Advisers need to tell their story

Posted by Robin Powell on January 27, 2016


The fact that he runs the most successful fund management company on the planet is reason enough to listen to Bill McNabb. But the Vanguard CEO speaks such perfect common sense that everyone who genuinely cares about producing better outcomes for investors should take notice of what he says.

He was at it again at the Inside ETFs conference in Florida this week. First he questioned the extraordinary proliferation of ETF rollouts (as I did at Inside ETFs Europe last summer). 285 new ETFs were launched in 2015 in the US alone. “This is like the 1980s and mutual funds,” McNabb told delegates. “Things did not end well for all those funds.”

He also gave his measured opinion on smart beta. It is active management, he said, and the term itself is not particularly helpful, but there is a “place for those expressing a market view in a low-cost way”.

It was what he had to say about advisers, though, that particularly struck a chord with me. He essentially made five points:


1. We are in a low-cost revolution

Today’s investor expects to pay less. True, traditional advisers can provide the personalised services that a robo-adviser can’t, but they have to demonstrate their value.


2. Advisers must adapt to a changing industry

Financial advice is evolving and technology is part of that evolution. Advisers need to offer a first-rate client experience online, as well as face to face.


3. In some ways, the world is less complex..

Investments and portfolio construction are becoming more commoditised. What once took hours to do can now be done automatically in minutes, so advisers have to find new selling points that differentiate themselves.


4. ..but in other ways, the world is more complex

The questions retirees face today are increasingly intricate. Most investors need advice, and with Baby Boomers now starting to retire, demand for advice is growing.   


5. Advisers must tell their story

To differentiate themselves, advisers have to explain their value proposition.


As a content marketer working with advisory firms, you might expect me to emphasise that fifth and final point, but marketing essentially is story-telling.

The first step is to identify what your particular story is. Advisers who don’t have an evidence-based investment philosophy often find this easier than whose who do. Their story might be, “The economic outlook is grim, so I’m going to be cautious with your money.” Or, “The future is teeming with opportunities, so let’s invest aggressively”. Others say, “Although I personally don’t know where the economy’s heading, I do know how to select the fund managers with the skill to outperform the market whatever happens”.

Evidence-based investing is, in many ways, a harder sell. It’s largely counter-intuitive and needs explaining. There’s also a common misconception that, because they use passive investment vehicles, evidence-based advisers “don’t do anything” (or at least anything that you couldn’t easily do yourself).

The truth, of course, is very different. Risk profiling, asset allocation, rebalancing and behavioural coaching are all important ways in which the right adviser can make a significant difference. Vanguard’s own research suggests that a good adviser typically adds a whopping 3% on average to an investor’s annual returns. Just think what a difference that would make over, say, 30 or 40 years. That’s an extremely compelling story to me.

There are, of course, more personal aspects to their story that individual advisers might like to emphasise. One of our clients at Regis Media, for example, had little interest in investing until a friend died in a car crash and his widow asked him to manage her finances; it was seeing how much bad advice there was out there that persuaded him to become an adviser himself. Another of our clients has strong religious convictions and sees it as part of his vocation as an adviser to help people find their true purpose in life.

Once you’ve identified your story, you need to start telling it, and that’s a very big subject in its own right. Suffice it to say, Joe Pulizzi’s Epic Content Marketing is well worth reading on this subject, as is Ogilvy & Mather’s The Digital Social Contract. My colleague Sam Lewis has also written an eGuide called Attract and Retain: A content marketing guide for growing fiduciary businesses, which you can download via the Regis Media website.

Good luck, and remember what Bill McNabb says: “The best advisers are seizing this moment to tell their story.” Are you?


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Robin Powell

Robin is a journalist and campaigner for positive change in global investing. He runs Regis Media, a niche provider of content marketing for financial advice firms with an evidence-based investment philosophy. He also works as a consultant to other disruptive firms in the investing sector.


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