I received a lot of love for the post “Knife in a Gun Fight”. At the same time, some of you had many questions. One reader wrote, “I lost 2 important clients to a bank and a wealth firm recently. I don’t know what to do. Can you help?” Another reader wrote, “One big client of mine suddenly sold his portfolio to buy real estate as an investment. In the process, I lost some sizable AUM.” A third one wrote, “I want to grow my business, but I also want to protect the hard work I have put in. How do I compete with the kind of competition that you wrote about?”

The answer to all the questions I had received revolved around a common theme – Competitive Advantage. While the two words might sound jargony and even daunting, competitive advantage all boils down to these two key questions:

1. What can you do that no one else can?
2. How can you deliver value in a way that’s uniquely yours?

How often do you ask yourself this question…The answer for most people is “Rarely or Never.”

If you were to ask yourself the above two questions, what would your answers be? While I would love to hear your responses now (you can always email me), let’s move forward with a definition.

Competitive advantage is the attribute that allows you to outperform everyone. In simple words, it is the unique advantage that you have over competition (whoever that is). However, competitive advantage is not just one thing. While most people in our industry think of competitive advantage from a very narrow lens of faster transactions, lower cost, higher returns, and access to products, it is a culmination of several factors — your value proposition to your ideal client, client experience, your product and service offering, your team (in cases of solo professionals- it’s you), your processes and your care.  Some even refer to competitive advantage as MOAT.

Before I share some of the different types of competitive advantage, let me tell you that the true essence of a competitive advantage is sustainability. It’s not a one-time thing. Without the ability to maintain and protect your unique competitive propositions, any advantage can be fleeting.

There are several sustainable sources of competitive advantage:

The best one and my personal favourite: You care better than your competition.

This is one of the most powerful sources. You care about your clients in a way no one does. You care about your team in a way no one does. You care about quality in a way no one does. You care about the profession in a way no one does.

When I say this, I am in the great company of General Melvin Zais. In his address to mid-grade officers, U.S. Army War College, General Zais said, “The one piece of advice which I believe will contribute more to making you a better leader and commander- will provide you greater happiness and self-esteem and at the same time advance your career more- than any other advice…and it doesn’t call for a special personality or any certain chemistry, any one of you can do it, and that advice is – you must care.”

If you must Tattoo a word…the word is Care. We are in the Financial Care industry/profession, and it is our duty to care for our clients, team, and people better than anyone else.

The other sources of competitive advantage are:

1. You think better than competition. This is where Innovation comes in. Innovation is not just about creating something new; it can be about improving something that already exists. Innovative solutions to existing problems can catapult a company into the limelight. However, innovation must be more than a one-time event; it should be woven into the fabric of the company’s culture, encouraging continuous improvement and adaptation.
   Onboarding a client is a key process to innovate. Another area is about having powerful conversations which brings me to the topic of asking great questions. How good are you at this? I am continuing to innovate on the Questions front. In fact this topic is so important that I am doing an entire book on this.
   
   
2. You change faster than competition. 
   
   
3. You act faster than competition. The ability to pivot and adapt to changing market conditions is a competitive advantage in itself. Agile businesses listen to the market and evolve, turning potential threats into opportunities.
   
   
4. You focus better than your competition. There is a real lack of focus in our industry/profession. MFDs are asked to do everything – “Do PMS. Do AIFs. Sell Life Insurance. Sell Something. Get your foot in the door. Get some business.” Often this is touted as the mantra for growth. However, trying to do everything is nothing but the fastest way to mediocrity.
   
   
5. You unlearn faster than competition and then you learn faster than competition. 
   
   
6. You communicate better than competition. As you might know, generally the best product does not win, the best sold product wins. Even in the publishing world, it’s always the best-selling book. It’s not the best-written (sad but true). Customers are not taught how to buy financial services. They do not know how to differentiate between service providers. Imagine their difficulty when most people sound the same. Thus, how you communicate is critical. The way you conduct your first meeting is important. The conversation you have in the first meeting is important. The expectations you set then are important. The way you help clients experience your differentiation is important.
   
   
7. You deliver a wow (and better) client experience than competition. This is about delighting your clients in every interaction with you and your firm. It’s no longer about Client Service. It’s about Client Delight. It’s about delivering Love-Marks (a post on this and Client Experience coming soon).

Everything else whether it is smarts, intelligence, access to products, technology, price, or any other thing will be beaten.

FinTechs think this business is about tech. MFDs and Advisors think this business is about finance, numbers, excel sheets and products. But Personal Finance has always been about Personal than it has been about Finance, and it will always remain about Personal than it will be about Finance and/or Technology (and now AI).

This industry/profession is going from an IQ based one to an EQ based one. Rather it always was about EQ. It’s just that some people are starting to realize this truth, but many still don’t realize that this is an EQ based industry.

Isn’t this a source of competitive advantage for people who have realized this and are willing to change and act on this insight? I bet it is.

It’s not about whether you are a solo practitioner or a bank.

Even a solo professional firm can win against a giant financial institution. But to do this, you need a clear strategy. You need a clear competitive advantage. You can’t do this while you are serving 1000 clients, but you can certainly do this if you are catering to 60 clients or 30 or even 5.

Having said all the above, some things to remember are – Your competition is not others…Your competition is who you were yesterday. Your goal is to become the best version of yourself. Therefore, you must compare who you are going to be with who you are today and do everything you can to fill that gap.

There are people as smart as you…There are people as hardworking as you. There are people as driven as you. So what makes you different and better?

Why should prospects and clients choose you over others? Why should clients sign up with you in the first meeting itself? Why should your clients tell others about you?

The answers to these questions will lead you to your competitive advantage – Your Unbeatable Edge.

Do you know what’s yours?