Jordan talks about a trend in the industry being implemented across advisory firms: Value Adds. He dives into why value adds may not actually add value to client relationships and steps advisors can take to ensure value adds actually add value.

Transcript

Jordan Haines:

Hello friends, and welcome to Elementality, A show where financial advisors explore modern and relevant client journeys.

I’m Jordan Haines, and today I want to talk to you about value adds. Yes. The thing that we hear everyone talking about from Michael Kitces to Matthew Jarvis, to everyone in between, everyone is talking about how we can quote, unquote, add more value to our clients. Now, the motivations are mixed. Oftentimes it’s to justify the fees that we charge for clients.

It is high, it’s a premium service, and sometimes it’s just because we want to add more value. We wanna create a premium service offering. We want clients to feel wonderful working with us, and so we do these things that we call value adds. Now first, let’s start by defining what a value add is.

Traditionally in a software business, a value add is essentially a new feature. Right. It’s a thing that is added onto the core product that ideally supports that core product or solves a problem that is very, uh, relevant and useful to that client or that customer. So in the case for financial services, a value add is maybe something ancillary that we add to, let’s say the core product that we offer is, um, a comprehensive or holistic financial plan.

And a value add might be doing a beneficiary review on their accounts once a year, right? So that’s the definition of a value add. Now, let’s get real on this. Value adds do not automatically equal added value. And that is something that I have learned over the years, especially here at Elements, because here at Elements, we have a really interesting product, a really interesting software that enables advisors to do wonderful things for a certain type of client.

Now, elements is not a silver bullet. It’s not the thing that’s going to absolutely transform your client service unless your clients need that. And want that. And what I’ve experienced over the last four or five years working with advisors here at Elements is that so many advisors do something because it looks great, because their friends are doing it or because they are in pursuit of a quote unquote value add, not realizing if that value add is actually relevant to the core job to be done, that they do for their clients.

And the reason is one thing. Why do financial advisors implement value adds that have no relevance to a client’s situation? I really think that it’s just due to this one thing. We don’t know what the main thing is. I. We don’t know what our core value proposition is. There’s this term in most businesses called product market fit.

You might have heard about it before. Let’s change the wording on that a little bit, and let’s call this service market fit or expertise market fit essentially, service market fit is you have found a market, a group of people that want what you are offering. That’s it. That’s all it is as simple as possible, and for most financial advisors, we unintentionally find product market fit or service market fit.

We have gotten really intentional over the last 15 or so years in our, our industry of getting really clear on the market that we are going to, so dentist advisors serves dentists and even now they’re getting more specific on which types of dentists that’s allowed us to find service market fit, however.

In my experience working with advisors, we very rarely know what the service is that resonates with this market. We’ve unintentionally found service market fit. We don’t know what the core job to be done is. Here at Elements. I know what our core job is, our core service, our core product, is the element scorecard.

That’s really foundational. Honestly, if I were to strip away all the technology. And leave one thing. The thing that I would leave is the element scorecard. That is going to be the thing that resonates with so many financial advisors. If you were to apply that same idea to your service financial advisors, if you were to strip away every single quote unquote value add or feature or service that you offer and leave only one thing, what would that one thing be that is meaningful and important to your clients that actually solves their core job to be done?

That’s what you need to understand before you go in search of value adds. So let’s go through a quick five, six step process that I follow. I followed with dentist advisors. We’ve done this at Elements, I’ve done this with hundreds of financial advisors, and I just wanna share that with you today before you go out and do a value add.

Before you just say, that looks interesting, I’m gonna put that into my service offering. You want to start by uncovering what your main thing is. And this sounds easier than it actually is, primarily because this is the space where we do not make assumptions. In my experience with advisors, we make assumptions.

Too much. We assume what the core, main thing to do. I posted on LinkedIn, um, earlier this week asking essentially this question, what is your main thing? I don’t think it’s comprehensive financial planning. What do you guys think it is? And I had mixed responses and a few of them, I, I got some direct messages from people.

Um, and a few people said, you know, my, my main thing is clarity or peace of mind, or financial confidence or, um, looking at every area of their life or things like that. In my experience, that’s not necessarily what a main thing is. The main thing tends to be unique to your specified clients. Now I follow a really good book.

This is something that we talked about at the beginning of the year a lot. The book’s name is Demand Side Sales 1 0 1 by Bob Mota. Um, and in it he goes through an interview process of interviewing clients that. R basically satisfy your service market fit. They have hired you for the right reasons.

They’re the type of client that you wanna work with more of, and they’re within your ideal client profile. You’re going to interview them and actually ask questions. You want to figure out number one. What, what’s the story? What’s their catalyst event? What’s the thing that finally pushed them to come talk to you?

Where were they at on their buyer’s journey? Were they actively looking? Did you, did you input that, uh, insert that first thought that, oh, I need to hire a financial advisor. What happened? Tell me that whole story. And you wanna do that with multiple people. ’cause just one person is not a high enough sample size.

Interview multiple people to understand what their catalyst events and what you will naturally find is commonalities. You’ll find common themes and threads, things that you can then articulate to other clients, and frankly, that really will inform what your marketing strategy is, who you go to, to find these people, right?

So you want to first uncover what the main thing is. What is the core job to be done? Second, you wanna figure out what your catalyst event is, that push them to your service. And then third, you wanna understand the four forces of progress. This is actually a concept outlined in that book. The idea being, and I’m not gonna dive into each four of these, the, the concept here is.

Your there, there’s a push and a pull. There’s a push towards your service. There’s a pull towards your service. There’s a pull away from your service and a push away from your service. The idea being that there are things that are pulling the client away from your service and things pulling them to it.

Essentially, sales is making the draw to your service. Larger than the pull away from your service. And so you wanna understand what those four forces of progress are for your clientele. And then you start to identify a core and ancillary jobs to be done. You’ve heard me talk about emotional jobs to be done, social jobs to be done, uh, functional jobs to be done.

This is where we kind of list them out. It’s not that the main thing is the only thing that matters. No, you’re, you’re solving other problems for people. We’re in a really robust, and there’s a lot of variety in our services, but we wanna get really clear on what the main thing is. And what the ancillary jobs be done are, and then you’re gonna audit everything.

I want you to audit your sales process and playbook. I wanna audit how you talk about what you do for a living. I want you to audit what your actual onboarding process is. Is everything adding to that core, um, value proposition? I want you to audit then what your ongoing service calendar looks like. Are there value add that you are doing that are not contributing?

Because in my experience, if it is not contributing to your core value proposition, it’s distracting from it. It is that simple. I know sometimes we think that, oh, we can just offer everything and it’s gonna be great, because the more that I offer, the more valuable it is. That’s not true. Sometimes the more that you offer, the less value they receive because it’s distracting from the core thing they hired you to do in the first place.

I. So that’s it. As simple as possible. Go figure out what your main thing is. Figure out what the catalyst events are. What’s the story that pushes people to your service? Understand the four forces of progress. Go look that up. It’s a pretty simple concept. And then start to identify ancillary jobs to be done.

Once you’ve done that, you’ll audit your entire service, your sales narrative, all of it. And then and only then go in search of value ads. And only if those value adds actually support your core job to be done. If they do not, they are distracting distraction. They’re going to distract your clients, they’re going to distract you frankly and pull you away from really delivering on what your core value proposition is to your clients.

So let’s start there and remember this, value adds do not necessarily equal added value. Doing things for the sake of doing things is not going to inherently add value to people. It’s as simple as supply and demand. If you are approaching your clients from the supply side, meaning I’m going to give them more, and therefore more quantity equals higher quality.

I. It’s a losing proposition. Get really, really, really good at your main thing. Deliver relentlessly on that main thing. And only once you know you can do that and you know that that’s actually what the job to be done is then go out and search of ancillary value adds. That’s the only way it’ll work. I think to, to kind of put a a, a fine point on this, I think many financial advisors get to this point, and I’ve talked to.

Hundreds of advisors like this, they get a point in their business where they have this service market fit. They have a set of clients that they really like. They’re getting a little bit more intentional about growing their business, and essentially they want that business to grow beyond them. They wanna find new clients without them having to be the one finding new clients.

There is a point at which you will not grow further until you can clearly articulate what your core. Job to be done is and be able to then build a playbook around delivering on that core job to be done articulating what that core job to be done is. That is the only way you’ll be able to grow beyond yourself.

So I’ll leave that little thought with you. I know, um, I promised a lot of new things. Next week we’re gonna be talking, actually doing a quick, this is actually timely next week. I’m gonna have Abby on the show. Um, I, we actually recorded already. We’re going to talk through a few of the features that we’re releasing here at Elements that are really exciting.

So, so actually this is kind of timely. These are our value add, right? These are new features that are being added. That support our core job to be done. I’m really excited to dive into that with her. We have an awesome conversation. If you guys have any questions or concerns or thoughts for me, please feel free to push back.

You can email us at podcast@getelements.com. And with that, my friends, we’ll see you next week.