How One Advisor’s Online Presence Yields Three Clients a Month

Wednesday, June 13th, 2012

I’ve had sev­eral emails in response to last Thursday’s arti­cle on how investors are using LinkedIn to help select advi­sors. A com­mon theme is the extent to which advi­sors are frus­trated by head office restric­tions on their abil­ity to use vehi­cles like LinkedIn; some­thing which I sus­pect will change over time.

Today, the focus shifts to how one advi­sor is cap­i­tal­iz­ing on his online pres­ence to attract an aver­age of three new clients per month. This has taken place in three steps:

1. Build­ing online aware­ness and dri­ving traf­fic to his site
2. Invit­ing vis­i­tors to his site to sit in on a monthly webi­nar, typ­i­cally on a week­night or Sat­ur­day morning
3. Fol­low­ing up with investors who sign on for the webinar

Build­ing online awareness:

The first step for this advi­sor was to become com­fort­able with the online world. Begin­ning about eight years ago, he spent sev­eral hours a week online vis­it­ing dif­fer­ent sites. He com­mented and expressed opin­ions on things that he read, addressed mis­con­cep­tions, pro­vided clar­i­fi­ca­tion where there was con­fu­sion and answered questions.

In 2007, this advi­sor was approached by the author of one of Canada’s top finan­cial blogs, who had read some of his com­ments. The advi­sor was invited to become a reg­u­lar con­trib­u­tor to this blog.

A cou­ple of things hap­pened. First, with repeated expo­sure, his vis­i­bil­ity on the blog increased. And sec­ond, he started to get read­ers of his com­ments on the blog vis­it­ing the advisor’s site to learn more.

Trans­lat­ing traf­fic to engagement:

It’s nice to get traf­fic to your site, but that traf­fic is of lit­tle value if there’s no way to engage visitors.

One solu­tion is to encour­age vis­i­tors to your site to sign up to receive your online com­men­taries and other communication.

Or you can do what this advi­sor did: On his site, he invites vis­i­tors to sign up for a free monthly webi­nar, last­ing for one hour and held on a week­night or Sat­ur­day morn­ing. This webi­nar is purely edu­ca­tional in nature, pro­vid­ing advice on high level finan­cial plan­ning issues and get­ting into specifics on com­mon behav­ioural mis­takes by investors.

He’ll nor­mally have 10 to 15 prospects sign on for a webi­nar. There are two big advan­tages to webi­nars; from the advisor’s per­spec­tive, it allows him to take on clients across Canada, pro­vided that he’s reg­is­tered in their province. More impor­tant, from the investor’s point of view, sign­ing on for a webi­nar from home is much more con­ve­nient and much less threat­en­ing than meet­ing with an advi­sor in per­son or attend­ing a seminar.

Con­vert­ing prospects to clients:

While the webi­nar is tak­ing place, prospects get an email with a two part form. The first part asks for feed­back on the webi­nar; the sec­ond invites prospects to request a tele­phone call to explore the pos­si­bil­ity of work­ing together.

About 70% of peo­ple who attend the webi­nar request that call so any­where from seven to ten prospects take that next step. Dur­ing that call, one of the mem­bers of this advisor’s team tries to get a sense of whether there is a pos­si­ble fit. For exam­ple, this advi­sor requires all new clients to go through devel­op­ment of a finan­cial plan with him and one of the two plan­ners he has on staff.

He also lim­its his prac­tice to clients who com­mit to invest­ing all of their long term invest­ments with him; given that the online space fea­tures many do-it-yourself investors, that’s a deal breaker for some investors (although investors who are truly self-directed will gen­er­ally screen them­selves out before they get to the phone call.) Ulti­mately, about half of the prospects who request a phone call become clients, yield­ing three to five new clients monthly.

Being an advi­sor gives you scope to exper­i­ment with dif­fer­ent approaches to com­mu­ni­cat­ing with both exist­ing and prospec­tive clients. This advisor’s approach won’t be a fit for most advi­sors, but con­sider whether you can apply some lessons from his suc­cess in engag­ing prospects who visit his site to your business.

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Tags: Blog, Blogs, Canada, Clarification, Confusion, Contributor, Extent, Focus, Investors, Last Thursday, Misconceptions, Online Commentaries, Presence, Saturday Morning, Three Steps, Time Today, Traffic, Visibility, Webinar, Weeknight
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The Surprising Way to Deepen Client Relationships

Wednesday, May 9th, 2012

A lot has been writ­ten about how to increase client loy­alty, and cer­tainly I’ve made my own con­tri­bu­tions to that body of work.

Despite the vol­ume of ideas on this topic, many advi­sors still have bet­ter rela­tion­ships as a key goal, par­tic­u­larly in light of the extent to which the mar­ket tur­moil of the past few years has tested client goodwill.

That’s why it’s worth con­sid­er­ing a sim­ple approach to deep­en­ing client rela­tion­ships. That approach, quite sim­ply, is to high­light in an appro­pri­ate fash­ion some of the things you do in terms of com­mu­nity involve­ment and activity.

Increas­ing your like­abil­ity quotient:

When I talk to clients who are really happy with their advi­sors, it’s remark­able how often I hear some­thing along the lines of “I sim­ply like her (or him.)” In fact, one of my most read arti­cles last year related to how to increase your “like­abil­ity quotient.”

Some of the qual­i­ties that make advi­sors like­able will be no sur­prise: An upbeat opti­mistic out­look, ask­ing ques­tions to engage clients in con­ver­sa­tion and demon­strat­ing that you’re lis­ten­ing closely.

But oth­ers are less evi­dent. Amer­i­can civil rights leader Jesse Jack­son has been quoted as say­ing “You have to bring more to the table than your own appetite.” And com­mu­ni­cat­ing that qual­ity to clients, that you bring more to the table than your own appetite is one of things that helps make advi­sors like­able and deep­ens client relationships.

“Bring more to the table than your appetite:”

That’s why I’ve come to the view that many advi­sors would ben­e­fit from incor­po­rat­ing a sig­na­ture char­ity into client com­mu­ni­ca­tion. Quite sim­ply, peo­ple like to work with peo­ple they like. By hav­ing clients feel that your moti­va­tions extend beyond your own mate­r­ial well-being, you often become more like­able in the process.

Hav­ing a sig­na­ture char­ity doesn’t have to entail writ­ing big cheques, or for that mat­ter writ­ing cheques at all. One advi­sor has pro­filed vol­un­teer efforts by him and his fam­ily at a food bank and has got­ten a great response from clients.

It doesn’t mean you have to select high-profile char­i­ties; to the con­trary. I’ve had advi­sors tell me about ter­rific feed­back to their efforts to sup­port small, grass­roots orga­ni­za­tions. Here are four guide­lines to mak­ing a sig­na­ture char­ity work for you:

Find a cause you can truly com­mit to:

First and most impor­tant, the sig­na­ture char­ity has to be some­thing that you are truly pas­sion­ate about. To achieve the desired effect, your com­mit­ment has to be gen­uine and one that you would sus­tain for an extended period, even if you get zero ben­e­fits in terms of client goodwill.

Note that many advi­sors already pro­vide exten­sive sup­port to great causes, but have sim­ply not incor­po­rated this into client communication.

Take the view that any mar­ket­ing ben­e­fit is secondary:

You need to truly take the view that any mar­ket­ing ben­e­fits are sec­ondary to the pos­i­tive impact that you make through your efforts. Rec­og­nize that fairly or not, in today’s skep­ti­cal world some peo­ple will see any com­mu­ni­ca­tion about your good works as self-promotion. In a per­verse way, the more you try to draw atten­tion to your­self and get credit for your good works, the less the good­will that creates.

That’s why com­mu­ni­ca­tion about your sig­na­ture char­ity should be low key, espe­cially ini­tially. In fact, a case can be made that you should only start telling clients about your efforts after you’ve spent at least a year or two in active sup­port. It adds to your cred­i­bil­ity to say: “For the past sev­eral years, my fam­ily and I have been supporting ….. “

Smaller is better:

When it comes to the cause you select as your sig­na­ture char­ity, beyond the rule of thumb that it is one you are per­son­ally pas­sion­ate about, the other con­sid­er­a­tion is it being some­thing that clients can relate to in terms of the impact it makes. Every­one rec­og­nizes that there are tons of great causes that do ter­rific work. That said the ones that seem to get the best response from clients are small in scale and grass­roots in nature, where the impact is tan­gi­ble and immediate.

Any cause that you’re pas­sion­ate about can be a can­di­date for a sig­na­ture char­ity. One advi­sor gave back by spend­ing four years rais­ing money to help build a local hik­ing trail. That said, the most com­mon sig­na­ture char­i­ties seem to revolve around chil­dren; here are some examples:

• Pro­grams tar­geted to chil­dren in lower income areas: I’ve talked to advi­sors who help spon­sor break­fast clubs at schools and after school and sum­mer programs.
• Char­i­ties that help chil­dren with can­cer or other child­hood dis­eases achieve their dreams or par­tic­i­pate at sum­mer camps.
• Causes related to help­ing chil­dren in the devel­op­ing world. Exam­ples are Plan Because I Am a Girland Amani Chil­drens’ Home in Tan­za­nia (an orga­ni­za­tion I’ve sup­ported since 2008 as my own sig­na­ture char­ity with clients.)

Get your clients involved:

Let’s sup­pose that for the past few years you’ve sup­ported a cause that you’re pas­sion­ate about, that is small in scale with a tan­gi­ble, imme­di­ate impact and that is mak­ing a real difference.

To make this your sig­na­ture char­ity, one final step is required; and that’s to let clients know about this.

Some ways to do this:

• Ensure you have a promi­nent photo in your office that pro­files the charity
• Incor­po­rate news about the char­ity into client newslet­ters and other forms of client com­mu­ni­ca­tion. For exam­ple, con­sider let­ting clients know that instead of gifts and cards at Christ­mas, you have made a con­tri­bu­tion on behalf of all of your clients.
• Invite clients to get involved. The advi­sor who vol­un­teers at a food bank has an annual evening where he encour­ages any clients who are inter­ested to bring out their kids and join him and his fam­ily. Other advi­sors have invited clients to buy tick­ets to fundrais­ers for their sig­na­ture charity.

The law of unin­tended con­se­quences at work:

Let me close with a word of cau­tion: If you embark on this with the moti­va­tion of impress­ing clients and per­haps attract­ing new ones, you will almost cer­tainly fail. In my expe­ri­ence, the advi­sors who’ve had the best suc­cess are those whose pas­sion for the cause they sup­port is evi­dent. The more pas­sion­ate you are the stronger clients tend to feel about this.

One final ben­e­fit to hav­ing a sig­na­ture char­ity has noth­ing to do with clients and every­thing to do with how you and your staff feel about the work you do. In con­ver­sa­tion with advi­sors who’ve made ongo­ing com­mit­ment to a sig­na­ture char­ity a core part of their life, I’m struck by how often they talk about the impact this has on their own moti­va­tion and sense of satisfaction.

And in the cat­e­gory of unex­pected con­se­quences, I spoke to one advi­sor who invited select clients to a fundrais­ing lunch for girls in devel­op­ing coun­tries; where par­ents often strug­gle to fund their daugh­ters’ basic edu­ca­tion. This advi­sor got a great response at the time, but was aston­ished by what hap­pened after­wards.
When she met with these clients in the months that fol­lowed, often they wanted to take the first five or ten min­utes to talk about the lunch and work the char­ity was doing, and what had hap­pened since. Even though these clients had writ­ten cheques to attend the lunch, the advi­sor felt that her rela­tion­ships with many of these clients had been fun­da­men­tally deepened.

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Tags: American Civil Rights, Appetite, Better Relationships, Charity, Cheques, Civil Rights Leader, Client Communication, Client Loyalty, Client Relationships, Community Involvement, Extent, Goodwill, Jesse Jackson, Key Goal, Likeable, Market Turmoil, Motivations, Optimistic Outlook, Quotient, Signature, Volunteer
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How to Ensure Clients “Feel Valued”

Wednesday, May 2nd, 2012

Ask advi­sors whether they value their clients (espe­cially top clients) and care about their future suc­cess and you’ll get funny looks won­der­ing what you’ve been smok­ing. The answer is so obvi­ous that the ques­tion isn’t worth asking.

Ask clients the same ques­tion and the response is often quite dif­fer­ent. Yes, their advi­sor would regret the loss of rev­enue should they leave; but beyond that many do feel taken for granted at least a lit­tle bit. Ask a fur­ther ques­tion about how much their advi­sor cares about the rela­tion­ship and their suc­cess beyond the prof­its they rep­re­sent, and even more uncer­tainty creeps in.

The mes­sage is clear: Just car­ing about clients and valu­ing rela­tion­ships isn’t enough. Clients have to know you care and know that you value rela­tion­ships. To the extent that clients don’t per­ceive this, in the words of the Oscar-winning 1980’s movie Cool Hand Luke: “ What we have here is a fail­ure to communicate.”

Trap One: Doing more of the same:

The first trap for advi­sors is rely­ing on doing an out­stand­ing job to make clients feel appreciated.

One approach is by focus­ing on the deliv­er­ables you’re paid for. Increas­ing the time devel­op­ing in depth finan­cial plans, research­ing invest­ment alter­na­tives, read­ing and attend­ing con­fer­ences, find­ing bet­ter ways to rebal­ance portfolios.

A sec­ond approach is to ramp up client com­mu­ni­ca­tion. Increase the fre­quency of reviews, call to check in more often, host more break­fasts, and send more newsletters.

The chal­lenge with both these approaches is by focus­ing your efforts here, you’re gen­er­ally deliv­er­ing what clients expect for the fees they pay. Of course you’re going to do a great job of research­ing invest­ments and build­ing port­fo­lios and of com­mu­ni­cat­ing.

For­get the fact that you do a far bet­ter job on these than most other advi­sors. All too often by doing more of the same, clients may feel reas­sured they’re get­ting what they pay for; but they don’t feel they’re get­ting MORE than what they pay for.

And it’s get­ting more than what they pay for that makes clients feel appre­ci­ated and val­ued. I’m not sug­gest­ing for a moment that you should stop doing an out­stand­ing job on deliv­er­ing value in your day to day process, and in your client com­mu­ni­ca­tion. In fact these may be a core part of your value propo­si­tion in keep­ing exist­ing clients and in attract­ing new ones. It’s just that for many clients this isn’t suf­fi­cient for them to feel truly valued.

Trap Two: Rely­ing on recog­ni­tion activity:

A sec­ond strat­egy some advi­sors use is to invest time and money in activ­ity that makes clients feel rec­og­nized and appre­ci­ated. There are almost as many dif­fer­ent ways to do this as there are advi­sors; din­ners, boat cruises, wine tast­ing, golf out­ings, and the list is a long one.

There are a few chal­lenges to this approach. First, these events tend to be costly. Sec­ond, given how busy peo­ple are, it can be hard to get top clients out to them. Third, while the results can be pos­i­tive ini­tially, the impact often lessens with repetition.

And finally, unless per­son­al­ized in some fash­ion (exam­ple, an evening for clients who love wine), the very fact that you do some­thing for a large group can under­mine the sense among your clients that this is espe­cially for them. And depend­ing on how cyn­i­cal the client is, you may even get the sense among some clients that “I’m pay­ing for this.”

That’s not to say that the right recog­ni­tion activ­ity can’t send a pos­i­tive sig­nal, because it cer­tainly can. The chal­lenge is that the mes­sage may be hard to get through to all your key clients, and also may wear off over time.

An approach to let clients know you care:

The good news is that in my con­ver­sa­tions with clients over the years, I have run into many who absolutely believe that their advi­sor cares about them and their suc­cess. When I reflect on those con­ver­sa­tions, there are a few recur­rent themes.

Firstly, clients who say their advi­sors care almost always say they really feel lis­tened to. Per­haps the sim­plest way to let clients know you care is to make draw­ing them out in con­ver­sa­tions your top pri­or­ity. The more you ask clients to talk about their sit­u­a­tion and cir­cum­stances and how they feel, the more they see you as truly car­ing. Basic I know, but some­thing that a remark­able num­ber of advi­sors seem to miss.

Sec­ond, these clients gen­er­ally like their advi­sors as peo­ple. They don’t see their advi­sors as obsessed with mate­r­ial suc­cess, or fix­at­ing on max­i­miz­ing their finan­cial out­comes. One inter­est­ing com­ment from clients who say their advi­sors care about them is that sur­pris­ingly often they feel that their advi­sor cares about other peo­ple also. They see their advi­sors as gen­er­ous con­trib­u­tors to char­i­ties and other good works from which they derive no per­sonal gain. If you make giv­ing back to the com­mu­nity a pri­or­ity, con­sider find­ing ways to let your clients know.

Third, not every con­ver­sa­tion should be about money. If all of your con­ver­sa­tions are about finances, some clients won­der what moti­vated the call; your inter­ests or theirs. Con­sider allo­cat­ing a small por­tion of your con­ver­sa­tions with key clients to things from which you derive no imme­di­ate benefit.

Finally, don’t for­get the lit­tle things. When I talk to clients who say that their advi­sors truly care, I am aston­ished how often it’s the lit­tle things that make a big impact.

I recall one widow in her 70’s who said what really stood out for her was that when­ever she went in for a meet­ing, her advi­sor remem­bered exactly how she likes her tea.

Another advi­sor talked about ten min­utes each morn­ing that has made a big impact. At the start of each day his assis­tant gives him a list of clients cel­e­brat­ing a birth­day. He calls them first thing to say noth­ing more than “It’s my annual call to be among the first to wish you happy birth­day.” This inevitably leads to con­ver­sa­tions about their birth­day plans and life in gen­eral. Even leav­ing a voice mail sends a pos­i­tive message.

As you con­sider how you spend your time in the period ahead, by all means focus on the things that it takes to do a great job and the things you’re paid for. But don’t neglect to con­sider the other things often unre­lated to these, that can make the dif­fer­ence in ensur­ing that clients truly believ­ing that you care.

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Tags: Ask Question, Client Communication, Conferences, Cool Hand Luke, Deliverables, Extent, Failure, Investment Alternatives, Investments, Job, Little Bit, Portfolios, Profits, Ramp, Rebalance, Relationship, Uncertainty, Value Relationships
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How being an “additional advisor” can help win HNW clients

Wednesday, March 14th, 2012

How being an “addi­tional advi­sor” can attract HNW clients

When it comes to win­ning new clients, his­tor­i­cally most advi­sors have thought in terms of per­suad­ing prospects of the need to replace their exist­ing advisors.

New research from the United States sug­gests that in today’s envi­ron­ment, an eas­ier course of action might be to per­suade those prospects that they should sup­ple­ment the advi­sor or advi­sors they are cur­rently work­ing with. This is espe­cially the case if you’re work­ing at the top of the mar­ket, with high net worth investors with mil­lions of dollars.

The trend to mul­ti­ple advisors

An August report from Boston based Cerulli Asso­ciates indi­cated that about a quar­ter of Amer­i­can house­holds who seek finan­cial advice use mul­ti­ple advi­sors. For house­holds with assets of $2 mil­lion to $5 mil­lion, the per­cent­age with mul­ti­ple advi­sors is 33%. Of investors with assets over $5 mil­lion, 58% have mul­ti­ple advisors.

One Cerulli ana­lyst said: “Investors are tak­ing the idea of diver­si­fi­ca­tion one step fur­ther and diver­si­fy­ing across firms and across advisors.”

The drive for mul­ti­ple sources of advice has been dri­ven by the finan­cial cri­sis of the past three years. As Cerulli ‘s ana­lyst put it: “Today, fear is out­weigh­ing con­ve­nience.” With that trend to mul­ti­ple advi­sors, there is an increased push for quan­ti­ta­tive mea­sures of per­for­mance as well as a greater inter­est in under­stand­ing an advisor’s cre­den­tials, qual­i­fi­ca­tions and knowl­edge level.

As a result of this shift, many advi­sors over­es­ti­mate the extent to which they are a client’s pri­mary advi­sor. When Cerulli sur­veyed advi­sors about a cross sec­tion of their clients, advi­sors indi­cated that they were the pri­mary advi­sor 73% of the time; when those same clients were asked the ques­tion only 34% said that advi­sor filled this roll

Impli­ca­tions for action

There are some imme­di­ate impli­ca­tions from this trend, as well as some down the road.

When it comes to exist­ing top clients, don’t assume you’re the pri­mary or only advi­sor. Con­sider open­ing a dia­logue about how things are going and also about whether they may have begun work­ing with another advi­sor you’re not aware of.

With prospec­tive clients, some advi­sors have his­tor­i­cally had an “all or noth­ing” stance when it came to a client’s invest­ments; a posi­tion that you might want to recon­sider for the moment at least. You also need to rethink your con­ver­sa­tions with prospects, posi­tion­ing your­self as a sup­ple­ment rather than a replace­ment. Finally, con­sider relax­ing your account min­i­mums; one advi­sor tells prospec­tive clients that his nor­mal min­i­mum is $1 mil­lion, but that he’s will­ing to drop this to $250,000 for the first twelve months that he works with new clients, so they get to know him before mak­ing that big a commitment.

Finally, posi­tion your­self for the point in time when the pen­du­lum shifts and con­ve­nience becomes more impor­tant than fear, lead­ing to recon­sol­i­da­tion of advi­sors. Sug­gest to clients with mul­ti­ple advi­sors that you’ll pro­vide a monthly or quar­terly sum­mary of all their invest­ments; what you man­age as well as what they hold else­where. The oppor­tu­nity to iden­tify inef­fi­cient and over­lap­ping hold­ings could help posi­tion you to be among the win­ners when that recon­sol­i­da­tion occurs. Iif you don’t make this offer, the risk is that another of your client’s advi­sors will.

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Tags: 5 Million, American Households, Assets, Boston, Cerulli Associates, Convenience, Credentials, Cross Section, Diversification, Environment, Extent, Financial Advice, Financial Crisis, High Net Worth Investors, Knowledge Level, Prospects, Quantitative Measures, United States
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The Misconception of Asking Dumb Questions

Wednesday, January 18th, 2012

You’ve prob­a­bly heard the say­ing that there’s no such thing as a dumb question—only the ones you don’t ask. Depend­ing on that, you might assume that poten­tial clients com­pre­hend your require­ment to dis­cover insight about their issues and so pro­vide you with license to pose dumb questions.

You are able to get away with that to some extent in client meet­ings. But clients expect you to learn quick, and will eval­u­ate your capa­bil­i­ties accord­ingly. When the depth of your ques­tions does not enhance the client’s impres­sion of you with every one you ask, watch out.

Prior to you ask­ing your client a ques­tion, con­sider these three points:

1. Will your ques­tion really enhance your knowl­edge of the client’s issue?

2. Will it encour­age the client to think much more deeply about the matter?

3. Will your ques­tion lead the client to ask you ques­tions about your plan?

A per­fect client ques­tion fur­thers your under­stand­ing of the sit­u­a­tion, adds some value for that client, and shows that you really know your stuff. Obvi­ously, not every thing you ask about needs to trig­ger your clients to stroke their chins and rumi­nate on a response; you style some ques­tions solely to col­lect fun­da­men­tal info.

There are dumb ques­tions, and you get to ask a small num­ber of them in any client meet­ing. Make sure to try to ask them early on if you want to remain around to win the sale.

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Tags: Capabilities, Chins, Client Meetings, Customer Meetings, Dumb Question, Dumb Questions, Extent, Insight, Knowledge, Lead, Misconception, Ruminate
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New Research on Attracting Affluent Clients Today

Wednesday, December 14th, 2011

When it comes to win­ning new clients, his­tor­i­cally most advi­sors have tried to per­suade prospects of the need to replace their exist­ing advisors.

But new research from the United States shows that today an eas­ier course of action is to per­suade those prospects that they should sup­ple­ment the advi­sor they are cur­rently using. This is espe­cially the case if you’re work­ing at the top of the mar­ket, with high net worth investors with mil­lions of dollars.

The trend to mul­ti­ple advisors

An August report from Boston based Cerulli Asso­ciates showed that about a quar­ter of Amer­i­can house­holds who seek finan­cial advice use mul­ti­ple advi­sors. For house­holds with assets of $2 to $5 mil­lion, the per­cent­age with mul­ti­ple advi­sors is 33%. And of investors with assets over $5 mil­lion, 58% have mul­ti­ple advisors.

One Cerulli ana­lyst said: “Investors are tak­ing the idea of diver­si­fi­ca­tion one step fur­ther and diver­si­fy­ing across firms and across advisors.”

The drive for mul­ti­ple sources of advice has been fuelled by the finan­cial cri­sis of the past three years. As Cerulli ‘s ana­lyst put it: “Today, fear is out­weigh­ing con­ve­nience.” With that trend to mul­ti­ple advi­sors, there is an increased push for quan­ti­ta­tive mea­sures of per­for­mance as well as a greater inter­est in under­stand­ing an advisor’s cre­den­tials, qual­i­fi­ca­tions and knowl­edge level.

As a result of this shift, many advi­sors over­es­ti­mate the extent to which they are a client’s pri­mary advi­sor. When Cerulli sur­veyed advi­sors about a cross sec­tion of their clients, advi­sors indi­cated that they were the pri­mary advi­sor 73% of the time; when those same clients were asked the ques­tion, only 34% said that advi­sor filled this roll

Action items for advisors

There are some imme­di­ate impli­ca­tions from this trend – as well as some down the road.

When it comes to exist­ing top clients, don’t assume you’re the pri­mary or only advi­sor. Open a dia­logue about how things are going – and also about whether they may have begun work­ing with another advi­sor you’re not aware of.

With prospec­tive clients, some advi­sors have his­tor­i­cally had an “all or noth­ing” stance when it came to a client’s invest­ments – a posi­tion that you might want to recon­sider, for the moment at least. You also need to restruc­ture your con­ver­sa­tions with prospects, posi­tion­ing your­self as a sup­ple­ment rather than a replace­ment. Finally, you should relax your account min­i­mums – one advi­sor tells prospec­tive clients that his nor­mal min­i­mum is $1 mil­lion, but that he’s will­ing to drop this to $250,000 for the first 12 months that he works with new clients, so they get to know him before mak­ing that big a commitment.

Finally, posi­tion your­self for the point in time when the pen­du­lum shifts and con­ve­nience becomes more impor­tant than fear, lead­ing to con­sol­i­da­tion of advi­sors. Sug­gest to clients with mul­ti­ple advi­sors that you’ll do a monthly or quar­terly sum­mary of all their invest­ments – what you man­age as well as what they hold else­where. The oppor­tu­nity to iden­tify inef­fi­cient and over­lap­ping hold­ings will help posi­tion you to be the win­ner when that recon­sol­i­da­tion occurs. Note that if you don’t make this offer, there’s a risk that another of your client’s advi­sors will.

In today’s envi­ron­ment, these are essen­tial steps for any any­one look­ing to max­i­mize new clients. The finan­cial cri­sis of the past three years has fun­da­men­tally changed the world in lots of ways – not the least of these is the think­ing required to bring new clients on board.

    Lat­est Advi­so­r­An­a­lyst Prac­tice Growth Sto­ries

Tags: 5 Million, Affluent Clients, American Households, Assets, Boston, Cerulli Associates, Convenience, Credentials, Cross Section, Dialogue, Diversification, Extent, Fear, Financial Advice, Financial Crisis, High Net Worth Investors, Knowledge Level, Prospects, Quantitative Measures, United States
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The Single Best Way to Start a Client Meeting

Wednesday, November 30th, 2011

What does it take for a meet­ing with a key client to be successful?

Answer­ing that ques­tion requires you to first quan­tify how you mea­sure success.

Here are three alter­na­tive definitions:

• 1. First and fore­most, did the clients agree to move for­ward on at least one thing that will advance their agenda , mov­ing them towards their goals and leav­ing them bet­ter positioned?

• 2. Did the clients agree to move for­ward on at least one item that that will advance your agenda and leave you bet­ter off?

The list of pos­si­ble items here is lengthy, for example:

• A shift in your com­pen­sa­tion model
• Con­sol­i­dat­ing accounts they have elsewhere
• Agree­ing to deal with one of your team mem­bers on day to day issues instead of call­ing you
• Open­ing the door to talk­ing about needs that you’re not deal­ing with cur­rently (so insur­ance if you only have their invest­ments, invest­ments if you only have their insurance)
• Find­ing a way to get to know their kids bet­ter and poten­tially to begin work­ing with their children
• Intro­duc­tions to fam­ily mem­bers or their accountant
• Refer­rals to col­leagues at work

• 3. In the process, was your bond with these clients strength­ened? Did they walk away feel­ing bet­ter about your depth of knowl­edge and pro­fes­sion­al­ism and the extent to which you truly care about their long term suc­cess, beyond the rev­enue you gen­er­ate from their account? Did they leave say­ing to them­selves: “Am I ever glad that Dan’s my finan­cial advisor”

Shap­ing your conversation

I’m going to sug­gest that depend­ing on the cir­cum­stances, a meet­ing can be suc­cess­ful with­out spe­cific actions taken to advance your clients’ agenda or your agenda, but it’s impos­si­ble to have a truly suc­cess­ful meet­ing unless clients walk away feel­ing bet­ter about your rela­tion­ship. Even in tough mar­kets like we saw dur­ing the global finan­cial cri­sis, if clients don’t walk out of a meet­ing more con­fi­dent than they felt when they walked in, the meet­ing wasn’t a success.

I recently got a call from an advi­sor who’d attended one of my work­shops about a year ago and who’s a reg­u­lar reader of these articles.

Over the past year, she’s imple­mented a num­ber of ideas and feels that her meet­ings are much more pro­duc­tive as a result:

• 1. Before call­ing a client to sched­ule a meet­ing, she reviews her files and writes down her goals for the meet­ing, one or two things she hopes to achieve that will leave the clients bet­ter off and advance their agenda and also one thing that will leave her bet­ter off, advanc­ing her agenda.

• 2. When set­ting up the meet­ing, she starts by ask­ing clients what ques­tions they’d like to cover, then adds her own items to deal with (often emerg­ing from those goals she’s writ­ten down) and from that cre­ates an agenda, which she emails to clients before­hand and which is tabled at the start of the meeting.

I encour­age advi­sors to leave the line beside the first item blank and to say “You’ll note that he first item on the agenda is blank. That’s for any ques­tions that have come up since we set the meet­ing up or any­thing else that you’d like to talk about that’s not on the agenda.”

• 3. In devel­op­ing the meet­ing agenda, she fac­tors in some of the research I’ve writ­ten about on the “peak-end effect”. This research sug­gests that what shapes client rec­ol­lec­tions of any expe­ri­ence the most are the “peaks” — the highs and the lows — and what hap­pens at the very end. As a result, she struc­tures the agenda to be sure to end on a high note.

“What should I know about?”

This advi­sor has also incor­po­rated the idea of leav­ing the first agenda item blank, but after ask­ing clients about what else they’d like to dis­cuss that’s not on the agenda, she’s added another ques­tion of her own.

“At that point, I ask clients what’s hap­pened in their lives since we last met that I should know about, whether good or bad.

I have about 150 client meet­ings a year. About 95% of the time I don’t hear any­thing new or I hear great news about pro­mo­tions or buy­ing a vaca­tion home or their kids get­ting uni­ver­sity schol­ar­ships or per­haps expect­ing chil­dren them­selves. In those cases, we con­tinue on with the meet­ing, unless of course their good news has finan­cial impli­ca­tions we need to discuss.

Every cou­ple of months, though, the answer causes our meet­ing to move in an entirely dif­fer­ent direc­tion … I hear about health or work issues with them or fam­ily mem­bers or kids strug­gling with school or careers. Some­times their issues have spe­cific finan­cial con­se­quences that we talk about. Often though, I’m just there to lis­ten and to empathize … it’s amaz­ing how often clients tell me they have no one to talk to about these issues.

At times, that con­ver­sa­tion ends up con­sum­ing our whole meet­ing and we resched­ule. Occa­sion­ally I’m able to point to clients or peo­ple I know who’ve run into an issue sim­i­lar to theirs and ask if they’d like me to find out whether that other per­son would be will­ing to talk about their expe­ri­ence. And where clients are really strug­gling and need more help, I have a cou­ple of psy­chol­o­gists who I refer peo­ple to.

I know this won’t be every advisor’s cup of tea … most of the guys in my branch really don’t want to get into the soft stuff with clients.

But for me, there are four ben­e­fits to start­ing off meet­ings with that ques­tion — ‘What’s hap­pened in your lives since we last met that I should know about, whether good or bad?’

First, I think it sends a pos­i­tive sig­nal about my con­cern for every­thing going on in my clients’ lives.

Sec­ond, it helps me do my job bet­ter, by ensur­ing that plans reflect clients’ cur­rent circumstances.

Third, where clients have pos­i­tive things hap­pen­ing in their lives, which is most of the time, I’m able to con­grat­u­late them and talk about their good news a bit, I find that estab­lishes a pos­i­tive tone.

And finally, where clients are deal­ing with tough issues, I think it’s part of my role as their finan­cial advi­sor to make sure I know about that and to sup­port them as much as I can.

This advi­sor is right when she says that this approach won’t be a fit for every advi­sor. But it’s still worth think­ing about how you’re going to begin client meet­ings to max­i­mize the chances of a suc­cess­ful out­come, how­ever it is that you define suc­cess. And per­haps this advi­sor will inspire you to apply your own cre­ativ­ity on the ques­tion of the best way to start client meetings.

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Tags: Accountant, Circumstances, Colleagues, Compensation Model, Definitions, Extent, Family Members, Finding A Way, Global Financial Crisis, Insurance, Introductions, Investments, Measure Success, Professionalism, Referrals, Relationship, Team Members, Term Success
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Why You Aren’t Getting Referrals – and What to Do About It

Wednesday, November 16th, 2011

When it comes to attract­ing new clients, every advi­sor knows that noth­ing beats refer­rals from sat­is­fied clients.

And the sta­tis­tics bear this out:

A U.S. study by Cerulli Asso­ciates, for exam­ple, indi­cated that over half of investors who selected a new finan­cial advi­sor in 2009 did so on the basis of a referral.

Com­mon refer­ral mistakes

Despite their desire for new clients, many advi­sors hold fun­da­men­tal mis­con­cep­tions about what it takes to get qual­ity refer­rals. As a result, they either don’t talk about refer­rals at all or do so ineffectively.

The biggest rea­son for the reluc­tance to raise refer­rals is the incred­i­ble amount of bad advice on this sub­ject — advo­cat­ing meth­ods that put both advi­sors and clients under pres­sure or posi­tion the advi­sor as a needy supplicant

To the extent they do raise refer­rals, many advi­sors do it in the wrong way and ask for the wrong thing, focus­ing on “ask­ing for refer­rals” rather than “hav­ing refer­ral conversations”

And the biggest mis­take of all — a remark­able num­ber of advi­sors’ entire approach to refer­rals is rooted in their own agenda, rather than today’s client reality.

In upcom­ing columns, I’m going to cover some com­mon mis­con­cep­tions — and the real­i­ties that you need to under­stand if you’re going to max­i­mize the num­ber of qual­ity refer­rals you get in 2011.

Mis­con­cep­tion 1: Under­stand­ing how refer­rals happen

Fic­tion:

Refer­rals don’t hap­pen on their own — you have to make them happen.

Fact:

A sub­stan­tial num­ber of refer­rals aren’t ini­ti­ated by your clients. Instead, some­one they know asks them if they have an advi­sor they could rec­om­mend. These are “reac­tive” refer­rals — all your client has to do is respond.

These are the best kinds of refer­rals — no pres­sure on your client, with a prospect who’s ready to move.

Because their friend has ini­ti­ated this, the sat­is­fac­tion thresh­old for clients to make a refer­ral here is lower than for refer­rals that advi­sors ini­ti­ate. As long as you’ve done a good job and they’re rea­son­ably happy, all that it nor­mally takes for the refer­ral to hap­pen is for clients know that you’re open for business.

So that’s the first step — in a pro­fes­sional, low key fash­ion, let the peo­ple you work with know that on a selec­tive basis you’re tak­ing on new clients .

More on how to do that next.

Mis­con­cep­tion 2: How and when to talk about refer­rals

Fic­tion

It’s best to ask for refer­rals as part of a spon­ta­neous chat at the con­clu­sion of a meeting.

Fact

When meet­ing with clients, it’s clear that their needs have to be dealt with first … the chal­lenge is doing that while still bring­ing up refer­rals in an effec­tive fashion.

One dif­fi­culty is that to the extent refer­rals are men­tioned at all, they’re often left to a pass­ing request at the very end of the meet­ing, as clients are putting their coats on and are on the way out the door.

To be effec­tive, refer­ral con­ver­sa­tions need to be incor­po­rated into the body of a meet­ing. By far the best way to achieve this is by adding a dis­cus­sion item when set­ting up the agenda for an upcom­ing meeting.

Here’s how you might add refer­rals to a meet­ing agenda:

“In addi­tion to address­ing the ques­tions you’re raised and the other things we’ll be dis­cussing, there’s one final thing I’d like to talk about when we meet a week from Friday

In the next year, I have capac­ity for fif­teen new clients.

At the end of our meet­ing, I’d like to spend three min­utes talk­ing about the pro­file of clients I’ve found I can help the most, in the event you’re talk­ing to some­one con­sid­er­ing mak­ing a change who might be a can­di­date for one of those spots.”

Let’s be clear. Your goal here is not to “ask for refer­rals” — rather it’s to ini­ti­ate a short con­ver­sa­tion about your approach and the kinds of peo­ple who would ben­e­fit from work­ing with you … the next step is to bring up a com­fort­able way for clients to intro­duce you to peo­ple they know.

Mis­con­cep­tion 3: What to ask for

Fic­tion:

Your goal should be to get meet­ings with your clients’ friends and family.

Fact:

The biggest obsta­cle to clients pro­vid­ing refer­rals comes down to one word — and that word is “risk.”

For many clients, ask­ing friends to meet with you entails a great deal of risk. They’re wor­ried that this may result in friends being put under pres­sure, that sug­gest­ing that friends meet with you is a stronger endorse­ment than they’re com­fort­able with or that if things don’t work out, their friend­ship may be jeopardized.

The best way to over­come this is to change what you ask for, to some­thing that is more com­fort­able and less risky for clients to provide.

That doesn’t mean there aren’t instances where prospects have indi­cated they’re ready to make a move, in which the appro­pri­ate goal is to set up an imme­di­ate meeting.

But those aren’t the norm. Gen­er­ally, your objec­tive should be low key intro­duc­tions, not high stress meetings.

Let’s sup­pose you’re doing a good job of sup­ple­ment­ing face to face and tele­phone con­ver­sa­tions with other forms of com­mu­ni­ca­tion — whether it be reg­u­lar newslet­ters or arti­cles, quar­terly con­fer­ence calls, or invi­ta­tions to lun­cheon round­ta­bles or evening updates.

Now you have the oppor­tu­nity to demon­strate patience and focus on pro­vid­ing real value to your clients’ friends by say­ing some­thing like:

“While the main rea­son that I email clients the monthly arti­cles you’ve been get­ting from the New York Times, For­tune and sim­i­lar pub­li­ca­tions is to keep you up to date, I’ve also found them a com­fort­able way for poten­tial new clients to get to know me.”

“Feel free to for­ward the emails you get to peo­ple you know who might find them of value.”

“And should your friends wish to receive these emails them­selves, either they or you can send me a quick email and we’ll be pleased to add them to the list”

And depend­ing on how com­fort­able you feel with this client, you could go on to say:

“You’ve men­tioned your col­league at work Mary Smith as some­one I should get to know at some point. Do you think she’d be inter­ested in receiv­ing these articles?”

On Thurs­day, I’ll be talk­ing about more rea­sons you don’t get refer­rals … and what to do about it.

    Lat­est Advi­so­r­An­a­lyst Prac­tice Growth Sto­ries

Tags: Asking For Referrals, Bad Advice, Biggest Mistake, Cerulli Associates, Conversations, Desire, Extent, Misconception, Quality Referrals, Realit, Realities, Referral, Reluctance, Remarkable Number, Satisfaction, Some Common Misconceptions, Substantial Number, Supplicant, Threshold, Wrong Way
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New research on attracting affluent clients today

Wednesday, October 12th, 2011

When it comes to win­ning new clients, his­tor­i­cally most advi­sors have tried to per­suade prospects of the need to replace their exist­ing advisors.

But new research from the United States shows that today an eas­ier course of action is to per­suade those prospects that they should sup­ple­ment the advi­sor they are cur­rently using. This is espe­cially the case if you’re work­ing at the top of the mar­ket, with high net worth investors with mil­lions of dollars.

The trend to mul­ti­ple advisors

An August report from Boston based Cerulli Asso­ciates showed that about a quar­ter of Amer­i­can house­holds who seek finan­cial advice use mul­ti­ple advi­sors. For house­holds with assets of $2 to $5 mil­lion, the per­cent­age with mul­ti­ple advi­sors is 33%. And of investors with assets over $5 mil­lion, 58% have mul­ti­ple advisors.

One Cerulli ana­lyst said: “Investors are tak­ing the idea of diver­si­fi­ca­tion one step fur­ther and diver­si­fy­ing across firms and across advisors.”

The drive for mul­ti­ple sources of advice has been fuelled by the finan­cial cri­sis of the past three years. As Cerulli ‘s ana­lyst put it: “Today, fear is out­weigh­ing con­ve­nience.” With that trend to mul­ti­ple advi­sors, there is an increased push for quan­ti­ta­tive mea­sures of per­for­mance as well as a greater inter­est in under­stand­ing an advisor’s cre­den­tials, qual­i­fi­ca­tions and knowl­edge level.

As a result of this shift, many advi­sors over­es­ti­mate the extent to which they are a client’s pri­mary advi­sor. When Cerulli sur­veyed advi­sors about a cross sec­tion of their clients, advi­sors indi­cated that they were the pri­mary advi­sor 73% of the time; when those same clients were asked the ques­tion, only 34% said that advi­sor filled this roll

Action items for advisors

There are some imme­di­ate impli­ca­tions from this trend – as well as some down the road.

When it comes to exist­ing top clients, don’t assume you’re the pri­mary or only advi­sor. Open a dia­logue about how things are going – and also about whether they may have begun work­ing with another advi­sor you’re not aware of.

With prospec­tive clients, some advi­sors have his­tor­i­cally had an “all or noth­ing” stance when it came to a client’s invest­ments – a posi­tion that you might want to recon­sider, for the moment at least. You also need to restruc­ture your con­ver­sa­tions with prospects, posi­tion­ing your­self as a sup­ple­ment rather than a replace­ment. Finally, you should relax your account min­i­mums – one advi­sor tells prospec­tive clients that his nor­mal min­i­mum is $1 mil­lion, but that he’s will­ing to drop this to $250,000 for the first 12 months that he works with new clients, so they get to know him before mak­ing that big a commitment.

Finally, posi­tion your­self for the point in time when the pen­du­lum shifts and con­ve­nience becomes more impor­tant than fear, lead­ing to con­sol­i­da­tion of advi­sors. Sug­gest to clients with mul­ti­ple advi­sors that you’ll do a monthly or quar­terly sum­mary of all their invest­ments – what you man­age as well as what they hold else­where. The oppor­tu­nity to iden­tify inef­fi­cient and over­lap­ping hold­ings will help posi­tion you to be the win­ner when that recon­sol­i­da­tion occurs. Note that if you don’t make this offer, there’s a risk that another of your client’s advi­sors will.

In today’s envi­ron­ment, these are essen­tial steps for any any­one look­ing to max­i­mize new clients. The finan­cial cri­sis of the past three years has fun­da­men­tally changed the world in lots of ways – not the least of these is the think­ing required to bring new clients on board.

    Lat­est Advi­so­r­An­a­lyst Prac­tice Growth Sto­ries

Tags: 5 Million, Affluent Clients, American Households, Assets, Boston, Cerulli Associates, Convenience, Credentials, Cross Section, Dialogue, Diversification, Extent, Fear, Financial Advice, Financial Crisis, High Net Worth Investors, Knowledge Level, Prospects, Quantitative Measures, United States
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