Your firm’s “story” – what’s in it?
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| Tammy Breitenbach |
Many investment businesses grapple with the need to differentiate themselves and their businesses to clients. We commonly hear, “how can we stand out in the marketplace?” and “we need to get our product out there.” Whether your firm is large or small, achieving differentiated status starts with getting clear on Your Story. What you do, why you do it that way, what makes your firm your firm – these are your story. These are your differentiators.
The heart of your differentiation story is your investment strategy. Think about yours for a moment. Can you explain it? Is it solid enough to “sell?” If not, back up and get solid on the product before embarking on a major promotional effort.
If you’re doing the investing, you have a strategy for making choices whether you know it or not. It doesn’t have to be sophisticated. A simple explanation is fine. Just make sure there is only one explanation.
If you find yourself with too many explanation options, it means you’re on the road to reactive mode, investing for whatever client need walks in the door. Or prospecting to fill whatever opportunity has an asset value attached. This is the wrong road. The sign-posts are spreading yourself too thin, managing solutions outside your comfort zone, creating tracking nightmares, and having no clearly differentiated brand clients can easily refer.
If this situation sounds like yours, or you don’t want to do the investing, or don’t have time to do the investing, it’s perfectly fine to pick a third party money manager to do it for you. In fact, it may be the best place to start for solving a variety of business challenges, including building stronger differentiation into the practice.
How do I select a third party manager?
If this situation sounds like yours, or you don’t want to do the investing, or don’t have time to do the investing, it’s perfectly fine to pick a third party money manager to do it for you. In fact, it may be the best place to start for solving a variety of business challenges, including building stronger differentiation into the practice.
How do I select a third party manager?
You pick an investment advisor for the same reason a client picks you. What are the managers like? Do they have a solid management team? Is their investment firm well-run? Do they give good service? Do they have a specific investment method or philosophy for making investment decisions and do they stick to it consistently? Or are they randomly chasing returns (the answer should be no.)
Is it fairly obvious to you why you have an interest in this particular manager? It should be. If the investment firm can’t tell you what’s special about their strategy and why they are great, then there is no story to tell. If you can’t tell it, you can’t sell it.
Importantly, are the third party manager’s fees reasonable relative to the information above, and can you use them profitably within your practice? Go back and refer to your balanced business model. Are you charging enough based on what your brand (your firm) reflects and delivers – or will soon reflect and deliver? And are you promoting enough confidence in your brand that clients will pay the fees necessary to accommodate the third party manager you’ve selected?
The story and the fees go hand in hand. Don’t go cheap on the money manager. These are the goods. They should be authentic and a good fit for you – a story you easily understand, believe in and can readily tell in a way clients understand. Just make sure you’re getting what you pay for, and try to find a middle ground between fit and your profitability.
If it appears their price would eat too much of your margin, go back and look at your balanced model. As long as the rest of your brand and service model are sufficient, adding them may be worth it if their story helps you justify higher fees. Not to mention the time savings for more prospecting. Their story is your story. Make it work for you. If it’s a stellar fit, get out there, promote it well and often, and charge accordingly.
Is it fairly obvious to you why you have an interest in this particular manager? It should be. If the investment firm can’t tell you what’s special about their strategy and why they are great, then there is no story to tell. If you can’t tell it, you can’t sell it.
Importantly, are the third party manager’s fees reasonable relative to the information above, and can you use them profitably within your practice? Go back and refer to your balanced business model. Are you charging enough based on what your brand (your firm) reflects and delivers – or will soon reflect and deliver? And are you promoting enough confidence in your brand that clients will pay the fees necessary to accommodate the third party manager you’ve selected?
The story and the fees go hand in hand. Don’t go cheap on the money manager. These are the goods. They should be authentic and a good fit for you – a story you easily understand, believe in and can readily tell in a way clients understand. Just make sure you’re getting what you pay for, and try to find a middle ground between fit and your profitability.
If it appears their price would eat too much of your margin, go back and look at your balanced model. As long as the rest of your brand and service model are sufficient, adding them may be worth it if their story helps you justify higher fees. Not to mention the time savings for more prospecting. Their story is your story. Make it work for you. If it’s a stellar fit, get out there, promote it well and often, and charge accordingly.
Tammy Breitenbach is president of Catalyst Partners, Inc. helps investment companies strengthen and increase the results of their business.
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