I love ice cream. As a kid, I’d often make a 20-minute bike trek to Baskin-Robbins, where I would deliberate over the famous “31 Flavors” menu of tantalizing combinations. Banana nut fudge, chocolate almond, peppermint stick, eggnog . . . the list seemed to go on and on.
To be honest, I was a pretty predictable customer. I usually ended up going for the mint chocolate chip or just opting for a straight hit of vanilla. But every now and then, I’d throw away the script and choose bubble gum or something more exotic.
Sometimes, you’ve just got to change it up; you’ve got to reach beyond the standard fare. Baskin-Robbins figured out a long time ago that variety and flexibility to suit each customer’s taste buds at the time of his or her visit was the key to success. It’s the reason that particular store, and not the one around the corner, was my go-to ice cream destination. And I wasn’t alone.
Imagine, though, if Baskin-Robbins only offered chocolate and vanilla, and maybe an occasional strawberry “special.” That wouldn’t be worth biking out of your way for, and it doesn’t sound like the recipe for a successful business, does it?
Yet this is exactly what the financial advisor industry has done. For years, advisors have offered two or three flavors of fee arrangements, ignoring the fact that investors’ situations and needs are much more diverse.