The information sources that impress clients

Wednesday, February 15th, 2012

In Monday’s email, I talked about the pos­i­tive impact of send­ing clients a reg­u­lar email with a link to an arti­cle or video from a cred­i­ble source. Not only does this keep you top of mind, but it reminds clients of the ongo­ing read­ing and research you’re doing on their behalf – and depend­ing on the source can enhance your credibility.

What makes sources credible?

Over the years, I’ve talked to investors about the infor­ma­tion sources that inspire con­fi­dence, and some clear pat­terns emerge:

1. Non-Canadian sources rank higher than Cana­dian sources.

This isn’t just part of our national infe­ri­or­ity com­plex – many investors take the view that they can eas­ily access domes­tic sources them­selves, they’re look­ing to their advi­sors for infor­ma­tion that they couldn’t find on their own.

2. Busi­ness and finan­cial sources score higher than broader based news orga­ni­za­tions (with one strik­ing exception).

3. Brand name recog­ni­tion matters.

We live in a star dri­ven soci­ety; brand recog­ni­tion is just as impor­tant for infor­ma­tion sources as for sports stars and entertainers.

4. The YouTube world has arrived.

An increas­ing num­ber of investors pre­fer to get their con­tent on video rather than by read­ing an arti­cle, and video packs an emo­tional punch that paper can’t match. (To see this, read an arti­cle about War­ren Buf­fett and then watch him inter­viewed on Bloomberg or Char­lie Rose. You’ll be amazed by the dif­fer­ence in impact.)

5. Inter­nal pub­li­ca­tions are at the bot­tom of the cred­i­bil­ity ladder.

Clients look to advi­sors for infor­ma­tion that is rel­e­vant, timely, and also objective.

Fairly or not, investors gen­er­ally put more cre­dence in infor­ma­tion that comes from a third party source than some­thing pro­duced by an advisor’s firm.

The infor­ma­tion source hierarchy

Given these pat­terns, infor­ma­tion sources fall into a clear hierarchy:

Tier One:

The Wall Street Jour­nal: Even clients who have never read the WSJ know the name, it evokes objec­tiv­ity. Note that the Jour­nal is behind a pay­wall for much of its con­tent, you can find spe­cial sub­scrip­tion offers to the online WSJ for $150 a year.

Finan­cial Times and The Econ­o­mist: While they don’t have the name brand recog­ni­tion of the Wall Street Jour­nal, they con­vey a high level of sophis­ti­ca­tion and cred­i­bil­ity among more worldly investors.

Tier Two:

The New York Times: The excep­tion to the rule about finan­cial spe­cial­ist pub­li­ca­tions, another exam­ple of the power of a respected brand name. The NYT has moved to a sub­scrip­tion model, after you’ve read 20 arti­cles in a month, but you can avoid this by Googling the arti­cle title and get­ting in the back door.

Bloomberg Busi­ness Week, Forbes and For­tune: While more busi­ness than invest­ment focused, these also bring strong credibility.

Tier Three:

Bar­rons: Great, in depth con­tent in a pub­li­ca­tion that suf­fers from lower aware­ness, it can be very effec­tive with more sophis­ti­cated clients, and some­times the level of analy­sis off­sets the lack of aware­ness. This is another pub­li­ca­tion that requires a sub­scrip­tion to access all its content.

Time and Newsweek: Gen­er­al­ist pub­li­ca­tions that are more effec­tive among older clients who remem­ber them in their glory days, these work less well with clients under 50.

Tier Four:

Globe and Mail Report on Busi­ness: First on the cred­i­bil­ity hier­ar­chy among Cana­dian sources by a sub­stan­tial mar­gin, Canada’s equiv­a­lent of the New York Times.

National Post, Cana­dian Busi­ness: While lag­ging the Globe in cred­i­bil­ity, these do have good aware­ness and strong followings.

Tier Five:

In house pub­li­ca­tions: Sad but true, for the rea­sons out­lined above.

Local news­pa­pers: These suf­fer from over famil­iar­ity and lack of cred­i­bil­ity as spe­cial­ist resources on finan­cial issues.

Video Resources:

Video is a clas­sic star-driven medium, what makes video cred­i­ble is the expert talk­ing rather than the source; War­ren Buf­fett, Ben Bernanke and to a lesser extent Mark Car­ney , the head of the IMF (Chris­tine Lagarde) or the World Bank (Robert Zoel­lick) will all get client’s attention.

The most pro­lific sources for video are CNBC and Bloomberg, the PBS inter­view pro­grams Con­suelo Mack and Char­lie Rose can also be good sources of inter­est­ing interviews.

Mak­ing this work in your day

While pro­vid­ing great con­tent, keep­ing track of the con­tent in these infor­ma­tion sources could be a full time job. Here’s a rou­tine to make keep­ing on top of these man­age­able, rec­og­niz­ing that many advi­sors already spend a sig­nif­i­cant amount of time stay­ing abreast of mar­ket developments.

1. Set aside 30 min­utes each morn­ing to review that day’s news

Carve out the time that works for you, whether it is get­ting up early at home or get­ting in the office half an hour early. What you read in that 30 min­utes is your per­sonal pref­er­ence. As a start­ing point for your daily pub­li­ca­tions, I rec­om­mend the Globe and Wall Street Jour­nal first, then the Finan­cial Times and New York Times.

If you’re dis­ci­plined, you can scan the head­lines in half an hour and read a few arti­cles in their entirety; any longer pieces can be read at the end of the day or at home that night.

2. Set aside 90 min­utes a week to look at weekly publications

Find a con­sis­tent time on the week­end to catch up on more in depth news. Here’s where you visit the online sites for pub­li­ca­tions such as The Econ­o­mist, Bloomberg Busi­ness Week, Forbes and For­tune. Again you’re scan­ning for impor­tant infor­ma­tion, you can go back to read long arti­cles later if time per­mits. This is also when you can look at the sites for Con­suelo Mack and Char­lie Rose to see whom they inter­viewed that week.

Given today’s volatile mar­kets, investors want to know that their advi­sor is on top of impor­tant devel­op­ments. By adopt­ing a con­sis­tent rou­tine such as the one I’ve described – and shar­ing some of the infor­ma­tion you come across with your clients – you’ll be in a posi­tion that they’re work­ing with the right advi­sor for today’s mar­ket environment.

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Tags: Brand Name Recognition, Brand Recognition, Canadian Sources, Charlie Rose, Credence, Credible Source, Domestic Sources, Driven Society, Emotional Punch, Financial Sources, Impact 5, Inferiority, Information Sources, Internal Publications, Party Source, Source Hierarchy, Sports Stars, Tier One, Wall Street Journal, Warren Buffett
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