The FOUR LETTERS with a Major Impact to your Advisory Practice are “PFAB”

These can change the way you interface with your clients.

If you are watching or listening to this blog, you are likely either a financial advisor or a coach to advisors. Often, we think of ourselves more as problem solvers than as salespeople. We have a passion to solve the challenges our clients face, and it is too easy to go directly to the solutions we know are available. A long-term friend recently shared that “the listener is in control of the conversation.” That’s powerful advice and should be adhered to in our client meetings.

Here is a short acronym that my friend John Ripma, recently shared with me. He developed this to help one of the major hotel and casino organizations create the largest rewards program in the nation.

The unequaled success of their rewards program is based on these four letters. I hope this helps you in your practice.

Oh, what are the Four Letters? Glad you asked . . .

THE Acronym is: PFAB.

I trust that applying PFAB will be as rewarding to your practice as it was to the nation’s most popular Rewards program.

The P is the first letter in the word PAIN

It’s easy to talk about the solutions we are presenting, but unless we know the PAIN our clients are feeling, they may not feel the motivation to proceed with our recommendations. Instead of launching into a greatly designed and well-practiced presentation, instead try listening carefully to what is causing your clients the most PAIN. We know that we sell by emotion and support by logic. A very popular all-natural product is setting sales records by focusing on providing relief from a factor of pain. There is a clue in there somewhere. Is the focus on the product or the relief from pain?

The F is for FEATURES

Features are certainly important, but they don’t effectively sell. Think back to a sales presentation that was made to you. It is highly likely that the features weren’t what convinced you to make a purchase.

The A is for ADVANTAGES

Features and Advantages are both important, but too often that is where more time is invested. Most advisors clearly understand the Features and Advantages of the products or solutions they design for their clients. Our passion for helping and our compassion for the pain that our clients feel is a powerful force.

The B is for BENEFITS

This is where your specific solution gets personal and should receive a larger portion of time invested with your clients. Tailoring the Benefits to solving the Pain is where the real connection happens. Think back to my mention of the advertisements for an all-natural product to provide relief from pain and you will see the factor involved here. Find a problem and then seek to solve it.

PFAB is about Pain, Features, Advantages, and Benefits. While all four are important, in my opinion, two of them are critical. Think of a sandwich with Pain and Benefits as the two outsides, which are more visible. Features and Advantages are in the middle.

Think of how difficult it is to attempt to teach a teenager how to do something that they are not interested in learning. It’s like trying to nail Jello to a tree. It’s always better to answer the WHY question before the HOW question. Pain is the WHY and Benefits are the HOW.
Relating this to PFAB, solving the PAIN tends to be of a greater urgency than Features, Advantages and Benefits.
I am thankful to my friend, John Ripma, for sharing the power of PFAB.

On the Victory side,
Ray Harrison

Advisors Solution . . . November 8, 2021

The FOUR LETTERS with a Major Impact to your Advisory Practice are “PFAB”

By: Ray Harrison (Advisory Transformer | Entrepreneur | Speaker |
Media Contributor| Thought Leader)
October 2021

VERTICAL INTEGRATION

How does Vertical Integration Benefit a Financial Advisor?

To answer that question let’s look at an example of Vertical Integration in corporate America.

What’s the difference between Kmart and Target? One of them is basically gone, and the other is having record same store sales every quarter. We know which of these two companies is thriving, or at least I bet you can TARGET the right guess.

Kmart distributes products. Target distributes products and created their own successful “Private-Labeled” lines.

DEFINITION OF VERTICAL INTEGRATION:

“A company utilizing two or more stages of production, normally operated by separate companies, to become both the Manufacturer and Distributor.”

Target’s Vertical Integration through Private-Labels:

Target started manufacturing their own private labeled products almost 20 years ago, and since 2016 have launched almost 40 brand new lines.

Their private labeled brands are in food, apparel, home decor, electronics, and personal care. These brands helped cement private label as a priority for Target. Over the last 12 months alone, they launched new brands in over 20 separate categories.


My wife, Judi, has a fifth-degree black belt in Shopping and can strongly attest to the quality and value of these Private Labels.


Here are some of the privately labeled Target brands:

Market Pantry, Archer Farms, Simply Balanced, Favorite Day, Good and Gather, Health and Hand with Magnolia, Universal Thread, and Goodfellow & Co.

They even have their own line of Cat and Dog Food.

Target’s newest line is: Up & Up – A line of products designed to deliver performance and value focused on consistently beating national-brand products.

NOTABLE EXAMPLES OF PRIVATE LABELS:

How does this Relate to an advisory Practice?

HERE IS AN ADVISORY PRACTICE’S DEFINITION:

A Vertically Integrated Advisory Practice provides both Asset Management (Manufacturer) and Financial Advice (Distributor.)

When an advisory practice “Out-Sources” their Investment Research, the cost tends to be loaded or marked-up to provide a profit portion to the manufacturer of the service, or in this case the research provider. That also applies to traditional home office provided research, whether it’s from a Hybrid Broker-Dealer model or from an outside RIA or from mutual fund companies.

There is a newly available and more economically attractive option. It’s now possible to “In-Source” investment research from a provider that uses an Institutionally Designed EcoSystem of fully customized model portfolios. These mathematically diverse models are White-Labeled and typically provided at about 1/3 of the cost of traditional research.

This allows you to drive significantly more revenue to your practice. Often your client will see the overall cost of investing reduced significantly.

Another benefit is this fully documented process assists in reducing your firm’s compliance exposure.

We welcome the opportunity to introduce you to the capabilities of one of the nation’s fastest growing research providers. You will receive a fully customized EcoSystems of White-Labeled Portfolio Models that are delivered directly to your Investment Committee. You are always in total control of the process.

The firm providing this Bespoke Service has grown to influence over $30 billion of advisor managed assets in less than 6 years.

Vertical Integration is a Powerful Advantage for Forward-Thinking Advisory Practices who want to be on the Disruptor rather than the Disrupted.

Jay Samit said… “Disrupt or be Disrupted. There is no Middle Ground.”

We say that Hanging on to the “Status Quo” could result in becoming the “Status No.”

Let’s share a brief 7-minute conversation about Vertical Integration.

Here is the link to contact us for more info at info@advisorssolution.com

Vertical Integration only works if:

⦁ The client can easily see the value (compelling)
and cannot get it anywhere else (unique)
⦁ It maintains or reduces the total cost of investing for the client
⦁ It increases revenue and/or reduces workload (creates scale and efficiency)

Here is the link to request a 7-minute conversation on Vertical Integration: info@advisorssolution.com

VERTICAL INTEGRATION

By: Ray Harrison (Advisory Transformer | Entrepreneur | Speaker |
Media Contributor| Thought Leader)
October 2021