The Best Buy Effect


 
It’s not easy being Best Buy these days.
Price competition is intense, and pressure is coming from all directions. Online competitors, without costly overhead, are selling the same products cheaper. Tech-savvy consumers are comparison shopping right on the showroom floor, using mobile phones and the RedLaser app to scan for the best price. Instantly, a consumer can get a list of better deals on a flat screen TV or Blu-ray player from online retailers and even nearby stores.
Wealth advisors are facing the same challenges from online “firms” like Wealthfront and from other advisors who are willing to cut their fees to win business.

The Opportunity in Solving Problems
But all is not lost for advisors or retailers if they heed the lesson from one of Best Buy’s more successful innovations: The Geek Squad.
The Geek Squad delivers what most low-priced product sellers don’t: Expertise to make everything work together. Anyone who has ever tried to create a home theater knows the frustration. Integrating sophisticated pieces of consumer electronics has almost become rocket science. Best Buy is keeping clients happy and loyal by providing a service that makes it easy to buy and then enjoy cool products.
Financial advisors have the same opportunity to attract and retain clients if they take the responsibility to simplify the many complex financial products and design a program that works.
In fact, anyone can open a discount brokerage account, do some online research and start buying investment products. However, buying and selling products doesn’t equate to comprehensive wealth management. There’s much more to this discipline than most recognize initially.

Watch Out For Cheap
An advisor who provides real value need not fear the cheap advice that can be obtained online or through cut-rate competitors.
Cheap online advice is nothing more than a computer algorithm. More often than not, human strategy trumps most computer driven decisions (Kasparov Wins). Only an experienced human advisor can provide that strategy and then recommend how to put together the complex investment solutions that meet each client’s needs. When you’re talking about your life savings and financial independence, what would you prefer, a cheap computer automated solution or a unique personalized plan?
Put another way, it might seem like a good idea to buy the bargain-priced flat screen TV and then read the directions to mount and connect the components. You can’t really appreciate the Geek Squad until the whole project has gone terribly awry. It’s one thing to mess up your home theater; it’s another when it’s your financial security.
That’s the good news for advisors. By providing understandable solutions, personalized service and delivering wise counsel – an advisor’s value proposition is as compelling as ever.

Comments

Post a Comment

Popular posts from this blog

Inorganic

Image
Our industry has always looked down on Wall Street’s recruiting checks.  Last week there were numerous announcements that independent firms were offering advisors money to purchase their practice.  The term for these transactions is inorganic growth.  This week we will look at why these transactions are the new rage and examine if they are better than the old Wall Street checks. Wempy Popeye and financial advisors fall for the “I’ll gladly pay pay you tomorrow for a Hamburger today” pitch.  Unfortunately Popeye and and most financial advisors provide their hamburger but seldomly get paid what the firms and Wimpy promise .  Why?  The advisors need the cash and Popeye is gullible.  On Wall Street the deals adjusted when the advisors changed firms looking for a new deal every five to eight years.  The recent Luminous departure shows that the advisory contracts need to be adjusted.  The new contracts are written by experienced firm...
Read more

Career Hacks

Image
We are in constant pursuit to be the best we can be in our profession.  Is there a hack to help us?  Some days it feels like others have found one.  The Baby Boomer hack was to be a Doctor, a Lawyer or work for Goldman Sachs.  Millennials believe in the power of social media hacks and that a job at Google is on the Yellow Brick Road.  This week I’ll look at other experts and share my opinion that there isn’t an easy solution to professional success. Academia Those who  can’t do teach and those who can’t teach, teach gym .  Many of the established ideas that guide people in the wealth advisory business where researched in academia.  While their research is credible most academics remain as advisors not a practitioners.   William Sharpe  might be an exception to this rule.  He lost at Long Term Capital but was a recent  winner with Financial Engines .  Resilient and richer. Conferences and Media We...
Read more

Heigh Ho

Image
 It appears we are headed back to work. Our monthly podcast summary will give us items to put in our backpacks.  So Heigh Ho ! Business Consulting  Adam Grant teaches how to  not make work suck. Work Life These two industry icons share their different opinions for independent wealth advisors. Kices and Carl Reid Hoffman is one of the most successful entrepreneurs who believes in giving back. Masters of Scale Educational  This podcast will entertain and educate. Pivot The host is a law professor who shares insight on controversial issues. Deep Background  While I don’t prefer Houston, this podcast makes me want to visit and attend class. Unlocking Us Hope you all listen to the podcasts and get vaccinated. 
Read more