Consumers won't use Financial Planners until they know what we do...
“Only 2% of consumers would go to a financial planner to take out life or other personal insurance”
“Only 9% of consumers would go to a financial planner for retirement planning”
“12% of consumers would seek investment advice from a financial planner”
What on earth do consumers think financial planners actually do?
These statistics are from research conducted in Australia a couple of years ago so perhaps the consumers perception of what financial planners do has shifted substantially since then. Perhaps also these results are uniquely Australian, and everywhere else in the world consumers are smarter or better informed. But I doubt that.
Financial planners have a problem. The problem is not dumb consumers either; the problem is the positioning of financial planners within the wider financial advice industry.
Clearly there is an issue with the financial advice industry as a whole being able to express the basics of what it does for its customers in a way that makes sense to them. There is an issue also with being able to deliver a clear and compelling value proposition. I separate those two, even though they are inextricably linked, because there are clearly 2 issues at work here:
- General education of what financial advisers do
- Value propositions of individual firms that express their point of difference to their particular target market segment
I strongly believe that a well defined and articulated value proposition is the central ingredient in a professionals marketing strategy, however this research reinforces that a great value proposition just isn’t enough.
It isn’t enough if the consumers do not understand the positioning and function of the adviser to begin with. That is where financial planners have a distinct problem – their positioning as a specialist discipline. Mortgage brokers for instance have done reasonably well at carving out a position in consumers minds, and that then provides an enhanced opportunity for those financial advisers to begin to differentiate from their competitors more easily because consumers don’t grapple to understand their essential service to begin with.
Financial planners haven’t achieved this general positioning in enough of the consumers minds….well, not in this part of the world at least.
We have to accept that if consumers are essentially ignorant in respect of understanding what particular types of financial advisers can do and help them with then a well crafted and pointed value proposition becomes ineffective. Beautiful branding and market positioning also are meaningless until the target market understand the generic advantages of working with a partiuclar financial advisory discipline.
One thing should be abundantly clear to advisers by now though: consumers simply won’t use us until they know what it is we can do for them. Positioning the general discipline and ensuring consumers comprehend the differences between (say) a financial planner and a mortgage broker or accountant is the first marketing challenge.