doesn’t discount your fiduciary standard of care—it’s simply a fact. Providing a client experience that is client-centric strengthens the likelihood that you will increase engagement in all of your touchpoints and receive more (and stronger) word of mouth referrals, which continue to be one of the best avenues for business development. As people tend to trust the opinions of those with whom they are closest, referrals are an incredibly effective way to create growth. With technological expansions and the abundance of digital communities, opportunities for “word of mouth business development” are increasingly vast.

It’s also important to get comfortable with tooting your own horn a bit. After all, as a financial advisor you ARE selling an idea that you are the best possible resource to help clients reach their financial goals. Come to terms with your strengths and weaknesses, and build off of them. Determine your niche and speak directly to them. With fee models evolving from commission to AUM, and now to flat fee and subscription models, the importance of differentiating the value you bring is more important than ever.

The reality is that, while we have shied away from being salesy in the past, it’s important to embrace that business development plays an important role in building a successful financial advisory firm. Simply put, more business development and more growth directly correlate to more clients served within a fiduciary approach. How are you using modern marketing and business development tactics to create opportunities for clients and prospects to engage with you and your firm?

Want to learn more about how to get referrals without sounding salesy? Read Beyond AUM’s previous blog.

Beyond AUM is a growth, experience, and technology agency that specializes in serving financial advisory firms.

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