How to Win Younger Wealthy Clients

Thursday, December 20th, 2012

by Stephen Wer­sh­ing, The Client Dri­ven Practice

A new report from Cisco indi­cates that wealthy investors under 55 have less trust in advi­sors and dif­fer­ent expec­ta­tions than older clients, and offers some ideas on how to attract them. A Wall Street Jour­nal arti­cle that referred to this study and another high­light the impor­tance of a care­fully researched value propo­si­tion and ser­vice model.

The Cisco study, writ­ten up in wealth man​age​ment​.com, is pri­mar­ily a sales pitch to buy tech­nol­ogy for your prac­tice. Big sur­prise. Nev­er­the­less, it had some very inter­est­ing data with sig­nif­i­cant impli­ca­tions for you as you update your mar­ket­ing plan. Among the findings:

• This is a sig­nif­i­cant mar­ket – Investors under 55 with over $500,000 in investable assets rep­re­sent 37% of investable assets in the US.

• They are the most likely to move – In the sur­vey, 20% of this group indi­cated they were some­what or very likely to change advi­sors within the next 12 months. Older age groups had a far less like­li­hood of mov­ing. Not only does this mean that you are most at risk for los­ing your younger clients if you don’t pro­vide them what they want, but another impli­ca­tion is that mar­ket­ing strate­gies aimed at older investors are much less likely to be suc­cess­ful at attract­ing them away from their cur­rent advi­sor. Younger investors rep­re­sent a risk and an opportunity.

• Younger investors have less trust in advi­sors – among respon­dents 65 and older, 58% trust advi­sors more than they trust other investors and only 7% trust fel­low investors more than advi­sors. Among respon­dents under 55, how­ever, only 32% trust advi­sors more and 22% trust fel­low investors more than advi­sors. So, refer­ral mar­ket­ing is even more crit­i­cal with younger investors and tra­di­tional mar­ket­ing is likely to be less effective.

• Expec­ta­tions are key –clients under 55 report their inter­ac­tions are not valu­able enough with their finan­cial advi­sor. The study reports that these clients said they want:

• more per­son­al­ized rec­om­men­da­tions and advice

• more dis­cus­sion of strate­gies rather than investments

• more fre­quent interactions

• more infor­ma­tion (includ­ing charts and graphs) prior to and dur­ing meetings

Now, the sur­vey respon­dents prob­a­bly did not actu­ally say those things – they prob­a­bly checked those boxes on a form. It may be that they actu­ally desire more per­son­al­ized rec­om­men­da­tions and more dis­cus­sion of strate­gies, but I sus­pect that this could be a good indi­ca­tion that they place a higher value on finan­cial plan­ning than invest­ment management.

What I feel con­fi­dent about tak­ing from this sur­vey is that younger clients have dif­fer­ent expec­ta­tions about how they will inter­act with you. Maybe it is via the high-tech, high def com­mu­ni­ca­tions chan­nels Cisco wants to sell you, or maybe it is sim­ply some­how uti­liz­ing the com­puter desk­top to inter­act with you and save a trip to the office. Regard­less, it is clearly a good idea to have a con­ver­sa­tion about whether the come-to-my-office-quarterly model is your client’s preference.

The other study the Jour­nal arti­cle ref­er­enced is dis­cussed in this arti­cle in the cur­rent issue of Finan­cial Advi­sor, explor­ing the desires of even younger investors, the Mil­len­ni­als, born between 1980 and 2000. Clients in this cat­e­gory, once they have taken care of their basic needs, want to use their invest­ments to change the world. The wealth­i­est among them may not have supe­rior invest­ment returns as a pri­or­ity. If they get only ade­quate returns but advance their social goals, they feel successful.

What I take from these stud­ies, and oth­ers like them I have seen, is that explor­ing your ideal clients’ expec­ta­tions and incor­po­rat­ing them into your value propo­si­tion and client processes offers tremen­dous oppor­tu­nity. Build­ing a prac­tice around what your ideal clients want – what they want to accom­plish Whether it is sav­ing enough for retire­ment or chang­ing the world), how they want to get there, how they want to meet with you and how often (which may include Skype, video con­fer­enc­ing, per­son­al­ized web­sites, remote inter­ac­tive plan­ning tools like Mon­eyGuide Pro, or even sim­ply fewer meet­ings and more phone calls) – can dra­mat­i­cally increase the like­li­hood they will tell their friends about you. And, espe­cially for wealthy investors under 55, that word-of-mouth is likely to be the best way to attract them.

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Tags: Age Groups, Cisco Study, Driven Practice, Fellow Investors, Implication, Investable Assets, Market Investors, Marketing Plan, Marketing Strategies, Older Investors, Referral Marketing, Respondents, Service Model, Street Journal Article, Traditional Marketing, Value Proposition, Wall Street Journal, Wealth Management, Wealthy Clients, Wealthy Investors
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A Good Brand Will Repel More Than It Attracts

Wednesday, December 12th, 2012

by Stephen Wer­sh­ing, The Client Dri­ven Practice

Finan­cial advi­sors work hard to develop a value propo­si­tion that will get the atten­tion of prospec­tive clients. Focus­ing on how well your slo­gan or ele­va­tor speech attracts atten­tion, though, can backfire.

How you describe your­self, whether it be ver­bally or through a brochure or your web­site, is one of the key ele­ments in pro­mot­ing your brand. It needs to be effec­tive in prompt­ing ques­tions or con­ver­sa­tion about what your prac­tice has to offer. Ide­ally, it will cap­ture the inter­ests of prospec­tive clients in your niche. And it will do noth­ing for peo­ple out­side that tar­get mar­ket. If that value propo­si­tion is well-crafted it will actu­ally turn peo­ple away from your prac­tice if they are not in your niche.

I was reminded of this by Eric Schwartz, CEO of Cam­bridge Invest­ment Research, in a talk he gave a cou­ple months ago. We sus­pect it may have been said by leg­endary mar­ket­ing guru Al Ries. The only direct ref­er­ence I can find is by William Arruda, but if you have not read any­thing by Ries on brand­ing it is worth your time.

Many finan­cial advi­sors I work with are chal­lenged when nar­row­ing their mes­sage. The whole point, they believe, is to attract new clients. Why say some­thing that may turn away most of the peo­ple you talk to? But the desire to say some­thing that every­one finds attrac­tive hurts your brand because it takes the empha­sis off of what is spe­cial about what you have to offer a par­tic­u­lar group of people.

Brands that attract the right clients and gen­er­ate refer­rals build a rep­u­ta­tion. Fuzzy, gen­eral, unfo­cused brand­ing mes­sages are not mem­o­rable. An effec­tive brand will help you build a rep­u­ta­tion that will assist peo­ple in remem­ber­ing you when the right sit­u­a­tion comes along.

Let’s say you tar­get vet­eri­nar­i­ans. You have devel­oped an exper­tise in the finan­cial chal­lenge of run­ning an ani­mal hos­pi­tal. You under­stand how to value a vet­eri­nary prac­tice and are famil­iar with the terms and lim­i­ta­tions of suc­ces­sion agree­ments when those prac­tices get sold. Your brand – what peo­ple say about you – would empha­size that unique knowl­edge. So when you describe the value of what you do, you would talk about that exper­tise. If the per­son you were talk­ing to was not a vet­eri­nar­ian, they would prob­a­bly have no inter­est at all in dis­cussing it further.

And that’s okay. Because if a vet­eri­nar­ian 10 years from sell­ing his prac­tice talks to you and the advi­sor who talks about his “spe­cial rela­tion­ship with his clients” and another who talks about her “sophis­ti­cated invest­ment man­age­ment strat­egy”, who do you think will win the client?

Brand­ing is not about attract­ing the most clients, it is about attract­ing the right clients. Get com­fort­able with describ­ing your prac­tice in a way that most of the pop­u­la­tion will have no inter­est in. Then you can focus on build­ing a rep­u­ta­tion that your ideal prospects will have a lot of inter­est in.

The Client Dri­ven Practice

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Tags: Al Ries, Animal Hospital, Brochure, Driven Practice, Elevator Speech, Financial Advisors, Financial Challenge, Guru Al Ries, Investment Research, Niche, Promoting Your Brand, Prospective Clients, Referrals, Reputation, Slogan, Succession, Target Market, Value Proposition, Veterinarians, Veterinary Practice, William Arruda
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What To Do When You Get A Referral

Wednesday, December 5th, 2012

by Stephen Wer­sh­ing, The Client Drive Practice

I spend a lot of time coach­ing advi­sors on how to attract refer­rals. Let me take a minute and dis­cuss what to do when you receive one.

• Con­tact them promptly. It should be obvi­ous and go with­out say­ing, but you would be sur­prised that some advi­sors receive a name and num­ber from a client and put off con­tact­ing them. Your client prob­a­bly men­tioned you because their friend expressed a chal­lenge they were deal­ing with right now. Don’t waste time. Make that phone call a priority.

• Ask what they need. When you reach the refer­ral, after intro­duc­ing your­self and ref­er­enc­ing the client who rec­om­mended you, find out what’s on their mind. Give them an oppor­tu­nity to describe what prob­lem they have and what kind of solu­tion they look for. Put the spot­light on them.

• Lead with your value propo­si­tion. Once the refer­ral has described their chal­lenge, give them your ele­va­tor pitch. You should be in the habit of start­ing every con­ver­sa­tion about your prac­tice with it.

• Com­pare their need to your unique skill. If things go well, and the refer­ral was sent to you because of the spe­cial solu­tion or exper­tise you rep­re­sent, it will be clear to the refer­ral that what you do answers the prob­lem they just described.

• Set the appoint­ment. Don’t waste time on the phone doing fact gath­er­ing or pre­sent­ing. If you have suc­cess­fully con­nected their need to your spe­cial skill, the next step is to get together.

• Send your client a thank you note. Express your grat­i­tude for their vote of con­fi­dence. Your client takes the risk by send­ing a friend to you – honor it. Update them on the sta­tus of your con­ver­sa­tion with­out breach­ing con­fi­dences. Let your client know that you spoke to the per­son that they sent and you have sched­uled an appoint­ment, or didn’t. Send them a thank you regard­less of whether the refer­ral went any­where or not. My pref­er­ence is to hand write a card and send by mail. Peo­ple don’t do that very often any­more, so it is much more spe­cial than an e-mail. Do it the same day you speak with the referral.

• Next time you see the client who sent you the refer­ral, ask about the cir­cum­stances that led to it. It leads your client to relive the sit­u­a­tion, and makes it more likely they will make another refer­ral in the same sit­u­a­tion. Know­ing what the client said will give you valu­able infor­ma­tion about what the client val­ues and how to teach other clients to do the same. It gives you a chance to con­firm that they under­stand your value propo­si­tion and teaches you how they describe it. It enables you to dis­cover a new trig­ger phrases that prompted your client to refer.

Receiv­ing refer­rals is more than an oppor­tu­nity to bring in a new client. It is an oppor­tu­nity to reward a refer­ror with grat­i­tude. It is an oppor­tu­nity to learn more about when clients refer, which helps you attract more. It rein­forces your dif­fer­en­tia­tor, and dri­ves it fur­ther into the clients brain. And all of this helps lead to more referrals.

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Tags: Appointment, Contact, Elevator Pitch, Express, Gratitude, Habit, Lot, Mail, Opportunity, People, Phone Call, Preference, Priority, Referral, Referrals, Risk, Spotlight, Value Proposition, Vote Of Confidence, Waste Time
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Is Attracting Referrals Passive?

Wednesday, December 5th, 2012

by Stephen Wer­sh­ing, The Client Dri­ven Practice

Thomas Coyle, in an arti­cle in the Wall Street Jour­nal last week, sug­gested that a strat­egy for attract­ing refer­rals, rather than ask­ing for them, is pas­sive. He went so far as to describe my approach as a “wall­flower strat­egy.” I have heard sim­i­lar com­ments before. It makes sense. If you not actively engaged in ask­ing for refer­rals, it must be pas­sive, right?

I don’t think so.

It goes back to hunt­ing ver­sus farm­ing. Most advi­sors “hunt” for refer­rals, but I coach advi­sors to farm them instead. The farmer does not stalk prey, actively pur­su­ing it until he cap­tures it. But farm­ers work hard, and pur­sue a spe­cific, active strat­egy. Till­ing the soil, care­fully plant­ing the right seeds at the right time, tend­ing the field until the har­vest yields the return on his efforts.

A well designed and imple­mented refer­ral mar­ket­ing strat­egy is a big project that requires hard work. It involves going to the cen­ter of your strate­gic plan, iden­ti­fy­ing your ideal clients and design­ing a prac­tice around them. It takes care­ful craft­ing of a value propo­si­tion tai­lored to that niche. It requires dili­gence and tenac­ity in con­sis­tently com­mu­ni­cat­ing that value and teach­ing your staff, clients and cen­ters of influ­ence to use that mes­sage in describ­ing you. It involves ded­i­cat­ing time to doing the research to uncover your clients’ con­nec­tions and affin­ity groups and net­work to be able to ask for the right intro­duc­tions. It takes courage to refer to other pro­fes­sion­als the poten­tially lucra­tive prospects who are not part of your niche. It calls for cre­ativ­ity in dis­cov­er­ing how to serve your tar­get mar­ket in ways they did not real­ize they needed.

No, attract­ing refer­rals is a very active strat­egy. In fact, it takes con­sid­er­ably more effort than tak­ing the easy and unimag­i­na­tive (if a bit uncom­fort­able) path of sim­ply pes­ter­ing your clients for names and numbers.

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Tags: Affinity Groups, Asking For Referrals, Centers Of Influence, Diligence, Driven Practice, Farming, Introductions, Marketing Strategy, Niche, Prey, Prospects, Referral Marketing, Right Seeds, Right Time, Staff Clients, Strategic Plan, Target Market, Tenacity, Value Proposition, Wall Street Journal
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Breaking Down the Business Builder Model

Wednesday, November 28th, 2012

by Norm Trainor, The Covenant Group

As our team pre­pares for our upcom­ing Pin­na­cle Con­fer­ence, I look for­ward to shar­ing with our audi­ence how entre­pre­neurscan cre­ate a busi­ness model that enables growth. In my expe­ri­ence, a num­ber of busi­ness own­ers go into work on a daily basis with­out con­sid­er­ing how what they do that day will impact their orga­ni­za­tions one, three, or 10 years in the future.

This can lead busi­ness own­ers to the orga­ni­za­tional equiv­a­lent of spin­ning tires: They are expend­ing an exor­bi­tant amount of energy with­out mak­ing any progress, grad­u­ally entrench­ing them­selves in a rut.

The Busi­ness Builder Model stip­u­lates that there are five com­po­nents in expand­ing oper­a­tions: mind­set, tar­get, engage, com­mit and expand. In defin­ing your mind­set as the entre­pre­neur, you will be able to advance your com­pany and help it achieve its full poten­tial. There are five ques­tions that you must ask as you work to imple­ment your stated mind­set. You must define your busi­ness model and think about what new prod­ucts and ser­vices you will intro­duce. Ask how you iden­tify and imple­ment your sys­tems and processes, and con­sider what you do to guar­an­tee qual­ity and con­tin­u­ous improve­ment. What does ser­vice excel­lence mean to you?

To move on to the next stage, tar­get­ing and cre­at­ing a mar­ket­ing strat­egy, you will have to fig­ure out who your ideal or right client is, what the right value propo­si­tion is and what the cor­rect price is (the equi­lib­rium of value for you and for your client).

As you move on to engag­ing prospects, you will have to design and spark a con­ver­sa­tion that grabs poten­tial clients’ inter­est and estab­lishes a mean­ing­ful dia­logue. In secur­ing the progress you have made and using that as a foun­da­tion for future suc­cess, you must com­mit to your busi­ness rela­tion­ships, thus build­ing client cap­i­tal and prov­ing your value to clients. Tran­si­tion­ing into the expan­sion phase requires devel­op­ing a client expe­ri­ence that demon­strates your added value and excel­lent ser­vice, as this will help you strengthen your rela­tion­ship equity.

Have you cre­ated a strat­egy for how you will expo­nen­tially grow your busi­ness? Have you thought past the client acqui­si­tion step to con­sider tac­tics for retain­ing those clients and cap­i­tal­iz­ing on the ini­tial suc­cess to lay out a sus­tain­able growth model?

As founder, pres­i­dent and CEO of The Covenant Group, Norm Trainor is often seen as the face of the com­pany and its lead­ing finan­cial advi­sor train­ing pro­grams. He has penned sev­eral best-selling books, arti­cles and other works with entre­pre­neurs and finan­cial advi­sors to show them how they can become more valu­able to their clients, boost pro­duc­tiv­ity and, ulti­mately, achieve the suc­cess they desire.

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Tags: Added Value, Business Builder, Business Model, Business Owners, Business Relationships, Client Experience, Continuous Improvement, Covenant Group, Daily Basis, Equilibrium, Expansion Phase, Grabs, Marketing Strategy, Meaningful Dialogue, Mindset, Norm Trainor, Pinnacle, Service Excellence, Target, Value Proposition
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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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The Most Important Attribute For Successful Entrepreneurs

Wednesday, May 16th, 2012

Ear­lier this year, I spent a day with a train­ing class at a bank-owned invest­ment firm. In the Q & A period that con­cluded the day, the first ques­tion was decep­tively sim­ple: “What one thing do I have to do to make Chairman’s Club and to really excel in this business?”

The rea­son it was decep­tively sim­ple is because there are so many pos­si­ble answers. These vary from the value propo­si­tion you choose to deliver, the prospec­tive clients you focus on, how effec­tively you get in front of those prospects and the team you assem­ble, not to men­tion your dis­ci­pline and work ethic.

For­tu­nately a talk I attended last fall allowed me to pro­vide a clearcut answer.

Bounc­ing back from setbacks

In the past decade, Israel has emerged as a hotbed of high tech star­tups. In Novem­ber, I attended a talk by the aca­d­e­mic direc­tor of Tech­nion Israel Insti­tute of Tech­nol­ogy, a uni­ver­sity that has played a crit­i­cal role in the growth of that country’s tech sec­tor. He dis­cussed a research study in which suc­cess­ful entre­pre­neurs were asked to iden­tify the sin­gle qual­ity most impor­tant to their suc­cess, from a list of 20 candidates.

The over­whelm­ing first choice was resilience, the abil­ity to bounce back from adver­sity and with­stand set­backs. As an entre­pre­neur, you can have every­thing going for you, but if you’re unable to deal with the inevitable dis­ap­point­ment and bumps in the road that every start-up encoun­ters, your odds of real suc­cess plummet.

And that abil­ity to cope with unex­pected rever­sals is just as impor­tant when it comes to finan­cial advi­sors who aspire to build excep­tional busi­nesses. Even if you’ve done every­thing else right, if you don’t have the con­vic­tion and dis­ci­pline to tough your way through dis­cour­age­ment and set­backs, you won’t hit your full poten­tial.

Strate­gies to build resilience

I saw the impor­tance of resilience first hand at a round­table for the top ten pro­duc­ers at a major firm that I facil­i­tated a cou­ple of years back. One topic was how they’d coped with set­backs on their path to suc­cess. In every case, these multi-million dol­lar pro­duc­ers iden­ti­fied points early in their careers where they’d run into major dis­ap­point­ments, whether these related to exist­ing or prospec­tive clients, invest­ment solu­tions that blew up or unex­pected prob­lems at the firms they were with. And in every case, these advi­sors described how they’d had to dig deep to find the energy and will to over­come these disappointments.

At one time, there was a view that the abil­ity to bounce back from set­backs is innate – you either have it or you don’t. Research over the past twenty years has shown that while some peo­ple do have inher­ently greater lev­els of resilience, there are a num­ber of strate­gies proven to increase the capac­ity to deal with disappointment.

1. 1. Antic­i­pate bumps in the road

The first key to sur­mount­ing prob­lems is hav­ing a going in mind­set of “real­is­tic opti­mism”, which acknowl­edges that things will sel­dom go as smoothly as we’d like them to.

Some years ago, I attended a talk by sports psy­chol­o­gist Peter Jensen, in which he dis­cussed the per­ils of opti­mism. Opti­mism is uni­ver­sally seen as a pos­i­tive trait, lauded by peo­ple from Win­ston Churchill ( “A pes­simist sees the dif­fi­culty in every oppor­tu­nity; an opti­mist sees the oppor­tu­nity in every dif­fi­culty.”) to Helen Keller (“Opti­mism is the faith that leads to achieve­ment. Noth­ing can be done with­out hope and confidence.”)

Jensen’s take was a bit dif­fer­ent. Yes, we have to be opti­mistic and hope­ful to embark on ambi­tious under­tak­ings, but we also have to intro­duce real­ity into that opti­mistic mind­set. Jensen pointed to US pris­on­ers of war in the Viet­nam War, locked up in pris­ons in North Viet­nam. The opti­mists among those sol­diers expected that they’d be res­cued imme­di­ately – each day they woke up think­ing that this would be the day. As a result, within a few months they often found them­selves strug­gling with depres­sion and dis­cour­age­ment. The pes­simists took the view that the res­cue could quite likely be years com­ing and looked for ways to cope men­tally with a long period of impris­on­ment – and as a result were able to deal with excep­tion­ally dif­fi­cult circumstances.

So the first key to deal­ing with set­backs is rec­og­niz­ing that we will almost cer­tainly run into adver­sity. We don’t know how, we don’t know when – but those set­backs will almost cer­tainly hap­pen. By adopt­ing that mind­set of real­is­tic opti­mism, we are much bet­ter able to cope with unex­pected neg­a­tive events when they actu­ally occur.

2. Put set­backs in perspective

The sec­ond strat­egy is to develop the facil­ity to put neg­a­tive events into con­text. The aca­d­e­mic direc­tor of Tech­nion dis­cussed some of the hur­dles that Israeli entre­pre­neurs had run into:

• Delays in get­ting financ­ing — One entre­pre­neur invested 12 months nego­ti­at­ing financ­ing, only to have it fall through at the last moment.
• Chal­lenges with com­peti­tors — Another encoun­tered a well-financed com­peti­tor com­ing to mar­ket with a sim­i­lar solu­tion weeks before his own was planned to launch.
• Acri­mo­nious splits with part­ners, some­times with threats of law­suits on own­er­ship of key technology.
• Key ini­tial sales falling through – often these had been cul­ti­vated over a long period of time and seemed in the bag.

These set­backs had the poten­tial to destroy the con­vic­tion and con­fi­dence of these entre­pre­neurs. One of the strate­gies that avoided this was “fram­ing” these prob­lems, putting them in per­spec­tive. If the first step is to antic­i­pate set­backs, the next is to step back when they occur and take a deep breath.

Then you need to ana­lyze the real dam­age that’s been done and look at your options in light of that, remind­ing your­self that most suc­cess­ful advi­sors have encoun­tered prob­lems that are equal or worse than yours. As an extreme exam­ple of refram­ing, Vic­tor Frankl was an Aus­trian psy­chi­a­trist impris­oned in a con­cen­tra­tion camp dur­ing the Holo­caust. In his book “ Man’s Search for Mean­ing,” he observed fel­low inmates who lost hope often died shortly after­wards. Frankl focused his energy on main­tain­ing hope and planned for the lec­tures he would give after his release. In his own mind, he turned what many would have seen as hope­less sit­u­a­tion into a source of rich experiences.

1. 3. Take action

One of the big­ger chal­lenges after a sig­nif­i­cant set­back is the imme­di­ate shock and sense of being over­whelmed and the paral­y­sis that often fol­lows — look no fur­ther than how Amer­i­can busi­ness shut down in the after­math of the 9/11 bombings.

It’s easy to be swept away by the emo­tions that fol­low a major dis­ap­point­ment – the issue is how to har­ness those emo­tions. The Amer­i­can Psy­cho­log­i­cal Asso­ci­a­tion has pub­lished an online brochure titled The Road to Resilience; one key trait they iden­ti­fied to help peo­ple bounce back from unex­pected loss is tak­ing small steps, with a view to reestab­lish­ing momen­tum and movement.

In talk­ing to advi­sors who’ve bounced back from the unex­pected loss of a big client, they typ­i­cally expe­ri­enced the five stages of grief iden­ti­fied by Swiss psy­chi­a­trist Elis­a­beth Kubler-Ross (denial, anger, bar­gain­ing, depres­sion, acceptance).

The issue is how quickly you move through the first four to get to accep­tance, so that you can har­ness the energy that might be con­sumed by the first four stages and move on. One way to do this is to focus on steps that will turn iner­tia into action — rather than try­ing to solve the entire prob­lem, focus on a spe­cific action that can help move you in the right direction.

4. Lean on your network

When I talk to suc­cess­ful advi­sors, many point to a strong net­work as instru­men­tal to their busi­ness growth – not just friends and fam­ily, but also branch man­agers, peers and vet­eran advi­sors in their office.

A strong sup­port net­work with which to bounce off ideas and dis­cuss issues can be a big asset at every stage, but it’s in chal­leng­ing times that it makes the biggest dif­fer­ence. Being able to tap into sup­port from peo­ple you trust and like can be a crit­i­cal fac­tor to recov­er­ing from the inevitable tough peri­ods we all go encounter.

Of note, a good net­work takes time to build – for it to be there to help see you through peri­ods of busi­ness chal­lenges, you have to invest the effort to develop your sup­port net­work before you actu­ally need it.

5. Tak­ing care of yourself

The last key ingre­di­ent to resilience that The Road to Resilience talked about is “tak­ing care of yourself.”

Sim­i­lar to a sup­port net­work, exer­cise, sleep and diet are impor­tant ele­ments of peak per­for­mance in every envi­ron­ment – but are espe­cially crit­i­cal when your stress lev­els are elevated.

If like that rookie advi­sor you have ambi­tious goals for busi­ness suc­cess, by all means put in place plans to drive growth in your busi­ness. Remem­ber, though, that you will almost cer­tainly hit rever­sals and set­backs – and ensure that you have the resilience to work through those peri­ods.
In the mean­time, here’s the link to The Road to Resilience. http://​www​.apa​.org/​h​e​l​p​c​e​n​t​e​r​/​r​o​a​d​-​r​e​s​i​l​i​e​n​c​e​.​a​spx

    Lat­est Advi­so­r­An­a­lyst Prac­tice Growth Sto­ries

Tags: Academic Director, Adversity, Critical Role, Discouragement, Financial Advisors, First Choice, Hotbed, Investment Firm, Israel Institute, Plummet, Prospective Clients, Resilience, Reversals, Roundtable, Setbacks, Successful Entrepreneurs, Tech Startups, Technion Israel Institute Of Technology, Value Proposition, Work Ethic
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The Most Important Attribute For Successful Entrepreneurs

Wednesday, May 9th, 2012

Ear­lier this year, I spent a day with a train­ing class at a bank-owned invest­ment firm. In the Q & A period that con­cluded the day, the first ques­tion was decep­tively sim­ple: “What one thing do I have to do to make Chairman’s Club and to really excel in this business?”

The rea­son it was decep­tively sim­ple is because there are so many pos­si­ble answers. These vary from the value propo­si­tion you choose to deliver, the prospec­tive clients you focus on, how effec­tively you get in front of those prospects and the team you assem­ble, not to men­tion your dis­ci­pline and work ethic.

For­tu­nately a talk I attended last fall allowed me to pro­vide a clearcut answer.

Bounc­ing back from setbacks

In the past decade, Israel has emerged as a hotbed of high tech star­tups. In Novem­ber, I attended a talk by the aca­d­e­mic direc­tor of Tech­nion Israel Insti­tute of Tech­nol­ogy, a uni­ver­sity that has played a crit­i­cal role in the growth of that country’s tech sec­tor. He dis­cussed a research study in which suc­cess­ful entre­pre­neurs were asked to iden­tify the sin­gle qual­ity most impor­tant to their suc­cess, from a list of 20 candidates.

The over­whelm­ing first choice was resilience, the abil­ity to bounce back from adver­sity and with­stand set­backs. As an entre­pre­neur, you can have every­thing going for you, but if you’re unable to deal with the inevitable dis­ap­point­ment and bumps in the road that every start-up encoun­ters, your odds of real suc­cess plummet.

And that abil­ity to cope with unex­pected rever­sals is just as impor­tant when it comes to finan­cial advi­sors who aspire to build excep­tional busi­nesses. Even if you’ve done every­thing else right, if you don’t have the con­vic­tion and dis­ci­pline to tough your way through dis­cour­age­ment and set­backs, you won’t hit your full poten­tial.

Strate­gies to build resilience

I saw the impor­tance of resilience first hand at a round­table for the top ten pro­duc­ers at a major firm that I facil­i­tated a cou­ple of years back. One topic was how they’d coped with set­backs on their path to suc­cess. In every case, these multi-million dol­lar pro­duc­ers iden­ti­fied points early in their careers where they’d run into major dis­ap­point­ments, whether these related to exist­ing or prospec­tive clients, invest­ment solu­tions that blew up or unex­pected prob­lems at the firms they were with. And in every case, these advi­sors described how they’d had to dig deep to find the energy and will to over­come these disappointments.

At one time, there was a view that the abil­ity to bounce back from set­backs is innate – you either have it or you don’t. Research over the past twenty years has shown that while some peo­ple do have inher­ently greater lev­els of resilience, there are a num­ber of strate­gies proven to increase the capac­ity to deal with disappointment.

1. Antic­i­pate bumps in the road

The first key to sur­mount­ing prob­lems is hav­ing a going in mind­set of “real­is­tic opti­mism”, which acknowl­edges that things will sel­dom go as smoothly as we’d like them to.

Some years ago, I attended a talk by sports psy­chol­o­gist Peter Jensen, in which he dis­cussed the per­ils of opti­mism. Opti­mism is uni­ver­sally seen as a pos­i­tive trait, lauded by peo­ple from Win­ston Churchill ( “A pes­simist sees the dif­fi­culty in every oppor­tu­nity; an opti­mist sees the oppor­tu­nity in every dif­fi­culty.”) to Helen Keller (“Opti­mism is the faith that leads to achieve­ment. Noth­ing can be done with­out hope and confidence.”)

Jensen’s take was a bit dif­fer­ent. Yes, we have to be opti­mistic and hope­ful to embark on ambi­tious under­tak­ings, but we also have to intro­duce real­ity into that opti­mistic mind­set. Jensen pointed to US pris­on­ers of war in the Viet­nam War, locked up in pris­ons in North Viet­nam. The opti­mists among those sol­diers expected that they’d be res­cued imme­di­ately – each day they woke up think­ing that this would be the day. As a result, within a few months they often found them­selves strug­gling with depres­sion and dis­cour­age­ment. The pes­simists took the view that the res­cue could quite likely be years com­ing and looked for ways to cope men­tally with a long period of impris­on­ment – and as a result were able to deal with excep­tion­ally dif­fi­cult circumstances.

So the first key to deal­ing with set­backs is rec­og­niz­ing that we will almost cer­tainly run into adver­sity. We don’t know how, we don’t know when – but those set­backs will almost cer­tainly hap­pen. By adopt­ing that mind­set of real­is­tic opti­mism, we are much bet­ter able to cope with unex­pected neg­a­tive events when they actu­ally occur.

2. Put set­backs in perspective

The sec­ond strat­egy is to develop the facil­ity to put neg­a­tive events into con­text. The aca­d­e­mic direc­tor of Tech­nion dis­cussed some of the hur­dles that Israeli entre­pre­neurs had run into:

• Delays in get­ting financ­ing — One entre­pre­neur invested 12 months nego­ti­at­ing financ­ing, only to have it fall through at the last moment.
• Chal­lenges with com­peti­tors — Another encoun­tered a well-financed com­peti­tor com­ing to mar­ket with a sim­i­lar solu­tion weeks before his own was planned to launch.
• Acri­mo­nious splits with part­ners, some­times with threats of law­suits on own­er­ship of key technology.
• Key ini­tial sales falling through – often these had been cul­ti­vated over a long period of time and seemed in the bag.

These set­backs had the poten­tial to destroy the con­vic­tion and con­fi­dence of these entre­pre­neurs. One of the strate­gies that avoided this was “fram­ing” these prob­lems, putting them in per­spec­tive. If the first step is to antic­i­pate set­backs, the next is to step back when they occur and take a deep breath.

Then you need to ana­lyze the real dam­age that’s been done and look at your options in light of that, remind­ing your­self that most suc­cess­ful advi­sors have encoun­tered prob­lems that are equal or worse than yours. As an extreme exam­ple of refram­ing, Vic­tor Frankl was an Aus­trian psy­chi­a­trist impris­oned in a con­cen­tra­tion camp dur­ing the Holo­caust. In his book “ Man’s Search for Mean­ing,” he observed fel­low inmates who lost hope often died shortly after­wards. Frankl focused his energy on main­tain­ing hope and planned for the lec­tures he would give after his release. In his own mind, he turned what many would have seen as hope­less sit­u­a­tion into a source of rich experiences.

3. Take action

One of the big­ger chal­lenges after a sig­nif­i­cant set­back is the imme­di­ate shock and sense of being over­whelmed and the paral­y­sis that often fol­lows — look no fur­ther than how Amer­i­can busi­ness shut down in the after­math of the 9/11 bombings.

It’s easy to be swept away by the emo­tions that fol­low a major dis­ap­point­ment – the issue is how to har­ness those emo­tions. The Amer­i­can Psy­cho­log­i­cal Asso­ci­a­tion has pub­lished an online brochure titled The Road to Resilience; one key trait they iden­ti­fied to help peo­ple bounce back from unex­pected loss is tak­ing small steps, with a view to reestab­lish­ing momen­tum and movement.

In talk­ing to advi­sors who’ve bounced back from the unex­pected loss of a big client, they typ­i­cally expe­ri­enced the five stages of grief iden­ti­fied by Swiss psy­chi­a­trist Elis­a­beth Kubler-Ross (denial, anger, bar­gain­ing, depres­sion, acceptance).

The issue is how quickly you move through the first four to get to accep­tance, so that you can har­ness the energy that might be con­sumed by the first four stages and move on. One way to do this is to focus on steps that will turn iner­tia into action — rather than try­ing to solve the entire prob­lem, focus on a spe­cific action that can help move you in the right direction.

4. Lean on your network

When I talk to suc­cess­ful advi­sors, many point to a strong net­work as instru­men­tal to their busi­ness growth – not just friends and fam­ily, but also branch man­agers, peers and vet­eran advi­sors in their office.

A strong sup­port net­work with which to bounce off ideas and dis­cuss issues can be a big asset at every stage, but it’s in chal­leng­ing times that it makes the biggest dif­fer­ence. Being able to tap into sup­port from peo­ple you trust and like can be a crit­i­cal fac­tor to recov­er­ing from the inevitable tough peri­ods we all go encounter.

Of note, a good net­work takes time to build – for it to be there to help see you through peri­ods of busi­ness chal­lenges, you have to invest the effort to develop your sup­port net­work before you actu­ally need it.

5. Tak­ing care of yourself

The last key ingre­di­ent to resilience that The Road to Resilience talked about is “tak­ing care of yourself.”

Sim­i­lar to a sup­port net­work, exer­cise, sleep and diet are impor­tant ele­ments of peak per­for­mance in every envi­ron­ment – but are espe­cially crit­i­cal when your stress lev­els are elevated.

If like that rookie advi­sor you have ambi­tious goals for busi­ness suc­cess, by all means put in place plans to drive growth in your busi­ness. Remem­ber, though, that you will almost cer­tainly hit rever­sals and set­backs – and ensure that you have the resilience to work through those peri­ods.
In the mean­time, here’s the link to The Road to Resilience. http://​www​.apa​.org/​h​e​l​p​c​e​n​t​e​r​/​r​o​a​d​-​r​e​s​i​l​i​e​n​c​e​.​a​spx

    Lat­est Advi­so­r­An­a­lyst Prac­tice Growth Sto­ries

Tags: Academic Director, Adversity, Critical Role, Discouragement, Financial Advisors, First Choice, Hotbed, Investment Firm, Israel Institute, Plummet, Prospective Clients, Resilience, Reversals, Roundtable, Setbacks, Successful Entrepreneurs, Tech Startups, Technion Israel Institute Of Technology, Value Proposition, Work Ethic
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Reduce Your Vulnerability to a Market Downturn

Wednesday, April 4th, 2012

by Stephen Wer­sh­ing, The Client Dri­ven Practice

Is the next mar­ket down­turn your biggest vul­ner­a­bil­ity? It shouldn’t be. Many advi­sors lose clients when the mar­ket declines.  The most suc­cess­ful add clients.  Is the next bear a threat to your prac­tice? If it is, how will you elim­i­nate it?

Jack Stack is rec­og­nized as an out­stand­ing busi­ness strate­gist.  I have great respect for his work, and, not to take any­thing away from his accom­plish­ments or The Great Game of Busi­ness, his secret is not as sim­ple as hav­ing a great vision.  It may be that he does not even excel at the “vision thing.” He man­aged to steer his com­pany through a very chal­leng­ing period, and sub­se­quently spin off 63 other suc­cess­ful com­pa­nies, by focus­ing on its biggest vul­ner­a­bil­ity. As the firm grad­u­ally reduced the threat, he turned his atten­tion to the next biggest.  Sys­tem­at­i­cally mit­i­gat­ing or elim­i­nat­ing the biggest threat to the busi­ness made him one of the most suc­cess­ful lead­ers in business.

Suc­cess­ful advi­sors pro­vide clients valu­able guid­ance and ser­vices beyond invest­ment returns. If the advice you offer does not go much beyond port­fo­lio per­for­mance, it needs to now. You can­not con­trol the direc­tion of the mar­ket, and it would be fool­ish to leave the future of your prac­tice to the fickle direc­tion of stocks. Besides, if your pri­mary value is invest­ment returns, how will you dis­tin­guish your­self from the thou­sands of advi­sors who do exactly the same thing?

When we ask clients “What is the most valu­able thing your advi­sor brings to the rela­tion­ship?” we prac­ti­cally never hear “earns a good return on invest­ment.” Like good cus­tomer ser­vice and trust, it is assumed you will man­age their port­fo­lio com­pe­tently. What they value, remem­ber you for, and ulti­mately refer you for, is some­thing more. Find out what that is, and build your strate­gic plan around it.

Refine your value propo­si­tion and build on what keeps your best clients with you. Learn new skills that enhance what dif­fer­en­ti­ates you from other advi­sors and strength­ens your real value to clients. And do it before another mar­ket down­turn jeop­ar­dizes your relationships!

Copy­right © Stephen Wer­sh­ing, The Client Dri­ven Practice

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Tags: Business Strategist, Direction, Driven Practice, Good Customer Service, Great Game, Great Vision, Guidance, Investment Returns, Jack Stack, Market Downturn, Portfolio Performance, Relationship, Return On Investment, Stocks, Strategic Plan, Successful Companies, Value Proposition, Vision Thing, Vulnerability
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