The Most Important Word in Business

Wednesday, August 31st, 2011

When I give a pre­sen­ta­tion, I often start out by ask­ing the audi­ence the fol­low­ing ques­tion: “If you had to choose one word that is crit­i­cal to the suc­cess of a busi­ness, what would that word be?” Typ­i­cally, peo­ple will respond with words such as “moti­va­tion”, “plan­ning” or “inno­va­tion”. Obvi­ously, all of these words are impor­tant ele­ments in the suc­cess of a busi­ness. How­ever, if I had to choose just one word, it would be momen­tum. We learned in high school physics that momen­tum = mass x veloc­ity. For our pur­poses, in busi­ness, mass is com­prised of the peo­ple work­ing in the busi­ness, the cap­i­tal invested in grow­ing the busi­ness and the uti­liza­tion of tech­nol­ogy to fos­ter growth. Veloc­ity is the rate at which the busi­ness grows and the direc­tion in which it is moving.

Momen­tum = Mass x Velocity

The value of a pub­licly traded stock goes up or down based upon the per­cep­tion of the momen­tum in the busi­ness. If a com­pany reports that its rev­enue will not meet pro­jec­tions in the next quar­ter, the mar­ket usu­ally reacts neg­a­tively and ham­mers the share price. When you do not know where your next sale will come from, or what your rev­enue will be over the next year, your busi­ness is likely los­ing momen­tum. Your biggest chal­lenge in grow­ing your busi­ness is to con­trol the growth tra­jec­tory of your busi­ness. In other words, your great­est chal­lenge is to grow your busi­ness in a pre­dictable manner.

The prob­lem is that this is eas­ier said than done. Only a very small per­cent­age of entre­pre­neurs learn how to make their rev­enue and prof­itabil­ity pre­dictable. Entre­pre­neurs who mas­ter the growth in rev­enue and prof­itabil­ity of their busi­ness become the best in their cho­sen field.

Let me give you an exam­ple. Terry is a finan­cial advi­sor whom I started work­ing with in May of 2002. At that time, Terry was 46 and had been a finan­cial advi­sor for twenty years. His prac­tice had grown to a high six fig­ure busi­ness. How­ever, for the pre­vi­ous five years, his rev­enue remained flat. The busi­ness was not grow­ing. To regain momen­tum, the start­ing point was to revisit his direc­tion. The future dri­ves the present, not the past. The clearer you are about your future direc­tion, the more likely you are to achieve it.

Terry did not have a clear vision or direc­tion for his prac­tice. As a result, he fell into the dif­fu­sion trap. He invested his time, money, energy and cre­ativ­ity into a num­ber of areas. His brother-in-law wanted to get involved in a pizza fran­chise, so Terry became his finan­cial part­ner. Some friends began to invest in real estate, so Terry got involved. His lack of focus and broad range of inter­ests took its toll on his prac­tice. His rev­enue was flat and his expenses were increas­ing. Terry’s income and the prof­itabil­ity of the prac­tice began to suf­fer. At the same time, his var­i­ous invest­ments were not doing well. They also suf­fered from a lack of focus.

The solu­tion to Terry’s prob­lem was quite sim­ple. He needed to rede­fine his vision for his prac­tice. Rather than treat­ing his prac­tice as a cash cow to fund his other activ­i­ties, Terry decided to invest in the area he knew best, his prac­tice. He rede­ployed cap­i­tal back into the busi­ness. This allowed him to hire the right peo­ple to sup­port him and to invest in mar­ket­ing ini­tia­tives that increased sales to exist­ing and new clients. Over the last five years, his prac­tice has grown at a com­pound rate of over 30% per year. He has become the #1 pro­ducer with his major sup­plier. He is grow­ing his prac­tice in a pre­dictable man­ner and has gained mas­tery over the growth tra­jec­tory of his busi­ness. Even more impor­tant, he is hav­ing fun again and is pas­sion­ate about build­ing his business.

Norm Trainor is the founder of The Covenant Group, a com­pany spe­cial­iz­ing in prac­tice devel­op­ment for advi­sors. For fur­ther infor­ma­tion, visit his Web site at www​.covenant​group​.com.

Fol­low The Covenant Group at:

    Lat­est Advi­so­r­An­a­lyst Prac­tice Growth Sto­ries

Tags: Audience, Choose One, Elements, Greatest Challenge, Growth Trajectory, Growth Velocity, High School Physics, Innovation, Mass X, Momentum, Motivation, Next Sale, Norm Trainor, People Working, Percentage Of Entrepreneurs, Perception, Physics Momentum, Predictable Manner, Profitability, Share Price, Technology, Time Terry, Twenty Years
Posted in My Practice, Norm Trainor | Comments Off

On Trust and Touch (Dan Ariely)

Wednesday, August 31st, 2011

by Dan Ariely, Pro­fes­sor of Behav­ioural Eco­nom­ics at Duke Uni­ver­sity, and author of the best­selling book, ‘Pre­dictably Irra­tional.’

Recent research (1) shows how phys­i­cal con­tact can pro­mote trust, even among com­plete strangers. Paul Zak, a neu­roe­con­o­mist at Clare­mont Grad­u­ate Uni­ver­sity (together with Vera Morhenn, Jang Woo Park, and Elis­a­beth Piper), stud­ies the links between lev­els of oxy­tocin (the “bond­ing” hor­mone) in rela­tion to eco­nomic decision-making. In their study, they looked at par­tic­i­pants’ responses in the Trust Game when they were (or were not) given mas­sages. First, let’s take a look at how the clas­sic Trust Game works between two play­ers (who never meet):

• Player 1 gets some money ($10 in this case) and the option to send none, some, or all of it to Player 2, know­ing that the money that is sent will be tripled on its way into Player 2’s hands. So, if Player 1 decides to send $4 to Player 2 (and keep $6), Player 2 will receive $12 ($4 x 3).
• Player 2 then has the option of send­ing none, some, or all of the money back.

Paul and his col­lab­o­ra­tors found that a mere 15-minute mas­sage increased the amount of oxy­tocin in the blood­stream, lead­ing par­tic­i­pants to be more trust­ing of their anony­mous part­ners in the game. Those who were mas­saged (women, espe­cially) were primed to be more empa­thetic and trust­ing, ulti­mately sac­ri­fic­ing more to achieve mutual ben­e­fit. When mas­saged, Player 1 sent more money and when mas­saged Player 2 gave more money back.

But it’s prob­a­bly not just oxy­tocin guid­ing these trust­ing gamers. Another study from Cedars-Sinai Med­ical Cen­ter (2) showed that those who received a 45-minute Swedish mas­sage (as com­pared to a light-touch con­trol group) had decreased lev­els of the hor­mones cor­ti­sol (released dur­ing stress) and vaso­pressin (linked to aggres­sion and cor­ti­sol release). Basi­cally, the Swedish mas­sage relaxed par­tic­i­pants, decreas­ing their phys­i­o­log­i­cal stress response.

In addi­tion, An exper­i­ment con­ducted by Jonathan Levav and Jen­nifer Argo (3) showed that par­tic­i­pants who were phys­i­cally touched by a female exper­i­menter (on the shoul­der or with a hand­shake) made riskier finan­cial deci­sions like gam­bling or invest­ing money. Why? The con­tact made them feel secure and safe from harm. Con­se­quently, like their mas­saged coun­ter­parts, they were more will­ing to take risks for poten­tially greater gains.

Being phys­i­cally touched, whether with a knead­ing mas­sage or a com­fort­ing pat on the shoul­der, seems to encour­ages coop­er­a­tive behav­ior. While these deci­sions may ben­e­fit oth­ers more than our­selves (at least in terms of imme­di­ate mon­e­tary gain), they are not nec­es­sar­ily ill-advised. In fact, the decision-makers who gave money to an anony­mous part­ner ulti­mately felt bet­ter about their choices.

With this in mind, we pur­chased a mas­sage chair in the Cen­ter for Advanced Hind­sight. Now, we are look­ing for vol­un­teers to help us test what other ben­e­fits we can get from massage.

2: Mark H. Rapa­port, Pamela Schet­tler & Cather­ine Bre­see. “A Pre­lim­i­nary Study of the Effects of a Sin­gle Ses­sion of Swedish Mas­sage on Hypothalamic–Pituitary–Adrenal and Immune Func­tion in Nor­mal Individuals”. The Jour­nal Of Alter­na­tive And Com­ple­men­tary Med­i­cine, 16 (1−10), 2010.

3: Psy­cho­log­i­cal Sci­ence (2010), Jonathan Levav and Jen­nifer J. Argo, Phys­i­cal Con­tact and Finan­cial Risk Taking

Copy­right © Dan Ariely

Dan Ariely, is James B. Duke Pro­fes­sor of Behav­ioural Eco­nom­ics at Duke Uni­ver­sity, and author of the best­selling book, ‘Pre­dictably Irra­tional.’

    Lat­est Advi­so­r­An­a­lyst Prac­tice Growth Sto­ries

Tags: Behavioural Economics, Bestselling Book, Cedars Sinai Medical, Cedars Sinai Medical Center, Control Group, Duke University, Economic Decision, Elisabeth Piper, Game Works, Graduate University, Jang, Minute Massage, Mutual Benefit, Oxytocin, Physiological Stress, Player 1, Sinai Medical Center, Stress Response, Swedish Massage, Trust Game
Posted in My Practice | Comments Off

The New Reality for Effective Client Communication

Wednesday, August 31st, 2011

My col­umn this month in Invest­ment Exec­u­tive dealt with a major change in what it takes to com­mu­ni­cate effec­tively with a grow­ing num­ber of exist­ing and prospec­tive clients – and in par­tic­u­lar focuses on the grow­ing impor­tance of video based communication.

In under­stand­ing the need to change our think­ing on com­mu­ni­ca­tion, it’s impor­tant to look at the broader shift in mind­set among many clients.

Until recently, most investors would respond to a rec­om­men­da­tion with “If that’s what you think, fine.”

Today, even if the same deci­sion is ulti­mately reached, con­ver­sa­tions are tak­ing longer and investors are ask­ing tougher ques­tions – and often look­ing for back up via direct access to experts.

Indeed, many Cana­di­ans are look­ing to col­lab­o­rate on deci­sion mak­ing – that’s espe­cially true of younger clients in their for­ties and fifties, but in fact can cut across all ages.

This is reflected in a com­ment from Paul Allan, Senior Vice Pres­i­dent with Macken­zie Finan­cial regard­ing research with high net worth Cana­di­ans from Toronto con­sult­ing firm Investor Economics:

“High net worth investors are try­ing to get closer to their money and are lis­ten­ing to mul­ti­ple sources of infor­ma­tion beyond their finan­cial advisor.

As a result, advi­sors need to spend more time address­ing dif­fer­ent view­points. Three years ago, clients would typ­i­cally agree with finan­cial advi­sor rec­om­men­da­tions. Today, they want advi­sors to explain exactly why they are rec­om­mend­ing solu­tions and strate­gies – and to pro­vide evi­dence and support.”

A short atten­tion span world

It’s not just the amount of evi­dence needed to back up rec­om­men­da­tions that’s changed – it’s how Cana­di­ans want to receive that evidence.

His­tor­i­cally, finan­cial com­mu­ni­ca­tion was paper based – arti­cles, newslet­ters and lengthy reports. Clients have long com­plained about the avalanche of paper they get – long on dis­clo­sure to sat­isfy legal require­ments, short on meaning.

In fact, many finan­cial advi­sors doubt whether most of what they send gets read.

“Our firm’s econ­o­mist pub­lishes a monthly report that we’re encour­aged to send clients” one advi­sor told me. “In my view, the chances of most clients look­ing at that report approach zero. They’d be far bet­ter off to send a short video of him being inter­viewed on BNN.”

The power of video

What makes video so pow­er­ful is not just the fact that clients are more likely to watch a video than read an arti­cle – it’s also the impact of the sight and sound that video bring.

In early 2009 I con­ducted a series of morn­ing work­shops, out­lin­ing strate­gies to improve com­mu­ni­ca­tion with clients.

Among the ideas I cov­ered was sup­ple­ment­ing face to face and tele­phone con­ver­sa­tions with reg­u­lar emails of arti­cles from cred­i­ble sources such as the Wall Street Jour­nal, the Econ­o­mist or Fortune.

A few weeks later, I got a call from an advi­sor who had attended the workshop.

He had started email­ing clients arti­cles and had received a gen­er­ally pos­i­tive response. Then one day he decided to try email­ing a video of a CNBC inter­view with War­ren Buf­fett instead – and was blown away by the feedback.

As he put it: “The response to the arti­cles was good but the feed­back to the video was great. Partly because it was War­ren Buf­fett, but a big com­po­nent was that clients could actu­ally see and lis­ten to him for the first time. Even if I’d sent an arti­cle by Buf­fett, it wouldn’t have had any­where near the same impact.”

David Foot in action

In the inter­est of full dis­clo­sure, I should men­tion that in the fall of 2009 my com­pany launched an ini­tia­tive to allow finan­cial advi­sors to send clients videos of inter­views with port­fo­lio man­ager and finan­cial experts.

Among these inter­views were sev­eral with David Foot of the Uni­ver­sity of Toronto, con­sid­ered Canada’s lead­ing author­ity on demo­graph­ics and co author of the best seller “Boom, Bust and Echo.”

One inter­view related to the the­sis in Harry Dent’s book “The Great Crash Ahead” that demo­graph­ics will cause a mar­ket col­lapse, which Foot dismisses.

Last fall, an advi­sor called to tell me about an expe­ri­ence he’d just had.

A mil­lion dol­lar client had called him, said he’d just fin­ished Harry Dent’s book and had decided to go to cash as a result. Despite all the advisor’s best efforts, noth­ing could change this client’s mind.

At lunch, a col­league told him about the Foot video. The advi­sor arranged for a short meet­ing at the client’s office that after­noon — and played Foot’s inter­view on the client’s computer.

After­wards, the client first thanked him, then said that now he under­stood the advisor’s per­spec­tive apol­o­gized for wast­ing his time – and asked if they could just pre­tend that morning’s con­ver­sa­tion had never taken place.

“What made this work” the advi­sor said “was that my client could see and hear David Foot in real time. Even if I’d sent an arti­cle by David Foot mak­ing the iden­ti­cal points, it wouldn’t have had the same impact.”

Let’s be clear, the writ­ten word will always be with us. In a time pressed world, read­ing is still the most effi­cient way to assim­i­late infor­ma­tion. And with the launch of dig­i­tal devices such as Amazon’s Kin­dle, Sony’s E-Reader and Apple’s rumoured new com­peti­tor, read­ing in real time will become easier.

Fur­ther, there are some com­plex top­ics that just don’t lend them­selves to video. And of course there are some clients who will always pre­fer to receive infor­ma­tion in writing.

For good or for ill, how­ever, those clients are shrink­ing in num­ber. We live in a world that’s mov­ing to shorter and shorter atten­tion spans, with greater empha­sis on imme­di­acy and on the visual medium.

Today, advi­sors need to take a hard look at every aspect of their business.

As part of that, it’s essen­tial that advi­sors closely exam­ine not just WHAT infor­ma­tion they send to clients – and also HOW they com­mu­ni­cate that information.

    Lat­est Advi­so­r­An­a­lyst Prac­tice Growth Sto­ries

Tags: Advisor Recommendations, Avalanche, Canadians, Client Communication, Consulting Firm, Direct Access, Fifties, Financial Communication, Forties, High Net Worth Investors, Investment Executive, Lengthy Reports, Mackenzie Financial, Mindset, New Reality, Prospective Clients, Senior Vice President, Short Attention Span, Sources Of Information, Viewpoints
Posted in Dan Richards | Comments Off

The Best Way to Start Client Meetings Today

Wednesday, August 31st, 2011

Last week’s arti­cle set out some guide­lines for effec­tive client meet­ings; among them the sug­ges­tion to adopt Stephen Covey’s pre­cept “Seek to under­stand before seek­ing to be understood.”

Meet­ings today have a num­ber of objec­tives; to calm nerves, reas­sure them about their port­fo­lio and instil con­fi­dence that they’re work­ing with the right advi­sor. To help achieve that, ensure that clients see meet­ings as address­ing their unique sit­u­a­tion and as dri­ven squarely by their agenda, not yours.

Here’s a three step process to help make that happen:

Step One: Start with an agenda

One way for clients to see meet­ings as deal­ing with their spe­cific con­cerns is by estab­lish­ing an agenda dur­ing the call to set up the review.

Dur­ing that call, you could say:

“I have a cou­ple of things I’d like to cover when we get together, but first, what are the key ques­tions you’d like to get answered and things you’d like to deal with when we meet?”

Sit back and lis­ten. The answer will be the core of the meet­ing agenda, to which you’ll add any addi­tional items.

Step Two: Set the client’s key goal for the meeting

When you sit down, start with some­thing along the lines of:

“Here’s the agenda that we dis­cussed on the phone. Tell me, what’s the sin­gle most impor­tant thing you want to achieve today, whether it’s on the agenda or not?”

Again, sit back and lis­ten. What you hear will set the direc­tion for the next while.

Step Three: Get clients talking

Once clients have iden­ti­fied their top goal, respond by saying:

“Let’s make that the first thing we focus on. Just before we do that, many clients tell me that they’ve been a bit shaken by recent mar­kets. Tell me, how have you found mar­kets affect­ing you?”

One last time, sit back and lis­ten. The more clients feel truly lis­tened to, the more effec­tive your meet­ings will be.

    Lat­est Advi­so­r­An­a­lyst Prac­tice Growth Sto­ries

Tags: Client Meetings, Confidence, Direction, Effective Meetings, Key Goal, Last Time, Meeting Agenda, Nerves, Precept, Single Most Important Thing, Sit, Stephen Covey, Suggestion
Posted in Dan Richards | Comments Off

The Destructive Power of Financial Markets

Wednesday, August 24th, 2011

via Spiegel Online

Spec­u­la­tors are bet­ting against the euro, banks are tak­ing incal­cu­la­ble risks and the mar­kets are in tur­moil. Three years after the Lehman Broth­ers bank­ruptcy, the finan­cial indus­try has become a threat to the global econ­omy again. Gov­ern­ments missed the chance to reg­u­late the indus­try, and another crash is just a mat­ter of time.

The enemy looks friendly and unpre­ten­tious. With his scuffed shoes and thin­ning gray hair, John Tay­lor resem­bles an elderly soci­ol­ogy pro­fes­sor. Books line the dark, floor-to-ceiling wooden shelves in his office in Man­hat­tan, along­side a bust of Theodore Roo­sevelt and an antique telescope.

Tay­lor is the chair­man and CEO of FX Con­cepts, a hedge fund that spe­cial­izes in cur­rency spec­u­la­tion. It’s the largest hedge fund of its kind world­wide, which is why Tay­lor is held partly respon­si­ble for the crash of the euro. Crit­ics accuse Tay­lor and oth­ers like him of hav­ing exac­er­bated the gov­ern­ment cri­sis in Greece and accel­er­ated the col­lapse in Ireland.

Peo­ple like Tay­lor are “like a pack of wolves” that seeks to tear entire coun­tries to pieces, said Swedish Finance Min­is­ter Anders Borg. For that rea­son, they should be fought “with­out mercy,” French Pres­i­dent Nico­las Sarkozy raged. Andrew Cuomo, the for­mer attor­ney gen­eral and cur­rent gov­er­nor of New York, once likened short-sellers to “loot­ers after a hurricane.”

The Ger­man tabloid news­pa­per Bild sharply crit­i­cized Tay­lor on its web­site, writ­ing: “This man is bet­ting against the euro.” If that is what he is doing, he is cer­tainly suc­cess­ful. While Greece is threat­ened with bank­ruptcy, Tay­lor is listed among the world’s 25 highest-paid hedge fund managers.

A well-read man, Tay­lor likes to phi­los­o­phize about the Con­gress of Vienna and the Treaties of Rome. But is this man really out to spec­u­late the euro to death? And does he have Greece on his conscience?

Tay­lor gri­maces and sighs. He was expect­ing these ques­tions. “The big prob­lem is that in some cases these politi­cians are look­ing for the easy way out and want to blame some­body else and say spec­u­la­tors are tak­ing Europe apart, tak­ing the euro down and ruin­ing the pros­per­ity of our coun­try,” he says, char­ac­ter­iz­ing such charges against hedge fund man­agers as “non­sense.” “My cap­i­tal isn’t the cap­i­tal of the Roth­schilds,” he says, insist­ing that he is work­ing with the “cap­i­tal of the peo­ple,” and that his goal is to pro­tect and increase this cap­i­tal. Tay­lor points out that no one from any of the Ger­man pen­sion funds that invest their money with him has ever called him on the phone to tell him not to bet against the euro.

Read the whole arti­cle here

    Lat­est Advi­so­r­An­a­lyst Prac­tice Growth Sto­ries

Tags: Andrew Cuomo, Antique Telescope, Congress Of Vienna, Currency Speculation, Euro Banks, French President Nicolas, French President Nicolas Sarkozy, Fx Concepts, Government Crisis, Hedge Fund Managers, Highest Paid Hedge Fund Managers, Lehman Brothers, Nicolas Sarkozy, Pack Of Wolves, President Nicolas Sarkozy, Professor Books, Sociology Professor, Spiegel Online, Treaties Of Rome, Wooden Shelves
Posted in My Practice | Comments Off

The Importance of Personal Connections

Wednesday, August 24th, 2011

Over the past few months, we’ve all read about “the new fru­gal­ity” that has become part of our cul​ture​.As a result, many con­sumers have been rethink­ing their spend­ing — with some sur­pris­ing insights about the impor­tance of per­sonal con­nec­tions in tough times.

A recent Wall Street Jour­nal arti­cle described the impact of per­sonal con­nec­tions on deci­sion mak­ing. Lawn and pool ser­vices that send a dif­fer­ent crew every week are easy to cut. On the other hand, it’s much harder to pull the plug on some­one that has cut your grass or cleaned your house for years, who has brought veg­eta­bles from their gar­den and shown you pic­tures of their kids.

Some own­ers of inde­pen­dent restau­rants were inter­viewed for the story. “One of the few advan­tages I have over the chains” one restau­rant owner said “are the per­sonal con­nec­tions I make with my cus­tomers. I make it a pri­or­ity to rec­og­nize my reg­u­lars and know where they like to sit and how they like their cof­fee. I ask about their kids and show them pic­tures of mine. I try to find out their birth­days and give them a piece of cake with a can­dle in it if they come in the week before. It’s the con­nec­tions that I cre­ate as a result that lead to real loyalty.”

There are some impor­tant lessons here for finan­cial advisors.

Some advi­sors take the stance that they’re in the busi­ness to pro­vide a pro­fes­sional ser­vice — and have lit­tle inter­est in exchang­ing the per­sonal details of their lives. And if that’s your style and where you’re com­fort­able, that’s fine.

But under­stand that if you just focus on the busi­ness part of the rela­tion­ship you are miss­ing the oppor­tu­nity to develop the deeper con­nec­tions that lead to loy­alty in tough times and refer­rals in good ones.

A cou­ple of recent con­ver­sa­tions with suc­cess­ful advi­sors drove this point home.

One was with a U.S. advi­sor who sends clients a short weekly email. Part of it talks to what’s hap­pened in mar­kets — but in the other part she talks in her own voice. Her per­son­al­ity and human­ity really comes through in this sec­ond por­tion — whether it be invit­ing clients to come in to fig­ure out if they need to cut back on spend­ing, talk­ing about dri­ving to visit fam­ily and being hit by how much gas prices are down or describ­ing how her bbq team did in a local competition.

The sec­ond con­ver­sa­tion was with a Cana­dian advi­sor who has over the years let clients know about some of the char­i­ties he has sup­ported, among them a fundrais­ing climb up Mount Kil­i­man­jaro for the Cana­dian Can­cer Soci­ety and a children’s home in Africa. He com­mented that he’s struck by how often long-standing clients ask about how the char­i­ties he sup­ports are doing when they come in to meet.

Years ago, I talked to a vet­eran advi­sor who set aside the first fif­teen min­utes of each day to call clients cel­e­brat­ing their birth­days, say­ing sim­ply “I just wanted to be among the first to wish you happy birth­day.” Based on the feed­back he received, this was the most pro­duc­tive fif­teen min­utes of his day.

Our first and para­mount pri­or­ity is to ensure clients are well-served in the finan­cial advice they receive. Just remem­ber though that in many cases the per­sonal con­nec­tions are as impor­tant as the advice we give clients - if we want to max­i­mize rela­tion­ships, these need atten­tion as well.

For more infor­ma­tion, please visit http://​get​keep​clients​.com.

    Lat­est Advi­so­r­An­a­lyst Prac­tice Growth Sto­ries

Tags: Birthdays, Chains, Conversations, Financial Advisors, Find Birthdays, Frugality, Grass, Independent Restaurants, Loyalty, Personal Connections, Piece Of Cake, Pool Services, Professional Service, Referrals, Regulars, Restaurant Owner, Street Journal Article, Tough Times, Vegetables, Wall Street, Wall Street Journal
Posted in Dan Richards | Comments Off

A Proven Way to Boost Your Response From Prospects

Wednesday, August 24th, 2011

At a recent work­shop, I was asked about whether advi­sors are more likely to get a response from prospects by leav­ing a voice mail or by send­ing an email.

There are mer­its to both. Email is easy to send and easy for prospects to respond to … but also easy to ignore. Voice mail does a bet­ter job of seiz­ing the listener’s atten­tion (at least until he presses the delete but­ton), but takes longer to deliver your mes­sage and is more intru­sive as a result.

Rather than spec­u­lat­ing, I asked a Toronto based advi­sor who prospects exten­sively among busi­ness own­ers to con­duct a sim­ple, three week experiment.

Vmail or email?

This advi­sor calls busi­ness own­ers from 7:30 to 11 every morn­ing. His call focuses on the tax sav­ing oppor­tu­ni­ties of indi­vid­ual pen­sion plans (IPPs).

Over the past cou­ple of years, he has devel­oped a list of one thou­sand busi­ness own­ers who he has talked to briefly, who were not inter­ested in meet­ing but agreed that he could email them infor­ma­tion on IPPs and stay in touch.

Much of his cur­rent focus is cir­cling back with these prospects that he has spo­ken with pre­vi­ously, offer­ing a com­men­tary from account­ing firm PWC on new devel­op­ments on IPPs aris­ing from the last bud­get. When he gets voice mail, he leaves a short mes­sage remind­ing prospects of their last con­ver­sa­tion and offers to send them the report.

When prospects call back, he tries to get them to agree to a 20 minute meet­ing at their office to review the com­men­tary. If they are still resis­tant, he says he will email them the report and con­cludes by say­ing that he would like to stay in touch.

Week One

In week one, this advi­sor con­tin­ued to leave voice mails and tracked the response rate. 11% of busi­ness own­ers for whom he left mes­sages called him back. (Remem­ber that he had spo­ken to them pre­vi­ously and they had agreed that he could send them infor­ma­tion on IPPs and stay in touch.)

Week Two

In week two, instead of call­ing and leav­ing a voice mail, this advi­sor sent an email. Only 8% of those emails were returned.

Week Three

In week three, he left a very short mes­sage along the lines of:

It’s Dan Richards. We spoke last fall about the tax sav­ings for busi­ness own­ers from indi­vid­ual pen­sion plans. I have a report from PWC out­lin­ing changes in the last bud­get. I will send you details by email. Look for­ward to connecting.

He then sent the prospect an email pro­vid­ing a bit more infor­ma­tion on the com­men­tary, and ask­ing them to let him know if they would like to receive an update on IPPs.

In this third week, he got return calls or emails from 14% of the prospects.

This is an exam­ple of field exper­i­ments, in which rather than spec­u­lat­ing on what will work best, you con­duct a con­trolled exper­i­ment. In this case, the answer is quite clear. When it comes to get­ting prospects to respond, your best odds are with nei­ther voice mail nor email alone but rather a com­bi­na­tion of the two.

As you think about your own chal­lenges, con­sider whether there is exam­ples like this one in which you can iden­tify, test and mea­sure the results from dif­fer­ent tac­tics, with a view to run­ning your busi­ness more efficiently.

    Lat­est Advi­so­r­An­a­lyst Prac­tice Growth Sto­ries

Tags: Accounting Firm, Briefly, Budget, Business Owners, Easy Mail, Emai, Email, Job, Leaves, Listener, Merits, New Developments, Prospects, Pwc, Response Rate, Short Message, Vmail, Voice Mail, Voice Mails
Posted in Dan Richards | Comments Off

Giving Back and Paying Forward

Wednesday, August 24th, 2011

The fol­low­ing is based on one of Norm Trainor’s clients, Wal­ton Rogers.

What does it mean to be in the top 1% of your pro­fes­sion? For mem­bers of the Mil­lion Dol­lar Round Table (MDRT), it means that you are not only rec­og­nized as hav­ing reached the pin­na­cle of suc­cess in your pro­fes­sion, but also, that you are the ben­e­fi­ciary of a tra­di­tion of shar­ing that is unusual in our com­pet­i­tive world. Wal­ton Rogers was cho­sen by his peers to be the Pres­i­dent of MDRT for 2009 and to be a part of its Exec­u­tive Com­mit­tee for five years. His elec­tion to this august posi­tion rec­og­nizes his years of giv­ing back as a trusted member/leader in over 25 lead­er­ship posi­tions. How­ever, Wal­ton would be the first to admit that he has gained far more than he has given through this association.

When you meet with Wal­ton and one of his MDRT asso­ciates you may notice that they are proud of their mem­ber­ship and the num­ber of lives they touch. Wal­ton describes what this means as follows:

“We are proud that our ethics, our activ­ity lev­els and the results we achieve enable us to qual­ify to be part of this select group. The pride is in what we do with and for our clients. The pride is in the mem­ber­ship and the sym­bol­ism of the orga­ni­za­tion. It is not a pride in self. Rather, it is the desire to be the best in the world at what we do.”

MDRT pro­vided Wal­ton with a stan­dard of excel­lence early in his career. It taught him the power of the Whole Per­son Con­cept which is a reminder to keep your life and your career in perspective.

With a desire to keep all of life’s events in a proper per­spec­tive, Wal­ton has been work­ing with two younger asso­ciates, Jonathan Williams and Robert Zim­mer, to imple­ment a Suc­ces­sion Plan. Wal­ton sum­ma­rizes the impor­tance of plan­ning for the future and pay­ing forward:

“We have promises to keep. Our clients pay us for the future deliv­ery of a ser­vice or a prod­uct. If we are not there to deliver, then we are not ful­fill­ing our com­mit­ments to them. Suc­ces­sion plan­ning is a log­i­cal way to keep our com­mit­ments to our clients. Our clients now have three advi­sors to rely upon. My com­mit­ment to Robert and Jonathan is to pro­vide inspi­ra­tion, knowl­edge and expe­ri­ence in what­ever way I can. I learned through MDRT that you inspire by exam­ple and you learn from oth­ers. The three of us are com­mit­ted to learn­ing from each other, the Round Table and our col­lec­tive experiences.”

There are two qual­i­ties that I have observed in work­ing with Wal­ton. The first is that he is a very good lis­tener. He has that rare abil­ity to make you feel as if he is totally engrossed in what you have to say and is lis­ten­ing with all of his senses. The sec­ond qual­ity is that he is a man of prin­ci­ple who is com­mit­ted to mak­ing a dif­fer­ence in peo­ples’ lives. These two qual­i­ties have served him well in over thirty years of work­ing with clients to assist them in mak­ing the often dif­fi­cult deci­sions related to build­ing and pro­tect­ing the finan­cial well being of fam­i­lies and busi­nesses. Wal­ton, Jonathan and Robert are com­mit­ted to lis­ten­ing to the needs, wants and val­ues of new and exist­ing clients and cus­tomiz­ing a finan­cial plan to real­ize the client’s dreams.

Through his involve­ment with MDRT, serv­ing over 800 fam­i­lies and tran­si­tion­ing his prac­tice over time to Jonathan and Robert, Wal­ton is giv­ing back and pay­ing forward.

Norm Trainor is the founder of The Covenant Group, a com­pany spe­cial­iz­ing in prac­tice devel­op­ment for advi­sors. For fur­ther infor­ma­tion, visit his Web site at www​.covenant​group​.com.

Fol­low The Covenant Group at:

    Lat­est Advi­so­r­An­a­lyst Prac­tice Growth Sto­ries

Tags: Beneficiary, Commitments, Competitive World, Executive Committee, Importance Of Planning, Jonathan Williams, Leadership Positions, Mdrt, Norm Trainor, Person Concept, Pinnacle, Proper Perspective, Robert Zimmer, Select Group, Standard Of Excellence, Succession Plan, Succession Planning, Symbolism, What This Means, Younger Associates
Posted in My Practice, Norm Trainor | Comments Off

Is Your Focus Narrow or Broad?

Wednesday, August 24th, 2011

In defin­ing your busi­ness, there are a num­ber of deci­sions you have to make in order to appro­pri­ately posi­tion what you offer. You can choose to have a nar­row or broad focus to your busi­ness. By choos­ing a nar­row focus, you have opted to spe­cial­ize. A finan­cial advi­sor may choose to focus on a spe­cialty such as invest­ment advice, life insur­ance plan­ning or estate plan­ning and, con­se­quently, offer a par­tic­u­lar set of prod­ucts and ser­vices. Another way to nar­row your focus is to spe­cial­ize in defined mar­ket seg­ments such as retirees or pre-retirees. If you spe­cial­ize in the retire­ment mar­ket, your clien­tele would pri­mar­ily con­sist of peo­ple in their 50s, 60s and beyond.

A case in point is a suc­cess­ful finan­cial advi­sor with whom I work. He is 60 and has been in finan­cial ser­vices for 39 years. Through­out his career, he has been a gen­eral prac­ti­tioner and a spe­cial­ist. Today, he spe­cial­izes in estate plan­ning. He works with ultra high net worth clients. His aver­age case size is $150,000 of annual life insur­ance pre­mium and he earns about $3,500,000 per year. He aver­ages about one new client per month, usu­ally acquir­ing them through intro­duc­tions from sat­is­fied clients and col­lat­eral pro­fes­sion­als. The rest of his busi­ness comes from exist­ing clients.

The deci­sion to have a broad focus in your busi­ness implies that you pro­vide a broad range of finan­cial prod­ucts and ser­vices. In effect, you seek to become a gen­eral prac­ti­tioner for your clients and assist them in real­iz­ing finan­cial health and well being. Typ­i­cally, this involves a finan­cial plan­ning process that takes into account the var­i­ous life stages your clients will expe­ri­ence and the strate­gies and tac­tics required to real­ize finan­cial secu­rity and inde­pen­dence through­out each stage. The intent is to pro­vide access to a broad array of finan­cial prod­ucts and ser­vices to address the needs, wants and val­ues of clients through­out their lives.

One of the finan­cial advi­sors whom I coach entered the busi­ness in his 40s and wanted to work with more mature and afflu­ent clients. His ideal client is 50+, a mil­lion­aire who is retired or approach­ing retire­ment and con­cerned about the growth and preser­va­tion of wealth. Ini­tially, the finan­cial advi­sor focused on man­aged money and annu­ities. Recently, he added life insur­ance and liv­ing ben­e­fits to his prod­uct mix and began to offer fee-based finan­cial plan­ning. He works closely with other col­lat­eral pro­fes­sion­als such as lawyers and accoun­tants to pro­vide a com­plete range of finan­cial man­age­ment, tax and estate plan­ning ser­vices to address the myr­iad finan­cial and life plan­ning needs of his clients. He encour­ages his clients to turn to him for advice on any mat­ters related to their finan­cial health and well being. He views him­self as a gen­eral prac­ti­tioner who is able to serve a large clien­tele and draw upon a strong pool of spe­cial­ists to assist his clients in main­tain­ing finan­cial health and prosperity.

The deci­sion to be nar­row or broad reflects your pref­er­ences with regard to the work you enjoy and your com­pe­ten­cies. The core com­pe­tence for advi­sors who choose a broad focus is rela­tion­ship man­age­ment. A nar­row focus puts more empha­sis on the core com­pe­tence of knowl­edge and exper­tise related to the advisor’s specialty.

Norm Trainor is the founder of The Covenant Group, a com­pany spe­cial­iz­ing in prac­tice devel­op­ment for advi­sors. For fur­ther infor­ma­tion, visit his Web site at www​.covenant​group​.com.

Fol­low The Covenant Group at:

    Lat­est Advi­so­r­An­a­lyst Prac­tice Growth Sto­ries

Tags: 50s 60s, Array, Case In Point, Case Size, Clientele, Collateral, Financial Advisors, Financial Health, Financial Planning, Financial Security, Financial Services, General Practitioner, High Net Worth Clients, Insurance Premium, Introductions, Investment Advice, Life Insurance, Market Segments, Narrow Focus, Norm Trainor, Retirement Market
Posted in My Practice, Norm Trainor | Comments Off