9 MIN READ
Not long ago, many considered the music industry dead. Technology had created virtually unlimited access to music. The introduction of MP3s and peer-to-peer sharing platforms like Napster and BitTorrent introduced “free” music. iTunes made it so easy to buy music that full-length albums became a thing of the past. Revenues completely tanked as music sales plummeted from almost $20 billion in 1999 to $5 billion today.
Yet, almost 20 years after the introduction of digital music, artists are thriving. Live music is at an all time high with revenues increasing from less than $1 billion in 1995 to over $12 billion in 2016. Vinyl sales have increased over 40% and indie record stores are thriving where big box brands have failed. Look at your own music collection. Personally, I have a Spotify family subscription, Amazon Prime, am always on SoundCloud and YouTube and have seen The Killers, Arcade Fire, and The War on Drugs in the last few months alone. Music isn’t dead. But the times they are a changin’.
The music industry found a way to embrace change and thrive at a time when it could have easily become obsolete. So, what can we learn from the music industry to stay on trend in the ever-changing landscape of financial planning?
The financial advisory sector is changing much like the music industry. Those that embrace the change will survive and thrive in ways we’ve never seen. Those that don’t may meet a different fate. I’m not predicting the demise of old-school firms, but I do think the clients of those firms will suffer in a completely analog world. There’s nothing more frustrating than hearing an advisor talk to clients about how their plan will change over time, and the need to adjust accordingly; and yet, in their own businesses, they’re stuck in their old ways because “it just works.”
At a time when your last great experience is your new expectation, we must keep evolving. We still love and listen to music, just not on cassette tapes. We listen on apps through wireless headphones to anything we want, anywhere and anytime we want. Give your clients that luxury!
Now Means Now
How are you delivering your financial plans? How’s that client portal coming? What about your performance reports? I ask these questions facetiously.
Yes, some of you still deliver performance reports and give people their physical “financial plan.” The real question is, “why?”
Time is our clients’ greatest asset, especially those in Gen X+Y. We live in an on-demand world. Clients don’t want to know what happened last quarter. They want to see what’s happening now. Yet still, one of the biggest questions we get at XY Investment Solutions is, “What about performance reports?”
We do our best to never have performance reports. We fundamentally believe that clients want to see their financial lives in real-time on their device, not on a dated PDF. We live in a “now means now” world. We want to listen to whatever song we want, whenever we want. The same goes for clients. They want to see their plan, their money, their financial lives right now, on demand.
Flip the Script
Artists used to tour so they could promote and sell albums. Today, they create new music so they can tour. Why? Because that’s where the money is now. Consumers are placing more value on the experience, thus increasing the value of the artist. The artist is the value; the digital music, on the other hand, is just the product.
We’re seeing the same thing in the financial services industry. Investment management has quickly become the digital music of our profession. Digital distribution and new products have considerably compressed the price and value perception in the eyes of advisors and clients. We previously wrote about the perception of value shift and the 75/25 ratio of planning value to investment management value. This happened in music, and it’s happening in financial services right now.
Advisors and planners used to do a financial plan so they could manage the assets. Today, most of the value is in the plan with consumers assigning a lower value to the management of assets. The script has been flipped. You manage the assets because it’s part of an overall holistic financial life plan. And how great is that for advisors who focuses on holistic planning and financial life management!
Know Your Genre: Niche Matters More Than Ever
When Napster came along, everyone thought it was about piracy. In reality, Napster created ultimate choice. We were no longer constrained to what was played on the radio or displayed and stocked in the music section. While this infuriated many of the larger, more established artists (remember when Lars Ulrich of Metallica took the stand?) and particularly the record labels who had more at stake than the artists, savvy young and innovative artists seized the opportunity to get their brand and style of music in the hands of consumers who would have otherwise never been able to access it.
I like that old time rock n’ roll, but what if I’m really looking for some alternative shoegaze or steampunk? The more niche you can be, the easier it is to find an audience and be an expert in the niche. Those who have the greatest success on our “Find An Advisor” portal (free to all XYPN members with a CFP(r)) are those who have much more specified and defined niches. And remember, access is easy now. Geography matters much less. You’re not constrained to the 30 mile radius where you live—you’re constrained by how broadly you define yourself.
Today more than ever, artists are collaborating. And in more ways than simply performing on eachothers tracks or than teaming up with other artists. How many businesses does Kanye have? How many A$APs are there now? Even lesser known artists are collaborating on smaller and larger scales, like Diplo recently taking over an entire channel on SiriusXM radio and creating multiple festivals.
Justin Timberlake recently gave a masterclass in marketing and collaboration with his latest Super Bowl performance. The Super Bowl performance and album release were a perfectly timed tease for his massive international concert tour (from which he stands to personally make upwards or $500,000 - $1M per show). Not to mention the collaboration with Nike’s Jordan Brand, his own “Man of the Woods” clothing collection and countless other small tie-ins and social campaigns.
As for Nike, the exposure created by the limited edition Air Jordan 3 ‘JTH’ worn by Timberlake during halftime was worth an estimated $2.86 million by Apex marketing Group. The shoes that dropped on Nike’s SNKRS app unannounced at halftime sold out immediately.
Admittedly, most of us are not JT or Kanye (hey, we can dream, can’t we?). But we can all take these lessons and apply them to our businesses. Again, it comes back to niche. The more niche, the more opportunity. Local is big right now. Think of ideas to cross-promote you local coffee house or brewery or CrossFit box (or whatever else you are into). Also look at other businesses with similar pricing and billing. It can be as simple as stocking the local coffee shop’s coffee in your office or as elaborate as hosting tasting parties at the local brewery.
Don’t be afraid to collaborate with other planners either. Just look at some of our amazing XYPN members in San Diego who created the San Diego Financial Advisors Network. It’s easy to click the link, but actually Google “San Diego Financial Planner” and see who pops up. Spoiler alert: San Diego Financial Advisors Network is in the top five. There’s strength in numbers and what’s good for one is often good for another. At XYPN, one of our core values is to have an “Abundance Mentality.” You should never have to rely on someone else’s failure to succeed. There’s room for everyone to succeed and the more you encourage and help others, the more you grow both personally and professionally.
This may seem obvious, but today’s most innovative artists are connecting with fans in ways the world has never seen. Remember when Taylor Swift went to prom? The key here is connecting. This doesn’t mean simply posting content. I’ve seen varying stats that show prospective clients will “touch content” of a prospective advisor upwards of 20 times before officially reaching out to an advisor. Be sure that you are leveraging available tools to allow prospects and current clients to connect to you and your firm. In today’s environment, many prospective clients will know your content better than you. Consider that many artists will share full-length concerts, including all the behind-the-scenes footage, the preparation for the event and even specific details about the show. People are literally walking into the concert knowing exactly what will happen. The same should be for your prospective and existing clients.
Give clients a virtual tour of your office even if they may never see it in person. Let them in on how you prepare for a meeting. Show them what it’s like to work through your client experience. Give them demo access or a video of exactly what they get working with you. And share your personality as much as possible. Humanizing your business allows clients to better connect to it, and to you. I love XYPN member Justin Castelli’s Weekly Mixtape from his All About the Benjamins site. Just by spending a few minutes on the site and reviewing a couple of videos and podcasts, I have an amazing sense of Justin as planner, but also as a human and can easily determine, “this is someone I’d like to work with”.
Artists have drastically changed how they release music and make announcements. While many artists still release traditional albums, most have shifted to putting out a more consistent stream of content. Whether that is through singles, LPs, performances on key platforms or collaborations, artists are paying much closer attention to remaining in the stream of consciousness of fans.
For planners, this is the 361 day challenge as coined by my good pal and former colleague at United Capital, Matt Brinker. Gone are the days of meeting with clients four times a year and sending them on their way. You must stay consistent and relevant to your clients constantly. Sure you still need high quality meetings, but don’t you think more clients who are constantly on the go would prefer quick 15 minute virtual check-ins that allow them to always feel connected and empowered rather than hour and a half long meetings?
Clients want to hear your voice, and I don’t mean in a literal sense. When your value is providing empathy, discipline and understanding to your clients, that won’t come across from a canned technology solution. It has to be real, genuine and authentic. Money is raw, nuanced and highly emotional. And just as easily as you can tell when Britney is lip syncing during her performance, your clients can tell when your words aren’t your own. Be sure that in all that you do, it’s your voice the client is hearing.
The music industry today looks far different than it did even as little as five years ago, and neither does the financial planning industry. Everyone has had to adjust based on not only technology, but the growing and shifting demands of fans, or consumers. How we get our music has changed, the sound quality has changed, the genres have changed, how it’s produced has changed, how it’s marketed has changed, and even how tickets are “scalped” has changed….EVERYTHING has changed. And yet the artists remain.
As a financial artist, you have the ability to shape and impact the lives of your clients in ways beyond even you can imagine. But the artist doesn’t plan the tour. The artist doesn’t load the music to the digital platform. And the artist doesn’t deal behind the scenes. The artist is the talent and the reason why people pay. As the advisor, be the talent. You are the difference between having profound impact versus just getting something done.
I’ll leave you with this. Below are two pictures. They are exactly the same. And at the same time, they’re very different.
One is a product. One is an experience.
After the experience, my perspective changed. The songs, though exactly the same, are more intense, have more meaning, elicit more emotion, and bring more pleasure now that I have experienced the songs in a different way. Oh, and they even sound better on my wireless airpods...
This is the impact you can have on clients. When we provide our clients with a different—a memorable—experience, their perspective changes. Now the only question is, do you give clients the concert experience, or do you just give them a playlist?
About the Author
A creative innovator and collaborator, Brandon Moss has had a front-row seat to the digital advice revolution, helping build one of the most innovative national RIAs on the planet. He’s acquired a 360* view of the RIA landscape, from being an advisor and running his own firm to designing and integrating some of the most innovative tools in the industry. He has lead, trained, coached, onboarded, integrated, transitioned, (you name it) over 100 RIA firms/wealth management teams. Additionally, he's evaluated, prospected, pitched (again...you name it) countless other firms. Consequently, he's an exceptional listener and comfortable in many different conversations! Occasionally, he's asked to opine on varying topics, typically Gen X+Y, innovation, client experience and technology. Beyond those topics, he's typically “winging it”. Brandon graduated from Texas Tech University's globally recognized personal financial planning program, then made it through some Executive Education at UC Berkeley's Haas School of Business. He’s also perpetually in online classes trying to figure out something new. Brandon resides in the Dallas/Ft. Worth area with his wife, Shelby, and his identical, mirror-image twin boys, Will and Reese. When he's not with them, he's probably in his garage tinkering, building, or buying way too much golf equipment.
Brandon is the Director of XY Investment Solutions (XYIS), XY Planning Network’s digital hybrid investment platform. It’s a turnkey asset management platform (TAMP) designed and curated to the specific needs of XYPN members.
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