This was done well in EA's The Lord of the Rings: The Third Age. Levelling up provides a general increase to all stats, but also provides a number of points that can be used to raise particular stats. Everyone keeps getting stronger, but you're free to develop each character's stats in whatever direction suits you best. You can decide who'll be a specialist mage or healer, who's best with weapons, and who's the defensive powerhouse. Pretty good system.