Making Mutual Funds Perform in Your Portfolios (Livingston)

Thursday, April 4th, 2013

Mak­ing Mutual Funds Per­form in Your Portfolios

By Brian Liv­ingston, Vice Pres­i­dent, SIA​Funds​.com

Whether you are an IIROC or an MFDA advi­sor, you are most likely hold­ing mutual funds in your client’s port­fo­lio. Some of you focus heav­ily on Mutual Funds in your prac­tice while oth­ers sim­ply receive them as legacy funds when they assume a new client’s port­fo­lio. Accord­ing to research from the Invest­ment Funds Insti­tute of Canada, there was almost $850 bil­lion invested in Cana­dian Mutual Funds as of Decem­ber 2012, which was a 10.4% increase from Decem­ber of 2011. In other terms, mutual funds and mutual fund wraps now account for about 30% of Cana­di­ans’ finan­cial wealth. No mat­ter what your expo­sure is to the indus­try, know­ing how to prop­erly han­dle your client’s Mutual Fund port­fo­lio can assist in the value added propo­si­tion that you need to present to your cur­rent and poten­tial new clients to help grow assets in your book of business.

In order to really grow your book as effi­ciently as pos­si­ble, you need to be spend­ing the major­ity of your time in client fac­ing activ­i­ties. So, if we want to con­tinue on with this busi­ness effi­ciency, how do we find the time to do research and make sure your clients are get­ting into the best mutual funds? If advi­sors are hon­est with them­selves, they usu­ally do their ini­tial due dili­gence and find out the risk pro­file of the client and then place them into some funds based on their risk pro­file but not nec­es­sar­ily based on mar­ket con­di­tions or per­for­mance. Advi­sors then lock them­selves into this men­tal­ity that those funds will suf­fice in all mar­ket con­di­tions because they have them “diver­si­fied” with every­one end­ing up in sim­i­lar funds. This method unfor­tu­nately fails to address chang­ing mar­ket con­di­tions, not to men­tion the fact that the funds they may be choos­ing could be under­per­form­ing rel­a­tive to their peer group.

I was speak­ing with a mutual fund whole­saler recently who told me that his aver­age client is work­ing with approx­i­mately 25 dif­fer­ent fund fam­i­lies, but not nec­es­sar­ily by choice. Often, an advi­sor will receive a port­fo­lio from a new client and they include funds from a com­pany that the advi­sor is not famil­iar with. But if the advi­sor moves the funds to a com­pany they are famil­iar with, the client may end up hav­ing to pay a sub­stan­tial penalty. So, how do we solve the var­i­ous issues that advi­sors have with Mutual Funds? Whether it is being over­whelmed with thou­sands of choices, unfa­mil­iar­ity with a com­pany out­side of our nor­mal core group, mov­ing the clients into dif­fer­ent prod­ucts based on mar­ket con­di­tions, or find­ing the funds that are per­form­ing well right now, we need a solu­tion to help answer these problems.

The good news is that there is a Cana­dian invest­ment tool to help you answer these prob­lems, save you valu­able time from doing research, and help you pick the best mutual funds for the future chang­ing mar­ket conditions.

SIA​Funds​.com was cre­ated to answer all of these issues and more. SIA­Funds cur­rently takes 35 of the largest fund com­pa­nies in Canada and ranks the funds using rel­a­tive strength tech­nol­ogy from each com­pany on a nightly basis from strongest to weak­est to help you nar­row down your invest­ment choices. You can pick and choose the fund com­pa­nies that you want, so you only work with fund com­pa­nies that are rel­e­vant to your busi­ness. SIA­Funds also helps with Asset Allo­ca­tion rota­tion, Mutual Fund sec­tor rota­tion (see screen­shot below), and com­bined with their pro­pri­etary Equity Action Call tool, SIA has helped their clients avoid mar­ket dis­as­ters like back in 2008.

Mutual Funds have kind of got­ten a bad rap over the last while, as they carry a much higher MER than ETF’s do. But, with a well-managed port­fo­lio of mutual funds, advi­sors using SIA­Funds have been able to suc­cess­fully out­per­form the bench­marks and lower their draw­down risk while reduc­ing their time spent on analy­sis. The chart below shows the per­for­mance of the mutual fund com­pa­nies SIA­Funds cur­rently ranks, using a quar­terly real­lo­ca­tion process.

*Data was cal­cu­lated as of the close of March 31, 2013. Num­bers above reflect the out­per­for­mance as com­pared to the TSX Com­pos­ite benchmark.

As you can see, the 5-year num­bers show that 97% of the fund com­pa­nies SIA cov­ered out­per­formed the TSX Com­pos­ite bench­mark and this includes stay­ing fully invested in funds back in 2008, even though the Equity Action Call and the Asset Allo­ca­tion model had our clients in cash back then.

With over three quar­ters of a tril­lion dol­lars invested in mutual funds in Canada, you need to be able to sit down with a poten­tial new client, look at their funds and explain to them that you have a defined process to be able to help them through var­i­ous mar­ket con­di­tions and a clear selec­tion process going for­ward for their funds. SIA­Funds can help sep­a­rate you from the herd, help you gather new assets, and help your cur­rent clients meet their invest­ment goals. SIA​Funds​.com offers a free one-week trial to their ser­vice, so try it out for FREE and start redefin­ing your invest­ment process today.

Copy­right © SIA​Funds​.com

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Tags: Assets, Best Mutual Funds, Brian Livingston, Business Efficiency, Canadian Mutual Funds, Canadians, Current, Focus, Initial Due Diligence, Investment Funds Institute, Investment Funds Institute Of Canada, Legacy, Mentality, Mutual Fund Portfolio, Peer Group, Portfolios, Risk Profile, Value Added, Vice President, Wholesaler
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Create a Strategy for Focusing on Real Work

Thursday, December 20th, 2012

by Herb Koplowitz, The Covenant Group

For far too many finan­cial advi­sors, it may feel as if they spend more time wrapped up in small details such as answer­ing email and man­ag­ing an office to focus on the real work of build­ing their busi­nesses and estab­lish­ing client cap­i­tal. Tying your­self up with unim­por­tant but easy tasks is often a tac­tic — uncon­scious or delib­er­ate — to pro­cras­ti­nate on tack­ling more dif­fi­cult or chal­leng­ing responsibilities.

As we enter a new year, it is impor­tant to con­sider how you can be more effi­icient and effec­tive at work. Con­sider mak­ing a to-do list at the start of every morn­ing, list­ing the items in order of impor­tance. Force your­self to com­plete one task before jump­ing to another. Writ­ing it down on a slip of paper instead of typ­ing it on your com­puter will also pre­vent you from mov­ing the tasks around, and you get the added sat­is­fac­tion of cross­ing out a line every time you fin­ish that item.

If what you are work­ing on does not require a com­puter or an inter­net con­nec­tion, turn it off. This can help you set­tle into and focus on one task at a time. At the very least, sign out of your email account and com­mit to only check­ing it once every hour, for 10 min­utes or less. The time limit will make it nec­es­sary to respond to the most press­ing issues first. Take advan­tage of many email ser­vices’ pri­or­i­ti­za­tion tools to orga­nize the mes­sages, and sched­ule more time later in your day to deal with the rest of your emails.

As you work to over­haul your own pro­duc­tiv­ity habits, it may be wise to get your employ­ees involved too, as the entire team can serve as a source of sup­port and encour­age­ment for one another. Dif­fer­ent employ­ees may be able to share new and inter­est­ing ways to man­age time most effectively.

David Gross­man recently issued an e-book explain­ing that employ­ees need to be empow­ered and encour­aged to pri­or­i­tize emails. Specif­i­cally, they should cat­e­go­rize which ones should be answered imme­di­ately and which can afford a delayed response. He rec­om­mends reassess­ing your choice of email for all com­mu­ni­ca­tion, using it instead to sum­ma­rize and fol­low up on con­ver­sa­tions you have in per­son or over the phone.

Sim­ply hav­ing every­one in the office work­ing toward the same goal of boost­ing their pro­duc­tiv­ity and trans­form­ing their work ethic can pro­vide the extra moti­va­tion you need to improve. Under­stand that you are work­ing to change habits asso­ci­ated with how you approach your daily tasks, and the trans­for­ma­tion will require time and ded­i­ca­tion. When you get frus­trated, talk to another team mem­ber about what it is you are strug­gling with. Ask them about their tac­tics for jug­gling minor details such as email and other tasks to get tips for block­ing out other thoughts when you have dif­fi­culty con­cen­trat­ing. Do not be afraid to ask for help or to del­e­gate some of the tasks that do not require your exper­tise to another employee.

Herb Koplowitz has 20 years expe­ri­ence con­sult­ing to orga­ni­za­tions on issues of strat­egy imple­men­ta­tion. His areas of exper­tise include con­sul­ta­tion on orga­ni­za­tional struc­ture, per­for­mance man­age­ment, com­pen­sa­tion, team­work and tal­ent pool devel­op­ment. He’s well-versed in the chal­lenges that an entre­pre­neur may strug­gle with, and as a Senior Coach and Facil­i­ta­tor, helps clients achieve busi­ness change through The Covenant Group’s exten­sive finan­cial advi­sor train­ing programs.

Fol­low The Covenant Group

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Tags: Client Capital, Covenant Group, David Grossman, E Book, Email Account, Email Services, Emails, Encouragement, Entire Team, Financial Advisors, Focus, Internet Connection, Managing An Office, New Year, Productivity, Satisfaction, Slip Of Paper, Tactic, Time Limit, Typing
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What Successful People Do Differently (Harvard Business Review)

Wednesday, November 21st, 2012

What Suc­cess­ful Peo­ple Do Differently

by Dan Richards, Cli​entIn​sights​.ca

One of 2012’s most read arti­cles on the Har­vard Busi­ness Review web­site is by psy­chol­o­gist Heidi Halvor­son, author of the book Suc­ceed: How We Can Reach our Goals.

In this arti­cle she out­lines nine things that suc­cess­ful peo­ple do differently:

1. Get specific

2. Seize the moment

3. Track progress

4. Be a real­is­tic optimist

5. Focus on get­ting better

6. Have grit

7. Build your willpower muscle

8. Don’t tempt fate

9. Focus on what you will do – not what you won’t

To become more pro­duc­tive and join the ranks of “truly suc­cess­ful” peo­ple, take three minute to read the arti­cle – and then pick one of these nine things to focus on in 2013.

Here’s the link – note that you may have to reg­is­ter for this site (at no cost) to read the article.

http://​blogs​.hbr​.org/​c​s​/​2​0​1​1​/​0​2​/​n​i​n​e​_​t​h​i​n​g​s​_​s​u​c​c​e​s​s​f​u​l​_​p​e​o​p​l​e​.​h​tml

Copy­right © Cli​entIn​sights​.ca

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Tags: Business People, Business Website, Copyright, Fate, Focus, Grit, Halvorson, Harvard Business Review, Harvard Review, Hbr, Heidi, Optimist, Psychologist, Successful People, Track Progress
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What Successful People Do with the First Hour of Their Day

Wednesday, November 14th, 2012

by Dan Richards, Cli​entIn​sights​.ca

One of 2012’s most read arti­cles on the Har­vard Busi­ness Review web­site is by psy­chol­o­gist Heidi Halvor­son, author of the book Suc­ceed: How We Can Reach our Goals.

In this arti­cle she out­lines nine things that suc­cess­ful peo­ple do differently:

1.       Get specific

2.       Seize the moment

3.       Track progress

4.       Be a real­is­tic optimist

5.       Focus on get­ting better

6.       Have grit

7.       Build your willpower muscle

8.       Don’t tempt fate

9.       Focus on what you will do – not what you won’t

To become more pro­duc­tive and join the ranks of “truly suc­cess­ful”  peo­ple,  take three min­utes to read the arti­cle – and then pick one of these nine things to focus on in 2013.

Here’s the link – note that you may have to reg­is­ter for this site (at no cost) to read the article.

http://​blogs​.hbr​.org/​c​s​/​2​0​1​1​/​0​2​/​n​i​n​e​_​t​h​i​n​g​s​_​s​u​c​c​e​s​s​f​u​l​_​p​e​o​p​l​e​.​h​tml

Copy­right © Cli​entIn​sights​.ca

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Tags: Copyright, Fate, Focus, Grit, Halvorson, Harvard Business Review, Harvard Review, Hbr, Heidi, Optimist, Psychologist, Successful People, Three Minutes, Track Progress
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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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Strategic Problem Solving or What’s The Cost of Losing a Client?

Wednesday, March 28th, 2012

by Bob Simp­son, Syn­chronic­ity Per­for­mance Consulting

Every sin­gle day, we are faced with problems:

• Per­sonal Problems
• Client Prob­lems
• Busi­ness Problems
• Rela­tion­ship Problems
• Finan­cial Problems

to name a few.

In fact, as a finan­cial advi­sor, you are in the busi­ness of solv­ing problems.

What is your process for solv­ing problems?

Strate­gic Prob­lem Solv­ing is a process that you can refine to pro­duce your sys­tem for solv­ing prob­lems for your­self and your clients.

Step 1 – Quan­tify the problem

One of my goals in work­ing with advi­sors is to “sim­plify every­thing” and focus on doing work that has the great­est impact on suc­cess, or focus on the 20% of activ­i­ties that pro­duce 80% of results.

Rather than fol­low­ing a tra­di­tional approach of “find a problem/fix a prob­lem”, you will achieve grater results by pri­or­i­tiz­ing the prob­lems and work­ing on the most impor­tant ones.  This is achieved by putting a finan­cial value on a problem.

Here’s an exam­ple.  You get a call from a client in which you are informed that this client is trans­fer­ring his account to another advi­sor or more likely, you get a transfer-out notice and no call.  In your dis­cus­sion, you try to iden­tify why your client made this deci­sion and find out that he is not sat­is­fied with fre­quency and qual­ity of contact.

Fol­low­ing the call, you sit at your desk and try to put a num­ber on how much rev­enue you lost as a result of this defec­tion.  This client had $750,000 in a 1% fee-based account.  So you have lost rev­enue of $7,500.  Not so fast.  If you had bet­ter sat­is­fied the client’s needs, this client who is in his early 50’s may have stayed with you for another ten years, for exam­ple.  So the num­ber is $75,000.  Think again.  This client plans to con­tribute $25,000 per year and will, in all like­li­hood, receive an inher­i­tance of $500,000 over the next ten years AND the account should grow, based on a con­ser­v­a­tive asset allo­ca­tion model of 6% per year.  Then, as you plan to retire and sell your busi­ness in ten years at 1.5 times rev­enue, you will lose this as well.

Based on this sce­nario, the loss of this one client will cost you approx­i­mately $86,000 with­out the inher­i­tance and over $113,000 in pre-tax income, if the inher­i­tance was received in the fifth year.

This num­ber gets crazy if you con­sider how many other clients you may lose if you don’t fix this prob­lem and poten­tial refer­rals, if you did a good job.

By quan­ti­fy­ing prob­lems, you are bet­ter able to pri­or­i­tize them and get them resolved before it costs you a small fortune.

How impor­tant do you think it is to solve a prob­lem like this?  How many clients have you lost in the last three years?  Sorry, it was not my inten­tion to make you feel nau­seous.  Maybe, you should get in touch with us?

Step 2 – Iden­tify the root of the problem

Some prob­lems are sim­ple and some are very com­plex.  Com­plex prob­lems can be very dif­fi­cult to solve and require a spe­cial­ized approach.

The first step, in work­ing on a com­plex prob­lem, is to break it down into smaller, more man­age­able prob­lems.  A com­plex prob­lem may be made up of ten or more sim­ple prob­lems.  Some may be sur­face issues that are easy to assess and some may be deeper and more dif­fi­cult to identify.

Your goal should be to drill down and find the root of the prob­lem.  The root may be com­plex but more often than not, it is rel­a­tively sim­ple to solve.  By fix­ing the root, many of the prob­lems you have iden­ti­fied may be resolved quite simply.

Step 3 – Plan to resolve the problem

Some prob­lems can be resolved sim­ply and it may make sense to knock them off quickly but it is impor­tant to give the high value prob­lems the proper pri­or­ity and atten­tion.  Any­thing that may result in the loss of a client is auto­mat­i­cally near the top of the list.

The best way to accom­plish this is to take a project man­age­ment approach to run­ning your busi­ness.  Our blog enti­tled The Project Man­age­ment Approach to Build­ing a Bet­ter Busi­ness will help you to wrap your mind around this concept.

Bob Simp­son is Pres­i­dent of Syn­chronic­ity Per­for­mance Con­sul­tants.  Bob can be reached on his direct line at 905−502−0100, toll free at 866−646−6002 or by e-mail at bob.simpson@synchronicity.ca.

About Bob Simpson

Syn­chronic­ity Per­for­mance Con­sult­ing has been coach­ing finan­cial advi­sors since 1998.

Bob Simp­son, pres­i­dent and founder of Syn­chronic­ity has been involved, directly or indi­rectly in the finan­cial ser­vices indus­try since 1981. He has been a very suc­cess­ful finan­cial advi­sor with Nes­bitt Thom­son Inc., a major Cana­dian finan­cial insti­tu­tion. Between 1981 and 1989, he built a busi­ness with more than $120 mil­lion in assets under man­age­ment, was branch man­ager and SVP National Sales for Mid­land Wal­wyn and has been coach­ing finan­cial advi­sors since 1998.

You can fol­low Bob Simp­son via:

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Tags: Asset Allocation Model, Busin, Business Problems, Defection, Desk, Financial Advisor, Focus, Frequency Contact, Goals, Inheritance, Likelihood, Personal Problems, Problem Solving, Relationship Problems, Single Day, Sit, Solving Problems, Step 1, Success, Traditional Approach
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To Get Your Clients Referring, Teach Them the Trigger Phrases

Wednesday, March 14th, 2012

The new refer­ral con­ver­sa­tion is about inter­act­ing with our clients the way friends would inter­act with each other or enlist their help in problem-solving. What­ever approach we take, it should be a con­ver­sa­tion that deliv­ers ben­e­fits to the client.

One aspect of the new refer­ral con­ver­sa­tion is that it can nat­u­rally grow out of edu­cat­ing the client. You have worked hard to deter­mine who your ideal client is, what prob­lems they have, and what kinds of solu­tions or expe­ri­ences they seek. Ide­ally, you would have reviewed your ser­vice mix and made some adjust­ments to more closely tai­lor it to that ideal client. So, the nat­ural place for the new refer­ral con­ver­sa­tion to begin is in describ­ing the prob­lem you have decided to focus on solv­ing or the need you have deter­mined to fill. By exten­sion, you will be draw­ing a pic­ture for your clients of your ideal prospect. Our objec­tive is to iden­tify and rein­force expres­sions the client may hear that we hope will prompt him to men­tion you. We want to be teach­ing the client how to know who a great refer­ral would be.

In The Refer­ral Engine, John Jantsch says “I believe any sales­per­son worth their salt has devel­oped a list of phrases, sit­u­a­tions, and ver­bal clues that, if heard dur­ing a sales pre­sen­ta­tion, sig­nal it’s time to take the order. The same idea is true of a qual­i­fied referral.”

What are your trig­ger phrases?

• I was just awarded another allo­ca­tion of stock options, and I’m not sure exactly what they can do for me.
• Our com­pany just moved to a cash bal­ance retire­ment plan.
• My best friends hus­band was just diag­nosed with Alzheimer’s.
• We went to my son’s high school last night to you the guid­ance coun­selor talk about finan­cial aid.
• My sis­ter just had her first child.

Take some time and talk with your clients about who you have real­ized your ideal client is. And dis­cuss those ideal clients in terms of needs they might express that you are par­tic­u­larly good at ful­fill­ing. Teach your clients those trig­ger phrases so that when they hear them again you will pop back into their mind.

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Tags: Alzheimer, Best Friends, Cash Balance, Experiences, Expressions, Financial Aid, Focus, Guidance Counselor, Ideal, Objective, Phrases, Referral, Retirement Plan, S High School, Sales Presentation, Salesperson, Stock Options, Verbal Clues
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The Magic Question For Growing Your Business

Wednesday, January 25th, 2012

Here’s a sim­ple idea to help you build a great business:

• Every time you need to make a deci­sion about your busi­ness, ask your­self “How will this impact client satisfaction?
• Every time you spend money for your prac­tice, ask your­self “How will this impact client satisfaction?
• Every time you make a staffing change, ask your­self “How will this impact client satisfaction?
• After a client meet­ing or inter­ac­tion, ask your­self, “What did I do in today’s meet­ing to improve client sat­is­fac­tion for this client?” and “What should I do in our next meet­ing to improve client satisfaction?”
• Every time you are pre­sented with a client com­plaint, ask your­self the ques­tion “Did I seize the oppor­tu­nity to turn this client com­plaint into an oppor­tu­nity to improve client satisfaction?”
• At the end of the day before you go home, ask your­self, “What did I do today to improve client satisfaction?”

Fred Reich­held is a thought-leader in the areas of client loy­alty and sat­is­fac­tion. In his book, The Ulti­mate Ques­tion (“How likely is it that you would rec­om­mend us to a friend or col­league?) states that if you can increase your Net Pro­moter Score ((Per­cent­age Pro­mot­ers (9 or 10 scores) – Per­cent­age Detrac­tors (0 – 6 scores)) by 12%, you can dou­ble the growth rate of your business.

If you refer to our blog enti­tled What’s the Com­pound Growth Rate of Your Busi­ness and What’s That Cost­ing You? and use the embed­ded spread­sheet, you can cal­cu­late that a $50 mil­lion busi­ness at a com­pound growth rate of 10% will grow to approx­i­mately $130 mil­lion AUM over the next 10 years. At a 20% com­pound growth rate, it will grow to $310 mil­lion AUM. If you were to sell your busi­ness at the end of 10 years, the dif­fer­ence in total pre-tax income is just over $6 million.

By focus­ing on your processes for improv­ing client sat­is­fac­tion instead of results, like rev­enue or assets under man­age­ment, you will achieve greater results.  Focus on the process and let the results take care of themselves.

What’s the first step in achiev­ing and main­tain­ing sus­tain­able growth of 20%? Increase client satisfaction.

About Bob Simpson

Syn­chronic­ity Per­for­mance Con­sult­ing has been coach­ing finan­cial advi­sors since 1998.

Bob Simp­son, pres­i­dent and founder of Syn­chronic­ity has been involved, directly or indi­rectly in the finan­cial ser­vices indus­try since 1981. He has been a very suc­cess­ful finan­cial advi­sor with Nes­bitt Thom­son Inc., a major Cana­dian finan­cial insti­tu­tion. Between 1981 and 1989, he built a busi­ness with more than $120 mil­lion in assets under man­age­ment and was one of the first Cana­dian advi­sors to build a team.

You can fol­low Bob Simp­son via:

    Lat­est Advi­so­r­An­a­lyst Prac­tice Growth Sto­ries

Tags: 10 Years, 50 Million, 6 Million, Ask Question, Assets Under Management, Aum, Client Loyalty, Client Satisfaction, Colleague, Compound Growth Rate, Detractors, Focus, Fred Reichheld, Interaction, Magic, Net Promoter Score, Promoters, Satisfaction Client, Spreadsheet, Thought Leader
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Focus and Avoid Lists for 2012

Wednesday, January 4th, 2012

I did a per­son­al­ity assess­ment a few years ago and was impressed that it not only advised me on what I needed to focus on to be suc­cess­ful but also on what I needed to avoid.  In the spirit of that assess­ment, here are my top 5 things that I believe advi­sors in gen­eral should focus on and the top 5 things you should avoid in 2012.

Top 5 Areas of Focus

1. Sim­plify Every­thing. There is way too much infor­ma­tion avail­able to you and your clients.  The most suc­cess­ful advi­sors take com­plex issues and make them sim­ple so clients can under­stand the con­cepts.  At the same time, sim­plify your prac­tice.  Most of the issues below fol­low the sim­plify theme.
2. Your Busi­ness is Not Your Life – It Sim­ply Pro­vides The Resources to Live Your Life. One of the con­cepts that I learned when I was a Cer­ti­fied E-Myth Con­sul­tant was the Prin­ci­ple of Life – “At the cen­ter of the E-Myth Point of View is the prin­ci­ple that your busi­ness should be a way to get more of what you want out of life. Your busi­ness should be a vehi­cle through which you gain per­sonal and finan­cial freedom.”
3. Goal-Based Plan­ning – Finan­cial Plan­ning can be over­whelm­ing for clients.  It is far too left-brain (ana­lyt­i­cal) and not enough right-brain (emo­tional).  Over the past year, I have heard a num­ber of advi­sors say that clients do not want to do plan­ning.  By help­ing clients to iden­tify the pur­poses for their money and develop a plan to accu­mu­late and invest to achieve their goals for each pur­pose, you will get greater accep­tance of plan­ning and clients will be more accept­ing of volatil­ity for longer dura­tion investments.
4. Every Client Should Have a For­mal Roadmap for the Next 12 – 24 Months Based On Their Pref­er­ences and Pri­or­i­ties. The main rea­son that clients leave their advi­sors is lack of ser­vice.  Our pri­mary focus at Syn­chronic­ity in 2012 is to help advi­sors to imple­ment Roadmap strate­gies because they sim­plify every­thing, improve client sat­is­fac­tion and reten­tion, improve time man­age­ment and team per­for­mance.  If you do one thing in 2012, imple­ment roadmap strate­gies for your clients.  There is lots of infor­ma­tion on our web­site at www​.syn​chronci​ity​.ca or go to www​.clien​troadmap​.com
5. Change Your Role from Finan­cial Advi­sor to Finan­cial Project Man­ager. Finan­cial or Wealth Plan­ning is the process of help­ing clients to iden­tify their goals and finan­cial prob­lems and develop solu­tions to achieve those goals and solve their prob­lems.  If you have 100 – 200 client rela­tion­ships, you may be jug­gling 2,000 to 5,000 client tasks dur­ing a year.  Your abil­ity to effec­tively jug­gle these tasks will deter­mine your abil­ity to sat­isfy your clients and the growth rate of your business.

Top 5 Areas to Avoid

1. Stop Try­ing to Be All Things to All Peo­ple. You and your team have lim­ited capac­ity.  Iden­tify your top and most prof­itable clients and focus your atten­tion on sat­is­fy­ing them.
2. Stop Accept­ing Less Than Ideal Clients. It is bad enough that you have too many small clients but it is worse that you accept more of them into your practice.
3. Stop Preach­ing Buy and Hold. It is time for a real­ity check.  We have been in a sec­u­lar bear mar­ket since 2000.  The S&P Total Return Index has returned 2.92% over the past 10 years.  When I started as an advi­sor in 1981, right at the end of a 20-year sec­u­lar bear mar­ket, peo­ple did not want to hear about stocks or mutual funds.  Even if buy and hold is the right strat­egy for the next 10-years, clients don’t want to hear this story any more.  Read Ed Easterling’s books Unex­pected Returns and Prob­a­ble Out­comes and explain the bru­tal facts about sec­u­lar bear mar­kets to your clients.
4. Stop Being The Same As Every­body Else. If you want to be more suc­cess­ful, start being dif­fer­ent.  Why would some­body want to work with you if you are the same as every other advisor?
5. Stop Sell­ing and Start Col­lab­o­rat­ing. We are enter­ing the Col­lab­o­ra­tion Econ­omy (Wiki­nomics by Don Tap­scott).  Baby Boomers like to buy but hate being sold.  Change your approach and watch your client sat­is­fac­tion scores rise.

Spend some time and develop your lists of Top Areas of Focus and Top Areas to Avoid for 2012.  Then book one-hour time slots to review your progress for March 30^th, June 29^th, Sep­tem­ber 28^th and Decem­ber 31^st to review your progress.

I hope this arti­cle will act as a guide in the devel­op­ment of your focus and avoid lists for 2012.

About Bob Simpson

Syn­chronic­ity Per­for­mance Con­sult­ing has been coach­ing finan­cial advi­sors since 1998.

Bob Simp­son, pres­i­dent and founder of Syn­chronic­ity has been involved, directly or indi­rectly in the finan­cial ser­vices indus­try since 1981. He has been a very suc­cess­ful finan­cial advi­sor with Nes­bitt Thom­son Inc., a major Cana­dian finan­cial insti­tu­tion. Between 1981 and 1989, he built a busi­ness with more than $120 mil­lion in assets under man­age­ment and was one of the first Cana­dian advi­sors to build a team.

You can fol­low Bob Simp­son via:

    Lat­est Advi­so­r­An­a­lyst Prac­tice Growth Sto­ries

Tags: Client Satisfaction, Duration, E Myth, Financial Freedom, Financial Planning, Focus, Investments, Left Brain, Money, Personal Freedom, Personality Assessment, Point Of View, Principle, Priorities, Right Brain, Roadmap, Spirit, Synchronicity, Volatility
Posted in My Practice, Synchronicity | Comments Off