Study Shows Clients Get First Impression From Your Website – Make Sure Your Message Is Clear

Tuesday, July 3rd, 2012

by Stephen Wer­sh­ing, The Client Dri­ven Practice

Don’t make the mis­take of say­ing what other advi­sors put on their websites.

At the Per­sh­ing INSITE 2012 con­fer­ence, Michelle Gutier­rez, a direc­tor at Per­sh­ing, ref­er­enced a Tower Group study that showed that 71% of a sam­ple of investors get their first impres­sion of you by vis­it­ing your web­site. Only then do they want to meet with you. (I can­not find a copy or sum­mary of this study, so I can’t ver­ify this sta­tis­tic. If any­one has seen it, I would be grate­ful if you would put the link in the com­ments below.) So, if your mes­sage is not clearly on your home­page you are miss­ing opportunities.

So many sites I see say the same thing: inde­pen­dent, objec­tive, com­pre­hen­sive, wealth man­age­ment, finan­cial plan­ning. Does your web­site say that you build one-on-one rela­tion­ships with clients, offer­ing per­son­al­ized atten­tion and finan­cial guid­ance? Then you are just like a national bro­ker­age! Aren’t you?

If the client can­not quickly under­stand that you are really good at some­thing in par­tic­u­lar that the prospect needs, you may not get the chance to make her a client. You may have an amaz­ing pre­sen­ta­tion that you make to prospects in an intro­duc­tory meet­ing, but you have to get that appoint­ment for it to work its magic. If your web­site looks pretty much like your com­peti­tors, and their in-person sales pitch is good, your prospect may sign on with them with­out ever talk­ing to you.

Estab­lish­ing your brand requires putting your value propo­si­tion, what makes you dif­fer­ent, every­where you have a mar­ket­ing mes­sage. When­ever you have a chance to tell peo­ple what you do, ver­bally, in print, or on the web, you need to be rein­forc­ing the descrip­tion of your ideal client and that spe­cial solu­tion or expe­ri­ence you deliver.

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Tags: Appointment, Brokerage, Driven Practice, Financial Guidance, Financial Planning, First Impression, Group Study, Insite, Investors, Magic, Mistake, Nbsp, Person Sales, Prospects, Relationships, Sales Pitch, Statistic, Tower Group, Value Proposition, Wealth Management
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Turn Your Marketing Into Lead Generation

Wednesday, May 16th, 2012

by Shauna Trainor, The Covenant Group

Yes, mar­ket­ing is an essen­tial part of run­ning a busi­ness, but entre­pre­neurs should not view this activ­ity as some­thing sep­a­rate from all other aspects of the com­pany. Buy­ing ad space or reach­ing out to prospects through news­pa­per arti­cles and blogs will help estab­lish your brand. Yet the efforts can also dou­ble as lead gath­er­ing and client rela­tion­ship man­age­ment opportunities.

In a piece for Entre­pre­neur mag­a­zine, Ann Han­d­ley out­lines some newer tech­nolo­gies that could offer your firm more chances to spread aware­ness of your brand. Mar­ket­ing can be as sim­ple as updat­ing your email sig­na­ture. She sug­gests adding a link to your blog or a “rel­e­vant down­load” at the bot­tom of your mes­sages — this can give con­tacts a bet­ter sense of what you do and rep­re­sent, and may fos­ter deeper rela­tion­ships in the future.

Han­d­ley also notes that SlideShare​.net is a valu­able means of pro­mot­ing your exper­tise on a spe­cific sub­ject while also gath­er­ing leads that could later become prospects and clients. That’s because in order to down­load a PDF or pre­sen­ta­tion, view­ers have to fill out a form with their con­tact infor­ma­tion. That fea­ture comes with the Pro SlideShare mem­ber­ship, but the invest­ment also allows you to prompt view­ers at var­i­ous points of the pre­sen­ta­tion to con­tact your busi­ness for more details.

Chim­ing in on LinkedIn dis­cus­sion pages is another strong tac­tic for show­ing your com­mand of a sub­ject while also build­ing a name for your­self. Han­d­ley rec­om­mends spend­ing some time click­ing through the ques­tions on the network’s forum, pro­vid­ing help­ful answers and, when rel­e­vant, point­ing to how your ser­vices can help.

How do you inte­grate your mar­ket­ing activ­i­ties with other func­tions in your com­pany? Do you see it as a means to not only build client cap­i­tal, but solid­ify the rela­tion­ships you already have with cur­rent clients? Are you reg­u­larly seek­ing ways to draw con­nec­tions between your adver­tis­ing and mar­ket­ing ini­tia­tives and the day-to-day aspects of the business?

In The Busi­ness Builder, Norm Trainor talks about the impor­tance of inte­grat­ing your sales, mar­ket­ing and client ser­vice efforts. He notes that there should be a smooth tran­si­tion from the point where you are tar­get­ing prospects, to engag­ing them in the open­ing inter­view, to com­mit­ting to future ser­vice when you finally close the sale.

Through­out this process, Norm notes that finan­cial advi­sors should be work­ing to make their clients feel spe­cial and appre­ci­ated while gen­tly push­ing them toward the next stage in the busi­ness cycle. This same con­cept applies to cre­at­ing and dis­trib­ut­ing con­tent online for mar­ket­ing pur­poses. When you write an arti­cle, cre­ate a slideshow or share a link with con­tacts, it should be done with the audience’s inter­est in mind. Your ulti­mate goal in mar­ket­ing is to cre­ate new clients, and offer­ing them valu­able infor­ma­tion is the best method for doing so.

Shauna Trainor is The Covenant Group’s Mar­ket­ing Man­ager. She focuses on The Covenant Group’s own mar­ket­ing strat­egy and also helps entre­pre­neurs through finan­cial advi­sor train­ing to lever­age social media and other tech­nol­ogy to spread the word about their ser­vices and prac­tices and build relationships.

Fol­low Covenant Group on

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Tags: Ad Space, Advertising And Marketing, Advertising Marketing, Better Sense, Blogs, Brand Marketing, Client Relationship Management, Contacts, Covenant Group, Download Pdf, Dynasty, Email Signature, Entrepreneur Magazine, Friends, Lead Generation, Management Opportunities, Marketing Lead, Nbsp, Newer Technologies, Prospects, Relationships, Running A Business, Shauna, Slideshare, Tactic
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The Key Numbers that Drive Your Business

Wednesday, May 2nd, 2012

A cou­ple of weeks back, I wrote about how mak­ing short term progress a pri­or­ity can fuel long term growth.

In response, I heard from a finan­cial advi­sor who starts each week by focus­ing on two spe­cific mea­sures and have seen sub­stan­tial gains in his busi­ness as a result.

“Over­whelmed by putting out fires”

This advi­sor began by describ­ing his con­clu­sions from a review of his busi­ness at the end of 2010.

“Going into 2010, I set two key goals. First, I set out to broaden and deepen my rela­tion­ships with my most impor­tant clients. And sec­ond, I wanted to sig­nif­i­cantly expand the num­ber of prospects that I was com­mu­ni­cat­ing with.

As I went through the year-end analy­sis of my busi­ness, I real­ized that I’d made lim­ited progress on the first goal and almost none on the sec­ond. When I thought about why that was, the dif­fi­culty wasn’t lack of desire or good inten­tions, it’s just that I found myself so over­whelmed by putting out fires and the sheer num­ber of things I had on the go, I wasn’t able to put con­certed effort against those two objectives.”

“What’s urgent vs. what’s impor­tant?”

This advisor’s dif­fi­culty is a uni­ver­sal one.

In “Seven Habits of Highly Effec­tive Peo­ple”, Stephen Covey describes the prob­lem we all face of assign­ing enough energy and resources to the impor­tant things that will drive our future suc­cess. Quite sim­ply, we’re all inun­dated with press­ing demands on our time that need to be dealt with right now; these are crit­i­cal but not nec­es­sar­ily impor­tant. And if we’re not care­ful, those things that are crit­i­cal in the short term can crowd out the impor­tant activ­i­ties that are essen­tial to achiev­ing long term success.

This advi­sor had another prob­lem beyond this, however.

“I had set out really ambi­tious plans for 2010, with a bunch of dif­fer­ent things that I wanted to move for­ward on, includ­ing broad­en­ing my knowl­edge on insur­ance, upgrad­ing my team, devel­op­ing closer rela­tion­ships with the accoun­tants for my key clients and rais­ing my pro­file among a key tar­get group that I see as hav­ing real promise.

As I looked back on the year I real­ized that I’d spread myself too thin. I’d set out to do too much, and as a result hadn’t been able to put enough real focus and effort against any of my goals.”

“A pre­scrip­tion for progress”

As he put together his 2011 busi­ness plan, this advi­sor resolved to learn from his fail­ure the pre­vi­ous year.

Step one was to select two and only two key objec­tives on which to focus. As part of that, he sat down with his asso­ciate and assis­tant and dis­cussed how they were going to achieve these goals. Next, he set quar­terly objec­tives for each of these goals, against which he can track progress. At the start of each quar­ter he fur­ther sets activ­ity goals by week.

All of this is on a spread­sheet that he and his team review each Mon­day morn­ing. For each of his goals, there are four columns that they focus on.

The first col­umn is an overview of tar­get activ­ity that was set out at begin­ning of year, with a run­ning tally year to date tally show­ing where they should be. Col­umn two shows where they actu­ally are. The other two columns focus on the cur­rent quar­ter; col­umn three lays out their goals for the cur­rent quar­ter, bro­ken out by week, and col­umn four shows actual progress for each week.

Using this spread­sheet as a guide they dis­cuss what they did last week against each of those two pri­or­ity activ­i­ties, and the num­bers that resulted from that activ­ity. They then agree to the activ­ity that will take place in the week ahead with those two goals in mind.

None of this is in any way rev­o­lu­tion­ary. But by main­tain­ing steady and con­sis­tent focus on weekly progress, this advi­sor was able to achieve his goals on two impor­tant long term ini­tia­tives in 2011; and is on track again in 2012.

Given that this has worked so well for this advi­sor, con­sider whether a sim­i­lar approach might help you move your busi­ness for­ward as well. In the mean­time, here’s a link to the arti­cle describ­ing the research on how focus on short term focus can advance your business.

http://​www​.cli​entin​sights​.ca/​a​r​t​i​c​l​e​/​a​-​b​r​e​a​k​t​h​r​o​u​g​h​-​s​t​r​a​t​e​g​y​-​t​o​-​a​c​h​i​e​v​e​-​a​m​b​i​t​i​o​u​s​-​g​o​als

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Tags: Accountants, Ambitious Plans, Concerted Effort, Conclusions, Different Things, Good Intentions, Important Things, Key Goals, Lack Of Desire, Measures, Priority, Prospects, Putting Out Fires, Relationships, Seven Habits Of Highly Effective People, Sheer Number, Stephen Covey, Substantial Gains, Term Success, Year End
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The Satisfaction Gaps that Cost You Clients

Wednesday, April 4th, 2012

Most advi­sors rec­og­nize that clients are unhappy with returns in the last decade, but believe that their clients are sat­is­fied with com­mu­ni­ca­tion and the rela­tion­ship as a whole.

That’s why three recent con­ver­sa­tions with both investors and advi­sor should set off alarm bells.

Three causes of client defection:

In my 25 years work­ing in the invest­ment indus­try, I’ve had numer­ous con­ver­sa­tions with advi­sors and investors about what makes clients leave. Some­times it truly is beyond an advi­sors’ con­trol; mar­kets under­per­form, clients have unre­al­is­tic expec­ta­tions, or feel they can save money invest­ing on their own. And some­times clients are won over by a sales pitch from another advi­sor who shot the lights out.

But often the issues that cost clients fall into three cat­e­gories that are absolutely within advi­sors’ control:

The first of these relates to communication.

A recent arti­cle described a con­ver­sa­tion with clients think­ing about switch­ing because they weren’t get­ting updates between annual meet­ings on mar­ket devel­op­ments, lead­ing them to won­der whether their advi­sor was actu­ally on top of what was hap­pen­ing. Other clients com­plain that they never hear from their advi­sor, unless they ini­ti­ate con­tact or that when they meet their advi­sor dom­i­nates the conversation.

Another set of issues within advi­sors’ con­trol that dam­age rela­tion­ships and can cost clients hinge on respon­sive­ness; and clients feel­ing unim­por­tant or unappreciated.

Last fall, I wrote about clients who left because their advi­sor hadn’t responded to requests for a com­pre­hen­sive finan­cial plan. Other clients have talked about advi­sors fail­ing to respond to ques­tions in a timely fash­ion, or things like change of address that drag on with­out resolution.

A third cause for clients leav­ing today is the sense that their advi­sor is too pas­sive in rec­om­men­da­tions to make changes to their port­fo­lio. In mar­kets like we’ve seen of late many clients want to feel that their advi­sor is actively look­ing for bet­ter oppor­tu­ni­ties. I recently talked to an advi­sor who lost a half a mil­lion dol­lar client and asked his branch man­ager to call the client to get feedback.

“I liked work­ing with John,” was the response from clients, “but all we’ve heard for the last five years is to be patient and hang in there. Given every­thing that’s gone on, it’s hard to imag­ine that the port­fo­lio that made sense five years ago still makes sense today.”

On this last issue, it’s not that you can’t rec­om­mend that clients stick with their port­fo­lio, but under­stand that today many clients are look­ing for their port­fo­lio to be actively man­aged; if you’re rec­om­mend­ing a sta­tus quo approach you have to take time to demon­strate that you’ve looked at all the alter­na­tives, and that this isn’t sim­ply the path of least resis­tance for you.

“What we have here is a fail­ure to communicate”

Let’s be clear here: The big prob­lem isn’t client unhap­pi­ness with com­mu­ni­ca­tion, respon­sive­ness or proac­tive advice. The prob­lem is that in many cases advi­sors are obliv­i­ous about these sat­is­fac­tion gaps and only learn about them when clients leave.

In the words of the war­den in the Oscar win­ning 1967 film Cool Hand Luke: “ What we have here is a fail­ure to communicate.”

There are a num­ber of ways to open the lines of com­mu­ni­ca­tion with clients.

A recent arti­cle described the Net pro­moter method­ol­ogy to mea­sure client sat­is­fac­tion and loyalty:

The Ques­tion that Pre­dicts Cus­tomer Loyalty

Last year, I wrote about ques­tions that will get clients to open up about how they really feel. One of the best ways to get feed­back is with the sim­ple ques­tion: “What one thing could I do to improve your expe­ri­ence work­ing with me and my team?”

You can hire one of the firms such as Advi­sor Impact that con­duct audits of client satisfaction.

Or you can par­tic­i­pate in a ground­break­ing research study I’ll be con­duct­ing this spring in con­junc­tion with Pro­fes­sor Tan­jim Hos­sain of the Rot­man School of Man­age­ment at the Uni­ver­sity of Toronto.

How the study will work:

The study is designed to pro­vide clear feed­back on how to improve your client meet­ings and your client rela­tion­ships gen­er­ally. At the begin­ning of meet­ings, advi­sors will tell clients that they’re par­tic­i­pat­ing in a research study to max­i­mize the value of meet­ings for clients, con­ducted with the Rot­man School of Man­age­ment at the Uni­ver­sity of Toronto.

At the end of the meet­ing, clients will com­plete a con­fi­den­tial writ­ten sur­vey which they’ll put in a stamped enve­lope and mail. While clients are answer­ing the writ­ten sur­vey, advi­sors will be at their desks com­plet­ing par­al­lel ques­tions. Notably, one client who com­pletes the sur­vey will win $5,000.

What you’ll get:

Par­tic­i­pat­ing advi­sors will receive:

- An analy­sis of what clients think of the value from your meet­ings and guid­ance on how meet­ings could be improved

- Feed­back on your over­all client sat­is­fac­tion level

- Iden­ti­fi­ca­tion of gaps between your view of client sat­is­fac­tion and what clients actu­ally say

- An overview of the bar­ri­ers to your clients pro­vid­ing referrals

- Where clients give us per­mis­sion to share their names, spe­cific feed­back from indi­vid­ual clients

Plus one advi­sor will have the chance to call a client and tell him or her that they’ve won $5,000.

Addi­tional information:

The study is being run over eight weeks, with the time com­mit­ment for the typ­i­cal advi­sor about ten min­utes per week.

1. More details on how the study will work: Client Meet­ing Study Sum­mary–Click Here

2. A link to down­load a 15 minute con­fer­ence call describ­ing the study: Research Study Con­fer­ence Call Record­ing–Click Here

3. A copy of the draft ques­tion­naire for clients to com­plete: Sam­ple Investor Ques­tion­naire–Click Here

Here’s the link to sign up for the study: Reg­is­ter Here

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Tags: Alarm Bells, Annual Meetings, Change Of Address, Control Markets, Conversations, Defection, Drag On, Gaps, Hadn, Investment Industry, Last Decade, Leaving Today, Market Developments, Recent Article, Relationships, Responsiveness, Sales Pitch, Satisfaction, Timely Fashion, Unrealistic Expectations
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10 Questions That Begin the Referral Process

Wednesday, January 11th, 2012

This is a guest arti­cle by U.S. con­sul­tant Bob Burg, reprinted with his permission.

Net­work­ing isn’t a con­test to see who can hand out the most busi­ness cards. Great net­work­ers know that leav­ing self-interest at the door is the key to cul­ti­vat­ing rela­tion­ships — and referrals.

Oppor­tu­ni­ties to meet peo­ple arise con­stantly: at local busi­ness events, your church or syn­a­gogue, char­ity func­tions, and myr­iad other places. And, while cer­tainly not every­one you meet is a qual­i­fied — or even inter­ested — prospect, many of them know lots of oth­ers who just might be. After all, it’s been doc­u­mented that most peo­ple know about 250 other peo­ple. There­fore, every time you develop a strong rela­tion­ship with one new per­son, you’ve poten­tially increased your per­sonal sphere of influ­ence by 250 peo­ple. But how do you build those refer­ral rela­tion­ships in a way that is pro­fes­sional, non-intimidating (to you as well as oth­ers), and effective?

Where many advi­sors go awry

I want to share the fol­low­ing premise with you, and ask you to take it very seri­ously. This is the cor­ner­stone on which super­star advi­sors build their practices:

“All things being equal, peo­ple will do busi­ness with, and refer busi­ness to, those advi­sors they know, like, and trust.”

That’s it, plain and sim­ple. Suc­cess­ful net­work­ing, there­fore, pro­motes rela­tion­ships in which you are known, liked, and trusted, and which nat­u­rally lead to the devel­op­ment of a strong refer­ral base.

Unfor­tu­nately, many advi­sors mis­un­der­stand the term “net­work­ing.” Since the term is so mis­un­der­stood by so many peo­ple, allow me to pro­vide you with a def­i­n­i­tion that will put it in the cor­rect perspective.

Net­work­ing is sim­ply “the cul­ti­vat­ing of mutu­ally ben­e­fi­cial, give-and-take, win-win rela­tion­ships” — as opposed to the stereo­typ­i­cal slick-talker who aggres­sively shakes hands and dis­trib­utes busi­ness cards to every­one with whom he crosses paths. When prac­ticed con­sis­tently and cor­rectly, with the needs, wants, and desires of the other per­son in mind, net­work­ing can dra­mat­i­cally increase your refer­ral busi­ness in a way that will astound you.

In his book Net­work­ing for Life , Thomas Power writes, “The energy in net­works arises from a will­ing sus­pen­sion of self-interest.” I love that sen­tence because it absolutely encap­su­lates the one trait com­mon to those I call “super­star net­work­ers.” These peo­ple con­stantly ask them­selves how they can add to the life/business of the other per­son, as opposed to what they can get from them.

Of course, they still expect to pros­per — in fact, they know they’ll pros­per in a huge way. But they are not emo­tion­ally attached to hav­ing to reap the rewards then and there, or even directly from that per­son. Thus, they can fully focus on the “giv­ing” part of being a suc­cess­ful net­worker. They know that the more they give, the more they’ll even­tu­ally receive. Yes, it really does work that way.

The key to com­pelling conversations

So, what does this all mean in prac­ti­cal terms? Let’s say you are meet­ing some­one for the first time. Many advi­sors, like most peo­ple, feel they need to do most of the talk­ing when they’re “net­work­ing.” In other words, they have to pro­mote their prac­tice, which means show­ing how intel­li­gent and suc­cess­ful they are, and maybe even ask­ing pointed, per­sonal ques­tions about the person’s finan­cial sit­u­a­tion in order to dis­cover needs. But what this typ­i­cally accom­plishes, more than any­thing, is to make the other per­son ner­vous and defensive.

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Tags: Business Cards, Business Events, Charity Functions, Cornerstone, Correct Perspective, Guest Article, Lead, Personal Sphere, Premise, Referral Base, Referrals, Relationship, Relationships, Self Interest, Sphere Of Influence, Synagogue, Term Networking
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To Connect, Communicate Solutions, NOT Methods

Wednesday, November 30th, 2011

Peo­ple care less about what you do and more about what they get.

When I asked advi­sors what they do, or what value they rep­re­sent, too many describe the process they uti­lize and not enough describe solu­tion they deliver. Peo­ple won’t send you a refer­ral because you have a cus­tomized finan­cial plan­ning process and eval­u­ate indi­vid­ual goals and gen­er­ate rec­om­men­da­tions tai­lored to client spe­cific needs, and they won’t send you a refer­ral because you care­fully mon­i­tor rela­tion­ships between mar­kets and rebal­ance port­fo­lios based on pro­pri­etary pro­to­cols. They will pro­vide a refer­ral beause you pro­vide a solu­tion to a prob­lem their friend has. Peo­ple care less about what you do and more about what they get.

I believe the most pow­er­ful descrip­tions of the value advi­sors offer encap­su­late the ben­e­fit a tar­get prospect real­izes by work­ing with them. This requires, first, that you have a prac­ti­cal and well defined tar­get mar­ket, but that’s another post. Con­sider describ­ing what you do worded as a solu­tion from the client’s point of view. Com­plete this sen­tence “Peo­ple like [describe tar­get prospect] come to me for [solu­tion that tar­get mar­ket requires]. Con­sider these possibilities:

Cor­po­rate exec­u­tives fac­ing retire­ment in the next three years come to me because I show them the right choice on their retire­ment plan distributions.

Sin­gle pro­fes­sional moth­ers come to me to learn how to bal­ance the demands of rais­ing kids with the abil­ity to afford college.

Peo­ple who have saved enough to take care of them­selves and want to use their sav­ings to leave a mark on the world come to us to plan their legacy.

You can teach your clients state­ments of value like these, and they will repeat them to oth­ers when pro­vid­ing you a referral.

Don’t worry about answer­ing the ques­tion “What do you do” with a sen­tence that starts out by describ­ing your tar­get client. You may think the per­son who asked you the ques­tion wants you to be the sub­ject of the sen­tence, but you can much more effec­tively get their atten­tion by describ­ing the per­son you spe­cial­ize in – espe­cially if it is them.

When I ask advi­sors what they do, most often I hear ver­sions of “I help peo­ple reach their finan­cial goals” or “I man­age people’s port­fo­lios to help reduce risk.”  Or “I give peo­ple peace of mind”. These are usu­ally too gen­eral to be use­ful. And the big­ger prob­lem is that I don’t think of my prob­lems in those terms. I have just started a new busi­ness with one child in col­lege, and am newly mar­ried, work­ing on con­sol­i­dat­ing two house­holds and have a three-year-old in the house for the first time in 14 years. You are NOT going to give me peace of mind.

Peo­ple will come to get a solu­tion, not to get a process. And peo­ple will remem­ber to refer you because a friend men­tions a prob­lem that your client can plug your solu­tion into, not because they like your process or because you have pro­vided them returns to keep up with the mar­ket (even if it’s with lower volatility).

If you stand for process you are a tech­ni­cian. If you rep­re­sent a solu­tion, you will attract clients and refer­rals who need a prob­lem solved.

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Tags: Answering The Question, Benefit, Corporate Executives, Financial Planning, Legacy, People, Point Of View, Portfolios, Possibilities, Proprietary Protocols, Raising Kids, Referral, Relationships, Retirement Plan Distributions, Right Choice, Target Client, Target Market, Worry
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Four Communication Imperatives for Today’s Clients

Wednesday, November 2nd, 2011

Four com­mu­ni­ca­tion imper­a­tives for today’s clients

I recently had the oppor­tu­nity to talk to a group of afflu­ent investors about rela­tion­ships with their advisors.

When it came to com­mu­ni­ca­tion, I was struck by how the things that would have impressed clients ten years ago are absolutely ho-hum today … and how quickly the stan­dards for effec­tive com­mu­ni­ca­tion are changing.

Not that long ago, investors would have been happy with an annual meet­ing and quar­terly newslet­ters or mar­ket updates. While this model will still sat­isfy some, a grow­ing num­ber of investors are look­ing for some­thing more when it comes to com­mu­ni­ca­tion from their advisor.

Four new rules for effec­tive communication

There are a num­ber of themes that run through con­ver­sa­tions with investors about what they look for in terms of communication.

1. More fre­quent contact

Given volatile mar­kets and the sheer vol­ume of avail­able infor­ma­tion, a grow­ing num­ber of investors want to hear from their advi­sors much more fre­quently than in the past — for many clients, the tra­di­tional model of an annual review as being the sole form of per­sonal con­tact no longer cuts it.

2. Shorter con­ver­sa­tions … on their terms

At the same time as investors want to hear from their advi­sors more fre­quently, they are reluc­tant to invest an hour on each con­ver­sa­tion — they want shorter updates. Fur­ther­more, more and more want at least some of these con­ver­sa­tions in a time, place and fash­ion that is more con­ve­nient than trekking to their advisor’s office.

3. Rel­e­vant and customized

Some investors com­plain of generic, same-old con­tent in meet­ings. A grow­ing num­ber are look­ing for con­ver­sa­tions that reflect cur­rent issues and which are directly rel­e­vant to their sit­u­a­tion, address­ing the key ques­tion of “what does all this mean to me?”

4. From cred­i­ble sources

We all rec­og­nize that today’s con­sumer is not only bom­barded with much more infor­ma­tion but also more scep­ti­cal. As a result, some investors are look­ing for direct access to expert views and for a sense that the per­spec­tives they’re get­ting come from cred­i­ble, objec­tive sources.

Build­ing a foun­da­tion of per­sonal contact

Effec­tive com­mu­ni­ca­tion starts with a foun­da­tion of per­sonal contact.

Let’s begin with the real­ity that while many things have changed, there’s still no sub­sti­tute for face to face con­tact. An annual face to face meet­ing is still essen­tial — and for impor­tant clients, you need to do what­ever it takes within rea­son to make that meet­ing hap­pen, in my opin­ion up to and includ­ing meet­ing at their home or office.

Pro­vided that you make it clear you’re mak­ing an excep­tion to accom­mo­date their sched­ules, if that’s what it takes to make it hap­pen, for sig­nif­i­cant clients I’d be open to occa­sional meet­ings on their premises.

Hav­ing the meet­ing is only the first step, though. Once face to face with clients, you need to ensure that you accom­plish a num­ber of key things:

1. Clients have to walk away reas­sured about your com­pe­tence and ability.

2. They need to feel lis­tened to and be con­fi­dent that the meet­ing revolves around their needs and agenda rather than yours.

3. Clients need to emerge feel­ing more pos­i­tive that they’re on tar­get to hit their long term goals, even if that entails mak­ing some mod­i­fi­ca­tions to their plan.

If you missed last week’s arti­cle, here’s how one advi­sor achieves this:

http://​www​.cli​entin​sights​.ca/​a​r​t​i​c​l​e​/​t​e​n​-​m​i​n​u​t​e​s​-​t​o​-​m​u​c​h​-​m​o​r​e​-​e​f​f​e​c​t​i​v​e​-​c​l​i​e​n​t​-​m​e​e​t​i​ngs

Sup­ple­ment­ing face to face meetings

For many clients, even if you accom­plish all these goals in your annual review, that once a year meet­ing isn’t enough … they want more fre­quent, shorter updates.

That’s where reg­u­lar tele­phone meet­ings come in. Increas­ingly, advi­sors will need to sched­ule 15 or 20 minute tele­phone appoint­ments to answer ques­tions and update progress.

The key is to mak­ing these tele­phone reviews feel as much as pos­si­ble like face to face meet­ings. The arti­cle below from late last year goes into detail on using tech­nol­ogy to make those phone meet­ings work.

http://​www​.cli​entin​sights​.ca/​a​r​t​i​c​l​e​/​a​-​b​e​t​t​e​r​-​a​l​t​e​r​n​a​t​i​v​e​-​t​o​-​f​a​c​e​-​t​o​-​f​a​c​e​-​m​e​e​t​i​ngs

For some clients, this level of per­sonal con­tact is suf­fi­cient — an annual face to face meet­ing and short quar­terly phone meet­ing would be absolutely sufficient.

Oth­ers, how­ever, are look­ing for more — on Thurs­day, I’ll cover the other two ingre­di­ents to effec­tive com­mu­ni­ca­tion — rel­e­vant con­tent from cred­i­ble sources.

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A proven path to gaining client assets

Wednesday, October 26th, 2011

Talk to suc­cess­ful advi­sors about their busi­ness objec­tives and for most increas­ing assets is towards the top of their list.

Some advi­sors believe that win­ning a greater share of assets from exist­ing clients is dri­ven by performance.

And while that may be true in some cases, research with 50,000 Cana­dian investors pin­points eight advi­sor activ­i­ties that lead to  increased client assets — none of which relate directly to performance.

A start­ing point on increas­ing client assets

I’ve writ­ten in the past about research show­ing that the major­ity of clients with

mul­ti­ple advi­sors had never been approached about con­sol­i­dat­ing assets.

In some cases, clients have made a con­scious deci­sion to work with more than one advisor.

They may have devel­oped strong rela­tion­ships with mul­ti­ple advi­sors, like to get mul­ti­ple per­spec­tives, work with more than one advi­sor to diver­sif risk or seek out dif­fer­ent advi­sors for dif­fer­ent skill sets.

And in a few cases clients are reluc­tant to con­sol­i­date assets with one advi­sor because they’re con­cerned they may lose some con­trol over their money as a result.

All of that said, clients mak­ing a con­scious deci­sion to work with mul­ti­ple advi­sors were a dis­tinct minor­ity. Most often this was a his­tor­i­cal acci­dent which just evolved over time.

In those cases, the first advi­sor who approaches a client about con­sol­i­dat­ing assets has an advan­tage. Note, how­ever that just approach­ing clients about con­sol­i­dat­ing assets isn’t enough — you have to demon­strate the ben­e­fit of doing this, whether it be reduc­ing over­lap­ping posi­tions, improv­ing the over­all risk return pro­file of a port­fo­lio, improv­ing the client’s tax sit­u­a­tion or sim­pli­fy­ing reporting.

New research on share of wal­let drivers

Among the speak­ers at a con­fer­ence I chaired this spring was Price Pow­ell of Cor­po­rate Insights, a Van­cou­ver based research firm that has col­lected infor­ma­tion from over 50,000 investors on behalf of some of Canada’s largest invest­ment deal­ers, finan­cial plan­ning firms and pri­vate bank­ing operations.

For the typ­i­cal advi­sor, his or her largest clients make up 25% of house­holds and 65% of exist­ing clients — but those largest clients make up almost 80% of the assets with clients that exist­ing advi­sors don’t cur­rently hold.

The good news is that there are spe­cific things that advi­sor can do to increase their assets among their largest clients.

Cor­po­rate insights has iden­ti­fied eight share of wal­let dri­vers. If those share of wal­let dri­vers are in place, the per­cent­age of client assets goes up, if they aren’t the share of assets goes down.

It is. If none of those eight dri­vers is in place, share of wal­let is under 20%. If four dri­vers are in place, share of assets is about 50%. And if seven of those dri­vers are in place, per­cent­age of assets is over 80%.

Client com­mu­ni­ca­tion drivers

The first four share of wal­let dri­vers all relate to client com­munca­tion — con­tact level, hav­ing a ser­vice agree­ment in place, port­fo­lio reviews and hold­ing con­ver­sa­tions about fees and charges.

Dri­ver one: Client contact

There were two mea­sures on con­tact level — whether investors thought advi­sors spend enough time man­ag­ing their account and whether they got suf­fi­cient contact.

On the first ques­tion, about half of clients think their advi­sors spend enough time man­ag­ing their account — which leaves half who don’t

And just under 30% com­plain of lack of suf­fi­cient contact.

Dri­ver two: Ser­vice agreements

Ser­vice agree­ments were also mea­sured two ways.

First, do clients say they under­stand the level of ser­vice they can expect from their advi­sor — just over half said yes to that ques­tion.

And sec­ond, is there a writ­ten ser­vice agree­ment in place spelling out exactly what clients can look for. And there only about 20% of advi­sors have a writ­ten ser­vice agree­ment in place.

Just by putting your com­mit­ments to ser­vice in writ­ing, the share of client assets  goes up.

Dri­ver Three: Port­fo­lio reviews:

Reg­u­lar port­fo­lio reviews increase sat­is­fac­tion and they increase share of assets. And yet only 40% of clients said they receive reg­u­lar port­fo­lio reviews.

Some advi­sors might say, well I offer those to clients but clients sim­ply aren’t inter­ested. But in fact research shows that almost half of clients want more reg­u­lar port­fo­lio reviews.

Again, reg­u­lar port­fo­lio reviews drive sat­is­fac­tion and share of assets.

Dri­ver Four: Com­mu­ni­ca­tion on fees and charges

Again, com­mu­ni­ca­tion on fees and charges was mea­sured two ways.

First, do clients under­stand how they’re charged — just under 60% said they do, which leaves four out of ten who say no.

And  sec­ond, do clients want an update and clar­i­fi­ca­tion of fees and charged — a full two thirds of clients said yes to this.

Wealth man­age­ment drivers

The other four dri­vers all related to wealth man­age­ment advice — things like finan­cial plan­ning, advi­sory ser­vices and insur­ance.

Dri­ver five: Wealth man­age­ment advice

A third of clients said they’re cur­rently get­ting wealth man­age­ment advice.

And among those not get­ting it, a quar­ter expressed inter­est in receiv­ing broad wealth man­age­ment advice.

Dri­ver six: Advi­sory services

Advi­sors who pro­vided advice on tax issues, estate plan­ning, edu­ca­tion sav­ings and char­i­ta­ble giv­ing expe­ri­enced a higher share of assets.

Just over half of clients said they’re cur­rently receiv­ing advice on these issues.

And just under 40% of those not receiv­ing this kind of advice expressed inter­est in get­ting it.

Dri­ver seven:  Insur­ance services

Just over half of clients use insur­ance services.

33% buy­ing insur­ance use their main invest­ment advi­sor — and just under one in five clents expressed inter­est in insur­ance advice.

Again, another dri­ver of share of assets with a client.

Dri­ver eight: Finan­cial planning

Hav­ing a finan­cial plan was the sin­gle fac­tor that drove share of wal­let the most — it truly does seem that the advi­sor who owns the play owns the client.

Half of clients sur­veyed said they had a finan­cial plan — but only 28% had a writ­ten plan, so about half that number.

And what research shows is that if the plan isn’t writ­ten down, it doesn’t really count in terms of impact on asset level.

Even more inter­est­ing, over 40% of clients expressed inter­est in finan­cial plan­ning, a very big num­ber.

On finan­cial plan­ning, fail­ing to have a writ­ten plan in place doesn’t just cost advi­sors poten­tial assets. It also rep­re­sents a point of vul­ner­a­bil­ity — if another advi­sor offers to pre­pare a finan­cial plan for that client, he or she will be at risk of leaving.

Mak­ing this happen

The good news is that the Cor­po­rate Insights research pro­vides a roadmap on how to increase client assets.

For advi­sors inter­ested in act­ing on this, con­sider this five step process.

1.     On a piece of paper list your top ten clients — chances are that a good num­ber of these have assets elsewhere.

2.     Across the top of the page write the eight share of wal­let activities:

• what clients see as suf­fi­cient contact
• a writ­ten ser­vice agreement
• reg­u­lar port­fo­lio reviews
• a con­ver­sa­tion about fees and charges
• gen­eral wealth man­age­ment advice
• advice on tax, estate plan­ning, char­i­ta­ble giv­ing or edu­ca­tion savings
• advice on insurance
• a writ­ten finan­cial plan

3.     For each of your top ten clients, check off any of those eight activ­i­ties that haven’t happened.

4.     Sched­ule time to call your each of you top ten clients to talk about any of those gaps.

5.     Finally, once you’ve done this for your top ten clients, repeat the process for your next ten — and then the next ten after that and another ten, until you’ve done this for all your mean­ing­ful clients.

By going through this process,  you not only lock in your rela­tion­ship with top clients, but chances are you’ll see addi­tional assets com­ing in along the way.

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Stop Leaving Fee Based Dollars on the Floor

Wednesday, October 26th, 2011

Stop leav­ing fee-based dol­lars on the floor

One of the impor­tant trends among suc­cess­ful advi­sors over the past decade has been the shift from a busi­ness whose rev­enue model depended on com­mis­sions to one based on annual fees.

A recent research report pro­vides impor­tant insights on get­ting the level of fee pric­ing right, one of the keys to mak­ing a fee-based approach work.

The big pic­ture on fee-based business

At the end of Decem­ber, the aver­age advi­sor at US and Cana­dian full-service secu­ri­ties firms had 25% of assets and 37% of rev­enue in fee-based accounts; 80% of advi­sors had at least 5% of assets in fee-based programs.

Over the last four years, the typ­i­cal advisor’s fee-based assets are up 24%, at a time when non fee-based assets were down slightly. The aver­age advi­sor opened just under 15 new fee-based accounts in 2010, up from 12 accounts in 2008 — over 80% of these accounts were with new relationships.

These are some of the find­ings from the most recent Insights whitepa­per by invest­ment indus­try soft­ware firm PriceMetrix. This report fea­tures data from 15,000 advi­sor books at a broad range of Cana­dian and US firms; these advi­sors worked with over 2 mil­lion investors rep­re­sent­ing assets of $850 bil­lion (so an aver­age account size of $400,000.)

Note that the firms PriceMetrix works with tend to be full-service secu­ri­ties firms, so the actual num­bers may dif­fer from advi­sors with other busi­ness mod­els, although the over­all trends should be.

What’s dri­ven the move to fee-based

There are a num­ber of rea­sons for the growth in fee-based accounts.

Start with the fact that a fee-based approach leads to bet­ter align­ment of inter­ests. For investors it can reduce con­cerns about poten­tial con­flicts and whether a rec­om­men­da­tion to buy or sell is moti­vated by the advisor’s desire to gen­er­ate a com­mis­sion. Fur­ther it elim­i­nates client anx­i­ety about not get­ting a fair price if they don’t hag­gle about com­mis­sion levels.

For advi­sors, fee based-business escapes the com­modi­ti­za­tion trap on com­mis­sions and matches rev­enue and effort — good advi­sors pro­vide ongo­ing, reg­u­lar com­mu­ni­ca­tion and advice to clients and a fee-based approach reflects that.

Finally, fee-based busi­ness pro­vides pre­dictable rev­enue. One of the key things that dri­ves long term value in a busi­ness is “recur­ring rev­enue”, the fact that once an ini­tial sale is made, pro­vided that you do a good job, addi­tional rev­enue can be relied on. This is noth­ing new — Gillette built a great busi­ness based on giv­ing away razors and then mak­ing money off razor blades.

For advi­sors look­ing to enhance the long term value of their busi­ness, recur­ring rev­enue is key — that’s why some advi­sors who were his­tor­i­cally trans­ac­tion ori­ented have sat down with clients, shown them how much they’ve paid in com­mis­sions over the past few years and sug­gested a fee below the com­mis­sion level clients paid in the past, fore­go­ing some rev­enue for sta­bil­ity and predictability.

Get­ting fee-based pric­ing right

Per­haps the most crit­i­cal ele­ment to a prof­itable fee based busi­ness is get­ting pric­ing right.

Three obser­va­tions on pric­ing from the PriceMetrix research:

1. Under­pric­ing of small and mid-sized accounts

Aver­age rev­enue from client house­holds with assets of $500K to $1 mil­lion is two to three times that for clients with $100K to $250K.

Even account­ing for higher com­mu­ni­ca­tion and ser­vice lev­els for larger clients, it appears that advi­sors are either under­charg­ing smaller clients or over­charg­ing larger ones.

Here’s the aver­age pric­ing for accounts at dif­fer­ent lev­els of house­hold assets:

Take­away One:

Advi­sors need to scale pric­ing so that it’s fair to clients of all sizes and to set min­i­mum lev­els of rev­enue per household.

2. Wide dis­par­i­ties in pric­ing for sim­i­lar clients

Fees for sim­i­lar accounts var­ied widely across advisors.

Here’s the dis­tri­b­u­tion of pric­ing to clients with assets of $250K to $500k in bal­anced accounts — note that the over­all aver­age price for this group 1.39%.

Of note, PriceMetrix didn’t find any cor­re­la­tion between pric­ing level on the one hand and geo­graphic loca­tion, other rev­enue from clients or suc­cess in win­ning new accounts on the other. The only appar­ent vari­able is the advisor’s busi­ness model and going in think­ing on pricing.

Take­away two:

Advi­sors need to be clear and con­sis­tent on their approach to fee-based pric­ing; as part of that, more atten­tion needs to be paid to mar­ket pric­ing and what other advi­sors are charg­ing for sim­i­lar accounts.

3. Get­ting ini­tial pric­ing right

Once a pric­ing level is set, it is incred­i­bly dif­fi­cult to raise it — only 5% of advi­sors saw a mean­ing­ful increase in pric­ing lev­els with exist­ing accounts. That means it’s of para­mount impor­tance to get the ini­tial pric­ing level on a fee based account right. To do that, you have to be crys­tal clear about your pric­ing going into client con­ver­sa­tions — and be com­mit­ted to main­tain pric­ing lev­els across your book that are con­sis­tent and fair both to you and to clients.

Take­away three:

You need to get ini­tial pric­ing on new fee-based accounts right. As part of that, you have to be crys­tal clear on the value you’re providing.

Two ingre­di­ents to build­ing a fee-based business

There are at least two keys to mak­ing fee-based busi­ness the foun­da­tion of your busi­ness going forward.

First is to focus — the advi­sors who are see­ing the most suc­cess are those who are adopt­ing the fee-based model as the foun­da­tion of their approach. To make fee-based busi­ness a cen­tral part of your busi­ness, you have to assign this top priority.

The sec­ond is to effec­tively artic­u­late what clients get for the fee they pay. A fee-based approach makes investors’ annual costs absolutely trans­par­ent and requires clients to explic­itly agree to pay that cost — in light of that, com­mu­ni­cat­ing your value is job one.

Here’s a recent arti­cle and video that talk specif­i­cally to this point:

Watch Video Run Time — 3m 31s

Read Arti­cle

And click here for the PriceMetrix report on fee and man­aged asset pricing:

http://​bit​.ly/​m​1​k​gu5

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