An Invitation That Lost a $5 Million Account

Wednesday, November 28th, 2012

by Dan Richards, Cli​entIn​sights​.ca

In a recent con­ver­sa­tion, an advi­sor asked me what one qual­ity, more than any other, he should work to get clients to asso­ciate with him. There are clearly lots of can­di­dates – dis­ci­plined, pro­fes­sional and client-oriented, to name just three. But my answer was none of those – if I had to pick one attribute, it would be “my advi­sor truly makes me feel special.”

That’s because that sen­ti­ment cap­tures lots of other pos­i­tives -  not only do you do a good job, but you truly lis­ten, have a deep under­stand­ing of client needs, make com­mu­ni­ca­tion a pri­or­ity and value their busi­ness. In an increas­ingly imper­sonal world, being made to feel spe­cial and truly val­ued by the com­pa­nies to whom we give busi­ness hap­pens less and less often – which cre­ates an oppor­tu­nity to stand out.

There’s clear upside to mak­ing clients feel like we’re giv­ing them spe­cial atten­tion – but also big down­side if they feel unac­knowl­edged. Today’s arti­cle describes one exam­ple of that down­side: Prac­tice Management’s Black­hole: Process Over­load by Matt Oech­sli

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Tags: 5 Million, Attribute, Blackhole, Business World, Communication, Compendium, Downside, Good Job, Impersonal World, Invitation, Lost, Matt Oechsli, Nbsp, Opportunity, Practice Management, Priority, Sentiment, Target
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Four Steps to Deepen Client Relationships and Increase Referrals

Wednesday, October 24th, 2012

by Dan Richards, Cli​entIn​sights​.ca

Research shows that only 25% of clients are truly “engaged” as opposed to merely sat­is­fied – and those engaged clients are not only the most loyal and sat­is­fied but also pro­vide almost all referrals.

Today’s arti­cle by Julie Lit­tlechild of Advi­sor Impact lays out an Engage­ment Roadmap, out­lin­ing the spe­cific steps to turn client sat­is­fac­tion into engage­ment. It focuses on four spe­cific steps that are highly cor­re­lated with engaged clients:

1.     Seek struc­tured feedback

2.     Ensure you have the right client fit

3.     Cre­ate deeper connections

4.     Take the lead in help­ing clients man­age their finan­cial lives

Click to read the full article:

http://​www​.advi​sorone​.com/​2​0​1​2​/​0​9​/​2​5​/​4​-​w​a​y​s​-​f​o​r​-​a​d​v​i​s​o​r​s​-​t​o​-​b​e​t​t​e​r​-​e​n​g​a​g​e​-​c​l​i​e​n​t​s​?​u​t​m​_​s​o​u​r​c​e​=​t​o​p​s​t​o​r​i​e​s​1​0​0​7​1​2​&​a​m​p​;​u​t​m​_​m​e​d​i​u​m​=​e​n​e​w​s​l​e​t​t​e​r​&​a​m​p​;​u​t​m​_​c​a​m​p​a​i​g​n​=​t​o​p​s​t​o​r​ies

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Tags: Amp, Client Relationships, Client Satisfaction, Compendium, Fit, Four Steps, Julie Littlechild, Referrals, Take The Lead, Target, Utm
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Fifteen retirement readiness tasks for clients

Wednesday, April 25th, 2012

In May, U.S. insurer Met Life issued a 28 page report, quan­ti­fy­ing where Amer­i­cans stand in terms of their prepa­ra­tion for retirement.

This readi­ness index mea­sures fif­teen tasks — attached to the report is a ques­tion­naire that advi­sors can take clients through to bench­mark where clients stand on each task and iden­tify areas to work on.

The fif­teen tasks for retire­ment readiness

The fif­teen tasks fall into five areas:

Activ­i­ties related to income and benefits.

This includes assess­ing when full time retire­ment will be finan­cially fea­si­ble, eval­u­at­ing the impact of changes in the econ­omy on pen­sions, invest­ments and retire­ment ben­e­fits and deter­min­ing what has to be done to receive the com­pany and Gov­ern­ment ben­e­fits that clients are enti­tled to.

Work related tasks

This makes up five of the fif­teen things to do.

These include decid­ing whether to fully retire or work part-time, iden­ti­fy­ing the options for full time or part time work in retire­ment, fig­ur­ing out if skills can be eas­ily trans­ferred to part-time work and explor­ing alter­nate career or part time oppor­tu­ni­ties in retirement.

Leisure related activities

Leisure related tasks include things like deter­min­ing the bal­ance between work and leisure in retire­ment and iden­ti­fy­ing per­sonal goals in retirement.

Rela­tion­ship tasks

Rela­tion­ship tasks to pre­pare for retire­ment cap­ture think­ing through the impact of retire­ment on rela­tion­ships with a spouse, fam­ily and friends and also con­sid­er­ing the effect on rela­tion­ships with co-workers.

Plan­ning for retirement

This includes deter­min­ing what it will take to have a sat­is­fy­ing retire­ment, iden­ti­fy­ing alter­nate plans should there be an unex­pected set­back related to health or finan­cial issues and also eval­u­at­ing whether retire­ment plans meet the demands of poten­tial changes.

Con­clu­sions on retire­ment readiness

This report reached a num­ber of gen­eral conclusions.

First, get­ting ready to retire is more com­pli­cated than just hav­ing enough money — there are many dimen­sions to a sat­is­fy­ing retirement.

In fact, the report points out that exist­ing retirees have pro­vided a road map to what has to hap­pen to max­i­mize the odds of a sat­is­fy­ing and ful­fill­ing retirement.

And sec­ond, com­plet­ing these tasks doesn’t mean that some­one should retire — but it does mean they can retire, they’re ready to retire.

The cur­rent think­ing on the tim­ing of retirement

Amer­i­cans are about evenly split on when they plan to retire — about half plan to retire at the age they’d been plan­ning to a cou­ple of years ago, the other half say they plan to work past the date they’d planned to.

Exist­ing retirees

About 64% of exist­ing retirees say they retired ear­lier than they’d expected, 33% retired when they’d expected to and only 3% said they’d retired later than expected.

The sur­vey didn’t ask if that early retire­ment was vol­un­tary — in all like­li­hood there were some cases in which com­pa­nies made the deci­sion for these early retirees.

Peo­ple feel­ing that they can retire on target

Peo­ple who say they can retire when they’d planned to were more likely to have estab­lished per­sonal goals. Estab­lish­ing those goals and then fol­low­ing through on them appears to focus peo­ple on the impor­tant activ­i­ties that will keep them on track.

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Tags: Alternate Plans, Benchmark, Co Workers, Compendium, Family And Friends, Government Benefits, Insurer, Opportunities In Retirement, Part Time Work, Pensions Investments, Personal Goals, Planning For Retirement, Planning Retirement, Questionnaire, Retirement Benefits, Retirement Plans, Retirement Readiness, Setback, Target, Time Opportunities
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Four steps to effective written communication

Wednesday, March 7th, 2012

Recently, a suc­cess­ful advi­sor asked me for my com­ments on a brochure designed to cap­i­tal­ize on grow­ing inter­est in char­i­ta­ble giv­ing. This mar­ket­ing piece’s good and bad points offer some use­ful insights about how to com­mu­ni­cate with clients effec­tively in general.

There were a num­ber of things to like about the brochure which was 8 ½ by 11 inches in dimen­sion, printed in full colour and ran 8 pages.

1. The over­all look and feel of the brochure was very high end and rein­forced this advisor’s high qual­ity positioning.

2. There was con­sis­tent visual imagery across the brochure and it was very well designed.

3. The brochure was excep­tion­ally well writ­ten — it pro­vided clear infor­ma­tion on the options for char­i­ta­ble giving.

4. As a talk­ing piece when meet­ing with clients or prospects, I could see it being very help­ful in intro­duc­ing the topic of char­i­ta­ble giving.

On the flip side of the coin:

1. The title on the front cover didn’t directly address char­i­ta­ble giv­ing. In a world where we have only sec­onds in which to gain or lose a client’s or prospect’s atten­tion, we need to deliver our core mes­sage quickly.

2. While well-written, the brochure had too much copy and the type­face, while ele­gant, was much too small, mak­ing it espe­cially dif­fi­cult to read for older clients. In my view, this brochure was designed to be looked at rather than read.

3. There was lim­ited use of graph­ics and pho­tos, with­out even a photo of the advi­sor — all the research on this topic is con­sis­tent that clients relate to pic­tures more than words.

4. While infor­ma­tive, I felt the brochure was a bit abstract and lacked emo­tional punch — this is some­thing that might have been addressed with case stud­ies and real life examples.

The bot­tom line when devel­op­ing mar­ket­ing mate­r­ial — and when com­mu­ni­cat­ing with clients and prospects gen­er­ally, whether in writ­ing or in face to face and tele­phone conversations:

1. Ensure you make your point upfront quickly and clearly.
2. Don’t over­load the num­ber of words — I’ve used the expres­sion “Less is more” before; it really does apply to any form of communication.
3. When send­ing any­thing in writ­ing, ensure that the type is large enough for easy read­ing and build in lots of visu­als to rein­force your message.
4. When­ever com­mu­ni­cat­ing with exist­ing or  prospec­tive clients, don’t for­get that you need to appeal to both the heart and the mind.

Keep these four prin­ci­ples in mind and you too will com­mu­ni­cate more effec­tively and con­nect with your clients.

And one final tip. Before send­ing out a let­ter, newslet­ter, email or any other writ­ten mate­r­ial, ask some­one who is not knowl­edge­able about mar­kets to go through it with a yel­low high­lighter — if you feel really brave, give it to one of your par­ents or an elderly rel­a­tive.  Ask them to high­light any­thing which is even a bit unclear — that can be the cue for you to revisit the words and exam­ples you use to ensure you’re com­mu­ni­cat­ing at the right level.

For more infor­ma­tion, please visit http://​www​.get​keep​clients​.com.

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Tags: Bottom Line, Brochure, Case Studies, Compendium, Core Message, Developing Marketing, Effective Communication, Effective Written Communication, Emotional Punch, Face To Face, Flip Side, Four Steps, High Quality, Insights, Marketing, Marketing Material, More Than Words, Photo, Photos, Prospects, Target, Telephone Conversations, Typeface, Visual Imagery
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Hard Lessons from a Lost Account

Wednesday, February 15th, 2012

Every cou­ple of weeks for the past year and a half, I’ve taken an evening or a week­end morn­ing to talk to investors — dis­cussing their mood and  chat­ting about what they’re think­ing and doing.

A cou­ple of weeks ago I talked to an investor who had recently switched advi­sors — and who  pro­vided an exam­ple of  the stress that investors expe­ri­ence when they’re not sure whether their advi­sor is really on top of their finan­cial affairs.

“I’d been work­ing with this advi­sor for a few years” he said “and I liked him well enough. He’s actu­ally a really nice guy.

But late last year I real­ized that I was los­ing sleep because I wasn’t sure whether he was really on top of my sit­u­a­tion.“

I asked this investor what had led to the deci­sion to change advisors.

“Two things really” he answered.

“First, my advi­sor had put together a finan­cial plan about three years ago.

In light of every­thing that’s hap­pened, about a year ago I asked him whether the plan needed to be updated. His answer was that the plan had a long term focus and that what we’d been through was just a blip and that I didn’t need to worry.

Given that I kept read­ing about how the finan­cial sys­tem was melt­ing down, I didn’t entirely buy that — and got more and more con­cerned that my advi­sor wasn’t really tak­ing my account seriously.”

Then he went on.

“The other thing that con­cerned me was that aside from get­ting a call from his assis­tant to book a meet­ing once a year, I had to take all the ini­tia­tive to stay in touch.

When­ever I called him, he always got back to me right away — he was really good on that.

But I only heard from him when I called. I was just con­cerned that I wasn’t impor­tant enough for my advi­sor to really care about — and that my half a mil­lion dol­lars was sec­ondary to his other big­ger clients.”

Like many peo­ple who switch, this investor didn’t rel­ish the prospect of break­ing the news  — and the new advi­sor told him he’d get in touch with his pre­vi­ous advisor’s office and take care of all the paper­work entailed to switch his account over.

Inevitably, the investor got an imme­di­ate call from his old advisor.

“I was really sur­prised to get a request to trans­fer your account” was how the con­ver­sa­tion began.

“I know that the mar­kets have been tough but I thought that we had talked about how your account has really bounced back and in fact done well under the cir­cum­stances. Based on our last con­ver­sa­tion, I thought you were actu­ally rea­son­ably happy.  ”

This investor explained that it was noth­ing per­sonal and that his move was not pri­mar­ily because of the per­for­mance of his portfolio.

He went on to men­tion that one of the rea­sons for his move was the con­cern that his plan hadn’t been brought up to date.

“That was actu­ally on my list to talk to you about the next time we met” was the response from the old advisor.

“I didn’t real­ize that this was that big a  con­cern — if you’d told me I would have been happy to do this for you.”

There are a cou­ple of impor­tant lessons from this expe­ri­ence — costly for the advi­sor who lost the half a mil­lion dol­lar account, but avail­able free of charge to every­one else.

The first les­son is to lis­ten for hid­den mean­ing when talk­ing to clients and to never dis­miss any con­cern or appre­hen­sion, no mat­ter how small it might seem. Chances are that if the advi­sor had acted when his client first ques­tioned whether his plan con­tin­ued to reflect the mar­ket real­ity at the time, he would still have that account.

The sec­ond les­son relates to the stress that many clients expe­ri­ence when they feel they have to ini­ti­ate all the con­tact with their advisor.

I’ve writ­ten in the past about the dif­fer­ence between a con­ver­sa­tion that a client ini­ti­ates on a topic such as TFSAs or RESPs for grand­chil­dren and that same con­ver­sa­tion if the advi­sor picks up the phone to make the call first.

It can be exactly the same con­ver­sa­tion, but if it hap­pens at the client’s ini­tia­tive, the advi­sor gets dra­mat­i­cally less credit — peo­ple won­der whether that con­ver­sa­tion would have hap­pened if they hadn’t picked up the phone and called.

I recently talked to an advi­sor who last spring began set­ting aside half an hour a day to pick up the phone and check in with clients who he hadn’t spo­ken to for a while. He told me he was aston­ished at the pos­i­tive response — and the relief many clients seemed to feel just know­ing that he was on top of their situation.

In fact, this advi­sor com­mented that the most pro­duc­tive 30 min­utes was when he didn’t actu­ally reach any clients and sim­ply left mes­sages, say­ing some­thing like: “It’s Joe Smith. I’m just call­ing to check to be sure everything’s okay and in case you have any ques­tions you’d like to talk about. If there’s any­thing you want to dis­cuss, give me a call at the office — oth­er­wise, I look for­ward to sit­ting down when we meet in a cou­ple of months for our reg­u­lar review.”

Along sim­i­lar lines, a cou­ple of years back, I inter­viewed an extremely suc­cess­ful busi­ness owner who talked about what he looked for from his pro­fes­sional advisors.

“I assume that most peo­ple are basi­cally com­pe­tent and know what they’re doing” he said.

“What I look for are peo­ple who are proac­tive and are always think­ing about my sit­u­a­tion so that I don’t have to” he said. “That’s what I look for in my accoun­tant, that’s what I look for in my lawyer — and that’s what I look for in my finan­cial advisor.”

Not every client artic­u­lates this as clearly as this busi­ness owner. But those words cap­ture the essence of what many clients look for — the con­fi­dence that their advi­sor is on top of their sit­u­a­tion so they don’t have to be.

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Tags: Advertisement, Blip, Compendium, Financial Affairs, Hard Lessons, Initiative, Investor, Investors, Losing Sleep, Lost, Nice Guy, Sleep, Stress, Target, Term Focus
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Dan Ariely — The Upside Of Irrationality

Wednesday, November 23rd, 2011

Make sure you watch this. Dan Ariely dis­cusses the virtue of irra­tional­ity, par­tic­u­larly the man­ner in which our irra­tional­ity serves us when it comes to the trust gap.

Dan Ariely and Dan Richards carry on a fas­ci­nat­ing dis­cus­sion about human nature that is mate­r­ial to under­stand­ing the com­plex­ity of all deci­sion making.

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Tags: Compendium, Complexity, Gap, Human Nature, Irrationality, Target, Trust Gap, Virtue
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Breakthrough research from the Harvard Business Review — The #1 way to stay motivated

Wednesday, October 19th, 2011

Every Jan­u­ary, the Har­vard Busi­ness Review pub­lishes ten break­through ideas for the year ahead.

Num­ber one on this year’s list was new research on what really dri­ves moti­va­tion. That fac­tor: A clear sense that progress is being made.

In a multi-year study, researchers at the Har­vard Busi­ness School first asked 600 man­agers from dozens of dif­fer­ent com­pa­nies to rank the impact of five fac­tors that are nor­mally asso­ci­ated with moti­va­tion — recog­ni­tion, incen­tives, sup­port from man­agers and col­leagues, clear goals and a sense of mak­ing progress.

In this first phase of the study, recog­ni­tion for good work was ranked by man­agers as the most impor­tant fac­tor in motivation.

In the next stage,  hun­dreds of knowl­edge work­ers in a vari­ety of set­tings emailed 12,000 end of day diaries, rat­ing their moti­va­tion level and talk­ing about the kind of day they’d had. The researchers then dug deep to look at what these work­ers reported as hav­ing hap­pened each day, espe­cially on those days that respon­dents said were their “best days” and their “worst days.”

And the answer is.…..

The study showed that a sense of progress was the fac­tor most strongly cor­re­lated with a strong feel­ing of moti­va­tion.  Par­tic­u­larly inter­est­ing — out of the five options rated by man­agers before the study began as keep­ing peo­ple moti­vated , a sense of mak­ing progress was rated last

Here’s an excerpt from the Har­vard Busi­ness Review article:

“On days when work­ers have the sense they’re mak­ing head­way in their jobs or when they receive sup­port that helps them over­come obsta­cles, their emo­tions are most pos­i­tive and their drive to suc­ceed is at its peak. On days when they feel they are spin­ning their wheels or encoun­ter­ing road­blocks to mean­ing­ful accom­plish­ment, their moods and moti­va­tion are low­est.“

Here are the five fac­tors that appear to drive moti­va­tion the most, the events work­ers said they expe­ri­enced on their very best days:

Mak­ing progress                                           76%

Col­lab­o­ra­tion                                                53%

Orga­ni­za­tional  sup­port                                  43%

Inter­per­sonal sup­port 25%

Doing impor­tant work                                    19%

The researchers reported that neg­a­tive events gen­er­ally have a greater effect on peo­ples’ emo­tions, per­cep­tions and moti­va­tions than pos­i­tive ones. And the most promi­nent event on work­ers’ worst days was expe­ri­enc­ing a setback.

And here’s what the HBR arti­cle had to say about recognition:

“As for recog­ni­tion, diaries revealed that it does indeed moti­vate work­ers and lift their moods. So man­agers should cel­e­brate progress, even the incre­men­tal sort. But there will be noth­ing to rec­og­nize if peo­ple aren’t gen­uinely mov­ing for­ward — and as a prac­ti­cal mat­ter, recog­ni­tion can’t hap­pen every day. You can, how­ever, see that progress hap­pens every day.”

Impli­ca­tions

This research has some impor­tant impli­ca­tions on how we and the peo­ple we work with can main­tain moti­va­tion lev­els, even in the face of the inevitable frus­tra­tions we face each day.

When it comes to the peo­ple who work with us, the study’s authors advise man­agers to set clear goals and to be con­sis­tent in those goals, to give staff the resources they need and to be deci­sive in our deci­sion making.

There is another impli­ca­tion as well — and that’s to set aside the time each day to acknowl­edge the progress you’ve made, large or small.

This can be done by main­tain­ing a “progress jour­nal” on your com­puter — tak­ing three min­utes at the con­clu­sion of each day to write down the top five things you’ve achieved that day.

Another advi­sor pre­pares a list of things to do and clients to call at the begin­ning of each day — and draws a line through each with a yel­low magic marker as they’re done.  “I know it sounds silly” she says “but just see­ing those yel­low lines on that list of peo­ple to call gives me a bit of a boost.”

Along sim­i­lar lines, one suc­cess­ful advi­sor starts each day with a short meet­ing of his four per­son team. At the con­clu­sion of that meet­ing, every­one iden­ti­fies the three most impor­tant things they need to get done that day — even some­thing as sim­ple as call­ing an impor­tant client can be on the list, espe­cially if that call is over­due or is likely to be difficult.

The team mem­bers take turns mak­ing notes on those items — and five min­utes after the meet­ing ends, every­one gets an email high­light­ing the goals they set.  Next morning’s meet­ing starts with a review of how every­one did against those goals — and ends with peo­ple iden­ti­fy­ing their top three goals for the day ahead.

This advi­sor com­mented that two things have hap­pened since they began doing this.

First, they’ve all become more focused on get­ting those top three things done — no one wants to be embar­rassed the next morning.

And sec­ond, every­one walks away from that meet­ing more pos­i­tive and enthused — because even after a tough day in the mar­kets or dif­fi­cult client meet­ings, they can still feel good about the tan­gi­ble accom­plish­ments they can point to inthe last day.

The impli­ca­tions of this research are very clear. As you think about how you and your team main­tain moti­va­tion, by all means include recog­ni­tion and rewards in the mix .… but in the process, don’t neglect the most impor­tant moti­va­tor of all, a sense that clear progress is being made each and every day.

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Tags: Accomplishment, Breakthrough Ideas, Breakthrough Research, Compendium, Different Companies, Excerpt From, Harvard Business Review, Harvard Business School, Harvard Review, Headway, Knowledge Workers, Moods, Motivation Level, Obstacles, Respondents, Roadblocks, Spinning Their Wheels, Strong Feeling, Study Researchers, Target
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A C.A. speaks out – Candid feedback from a referral source

Wednesday, September 21st, 2011

Recently, my weekly col­umn in the Globe and Mail talked about the desire by many clients to be more involved in the deci­sions on their accounts and to act more like part­ners with their advisors.

In response I got an email from a C.A. in a mid-sized com­mu­nity in south­ern Ontario – we sub­se­quently spoke on the phone.

His approach to referrals

This C.A. has spent twenty years work­ing on his own sup­ported by a small team of asso­ciates, focus­ing on busi­ness owners.

As well as audits and tax advice, he also is a cer­ti­fied finan­cial plan­ner and does finan­cial plan­ning. He has his­tor­i­cally sup­plied clients with­out an invest­ment advi­sor with a list of three to five advi­sors who they could talk to about imple­ment­ing their plan – gen­er­ally based on advi­sors that exist­ing clients were work­ing with.

He does this as a ser­vice to clients with no expec­ta­tion of being rewarded by either clients or advi­sors–  he men­tioned that he takes pride in going above and beyond to help clients.  He doesn’t ini­ti­ate refer­rals to advi­sors – if clients are happy where they are, he’s fine with that. The only time he makes refer­rals is when clients are unhappy, ask for sug­ges­tions or don’t have an advi­sor in place to imple­ment a finan­cial plan he’s devel­oped for him.

In some cases, he has par­tic­i­pated in meet­ings with clients and advi­sors two or three times a year, pro­vided that clients were pre­pared to pay for his time to do this – but gen­er­ally he has not been involved in the process after mak­ing refer­rals, other than prepar­ing taxes.

The his­tor­i­cal experience

His­tor­i­cally, his clients were gen­er­ally happy with the advi­sors he referred them to, although there were a cou­ple of con­sis­tent irritants.

One related to the qual­ity of report­ing. He com­mented that invest­ment indus­try report­ing is not uni­form and dif­fi­cult to deci­pher – it can take him an hour to cal­cu­late how clients have actu­ally done.

He went on to say that some firms look like they’re delib­er­ately mak­ing it hard for clients to fig­ure out what their annual return looks like and to deter­mine what clients have paid in fees. He did say that this has become bet­ter recently as some advi­sors have moved to charg­ing fees sep­a­rately, so that they are deductible on client taxes.

He’s also had some clients com­ment on the fact that after hav­ing paid him to develop a finan­cial plan, there was no reduc­tion in fees charged by their invest­ment advi­sor – in effect they felt they’re paid twice, once for the C.A. to develop the plan and a sec­ond time for the invest­ment advisor’s embed­ded cost of doing this plan.

He’s never had an advi­sor try to find a way to have the time they saved by not hav­ing to do a plan reflected in reduced fees to clients or ask about try­ing to find a way to help off­set the cost for this C.A. to con­tinue to be involved in client meetings.

And when I asked about whether advi­sors had offered to sit down with him to walk through their invest­ment approach or process to man­age client risk, he said he’s never had some­one offer to do that.

Rethink­ing the approach to referrals

A cou­ple of things are caus­ing him to rethink his approach to referrals.

One was an arti­cle in the March issue of C.A. mag­a­zine, talk­ing about the oppor­tu­nity for C.As to become more involved in help­ing clients reeval­u­ate their invest­ment strat­egy and phi­los­o­phy and  mon­i­tor their invest­ment plan.

He said it’s also become appar­ent to him that some clients have seen the names he sug­gested they talk to as an endorse­ment. This was par­tic­u­larly a prob­lem where clients were not actively involved in the invest­ment process, but del­e­gated and deferred to the advisor.

As a result, in future he will be more care­ful both about the clients he refers and the advi­sors he refers them to. He also plans to make his role more explicit, both ver­bally and in the engage­ment let­ter he has clients sign and encour­age clients to talk to more than one advi­sor before pick­ing some­one. He said that most advi­sors seem fine with this, although some years ago one advi­sor called him and said that he was not inter­ested in par­tic­i­pat­ing in a beauty con­test and that if this C.A. was going to give his clients mul­ti­ple advi­sors to talk to, then to take him off the list.

Tak­ing ver­sus giving

At the end of our con­ver­sa­tion, I asked about the kind of acknowl­edge­ment he’d received from advi­sors he’d referred clients to.

His com­ment was that in his expe­ri­ence most finan­cial advi­sors are much bet­ter at tak­ing than giving.

His­tor­i­cally he’s made two to three refer­rals a year, so about fifty refer­rals over the past twenty years. In that time, he’s never received a refer­ral in return or had an advi­sor ask about the nature of his busi­ness, should he or she run into a busi­ness owner who might ben­e­fit from this C.A.’s services.

And while he nor­mally receives a thank you call after refer­ring clients, typ­i­cally that’s as far as it goes.

He did com­ment that there are a cou­ple of advi­sors in his com­mu­nity who’ve picked up half a dozen clients in the past three or four years as a result of his referrals.

One of those advi­sors makes a point of invit­ing him and one of his clients out to lunch two or three times a year. He went on to say that even though he con­sid­ers these two advi­sors equally com­pe­tent, he can’t help being more dis­posed to mak­ing addi­tional refer­rals to the advi­sor who takes him and his client out to lunch periodically.

“I’m human like every­one else” this C.A. said. “Even though I know this shouldn’t affect my deci­sions, it’s still nice to feel that some­one who’s mak­ing money from refer­rals I’ve made doesn’t take me for granted.”

Key take­aways

I took a few things away from this conversation.

The first is that the changes as a result of events of the past cou­ple of years aren’t lim­ited to clients but also extend to the pro­fes­sion­als who some­times refer those clients.

As a result, advi­sors need to do a bet­ter job of com­mu­ni­cat­ing the process they have to mon­i­tor and man­age risk.

They and their firms need to do a bet­ter job on report­ing and on trans­parency of compensation.

And finally, many advi­sors need to think harder about how they acknowl­edge the sources of referrals.

None of these were nec­es­sar­ily crit­i­cal in the past – but will play an increas­ingly impor­tant role for advi­sors who want to max­i­mize refer­ral oppor­tu­ni­ties in future.

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Tags: Audits, Business Owners, Candid Feedback, Certified Financial Planner, Compendium, Email, Expectation, Financial Planning, Globe And Mail, Investment Advisor, Investment Industry, Preparing Taxes, Referral Source, Referrals, Southern Ontario, Target, Tax Advice, Three Times, Twenty Years, Weekly Column
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Four Essential Lessons from Steve Jobs

Wednesday, December 8th, 2010

Steve Jobs stands alone as today’s most admired CEO.

Recently, an arti­cle appeared in the US web­site Hors­es­mouth point­ing out four lessons advi­sors can learn from Jobs, writ­ten by Steve San­duski, a con­sul­tant with the PEAK orga­ni­za­tion in Omaha.

Les­son One: Say no.

San­duski starts by point­ing out that Jobs makes it his busi­ness to obses­sively hit on a small num­ber of things that are impor­tant to him.

Apple lim­its itself to three prod­uct lines — the Mac­in­tosh com­puter, the iPod, and the iPhone, with the recently announced IPad mak­ing it four.

With just three main prod­uct lines, Apple has a mar­ket cap­i­tal­iza­tion of more than $150 bil­lion. Jobs has resisted the call to offer lower-end prod­ucts and milk the company’s great brand. His phi­los­o­phy is that “it’s only by say­ing no that you can con­cen­trate on the things that are really important.”

Impli­ca­tions:

San­duski argues that there is no short­age of oppor­tu­ni­ties in this busi­ness. What there is a short­age of is conviction.

He says that the easy thing to do is to go to a meet­ing, hear a few good ideas, and then             go out and try them. When that does not work, you go to another meet­ing or hear another speaker and make a half-committed effort with new ideas, get­ting sim­i­lar unac­cept­able results.

Ulti­mately, you find your­self try­ing things but never really fin­ish­ing them. Most advi­sors have to-do lists. What fewer have but would ben­e­fit from are not-to-do lists. With not to do lists, advi­sors only take on ini­tia­tives that will have a dra­matic impact on their busi­ness, small scale projects that only make a dif­fer­ence at the mar­gin will drain energy and focus and ulti­mately leave you bogged down with­out really advanc­ing your business.

Les­son Two: Prac­tice the rule of 100%

Jobs built Pixar Stu­dios into a com­pany that he sold to Walt Dis­ney for $7.4 bil­lion. At Pixar, there is no 80/20 rule. It’s sim­ply the Rule of 100%-every effort gets 100% support.

Jobs is a noto­ri­ous stick­ler for minu­tiae l and one of the most obses­sive detail ori­ented peo­ple you’re likely ever to run into.

Accord­ingly, Pixar deliv­ered an aver­age of only one movie every 18 months, many fewer than most major movie stu­dio s. How­ever, the result was out­stand­ing. Pixar gen­er­ated more than $3.5 bil­lion in world­wide box-office receipts since 1995. And it had no bombs.

Impli­ca­tions:

Many suc­cess­ful advi­sors have 500 or more clients. These advi­sors have suc­cess­ful busi­nesses that gen­er­ate sub­stan­tial rev­enue and com­fort­able prof­its.

San­duski asks who got short­changed? The answer is the clients! None of those advi­sors would ever go on the record as say­ing they did a great job of tak­ing care of all of their clients. Typ­i­cally, 20% received great care and the other 80%, well, they were mainly an entry in a data­base.

So the key ques­tion for advi­sors is how to restruc­ture their busi­ness to deliver 100% qual­ity, to 100% of clients?

Les­son Three: Focus on your people

Jobs devotes a con­sid­er­able amount of his time to talk­ing with prospec­tive employ­ees that he thinks can be A-list play­ers on his team.

At the end of the day, there are no weak links in his exec­u­tive suite. He’s as obses­sive about the qual­ity of his peo­ple as he is about his products.

Impli­ca­tions:

Qual­ity work starts with qual­ity employ­ees. For many advi­sors, find­ing and retain­ing qual­ity staff mem­bers is a peren­nial issue. Advi­sors are tempted to hire the first per­son who mar­gin­ally fits the bill.

Unfor­tu­nately, that’s a recipe for long-term pain. It’s bet­ter to bite the bul­let now and con­tinue pur­su­ing the right per­son, rather than set­tle for an aver­age can­di­date who is des­tined to deliver mediocre results.

If you cur­rently have no sup­port staff, then go out and hire your first per­son. With­out staff, you’ll have a job, but you’ll never have a busi­ness. If you have exist­ing staff, con­tinue to sup­port and nur­ture your A play­ers — make sure they feel appre­ci­ated and know that they’re an impor­tant part of your team.

For your weaker links, work with them to try to get them to A sta­tus. If they can’t make the jump after you’ve given them every oppor­tu­nity to do so, it’s time to let them go.

Les­son Four: Refuse to settle

The last les­son is not to settle.

Jobs says, “We’re just try­ing to make great prod­ucts. We do things where we feel we can make a sig­nif­i­cant con­tri­bu­tion.” To him, it’s about stay­ing focused. It’s about doing great work. It’s about lov­ing what you do and doing it with all your energy. Don’t set­tle for any­thing less.

Impli­ca­tions:

San­duski writes that set­tling is a com­mon trap for many advi­sors. They rise to a level of pro­duc­tion that makes them com­fort­able and then they coast. They have the house, the cars, the vaca­tions, the club mem­ber­ship, and the kids’ col­lege edu­ca­tion funded … and many stop push­ing them­selves.

When you get to a point in your life where you are com­fort­able, coast­ing is the worst thing you can do. You’ll get stale dis­en­chanted, and start cyn­i­cal. The key is this: When grow­ing your busi­ness is no longer sat­is­fy­ing, it’s time to find new chal­lenges and to start grow­ing again.

To see more insights from Steve San­duski, go to www​.suc​ceed​with​peak​.com.

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Tags: Apple, Business Lesson, Ceo, Compendium, Conviction, Dramatic Impact, Initiatives, Iphone, Ipod, Macintosh, Macintosh Computer, Market Capitalization, Peak Organization, Philosophy, Pixar, Sanduski, Scale Projects, Steve Jobs, Target, Walt Dis
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