“You’re a consultant. Don’t let yourself be commoditized.” That’s what Ellen R. Lander of Renaissance Benefit Advisors would tell someone just starting out as an advisor. Speaking at a March 24 session of the NAPA 401(k) Summit in New Orleans, Lander advocated a new mindset toward what advisors do. “As an industry, we have to get our minds around us being consultants,” Lander argued.
A prime example of her reasoning is the difficulty in benchmarking advisor services and fees. For instance, sometimes clients benchmark an advisor’s services against those of a competitor. UBS Institutional Consulting senior VP Trent Sanden said that is very problematic, since a competitor has no idea what services the advisor they are being compared against provides; all it knows is the fee that advisor charges.
The solution? Sanden suggests that an advisor being compared to another describe for the client the complexity of the services it provides.
Lander goes one step further. She noted that benchmarking advisor fees is very difficult in the first place. Be she didn’t stop there — Lander questions benchmarking advisor fees at all, pointing out that other professionals’ services, such as those lawyers provide, are not benchmarked. But she lays at least some of the blame at advisors’ own door. “Shame on us. We’ve allowed this to happen,” she said.
