Arguably one of the loudest (and potentially threatening) warning shots to the advice industry is the FCA’s sunset clause, sounding rather like the death warrant for trail commission.
No-one knows for sure but the fall-out could be big, from significant revenue loss right through to fundamentally altering how an IFA business is valued – trail commission having historically provided proof of longevity to potential buyers, as well as a useful metric of value.
Either way, If I were running an advisory business of any scale today (and I’m not. I’m rather less than strategically clutching at anything that can encourage a 5 day old boy to settle – a sheep called Ewan, that makes womb noises is the latest attempt). I would work on the basis that all trail will go at some point. Working from this premise ensures that advisers are fully protected if it does happen; and if it doesn’t then you’re in a far stronger position anyway.
But that’s just one aspect of the multi-faceted value game. Being clear on where value lies and how to protect and build on it is crucial. Few would disagree with that. But it’s easier said than done.
Take, for instance, the role of differentiation in the creation of a value proposition. It is something we talk about a lot but do (well) far less. Just because we can draw some positioning charts and point to a relatively cluster-less quadrant, doesn’t mean we have a brand that really means anything to customers above and beyond anything else available to them.
Too often the answer to the question “what does your brand stand for?” is answered by a list of stuff about service and quality and customer-centricity. Important, yes, but that’s just what everyone else is doing. If a brand only stands for what all brands stand for, there’s nothing truly remarkable to own or protect or build upon.
Given the plethora of ‘good’ or even ‘great’ businesses out there, I think a better question to start with is “what makes us remarkable?” As Seth Godin points out (and sorry to bang on about him, but he is quite good) “Remarkable is in the eye of the consumer, the person who ’remarks’. If people talk about what you’re doing, it’s remarkable, by definition.”
The real value is in actually creating something that people choose to talk about, regardless of what the competition is doing.