Four Steps to Get in Front of Million-Dollar Prospects

Thursday, January 31st, 2013

by Dan Richards, Cli​entIn​sights​.ca

For most advi­sors, once you’re face to face with a prospect, you have an excel­lent chance of sign­ing them up – not the slam dunk that it might have been fif­teen or twenty years ago, but good odds nevertheless.

The big chal­lenge is get­ting that face to face meet­ing. That’s why I was inter­ested in an email from an inde­pen­dent advi­sor in a mid-sized com­mu­nity in the U.S. mid­west, ask­ing for my advice on fol­low­ing up with a prospect who’d opened the door to sit­ting down.

The ben­e­fits of stay­ing top of mind

This advi­sor, let’s call him Andrew, has been send­ing his newslet­ter to a prospect named Phil for sev­eral years. Andrew knows that Phil has at least $2 mil­lion in invest­ments and from his ini­tial take would be a pleas­ant client to deal with.

In Decem­ber, Andrew sent Phil an email men­tion­ing that it had been some time since they had spo­ken. He sug­gested sched­ul­ing a meet­ing for some point in Jan­u­ary and also sug­gested that it would make the meet­ing more pro­duc­tive if Phil could email him his cur­rent state­ment beforehand.

Phil responded by email quickly, mak­ing four points:

1.     He’d be happy to sit down and has good avail­abil­ity to meet –he always finds that he learns from sit­ting down with pro­fes­sion­als such as Andrew.

2.     How­ever, he wants to make it clear that he’s not look­ing to make a change and is not sure it would be a good use of Andrew’s time.

3.     Email­ing the rel­e­vant com­po­nent of his invest­ment state­ment is prob­lem­atic, given that the last state­ment for his Mer­rill Lynch uni­fied account was over 120 pages.

4.     Finally, he thanked Andrew for his newslet­ter, which he reads and enjoys

So Andrew’s ques­tion to me: How would I respond in his sit­u­a­tion?  Before read­ing on, con­sider what you would tell Andrew and what this exchange tells us about attract­ing new clients today.

The value of get­ting face to face

This inter­ac­tion demon­strates four prin­ci­ples when it comes to get­ting in front of prospects:

1.     Widen your net

Suc­cess­ful advi­sors rec­og­nize that prospect­ing is a num­bers game. Cer­tainly you can do some things to increase the odds of suc­cess, but if you com­mu­ni­cate with 50 qual­i­fied prospects, your chances of land­ing new clients are always bet­ter than if you’re com­mu­ni­cat­ing with  5 or 10. Andrew’s focus on expand­ing the base of prospects with whom he’s com­mu­ni­cat­ing was the crit­i­cal first step.

2.     Pro­vide clear value

Once a prospect has agreed to receive infor­ma­tion, you have to have the right qual­ity at the right fre­quency. If Phil hadn’t been impressed by the con­tents of Andrew’s newslet­ter, chances are that he wouldn’t have been open to meet­ing. And odds are that if Andrew’s newslet­ter had been two or three times a year rather than monthly, it wouldn’t have made the same impact.

3.     Be patient

Note that Phil had heard from Andrew for a num­ber of years before being pre­sented with the chance to meet – for­tu­nately, email allows you to com­mu­ni­cate much more eas­ily with greater fre­quency at lower cost than would have been pos­si­ble even ten years ago.

4.     Take the initiative

Even if prospects are impressed by the infor­ma­tion they get from you, you can’t wait for them to call – you still have to take the ini­tia­tive to get in front of them. If Andrew hadn’t sent Phil that email, then the chance to meet wouldn’t have pre­sented itself.

Fol­low­ing up when the door is open

With regard to my advice to Andrew, in my view his para­mount goal should be to get face to face with Phil in a fash­ion that accom­plishes four things:

1.     It helps him gain a bet­ter under­stand­ing of Phil’s situation

2.     It  rein­forces  Andrew’s pro­fes­sion­al­ism and the value that he pro­vides to clients

3.     It builds a deeper bond and increases Phil’s com­fort with him

4.     It con­veys Andrew’s con­fi­dence in the value of his time – if he appears too anx­ious to meet, then his chances of suc­cess in mov­ing for­ward go down dramatically.

Given that, in Andrew’s sit­u­a­tion I would call Phil and say:

1. I’m delighted that you find my newslet­ter helpful

2. I appre­ci­ate your being upfront about not mak­ing a change at this time, but am happy to invest the time to sit down and get to know you bet­ter with no expec­ta­tions of any­thing com­ing from that in the imme­di­ate period ahead

3.  With regard to your state­ment, I sug­gest that we sched­ule a con­ve­nient time for you to meet at my office and that you bring your state­ment along. While we’re meet­ing, I can have the rel­e­vant parts copied … depend­ing on how our con­ver­sa­tion goes, I would be happy to review it and get back to you with any thoughts and suggestions

This also has the advan­tage of putting the meet­ing on Andrew’s turf – some­times ask­ing prospects to come to you can be a test of seri­ous­ness on their part.

One final note: While I rec­og­nize that we’d all like to see state­ments of prospects’ invest­ment accounts in advance of our first meet­ing, it’s rarely a good idea to ask prospects to share their invest­ment details with you in advance of your ini­tial meet­ing (and cer­tainly before even agree­ing to a meet­ing, as Andrew did.)

Rec­og­niz­ing that it nor­mally takes at least a cou­ple of meet­ings to bring a prospect on board, ask for one com­mit­ment at a time. Focus first on get­ting the ini­tial meet­ing; once a meet­ing has been sched­uled you can ask prospects to bring their invest­ment state­ments with them, should they want to refer to them dur­ing the meet­ing.  If it feels right, towards the end of the meet­ing you can sug­gest sched­ul­ing a time to talk fur­ther, in advance of which you would review their invest­ment sit­u­a­tion in light of the con­ver­sa­tion you’ve just had.

As you think about your own prospect­ing plans for 2013, con­sider whether any of the lessons from Andrew’s suc­cess in get­ting in front of a two-million dol­lar prospect apply to your busi­ness. If the answer is yes, iden­tify when you’re going to dis­cuss this with your team with a view to build­ing this into your routine.

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Tags: Dollar, Email, Face To Face, Four Points, Four Steps, Independent Advisor, Interaction, Investment Statement, Investments, Merrill Lynch, Midwest, Newsletter, Odds, Prospects, Sit, Slam Dunk, Time 3, Twenty Years
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How to Turn Acquaintances Into Clients

Wednesday, October 17th, 2012

by Dan Richards, Cli​entIn​sights​.ca

Many advi­sors strug­gle with how to approach casual acquain­tances about the pos­si­bil­ity of work­ing together. Recently, I got an email from an advi­sor I’ve known for many years who works for a regional bro­ker dealer — let’s call him Allan.

Here’s the email, repro­duced with Allan’s per­mis­sion:  “Last night my wife and I attended the 50^th birth­day party of a client who’s become a friend.  I ended up talk­ing for a good length of time with a guy named Paul, some­one I knew vaguely; we work out at the same gym, our wives know each other and  we share a num­ber of com­mon interests.  

He and his wife are both part­ners at large law firms, so chances are they would be excel­lent clients.  We had a nice, engag­ing con­ver­sa­tion, but noth­ing to do with mar­kets or my work.  I am think­ing of approach­ing Paul with a gen­tle email say­ing I enjoyed our chat, and that I’d love to learn more about how he and his wife are set up with regard to their invest­ments and retire­ment plan­ning.  Do you think an email approach is too “chicken” and that I should just pick up the phone instead?  How would you approach it?”

In my follow-up phone con­ver­sa­tion with Allan, I started by agree­ing that he deserves credit for think­ing to fol­low up on this con­ver­sa­tion; many advi­sors would fail to seize this oppor­tu­nity. The chal­lenge is how.

The tran­si­tion from a casual social con­ver­sa­tion to a busi­ness related one is tricky, requir­ing us to do it in a way that’s not intru­sive and doesn’t put the per­son we’re talk­ing to under the gun. Fur­ther there’s rep­u­ta­tional risk to con­sider – no one wants to be known as “”the guy”” who’s con­stantly hus­tling for busi­ness in every situation.

I told Allan that in my view the best way to address this is through indi­rect com­mu­ni­ca­tion that aca­d­e­mics call “sig­nal­ing.”  For exam­ple, when there are gas sta­tions at all four cor­ners of an inter­sec­tion and one raises its price by two cents, it’s send­ing an indi­rect sig­nal to its com­peti­tors: “Do you want to raise prices?”  If they don’t raise prices to match, they’ve sent a sig­nal back and the first gas sta­tion takes its price back down. A dif­fer­ent form of sig­nal­ing takes place at bars, as peo­ple make eye con­tact – and either main­tain that eye con­tact or turn away.

You can use the same “sig­nal­ing” prin­ci­ple in com­mu­ni­cat­ing with peo­ple you know socially.

Here’s an email that’s an exam­ple of signaling:

“PauI, I very much enjoyed our con­ver­sa­tion last night. It occurred to me that you might be inter­ested in receiv­ing my monthly emails to clients on the out­look for mar­kets; let me know if this is of interest”

To be even gen­tler, Allan could add a PS “I know that none of us are lack­ing for emails, if you’re not inter­ested in receiv­ing another email each month, my feel­ings won’t be hurt in the slightest.”

An exam­ple of more indi­rect sig­nal­ing would be for Allan to send an email say­ing:  “Paul, I enjoyed the chance to chat last night, I’d like to know more about the bike trip you took through Croa­tia, but I know you said you’re going through a busy period right now. At some future point per­haps we can grab cof­fee one morn­ing after our workouts.”

After our con­ver­sa­tion, Allan sent an email offer­ing to put Paul on his email list, an invi­ta­tion which was wel­comed; Allan plans to fol­low up for a cof­fee in a few months.

The take­away from my con­ver­sa­tion with Allan is that some­times the best path to our goal is an indi­rect one. Note that in the exam­ple above there’s vir­tu­ally no pres­sure on Paul, he can respond or not based on how he feels. Allan has sent a sig­nal, now Paul can respond as he sees fit. That’s why for this kind of approach I pre­fer send­ing an email to call­ing. An email pro­vides the chance to think about a response and puts the recip­i­ent in con­trol of what to do next – and also avoids the awk­ward prospect of sev­eral voice mail exchanges cul­mi­nat­ing with your friend say­ing: “Sorry to be so tough to get a hold of, I’m return­ing your call.”

As you think about your own casual acquain­tances, con­sider whether some of them might be pos­si­ble can­di­dates to work together – and also whether the same low-key sig­nal­ing approach that worked for Alan might work for you.

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Tags: Academics, Address, Broker Dealer, Casual Acquaintances, Common Interests, Email, Four Corners, Gas Stations, Indirect Communication, Intersection, Investments, Law Firms, Length Of Time, Phone Conversation, Regard, Retirement Planning, Risk, Social Conversation, Th Birthday Party, Transition
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New Schwab Study Shows Why Clients Have Been Moving

Tuesday, July 3rd, 2012

Clients weren’t get­ting what they wanted, and they want to address more than the portfolio.

Charles Schwab recently released its 2012 sur­vey Inde­pen­dent Advi­sor Outlook/High Net Worth Investors Study. Among the data was an update on why peo­ple have been chang­ing advi­sors and how they found their new advisor.

Refer­rals con­tinue to be the sin­gle most impor­tant way clients con­nected with their new advi­sors, account­ing for over half of the clients who moved.

When it came to the rea­sons peo­ple moved, 66% said they didn’t get the kind of atten­tion or ser­vice they wanted from their prior advi­sor and 51% indi­cated that they wanted some­one to take a more holis­tic approach to their finances and invest­ments. This rein­forces other stud­ies that have shown that con­ver­sa­tions beyond the port­fo­lio drive client engage­ment. We would expect this to be espe­cially true in dif­fi­cult invest­ment mar­kets, but this study was com­pleted on Feb­ru­ary 3, 2012 – a time when the mar­ket was par­tic­u­larly strong.

It also indi­cates the impor­tance of get­ting sys­tem­atic client feed­back. While two thirds of the clients who moved indi­cated they were not get­ting what they wanted from their prior advi­sor, I do not believe it can fully be explained sim­ply by poor ser­vice. Rather, I sus­pect the ser­vice they received was not what they had hoped for or expected as opposed to inad­e­quate for infre­quent. Given that this is by far the most com­mon rea­son for peo­ple to move, com­pounded by the fact that we are in a volatile or declin­ing mar­ket, it makes more sense than ever to make sure that part of your ser­vice model includes client sur­veys or an advi­sory board.

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Tags: Accounting, Advisory Board, Charles Schwab, Client Engagement, Client Feedback, Client Surveys, Conversations, Declining Market, Driven Practice, High Net Worth Investors, Holistic Approach, Independent Advisor, Investment Markets, Investments, Moving, People, Portfolio, Referrals, Service Model, Two Thirds
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A Conversation that Tripled Referrals

Wednesday, June 27th, 2012

Last Sep­tem­ber, a vet­eran advi­sor con­tacted his retired clients with the sug­ges­tion that they meet. The meet­ing had one sim­ple goal; to lay out detailed monthly cash flow fore­casts for the period ahead match­ing funds com­ing in with cash going out.

The response was way beyond this advisor’s expec­ta­tions. Clients who he’d had dif­fi­culty get­ting into his office sud­denly made meet­ing him a pri­or­ity. The response after­wards was gen­er­ally relief. Even clients who had absolutely no con­cerns about cash flow expressed appre­ci­a­tion for his time and the peace of mind they felt as a result.

The good news was that most clients were fine although there were a few cases where income didn’t cover expenses. In those instances, he talked about the two alter­na­tives; to cur­tail spend­ing or real­lo­cate some of their port­fo­lio into invest­ments which threw off more income. In one case, he agreed with a client that they would tem­porar­ily eat into cap­i­tal with the pro­viso that they would revisit this in a year’s times.

At the end of each meet­ing he asked clients whether they’d felt it was time well spent. With­out excep­tion they said it was; retired cou­ples were espe­cially effu­sive. A num­ber said they’d each been wor­ry­ing about this but hadn’t known how to bring it up. Another client with assets of $5 mil­lion said that he’d been uncer­tain as to whether he could afford to offer to cover uni­ver­sity tuition for his three grandchildren.

After hear­ing clients out this advi­sor men­tioned that should they have fam­ily or friends in cir­cum­stances sim­i­lar to theirs who might be inter­ested in going through a sim­i­lar process, he would be happy to meet with them also. He sug­gested that either their friends could call his assis­tant to book a meet­ing or if his clients called her with their friends’ name and phone num­ber, she would con­tact them directly.

He started get­ting calls right away as clients talked to friends about the expe­ri­ence. He saw a par­tic­u­lar bump in calls in early Jan­u­ary as his clients got together with friends and fam­ily dur­ing the hol­i­day season.

Tap­ping into hot buttons

Why was the response to these meet­ings so positive?

I’ve writ­ten in the past about the need to focus on client hot but­tons. Many peo­ple in retire­ment have always wor­ried about their finances. His­tor­i­cally, under spend­ing has been a big­ger prob­lem than over­spend­ing (although it remains to be seen if this con­tin­ues to be the case as boomers enter retire­ment, with their “I want it all and I want it now” mind­set.)

With all the uncer­tainty about the econ­omy and stock mar­kets it’s under­stand­able that clients worry; and par­tic­u­larly retired clients. The rea­son that this worked was quite sim­ply that it addressed a pre­oc­cu­pa­tion and con­cern for many retired clients, whether war­ranted or not. Quite sim­ply, it gave them cer­tainty, and clients love cer­tainty, espe­cially those get­ting on in years.

The exer­cise achieved two other things as well.

First, it pro­vided con­text for dis­cre­tionary deci­sions. In prepar­ing cash flow fore­casts, it pro­vided a frame­work within which to make deci­sions on large items; buy­ing a new car, the kind of hol­i­day to take, giv­ing gifts to char­ity or to chil­dren and grandchildren.

And sec­ond, it con­sol­i­dated every­thing into one place, both income as well as expenses. The advi­sor asked clients to bring in their last year’s tax return as well as state­ments for any invest­ment accounts out­side of his firm. By putting every­thing onto one piece of paper, it clar­i­fied exactly where they stood, and in some cases opened this advisor’s eyes to accounts that clients held elsewhere.

As this advi­sor put it, ”There were two lessons for me from this experience.”

“First, see­ing how much clients with­out a clear cash flow fore­cast were wor­ry­ing; even those who had noth­ing to worry about.”

“And sec­ond, dis­cov­er­ing how much some clients where I was pos­i­tive I had all their money held else­where. There were a few Holy S… moments that emerged from this exercise.”

Mak­ing this happen

Like many advi­sors, this advi­sor had his­tor­i­cally shied away from focus­ing on client spend­ing. While he had pro­vided cash flow fore­casts to clients in the past show­ing income from div­i­dends and inter­est pay­ments, get­ting into con­ver­sa­tions about expenses was a new expe­ri­ence for him.

He started by pulling down one of the many bud­get­ing forms avail­able online. As a point of ref­er­ence for some clients who weren’t sure where to start, he used the 2009 Sta­tis­tics Canada sur­vey of house­hold spend­ing of Cana­dian house­holds available.

http://​www40​.stat​can​.ca/​l​0​1​/​c​s​t​0​1​/​f​a​m​i​l​1​6​a​-​e​n​g​.​htm

Where clients asked for the bud­get doc­u­ments before­hand, he sent them out in advance of the meet­ing. More often, he asked clients to bring their bank and credit card state­ments along to refer to if needed, and he worked through the bud­get along with his clients. Once he’d done about ten of these, he began com­pil­ing aver­ages of his own that he used to give retired clients some per­spec­tive about their spend­ing habits com­pared to other retired clients.

Some­thing else that this advi­sor learned was to book longer ses­sions for those meet­ings. Ini­tially, he sched­uled nor­mal one hour meet­ings, but after a cou­ple of ses­sions in which cou­ples had lengthy con­ver­sa­tions about some line items, he moved to a two hour time block. Towards the end, for his smaller clients he had his assis­tant do the ini­tial work to for­mu­late their spend­ing, join­ing in for the lat­ter part of the meeting.

I fully rec­og­nize that get­ting into the details of client spend­ing is not every advisor’s cup of tea. That said, I would point out that this truly does rep­re­sent an oppor­tu­nity to cre­ate peace of mind and to add value for your retired clients; and fur­ther, that if you don’t make this offer, there is always the risk that another advi­sor will.

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Top 10 Ways To Have More Meaningful Discussions With Clients About Their Investments In a Secular Bear Market

Friday, June 1st, 2012

by Bob Simp­son, Syn­chronic­ity Per­for­mance Consulting

If you are read­ing this arti­cle, there is a good chance that you are a reg­u­lar reader of arti­cles on Advi​so​r​An​a​lyst​.com.  I have been post­ing arti­cles on their web­site since Jan­u­ary of this year and am very impressed by the qual­ity of infor­ma­tion that is avail­able to you on this web­site.  Isn’t it great to have a place where you can receive unbi­ased, non-sensationalized infor­ma­tion from a vari­ety of great invest­ment minds to help you make bet­ter deci­sions about what to rec­om­mend to your clients?

I remem­ber advice our retail ana­lyst back in the 1980s in which he explained why Cana­dian Tire was a great stock to own dur­ing a reces­sion:  “Peo­ple keep their cars longer dur­ing a reces­sion and need parts and ser­vice to keep them on the road.”

I am sure the same logic applies and that Advi​so​r​An​a​lyst​.com is much more pop­u­lar dur­ing a sec­u­lar bear mar­ket, where there is a lot more uncer­tainty, than a sec­u­lar bull mar­ket when Will Rogers strat­egy of “Buy a stock, when it goes up sell it.  If it doesn’t go up, don’t buy it” is a sound strategy.

As an advi­sor in a sec­u­lar bear mar­ket, you have to work three to five times harder to earn less money than you did in the sec­u­lar bull mar­ket.  Every day, you prob­a­bly hold more hands than you did on prom night.  In a sec­u­lar bull mar­ket, your job is to posi­tion your clients to make money and in a sec­u­lar bear mar­ket, your job is to posi­tion clients to pre­serve capital.

Dur­ing sec­u­lar bull mar­kets, it is easy to sim­ply talk num­bers.  You may, as many advi­sors did, buy and hold and focus on the num­bers.  Under­per­for­mance and fees were accept­able because the num­bers were good.

That strat­egy does not work today.  You need to read Advi​so​r​An​a​lyst​.com so you can make informed deci­sions.  You need to look at alter­na­tive strate­gies.  Long only may not be an accept­able strat­egy.  Maybe you need to diver­sify from the tra­di­tional asset classes of North Amer­i­can stocks, North Amer­i­can bonds and cash.

In the last sec­u­lar bull mar­ket, peo­ple who invested $1,000 in the Dow Jones Indus­trial Aver­age in 1966, were returned $850 in 1980.  On the other hand, peo­ple who invested in Tem­ple­ton Growth Fund in 1966, were returned $12,500 in 1980.  Sir John’s port­fo­lios were mostly invested in Japan dur­ing this period.  Dur­ing the cur­rent sec­u­lar bear, $1,000 invested in Gold in 2000 has grown to more than $6,000.  It is not easy to spot these oppor­tu­ni­ties, but my mes­sage is “look out­side of tra­di­tional mar­kets (North Amer­i­can stocks, bonds and cash) when they are in a sec­u­lar bear mar­ket phase.  You have to work harder to iden­tify opportunities.”

Dur­ing tur­bu­lent times, peo­ple seek infor­ma­tion.  If you are still pre­sent­ing num­bers, you are play­ing a game of Russ­ian roulette.  Clients need infor­ma­tion, not num­bers, dur­ing dif­fi­cult times.

Here’s my top 10 list (in reverse order) of how to cut back on the report­ing of num­bers and increase the report­ing of infor­ma­tion to enable you to have more mean­ing­ful dis­cus­sions with your clients about their investments:

Num­ber 10 – Start using GoToMeet­ing or a sim­i­lar pro­gram to deliver your invest­ment or finan­cial plan­ning meet­ings.  This will make it eas­ier and less expen­sive for your clients to attend meetings.

Num­ber 9 – Have a quar­terly break­fast in which you invite a port­fo­lio man­ager or whole­saler as a guest speaker.

Num­ber 8 – Arrange reg­u­lar web inter­views with port­fo­lio man­agers or whole­salers.  Record them and put them on your website.

Num­ber 7 – Start writ­ing a quar­terly writ­ten com­men­tary about the invest­ment strate­gies and tac­tics of your invest­ment managers.

Num­ber 6 – Start book­ing off one to two days per quar­ter exclu­sively for invest­ment research and reporting.

Num­ber 5 – Pub­lish a quar­terly Barrons-like quar­terly round­table.  This is a great way to do a newslet­ter or blog.  Iden­tify four invest­ment man­agers that you work with, write out two ques­tions for each of them, get responses to your ques­tions, pic­tures and bios of you’re your pan­elists, for­mat and pub­lish.  This is really sim­ple to do!  You can also do this with cen­ters of influence.

Num­ber 4 – Set up a series of wealth man­age­ment meet­ings and calls, so the main focus of every meet­ing is not invest­ment management.

Num­ber 3 – If you are out­sourc­ing invest­ment man­age­ment, change your dis­cus­sions from returns to infor­ma­tion about why you hired their man­agers, man­ager qual­i­fi­ca­tions, per­for­mance in good and bad mar­kets and how they are man­ag­ing their money to pro­tect their cap­i­tal and gen­er­ate returns.

Num­ber 2 – Have a dis­cus­sion with your clients about the sec­u­lar bear mar­ket in North Amer­i­can finan­cial mar­kets and the need for dif­fer­ent strate­gies to pre­serve capital.

(Drum Roll) And the Num­ber 1 sug­ges­tion for hav­ing more mean­ing­ful dis­cus­sions with your clients about invest­ment man­age­ment is:

Posi­tion your­self “on the same side of the table as your clients” and work with them to select, hire and fire man­agers and other pro­fes­sion­als.  HNW investors who have made their money as busi­ness own­ers or man­agers in large cor­po­ra­tions like to be in con­trol and build teams to help them achieve their goals.  Most are frus­trated when they work with advi­sors because they do not feel that kind of con­trol.  They want and need a CFO.  Not some­body who sells them things but a trusted advi­sor to whom they can del­e­gate respon­si­bil­ity so they can focus on things that are more impor­tant to them.

I will do a more in-depth blog on a cou­ple of these ideas in the near future to pro­vide you with more details.

I enjoy hear­ing from peo­ple who read my arti­cles by phone, e-mail or text mes­sage.  I respond to all inquiries the same day.  If you have a prob­lem and would like to dis­cuss it with some­body, I would wel­come your call.  I enjoy help­ing peo­ple solve prob­lems and build more suc­cess­ful businesses.

Bob Simp­son

Direct Line:  905−502−0100

Toll Free:      866−646−6002

E-mail:  bob.simpson@synchronicity.ca

Text Mes­sage:  905−502−0100

Web­site:  www​.syn​chronic​ity​.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: 1980s, Bob Simpson, Bull Markets, Canadian Tire, Earn Money, Good Chance, Investment Minds, Investments, Logic, Meaningful Discussions, Nbsp, Performance Consulting, Recession, Retail Analyst, Secular Bear Market, Secular Bull Market, Sound Strategy, Synchronicity, Uncertainty, Will Rogers
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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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Four words of advice from a top producer

Wednesday, April 11th, 2012

Last  sum­mer, I talked to a thirty year vet­eran of the busi­ness who’s con­sis­tently ranked among his firm’s top ten producers.

The week before, he’d talked to a group of rook­ies just enter­ing the business.

In the ques­tion and answer period after­wards, he’d been asked about the sin­gle most impor­tant thing he’d learned over the course of his career

He answered with four words: ” Focus on big problems.”

He went on to say:

“When I meet with prospects, I con­cen­trate all my time on under­stand­ing the biggest issues that they’re con­cerned about, the things that are really both­er­ing them. In my expe­ri­ence, there’s no bet­ter use of time when meet­ing with a prospect than dig­ging deep to under­stand their hot but­tons … the more you can get prospects to talk about what’s really bug­ging them, the bet­ter the chances of a pos­i­tive outcome.

When I meet early on with prospects, my key goal is to get to the point that it’s com­fort­able for me to ask this ques­tion and for them to answer it.”

“And the same applies to clients” he said.

“When I’m meet­ing with clients, I make it my num­ber one pri­or­ity to ask what’s caus­ing them the most con­cern, the thing that’s keep­ing them up at night.

“And you don’t always get the obvi­ous answers” he con­tin­ued on.

“These days you’d expect peo­ple to talk about los­ing money on invest­ments, mar­ket volatil­ity and out­liv­ing their money .… and you cer­tainly do hear that.

“But ear­lier this year I met with my biggest clients and asked that ques­tion. This is some­one with over $10 mil­lion dol­lars .… and they talked about how dis­ap­pointed they are about the lack of ambi­tion among their kids and con­cerned about whether this will be passed on to their grandkids.

” My clients said they couldn’t do any­thing about their kids at this point … but still had hope for their grandchildren.

“We talked about what they could do about this … and ended up decid­ing to set aside some money to fund activ­i­ties for their grand­kids to open their eyes to more pos­si­bil­i­ties, things like tak­ing them to Europe or Asia on hol­i­days, maybe fund­ing sum­mer school at Har­vard or Oxford when they were in their teens, per­haps encour­ag­ing their par­ents to look at some­thing like Pear­son Col­lege on Van­cou­ver Island when the kids hit 15 and offer­ing to pay for this.

“We also talked about the clients set­ting up a trust fund for their grand­kids’ edu­ca­tion — so that they could go any­where in the world to study with­out wor­ry­ing about pay­ing for this .… but struc­tur­ing it in a way that that they couldn’t use it for any other pur­pose. While we were in the meet­ing, I actu­ally called a lawyer I work with and booked a meet­ing for them to meet with me and these clients to talk about this.”

The advi­sor fin­ished by say­ing: “Even though I’ve been work­ing with these clients for many years, this is the first time this came up in con­ver­sa­tion. And it wouldn’t have hap­pened if I hadn’t asked about what was caus­ing them the most con­cern these days.”

There are lots of things you can talk about in con­ver­sa­tions with exist­ing and prospec­tive clients. As you think about how you use the time dur­ing meet­ings, con­sider adding a focus on the really big prob­lems they’re grap­pling with to the list.

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Tags: 10 Million, Ambition, Answer Period, Grandchildren, Grandkids, Hot Buttons, Investments, Key Goal, Market Volatility, Million Dollars, Priority, Producers, Prospects, Question And Answer, Rookies, Single Most Important Thing, Top Producer, Use Of Time, Veteran, Words Of Advice
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Personal Financial Workspaces for Your Clients or Stop Being Average and Start Being Remarkable

Wednesday, March 28th, 2012

by Bob Simp­son, Syn­chronic­ity Per­for­mance Consulting

There is one unde­ni­able truth about build­ing a great finan­cial advi­sory practice:

The bet­ter you man­age client rela­tion­ships, the more suc­cess­ful your busi­ness will be.

Unfor­tu­nately, you work in an indus­try that teaches you how to be aver­age.  Man­age­ment and com­pli­ance don’t want you to be dif­fer­ent.  Sure, they would like you to pro­duce more rev­enue, as long as you don’t do any­thing different.

The prob­lem with this the­ory is that clients are demand­ing more.  Aver­age isn’t help­ing them to achieve their goals.  Baby boomers have taken over North America’s wealth and they are more demand­ing than pre­vi­ous generations.

When look­ing at indus­try stan­dards, rela­tion­ship man­age­ment has made the suc­cess­ful tran­si­tion from ran­dom acts of con­tact to MAYBE where most clients have a next con­tact sched­ule in a CRM.

If you are ready for some­thing rad­i­cally dif­fer­ent, I would like to intro­duce you to Client Roadmap:  a pro­gram that allows you to set up Per­sonal Finan­cial Work­spaces for your clients.

What is a Per­sonal Finan­cial Work­space?  It is a secure col­lab­o­ra­tive work­space that allows you, clients and their pro­fes­sional advi­sors to share doc­u­ments, con­ver­sa­tions and infor­ma­tion in the cloud.

What can you do in a Per­sonal Finan­cial Work­space?  You can keep every­thing orga­nized.  You can set up a vault for pri­vate doc­u­ments.  You can sched­ule meet­ings and calls for the next six to twelve months (or more) and have Client Roadmap send out e-mail reminders.  You can set up task lists and assign tasks to you, your team, your clients or their pro­fes­sional advi­sors.  You can set up pages in which they can view infor­ma­tion about their invest­ments so they know what their invest­ment man­agers are doing and why.

Here’s a good exam­ple: A client phones look­ing for a doc­u­ment.  His doc­u­ment is filed some­where and you and your team go search­ing for it.  It takes hours and your client is frus­trated because he needed it yesterday.

With Client Roadmap, all of this client’s doc­u­ments are stored in his per­sonal finan­cial work­space.  He doesn’t need to call.  He just logs in and down­loads the document.

Another exam­ple: A client phones to ask about an invest­ment that she holds.  Sure you can do some research and send it to her.

With Client Roadmap, you set up a tab point­ing directly to pub­lic infor­ma­tion about the invest­ment:  A Morn­ingstar report or one that a fund com­pany updates reg­u­larly on their web­site.  If she wants to check out per­for­mance, infor­ma­tion about port­fo­lio hold­ings or about the invest­ment man­ager, it is all there in real time.

Another exam­ple:

A client is won­der­ing about the sta­tus of some­thing you have promised and calls you to get an update.  You aren’t sure so you ask your assis­tant, who looks it up and reports back to you and then you back to your client.

With Client Roadmap, your client logs into his work­space and right there on the home­page is a report of all out­stand­ing projects and their status.

Another exam­ple:

Your client’s accoun­tant needs infor­ma­tion to pre­pare her tax return.  You get writ­ten per­mis­sion to allow the accoun­tant to access her work­space and you pro­vide tem­po­rary access to allow him to find the infor­ma­tion he needs.  When that is com­plete, you click a but­ton and no more access.

Another exam­ple:

You are look­ing for a bet­ter way to get newslet­ters or quar­terly mar­ket com­ments to your clients.

With Client Roadmap, you can set up a feed directly in the client work­space and every time you update your newslet­ter it is updated and pre­vi­ous ver­sions stored in your pri­vate client workspace.

Final exam­ple:

You meet with a client and make notes about the meet­ing.  Your client asks you a ques­tion about some of the things you discussed.

In Client Roadmap, you put your client notes right on the front page of the work­space for your client to access at any time.  Plus, if he sees some­thing he does not agree with, he can make a com­ment right in the work­space and you get e-mail notification.

Sound com­pli­cated?  As with all tech­no­log­i­cal solu­tions, there is a learn­ing curve and set up time required.   We can help you to set up a tem­plate and then all you need to do is to clone the work­space.  New work­spaces can be set up with a new series of meet­ings and calls in approx­i­mately 20 min­utes.  You will eas­ily make this up through sit­u­a­tions like the exam­ples above.

Per­sonal Finan­cial Work­spaces allow you to work more col­lab­o­ra­tively and with full trans­parency.  These are two major pieces to more effec­tive client rela­tion­ship management.

Stop being aver­age and start being remark­able and your per­sonal and busi­ness per­for­mance will improve dramatically.

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.

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Tags: Baby Boomers, Client Relationships, Collaborative Workspace, Compliance, Conversations, E Mail, Generations, Investment Managers, Investments, North America, Private Documents, Professional Advisors, Random Acts, Relationship Management, Reminders, Share Documents, Twelve Months, Undeniable Truth, Vault, Workspaces
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A Simple Method to Improve Your Clients’ Investment Performance

Thursday, March 22nd, 2012

There is a great arti­cle by Louis S. Har­vey of Dal­bar enti­tled Purpose-Based Asset Man­age­ment.

When I read this arti­cle, my ini­tial reac­tion was that this sim­pli­fied method would result in peo­ple walk­ing out of an advisor’s office, climb­ing into the car and say­ing to his or her spouse:

“Dear.  For the first time in my entire life, I think I finally under­stand how to invest our money.”

You should spend a cou­ple of min­utes read­ing the arti­cle before read­ing the rest of this arti­cle.  It is only six pages and has graphs.

OK.  Back with me now?  Here is how I would describe this process to a client:

“When I started in the indus­try, I used to sit through pre­sen­ta­tions by our Chief Econ­o­mist and walk out won­der­ing what lan­guage he was speak­ing.  Invest­ing and wealth man­age­ment can be very con­fus­ing and over­whelm­ing.  It is our job to take com­plex finan­cial prod­ucts and ser­vices, fil­ter them and trans­late them into a lan­guage that most peo­ple can understand.

To be hon­est, most peo­ple don’t under­stand how to invest their money.  Most advi­sors take them through a fact-finding process to help iden­tify finan­cial prob­lems and then rec­om­mend a port­fo­lio of stocks, bonds and mutual funds.  The port­fo­lio is devel­oped to gen­er­ate returns to help grow invest­ments over time.

Port­fo­lios are gen­er­ally devel­oped based on the level of risk you are able to with­stand.  Most advi­sors gen­er­ate a sin­gle risk tol­er­ance and develop a port­fo­lio based on that.

We do things quite dif­fer­ently.  One of the first things that we try to iden­tify is the pur­poses for your money.   Let me give you a cou­ple of examples.

Most peo­ple have mul­ti­ple ways in which they plan to use money.  Most peo­ple like to have an emer­gency fund or need to save money for retire­ment.  Oth­ers have chil­dren who plan to attend col­leges or uni­ver­si­ties, and some plan to pur­chase a recre­ational prop­erty or help their chil­dren to pur­chase homes.

I have placed sev­eral buck­ets on my desk to help you under­stand this process.  Some buck­ets are large, some are medium sized and some are small.  Each bucket rep­re­sents a pur­pose for your money.

Your retire­ment bucket may be one of the large ones.  A large bucket requires more money to fill.  One bucket may be edu­cat­ing your chil­dren.  This may be a medium bucket.  Another may be for the pur­chase of a new car.  That bucket is rel­a­tively small.

Some buck­ets need to be filled within a short time span.  In the exam­ples above, your new car bucket may need to be filled within the next two years.  Your retire­ment bucket, on the other hand, may not need to be filled for twenty years or more.

When you invest money, one of the major fac­tors for iden­ti­fy­ing risk is the length of time before the money is required.  If you have a short time­frame, you can­not assume much risk because there are a lot of things that can and will go wrong in a short period of time.  If some­thing goes wrong, you don’t have time to recover and there­fore, you need to be very con­ser­v­a­tive in the way you invest that money.

If you will not be using money in one of the buck­ets for over twenty years, you can take more risk.  If you lose 20% of your cap­i­tal in one year, you have lots of time to recover.  This becomes really impor­tant when you review invest­ment per­for­mance of the major stock indexes.  Approx­i­mately 50% of the time over the past 111 years, the stock mar­ket has gained more than 16% or lost more than 16% in a sin­gle year.

Let’s use 2008 as an exam­ple.  If you invested a one-year bucket in stocks at the begin­ning of the year, you lost 34% of your money that year.  Let’s say, your new car bucket had $40,000 in it at the begin­ning of 2008 and you planned to buy a new car at the end of the year.  You invested in the Dow Jones Indus­trial Aver­age at the begin­ning of the year and at the end of the year, your invest­ment was only worth $26,400 and you are nowhere close to buy­ing your new car.

If you invested a 25 year bucket in the Dow Jones Indus­trial Aver­age, you have time to recover from your loss and although it was uncom­fort­able, your bucket has more money in it today, espe­cially con­sid­er­ing that you have added per­sonal funds to this bucket as per your plan, than you did at the begin­ning of 2008.

So the task ahead of us today is to put some labels on each of these buck­ets, deter­mine how much you need to fill each bucket and put a time­frame on when they need to be filled.  Some buck­ets, like your retire­ment bucket, will be more dif­fi­cult to esti­mate how much money will be required to fill it but we have lots of time to make these calculations.

Then we need to put labels on each bucket sym­bol­iz­ing the tar­get date for fill­ing the buckets.

Are you ready to get started?”

The Bucket Strat­egy will help your clients to bet­ter under­stand the risks and will help them stay com­posed dur­ing dif­fi­cult mar­ket con­di­tions.  This will improve invest­ment per­for­mance and will reduce strains to your client rela­tion­ships caused by high lev­els of stress caused by uncertainty.

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 Management, Chief Economist, Colleges, Couple Of Minutes, Dalbar, Emergency Fund, Graphs, Initial Reaction, Invest Money, Investment Performance, Investments, Mutual Funds, Need Money, People, Portfolios, Retirement, Risk Tolerance, Stocks Bonds, Universities, Wealth Management
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