In this age of financial technology (fintech), advisors in all channels must find a way to differentiate themselves in order to survive and succeed. Overall, the financial services industry has been going through significant change at an increasingly rapid pace. How can advisors turn the speed of change to their advantage and offer real value to their clients?

Rick Capozzi
Rick Capozzi, President of Capozzi Advisory Group

With over 30 years in the business, industry veteran Rick Capozzi has had a distinguished career in senior leadership roles with some of the world’s largest banks and financial services organizations. During his tenure, he’s coached and cultivated talent and teams with great success. In his latest endeavor, Rick has built a boutique consulting practice sharing his experiences and strategies in helping financial professionals build a sustainable business.

I recently had the opportunity to speak with Rick and pick his brain on what he views as the keys to success.

Tell me a little bit about your company, why you started it and what you offer.

Our passion and focus is on human potential and helping financial professionals succeed. My network has given me the opportunity and platform to work with smart, like-minded people from around the world who are passionate about growth and execution. What sets us apart from other consulting or training organizations is our deep industry knowledge and experience – we were successful advisors, managers and senior executives. Our ideas and strategies are street-tested. We are committed to inspiring advisors and managers to make a difference in their clients’ lives.

I work with leaders who have a strong desire to take their businesses to the next level. We offer three things:

  1. Consulting services
  2. Training services
  3. Keynotes

What are some of the biggest challenges facing the industry?

Some of the big challenges are passive versus active investing, fee compression, robo-advisors, the challenge of differentiation, regulation and the demands of increasingly sophisticated clients. The only way to expand your practice is to offer comprehensive advice and planning and deliver an exceptional client experience. This has to be at the center of your value proposition. If you only focus on investment solutions, that will be insufficient to maintain your price. If advisors are still focused on the transaction, I believe their days are numbered.

What are some common mistakes that advisors make?

One of the benefits of being in front of thousands of advisors from different channels each year is the opportunity to see what’s working and what’s not. And yes, too many advisors try to be all things to all people, or become complacent and plateau after a number of years.

Given that we are experiencing change at arguably the fastest pace in modern history, one of the biggest challenges facing advisors is the ability to adapt. Many are still working with skill sets that may be 15 to 30 years old. They’re working with old technologies and old belief systems, which prevent them from moving forward and being successful. I’m sure you’ve heard the quote: “It is not the strongest of the species that survives, nor the most intelligent that survives. It is the one that is most adaptable to change.” Unfortunately, as I travel across the U.S., I see too many advisors in different channels who are not adapting to the new environment in which we live.

For younger advisors, I’ve seen how strength being over-extended can become a weakness. Being tech savvy, for instance – relying on texting or emails – can become a weakness if they are not also sitting down with a prospect or client face-to-face and using emotional intelligence to get into the traffic of people in motion. I see too many younger advisors who lack the necessary emotional intelligence or effective persuasion and communication skills. It’s important for them to be aware of their personal strengths and weaknesses when it comes to communication so that they can figure out how they can be most effective. The future is bright for young advisors, and just like the previous generation, some will be incredibly successful because they have a growth-oriented mindset while others will struggle.

What are some common traits you see among elite advisors?

I see five key attributes of elite advisors:

  1. They know who they are. They know their strengths and weaknesses, what they stand for, their values and their principles. They put the client first relentlessly, and they work harder than most on high pay-off activities.
  2. They have an ownership mindset. They take responsibility for everything, and they’re not relying on someone else to gather assets for them, build a marketing program or build a great team. They understand what needs to be done, and they have the discipline to do it.
  3. They are brilliant at the fundamentals. Everyone wants to be cute with new technologies, new products, new solutions – that’s all wonderful, but if you can’t get the fundamentals right, you can’t grow the business. In sports, athletes don’t forget about the fundamentals; great teams master those first. The fundamentals in our business are things like following through on commitments, active listening, punctuality and being prepared. It’s not rocket science. Yet I see a big gap on this point between elite advisors and everyone else. Elite advisors understand that details matter. They are passionate about creating an exceptional client experience, and that can only happen if you deliver valued advice.
  4. They surround themselves with competent people. They have a team of smart, loyal people and are great collaborators. They understand that the client values a team that is effective and efficient. These teams believe that they can make a difference in peoples’ lives and that they are the best choice for the client. That makes them confident, not arrogant.
  5. They take a truly holistic approach. They value the long-term view. Planning is not a product, it’s a philosophy, and it’s part of the culture. It means they’re not interested in the transaction or the instant gratification. They position themselves differently because they are consultative – it’s not just hollow words. Most advisors say they have a planning process, but I would argue that only a small percentage use the tools and lead their clients through the process correctly.

Do you have any advice to help teams work better together?

Let me be clear, an effective team wins not just a greater share of the wallet, but substantially more business than a solo practitioner. Clients and prospects value a team.

First, they have to know what kind of team they are. Are they situational? A team of experts? Horizontal? Vertical? What is the structure? I have formed and worked with hundreds of teams over the past 25 years, and the great ones have the following:

  • They trust, respect and like each other. It’s a tall order to have all three things, but it is foundational.
  • They have clear roles that compliment each other.
  • Open communication without fear of conflict is a must. No one should feel like they’re walking on eggshells. Too many teams have a fear of conflict and, in the end, that team doesn’t improve.
  • Everyone on the team needs to check their ego at the door, have fun and enjoy winning.

Rick, as you go through the wealth management process, what is the most important meeting?

By far, the most important meeting happens during the discovery process, when the advisor is trying to get as much information as possible from the prospect and make an emotional connection. What matters is being energetic, enthusiastic, curious and fully authentic. If they’re not doing 80% of the listening and 20% of the talking, that is probably not a successful discovery meeting.

Some of my favorite questions in a discovery meeting are:

  1. What is important to you in the next five years?
  2. What do you worry about most?
  3. What are two things that matter to you when choosing a firm?
  4. What are you passionate about? (This tells me how they spend their time).
  5. What is your vision for your assets?

For each of these questions, whatever the prospect responds with, the advisor should ask follow-up questions. That peels back the onion and goes deeper, to truly understand what drives the potential client, what’s inside. Because the most important is getting to the core, and you can’t get to the core unless you’re constantly asking more questions: “What do you mean by that?” and, “Tell me more.” Intuitive listening is so important. They’ve got to be listening to what’s not even being said.   

With this fee compression environment, what’s one of the best ways that an advisor can demonstrate value?

First of all, do the unexpected. They should do the things clients and prospects don’t expect, which will give the advisor an opportunity to wow them. Filtering information is paramount. We live in a world of information overload, so the advisor’s job is to filter and provide a perspective on all that information. Offering comprehensive financial planning is also of tremendous value. Behavioral coaching, excellent service and becoming a true life advisor – those are broadly what I consider “earning your 1%.”

Before they can provide value they need to make sure that they can meet and exceed expectations in the first meeting. The client should not only be interviewing the advisor; the advisor should be interviewing the client to make sure it’s the right fit.

We live in a world of tangible and intangible value. There are certain things you can actually see, but there are others you can’t. What advisors have to remember about intangible value is they have to consistently demonstrate, communicate and quantify that value to each client on a regular basis. Once they’ve completed one thing, they are not finished. It needs to be constantly communicated and quantified. They should start by segmenting their book. And remember, people may forget what you said in a meeting or client review, but they will remember how you made them feel.

What are your views on traditional fund fact sheets – crying out for disruption or still an essential tool for investors?

That falls into the category of creating a great client experience. Part of the great client experience is simplifying the client’s life, making it easier for them to digest information. Anything that empowers the client by giving them this information in an easy-to-understand format only makes the relationship better.

Any other comments you’d like to add?

Advice is still a growth business if advisors become brilliant in the fundamentals and are able to adapt to the accelerating change we’re experiencing. It’s still a wonderful industry, and we can’t lose sight of the fact that we are in the “people business” – the relationship business. Too many advisors focus on platform, products, the right tools, etc. All of those are important, but ultimately the advisor has to understand that they are the solution to their clients’ needs. It’s not the products, it’s not the platforms. Everyone offers basically the same products and services – the only true differentiation is their personal brand. If they don’t position themselves that way, then they’re just a vendor.

Thank you Rick.


About Rick

Rick Capozzi is an industry leader in financial services, author and former National Sales Manager at Morgan Stanley. Rick’s notable 34-year track record of success spans across several channels, including private banking and trust, wealth management, and Registered Investment Advisor (RIA). Holding senior leadership positions with the world’s largest organizations, including TD Private Bank, Merrill Lynch, Wells Fargo and UBS, Rick’s track record speaks for itself. As Regional President at Wells and Regional Director at Morgan Stanley, Rick led both regions from nearly last to first in the country by applying his sound principles, proven strategies and actionable tactics.

Rick’s life experiences and perspectives, which extend beyond financial services, allow him to bring unparalleled passion and fresh insight to his practice, Capozzi Advisory Group. He is an entrepreneur, adjunct professor, award-winning athlete, accomplished artist and a lecturer on leadership at universities including Harvard and Fairleigh Dickinson. Rick and his family reside in northern New Jersey. Connect with Rick on LinkedIn.

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Courtney McQuade

Courtney McQuade is an expert in financial technology and social media, with specific focus on marketing and sales strategy. Over the past 18 years, she has worked at startups, hedge fund and private equity firms, and several of Wall Street’s largest banks. Courtney is recognized for her unique ability to train and coach financial professionals at all levels of technology literacy.
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