Guidelines for an effective mid-year letter
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June 22nd, 2009 by Dan Richards, ClientInsights.ca
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Last week, U.S. discount broker Charles Schwab released a research report indicating that one in four American investors is considering changing firms or advisors, consistent with recent data on Canadian investors open to making a move.
An interesting insight emerged when investors were asked why they might switch. The top two factors, each mentioned 32% of the time, were desire for a better fee structure and better advice. Just behind in 29% of cases where investors are contemplating a move was the desire for more proactive contact.
Even with the 40% market recovery since March, many investors are still very anxious and looking for guidance and direction from their advisor. Markets over the past year created a huge spike in the demand for communication – whatever level of contact your clients were looking for a year ago, it’s almost certainly higher today.
And clients aren’t just looking for frequency of contact, substance and quality of communication are just as important.
One way to respond to this demand is by sending clients a mid year letter with your thoughts on where we are today and an outlook for the period ahead. Posted on this website today is a sample template of what that letter might look like, road tested with investors.
There are five keys to making a letter such as this one work for you:
1. It needs to be substantive.
Today homilies, platitudes and generic commentary don’t cut it – clients are seeking concrete guidance and substantive advice. Anything viewed as a puff piece will hurt more than help.
2. It has to be candid.
More than ever, investors are looking for candour and a balanced perspective – to maintain credibility, it’s critical that you be forthright in talking about the negatives as well as the positives in the period ahead.
3. It should be backed up by facts.
Given the spike in investor scepticism, we’re operating in a “Prove it” world. It’s not good enough to make a claim – you need to back it up with facts. That’s why the model letter’s comments are backed up by links to articles from the Wall Street Journal, Globe and Mail and Fortune Magazine.
4. It needs to be easy to read.
Being easy to read means using terms that your clients will understand and keeping the length manageable – the length of the template letter is at the limit of what most investors will read, your letter can certainly be shorter but it shouldn’t be longer.
5. And it has to be yours.
Advisors are all different in their perspective and you need to make any outlook reflect your own point of view. The template letter provides a starting point, but that’s all it is – to be effective you need to spend the time to incorporate your own personality and viewpoint and truly make the letter yours.
As you think about how to stay top of mind with clients in the next while, consider sending a mid year letter such as this one. The investment of time required could pay big dividends in client peace of mind and be the difference between keeping clients and losing them.
About ClientInsights.ca A breakthrough in client communication Not long ago, clients read what you sent them. Today that's changed. In the You Tube world we live in, many investors would prefer to hear from a portfolio manager directly. And instead of reading an article on tax saving or estate planning strategies, more and more Canadians would rather watch an expert discuss the topic. Clientinsights.ca was developed in response to these changes - to deliver information in the form that investors want to receive it. It provides over 150 short video interviews, each about 4 to 6 minutes - you can email them or watch a video along with clients to start a meeting. No matter how you use it, Clientinsights.ca is designed to help you take client communication to a higher level. Dan Richards Founder and CEO, Clientinsights.ca Read more from the author/contributor here.
Tags: American Investors, Balanced Perspective, Canadian Investors, Candour, Charles Schwab, Communication, Concrete Guidance, Credibility, Desire, Discount Broker, Fee Structure, Five Keys, Frequency Contact, Insight, Investor, Platitudes, Puff Piece, Scepticism, Spike, Substantive AdvicePosted in Dan Richards | No Comments »
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