When Making Connections, Be the Challenger

Wednesday, April 25th, 2012

Chal­leng­ing a prospect’s think­ing can some­times involve ask­ing him or her to think about some­thing they would pre­fer to ignore.

Matthew Dixon and Brent Adam­son, who co-wrote the book “The Chal­lenger Sale: Tak­ing Con­trol of the Cus­tomer Con­ver­sa­tion,” explain in an arti­cle for CNBC that focus­ing too nar­rowly on build­ing a rela­tion­ship with your clients can actu­ally get in the way of com­plet­ing a sales agree­ment and estab­lish­ing a client part­ner­ship as peo­ple become more averse to risk.

The bet­ter strat­egy, the men argue, is to offer insights and sug­ges­tions on how cus­tomers can read­just their think­ing. A chal­lenger sales­man is able to estab­lish trust with a client by push­ing the per­son to think dif­fer­ently and con­tin­u­ally offer new solu­tions to their prob­lems. These kinds of sales reps also tai­lor their mes­sage to address each client or prospect’s value dri­vers and objec­tives, the authors note, and strike a bal­ance between assertive­ness and aggression.

I gave an exam­ple of how you can chal­lenge a prospect care­fully and tact­fully in my book “The Eight Best Prac­tices of High-Performing Sales­peo­ple.” One of my clients, Alvin, was try­ing to sell life insur­ance to Gary Inwood, an ideal prospect who could take Alvin’s busi­ness to the next level. How­ever, in a follow-up meet­ing, Gary was against “the idea of insur­ance” and didn’t “like think­ing about death,” mak­ing it dif­fi­cult for Alvin to move on to the close.

So how was Alvin able to turn Gary’s neg­a­tive think­ing around? He started by re-establishing a rap­port and review­ing the prob­lem that the client faced. Alvin then turned the chal­lenge into an oppor­tu­nity by shift­ing Gary’s focus from the spec­tre of death to the idea of retirement.

Before pro­ceed­ing, Alvin reminded Gary of his cre­den­tials, pre­pared Gary to buy by offer­ing a pre­view for action and framed the pre­sen­ta­tion to help Gary see the poten­tial con­se­quences of not tak­ing action (i.e. buy­ing insurance).

From there, Alvin gave an exam­ple of how he had helped a sim­i­lar client in the past, mak­ing the issue tan­gi­ble for Gary. He told Gary how he had cre­ated an insur­ance plan for two pre­vi­ous busi­ness part­ners that allowed one of them to “close down the busi­ness with dig­nity” when the other passed away. Over the course of his entire con­ver­sa­tion with Gary, Alvin used “we” instead of “I” to show that they were work­ing together toward a shared goal.

Tak­ing con­trol of the con­ver­sa­tion and chal­leng­ing your prospects to think out­side their com­fort zone can be a suc­cess­ful strat­egy in acquir­ing more clients and build­ing your busi­ness. How­ever, through­out the dis­cus­sion, it’s nec­es­sary to show respect and earn the right to pro­ceed to the next stage.

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: Adamson, Aggression, Assertiveness, Best Practices, Buying Insurance, Challenger, Client Partnership, Cnbc, Credentials, Inwood, Life Insurance, Matthew Dixon, Negative Thinking, New Solutions, Next Level, Proceeding, Sales Reps, Salespeople, Spectre, Value Drivers
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Getting Prospects to Make Faster Decisions

Wednesday, April 25th, 2012

One of the biggest frus­tra­tions for advi­sors is the amount of dither­ing that prospects do — some­times it feels like it takes for­ever for peo­ple to make a decision.

Or you’ll have a really good meet­ing with a prospect, you agree to send them some infor­ma­tion as a follow-up and then prospects won’t return your calls.

There are a num­ber of rea­sons for this. Peo­ple are busy. Often they’re gen­uinely unsure whether life with you is going to be bet­ter than where they are now. Iner­tia is a pow­er­ful force — for some investors, it’s just eas­ier to stay where they are.

And often the harder that you try to accel­er­ate the process, the more prospec­tive clients get their backs up.

As a result, you need to have three strate­gies in place

1.     Min­i­mize pressure:

The chal­lenge when talk­ing to a prospec­tive client is to com­mu­ni­cate that you’d like to work with them but that you don’t need to work with them — you need to allow the con­ver­sa­tion to evolve at a com­fort­able pace. The moment you con­vey anx­i­ety or even a trace amount of des­per­a­tion for the busi­ness, your chances go way down.

One way to do that is to have lots of prospects in the hop­per. If you have five prospects, inevitably you’ll feel pres­sure when talk­ing to one of those five.

If you have fifty five prospects, much less so.

2.     Cre­ate momentum

Recently I fea­tured an arti­cle by a US advi­sor coach out­lin­ing a four meet­ing process to con­vert prospects to clients.

Whether your process when meet­ing with prospects is two, three or four meet­ings, you need to try to close each meet­ing by set­ting up the next one, ide­ally in the next cou­ple of weeks. You need to try to build an appro­pri­ate level of momen­tum into prospect meet­ings, with­out cre­at­ing pressure

So if a prospect asks you to send infor­ma­tion, if it’s a sig­nif­i­cant prospect, I’d try to set up a time to briefly review that mate­r­ial face to face. The prob­lem is that mail­ing or email­ing infor­ma­tion after a meet­ing typ­i­cally doesn’t add to momen­tum, in fact it often reduces it.

Instead of email­ing infor­ma­tion, I ‘d say some­thing like: “I’ve found that the best way to cover this kind of mate­r­ial is in per­son. I won­der if we could set up 20 to 30 min­utes the week after next to review this. We could do it at my office or if more con­ve­nient I’ve got a meet­ing in this area a week from Fri­day morning.”

3.     Com­mu­ni­cate scarcity

Let’s sup­pose that you’ve met with a prospect, had a good meet­ing and then they don’t respond to your voice mails and emails.

At that point, you could call the prospect and leave a voice mail along these lines:

Hi Jim, it’s Dan Richards. Sorry we haven’t been able to connect.

I have capac­ity for six new clients in the next quar­ter. After our last meet­ing I thought we’d work well together and you might be some­one I could help.

It sounds like you’re busy right now … I’ll touch base in about three months. Feel free to give me a call if you’d like to talk in the meantime.

This says you’re busy too. It lets the prospect know that you’re inter­ested but not des­per­ate. And whether or not the prospect calls you back, you’ve set the stage for your next con­tact in 90 days.

We have to accept that prospects will make deci­sions in their own time­frame, not ours … but that doesn’t mean we can’t do things to help the process along.  The next time you’re talk­ing to a prospect, con­sider try­ing to min­i­mize pres­sure, develop momen­tum or com­mu­ni­cate scarcity — and see if that helps move the prospect to a faster decision.

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Tags: Anxiety, Coach, Decisions, Desperation, Face To Face, Frustrations, Hopper, Inertia, Investors, Momentum, Pace, People, Prospective Client, Prospective Clients, Prospects
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Fifteen retirement readiness tasks for clients

Wednesday, April 25th, 2012

In May, U.S. insurer Met Life issued a 28 page report, quan­ti­fy­ing where Amer­i­cans stand in terms of their prepa­ra­tion for retirement.

This readi­ness index mea­sures fif­teen tasks — attached to the report is a ques­tion­naire that advi­sors can take clients through to bench­mark where clients stand on each task and iden­tify areas to work on.

The fif­teen tasks for retire­ment readiness

The fif­teen tasks fall into five areas:

Activ­i­ties related to income and benefits.

This includes assess­ing when full time retire­ment will be finan­cially fea­si­ble, eval­u­at­ing the impact of changes in the econ­omy on pen­sions, invest­ments and retire­ment ben­e­fits and deter­min­ing what has to be done to receive the com­pany and Gov­ern­ment ben­e­fits that clients are enti­tled to.

Work related tasks

This makes up five of the fif­teen things to do.

These include decid­ing whether to fully retire or work part-time, iden­ti­fy­ing the options for full time or part time work in retire­ment, fig­ur­ing out if skills can be eas­ily trans­ferred to part-time work and explor­ing alter­nate career or part time oppor­tu­ni­ties in retirement.

Leisure related activities

Leisure related tasks include things like deter­min­ing the bal­ance between work and leisure in retire­ment and iden­ti­fy­ing per­sonal goals in retirement.

Rela­tion­ship tasks

Rela­tion­ship tasks to pre­pare for retire­ment cap­ture think­ing through the impact of retire­ment on rela­tion­ships with a spouse, fam­ily and friends and also con­sid­er­ing the effect on rela­tion­ships with co-workers.

Plan­ning for retirement

This includes deter­min­ing what it will take to have a sat­is­fy­ing retire­ment, iden­ti­fy­ing alter­nate plans should there be an unex­pected set­back related to health or finan­cial issues and also eval­u­at­ing whether retire­ment plans meet the demands of poten­tial changes.

Con­clu­sions on retire­ment readiness

This report reached a num­ber of gen­eral conclusions.

First, get­ting ready to retire is more com­pli­cated than just hav­ing enough money — there are many dimen­sions to a sat­is­fy­ing retirement.

In fact, the report points out that exist­ing retirees have pro­vided a road map to what has to hap­pen to max­i­mize the odds of a sat­is­fy­ing and ful­fill­ing retirement.

And sec­ond, com­plet­ing these tasks doesn’t mean that some­one should retire — but it does mean they can retire, they’re ready to retire.

The cur­rent think­ing on the tim­ing of retirement

Amer­i­cans are about evenly split on when they plan to retire — about half plan to retire at the age they’d been plan­ning to a cou­ple of years ago, the other half say they plan to work past the date they’d planned to.

Exist­ing retirees

About 64% of exist­ing retirees say they retired ear­lier than they’d expected, 33% retired when they’d expected to and only 3% said they’d retired later than expected.

The sur­vey didn’t ask if that early retire­ment was vol­un­tary — in all like­li­hood there were some cases in which com­pa­nies made the deci­sion for these early retirees.

Peo­ple feel­ing that they can retire on target

Peo­ple who say they can retire when they’d planned to were more likely to have estab­lished per­sonal goals. Estab­lish­ing those goals and then fol­low­ing through on them appears to focus peo­ple on the impor­tant activ­i­ties that will keep them on track.

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Tags: Alternate Plans, Benchmark, Co Workers, Compendium, Family And Friends, Government Benefits, Insurer, Opportunities In Retirement, Part Time Work, Pensions Investments, Personal Goals, Planning For Retirement, Planning Retirement, Questionnaire, Retirement Benefits, Retirement Plans, Retirement Readiness, Setback, Target, Time Opportunities
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The Art of the Client Apology

Wednesday, April 25th, 2012

by Anthony Lam, Covenant Group

Some­times, you or your employ­ees will make mis­takes. When a client feels his or her needs have not been met or have been ignored, it’s impor­tant to make an effort to restore their con­fi­dence in your ser­vices and reset the tone of the relationship.

Tak­ing the time to con­tact an unhappy client and say “I’m sorry” can go a long way in doing that.

Writ­ing for Inc. mag­a­zine, Glen Blick­en­staff says har­bor­ing the con­cern that apol­o­giz­ing would open up a busi­ness to lia­bil­ity will not do much to repair hurt or angry feel­ings. In fact, that worry may be destruc­tive, dri­ving away clients who could be won back. Blick­en­staff explains that cus­tomers may be happy or unsat­is­fied, but there’s an oppor­tu­nity to con­vert the lat­ter group by recov­er­ing from a sit­u­a­tion where the com­pany didn’t “get it right the first time and meet expectation.”

He warns that unhappy cus­tomers are much more likely to share their bad expe­ri­ences pub­licly, but when the recov­ery is “done the right way, the cus­tomer who has the expe­ri­ence will tell a story. Not how bad their ini­tial expe­ri­ence was but the story of how well they were treated, respected and cared for in the recovery.”

Blick­en­staff offers some advice on how to mend a dam­aged cus­tomer rela­tion­ship. First, try to talk (and more impor­tantly, lis­ten!) to the client and get their side of the story. Give your apol­ogy. As he says he does when talk­ing to a cus­tomer, “I actu­ally and sin­cerely con­vey my regret that we failed them and accept respon­si­bil­ity.” From there, give them a few options that could solve the prob­lem, which makes them feel that they are in con­trol of where the dis­cus­sion goes next. Finally, fol­low up. Stay in touch with the client and make sure you “met the recov­ery expec­ta­tion,” he adds.

Have you ever had to do dam­age con­trol after a client expressed his or her dis­plea­sure with the qual­ity of cus­tomer ser­vice? Does your prac­tice have a stan­dard pol­icy for how it responds to and mit­i­gates the fall­out from an unhappy client?

As Norm Trainor wrote in The 8 Best Prac­tices of High-Performing Sales­peo­ple, “the key to devel­op­ing and main­tain­ing rela­tion­ships with your clients is your com­mit­ment to pro­vid­ing first-class ongo­ing service.”

A key in finan­cial advi­sor train­ing is under­stand­ing that when the deliv­ery of ser­vice falls short of first class, a heart­felt apol­ogy can serve as a recom­mit­ment. It can offer the client proof of another sales best prac­tice: that you will “do what you say you will do.”

Anthony Lam has spent more than 20 years hon­ing his cus­tomer rela­tion­ship man­age­ment skills. He has demon­strated his com­mit­ment to high-quality cus­tomer ser­vice in the retail, bank­ing and air­line indus­tries. Anthony is the Man­ager of Pro­gram Deliv­ery and Client Rela­tion­ships at The Covenant Group and coaches finan­cial advi­sors on client ser­vices through The Covenant Group’s finan­cial ser­vices train­ing.

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Tags: Angry Feelings, Anthony Lam, Apology, Blickenstaff, Confidence, Contact, Covenant Group, Customer Relationship, Customer Service, Damage Control, Displeasure, Expectation, Experiences, Initial Experience, Nbsp, Opportunity, Taking The Time, Unhappy Client, Unhappy Customers, Worry
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Technology Won’t Organize Us, it Creates a Greater Need to be Organized

Wednesday, April 25th, 2012

Tech­nol­ogy was sup­posed to make our lives sim­pler, and it has – pro­vided you have dis­ci­pline and real­is­tic expectations.

One thing it will not do is orga­nize our lives for us.

The inspi­ra­tion for this post was an arti­cle on the Clien­t­wise blog refer­ring to an arti­cle in the New York Times recently by pro­duc­tiv­ity guru David Allen. I am a huge fan of Allen’s, and over the last few years I have worked hard to incor­po­rate his prin­ci­ples into my daily routine.David Allen, founder & CEO of The David Allen Company

A com­mon com­plaint I hear relates to infor­ma­tion over­load. There is just too much we have to process every day. Tech­nol­ogy can put infor­ma­tion over­load on steroids. But it is not the infor­ma­tion, it is how we han­dle it. As David Allen is fond of say­ing, if the sheer quan­tity of infor­ma­tion were the prob­lem then every time we walked into the library our heads would explode.

Tech­nol­ogy is not the cause of our strug­gle to get the right things done but used poorly it can make the prob­lem a lot worse. Allen’s prin­ci­ples can help us do more than get orga­nized (hugely valu­able in itself), but can help us tame the tech­no­log­i­cal beast and put it in our ser­vice. He sug­gests a series of five steps to opti­mize your focus and resources:

• Cap­ture every­thing that has your atten­tion, at work and at home, and writ­ing. The first time you do this may take as much as six hours to “empty your head.” A big project to be sure but a nec­es­sary one if the rest of the sys­tem is going to work.
• Clar­ify what each pri­or­ity means to you. Decide what results you want, and what actions are required.
• Keep an inven­tory of all your projects some­place where you will see them often, and orga­nize reminders for the to-do lists you create.
• Reg­u­larly review your inven­tory of com­mit­ments and projects.
• Deploy your atten­tion and resources appropriately.

As I grad­u­ally learn how to uti­lize tech­nol­ogy to apply Allen’s prin­ci­ples, I find myself more con­sis­tently com­plet­ing the impor­tant tasks I have com­mit­ted to. I find that the more dili­gent I am about hav­ing dis­ci­pline in fol­low­ing his ideas, the more pro­duc­tive I am and the more tech­nol­ogy helps me accom­plish things rather than bury­ing me deeper in a tidal wave of tasks and infor­ma­tion. If you strug­gle with over­load of any kind, I strongly encour­age you to take a look at some of the arti­cles on Allen’s web­site or to get his book Get­ting Things Done. His ideas have been a career changer for me.

Update:

Since post­ing this arti­cle I had a con­ver­sa­tion with Mark Schoen­beck. It turns out he believes strongly in tar­get mar­ket­ing for finan­cial advi­sors and how that can help in attract­ing refer­rals. Mark fell vic­tim to the risk all of us face in the pub­lic realm: you may talk with a reporter for 20 min., and what gets pub­lished might be a sin­gle sen­tence that doesn’t nec­es­sar­ily relate to your point.

My point above holds true. If you fail to iden­tify your­self with a value propo­si­tion that goes beyond port­fo­lio returns, you run the risk that your client will assume that pos­i­tive returns are your value propo­si­tion. Mark, and Curian, believe that.  The results of their sur­vey update for this year dri­ves home how impor­tant that is.

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Tags: Amp, Beast, Ceo, Commitments, Discipline, Five Steps, Guru, Information Overload, Inspiration, New York Times, Priority, Process Technology, Productivity, Realistic Expectations, Reminders, Sheer Quantity, Six Hours, Steroids, Struggle, Technology Information
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A Prospecting Tip from J.P Morgan

Wednesday, April 25th, 2012

When it comes to attract­ing new clients, many advi­sors look for new and dif­fer­ent approaches. A com­mon ques­tion I get asked today relates to how to use social media and tools like LinkedIn, Face­book and Twit­ter to bring new clients on board.

There’s no doubt that at some point social media will play an impor­tant role and that time could be sooner than many expect. That said, I’m hard pressed to point to even one instance of an advi­sor who’s seen a mean­ing­ful num­ber of new clients aris­ing from social media tools.

At the same time, a recent con­ver­sa­tion reminded me that when it comes to busi­ness devel­op­ment, advi­sors can still learn from proven approaches from the past.

J.P. Morgan’s approach to busi­ness development:

In Feb­ru­ary, I spoke at an Amer­i­can Bankers Asso­ci­a­tion con­fer­ence in Phoenix. Dur­ing one of the breaks I got into a con­ver­sa­tion about busi­ness devel­op­ment with an attendee who runs the trust oper­a­tion for a mid-sized bank.

He began his career in the 1980’s work­ing for the pri­vate bank­ing oper­a­tion of J.P. Mor­gan in New York City; before its acqui­si­tion by Chase Man­hat­tan. Their clients had a min­i­mum of $10 mil­lion, and often much more than that. They worked with cur­rent or for­mer CEOs, ultra suc­cess­ful busi­ness own­ers, or third or fourth gen­er­a­tions of old money.

Con­fi­den­tial­ity is essen­tial for every client, but it’s par­tic­u­larly impor­tant when work­ing at the top of the mar­ket. Even in the face of that, J.P. Mor­gan had devel­oped a low key approach to busi­ness devel­op­ment (they would never call it any­thing as crass as prospect­ing) that pro­duced con­sis­tent results over time.

Iden­ti­fy­ing pos­si­ble connections:

At the J.P. Mor­gan library they archived direc­to­ries of Boards of Direc­tors of pub­lic com­pa­nies, the Who’s Who in Amer­ica, mem­ber­ship lists at pri­vate clubs and sim­i­lar resources. In advance of meet­ing a client, the pri­vate banker would go through these with the goal of iden­ti­fy­ing some­one this client was con­nected with.

If the meet­ing had gone well and the tone was pos­i­tive, the advi­sor might con­clude by saying:

“One final thing: I believe that one of the other direc­tors who has been on the board of XYZ Com­pany with you for some time is Bob Smith.

At J.P. Mor­gan, we’re always on the look­out for peo­ple who are a fit with how we work and who we can help. From what I know of Bob, I think he might fall into that cat­e­gory. The next time you’re talk­ing to Bob, if you’re com­fort­able doing this, I’d be grate­ful if you’d tell him that you work with us; and that JP Mor­gan would be happy to invite him to our next quar­terly break­fast or lunch.”

Now, it’s evi­dent that no one of these con­ver­sa­tions could be counted on to bear fruit. Given the size of the accounts, the goal wasn’t to bring large num­bers of new clients on board. If J.P. Morgan’s pri­vate bankers con­sis­tently built these con­ver­sa­tions into their process, over time a cer­tain num­ber would bear fruit. Note that this con­ver­sa­tion never took place more often than once every fourth meet­ing. When meet­ing with clients, you need to ensure they see their needs as dri­ving the agenda.

As you think about your upcom­ing meet­ings, think about whether you could apply this approach. By iden­ti­fy­ing one con­nec­tion before­hand, you open the door to dis­cussing how an intro­duc­tion might take place. Whether it involves adding clients’ con­nec­tions to the dis­tri­b­u­tion list for your reg­u­lar client com­mu­ni­ca­tion, invit­ing them to client func­tions or get­ting an intro­duc­tion in some other form; con­sider whether you can mod­ify the approach used by J.P. Mor­gan to your business.

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Tags: America Membership, American Bankers Association, Attendee, Boards Of Directors, Ceos, Chase Manhattan, Consistent Results, Facebook, J P Morgan, Media Tools, Membership Lists, Morgan Library, No Doubt, Old Money, Private Banker, Private Banking, Private Clubs, Similar Resources, Successful Business, Twitter
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Today’s Most Effective Marketing Tool

Wednesday, April 25th, 2012

How do you decide where to focus your mar­ket­ing efforts?

Con­ver­sa­tions with advi­sors and a recent arti­cle have per­suaded me that for many finan­cial advi­sors, the sin­gle best vehi­cle for com­mu­ni­cat­ing with exist­ing and prospec­tive clients is a reg­u­lar and fre­quent e-newsletter. Quite sim­ply, done con­sis­tently and to a rea­son­able stan­dard, I know of no other tool that right now gives advi­sors the same impact and return on effort.

Let’s define our terms here: By fre­quent I mean a min­i­mum of monthly and prefer­ably twice monthly; and per­haps even weekly. The com­mit­ment of time is sub­stan­tial, in fact it becomes the focal time of your communication.

Off­set­ting that invest­ment, advi­sors who’ve done this tell me they’ve been sur­prised at the pos­i­tive response from clients. Just as impor­tant, the right e-newsletter can be a great vehi­cle to stay top of mind with prospec­tive clients. And while the time com­mit­ment is sub­stan­tial, the cost is sur­pris­ingly inexpensive.

At the bot­tom today is a recent arti­cle by Debra Tay­lor, who recently wrote in Hors­es­mouth about her expe­ri­ence launch­ing an e-newsletter.

Here are some other lessons from advi­sors who send clients reg­u­lar e-newsletters.

Make it substantive:

If you’re going to ask clients to read some­thing fre­quently, you need to ensure that they get new insights that make it worthwhile.

Doug MacGray is a lawyer and Penn­syl­va­nia based advi­sor who spends each week look­ing for inter­est­ing sta­tis­tics and charts. Each Sun­day he dis­tills these down into a one page newsletter.

Another exam­ple is an advi­sor who each Fri­day sends an email under the head­line “Your crit­i­cal read­ing this week­end,” with links to arti­cles and videos from For­tune, the Econ­o­mist and other cred­i­ble sources.

Remem­ber though that peo­ple are busy; try to keep the newslet­ter to one page, two at most.

Build a routine:

Once you’ve started send­ing reg­u­lar e-newsletters, you’ve made a com­mit­ment that clients expect you to stick to. That’s why you may want to start monthly and then increase fre­quency. It’s always eas­ier to ramp up fre­quency than to reduce it.

Estab­lish a sched­ule for devel­op­ing con­tent, and be sure to include a com­pli­ance approval in the process. Con­sider giv­ing a mem­ber of your team respon­si­bil­ity for man­ag­ing the logistics.

Make it personal:

Inject your own views and per­son­al­ity into the newslet­ter. In the arti­cle that fol­lows from Hors­es­mouth, Debra Tay­lor talks about the impact of pho­tos of her and her staff.

This arti­cle first appeared in Hors­es­mouth, the lead­ing online prac­tice man­age­ment pub­li­ca­tion for finan­cial advi­sors. Click for a free 90 day trial subscription.

http://​www​.hors​es​mouth​.com/​p​u​b​l​i​c​/​j​o​i​n​/​j​o​i​n​.​a​s​p​?​O​f​f​e​r​C​o​d​e​=​N​A​IFA
Debra Tay­lor, CPA/PFS

Reg­u­lar com­mu­ni­ca­tion is prov­ing to be a key dif­fer­en­tia­tor in finan­cial mar­ket­ing these days. As one advi­sor has dis­cov­ered, pro­duc­ing your own e-newsletter is not as hard as you might think; and is tremen­dously effec­tive in stay­ing top-of-mind with clients and prospects.

For years I’d wanted to cre­ate a client newslet­ter. So I eval­u­ated the many options avail­able includ­ing Emer­ald Pub­li­ca­tions, and the quar­terly ser­vices offered through my broker-dealer.

How­ever, I never felt com­fort­able imple­ment­ing any of these; to me they always appeared canned and not focused on our client base. Our clients are pri­mar­ily high-net-worth indi­vid­u­als, who are not affected by such things as a 0% cap­i­tal gain rate for incomes under $69,000.

So instead of pur­chas­ing what for us would be an inad­e­quate prod­uct, we did with­out a newslet­ter, until recently.

A cou­ple of months ago, another advi­sor put me on his mail­ing list by mis­take, and I started receiv­ing his weekly e-newsletter. I imme­di­ately fell in love with the con­cept, graph­ics, and ease of dis­tri­b­u­tion. So we con­tacted the soft­ware provider, Con­stant Con­tact, and have been send­ing out our own e-newsletters for the past six months. It has been the most effec­tive mar­ket­ing tool we’ve imple­mented in years; pos­si­bly ever.

If you’re think­ing of doing a newslet­ter, here are some of the insights we’ve devel­oped in writ­ing, edit­ing, and dis­trib­ut­ing our pub­li­ca­tion each week.

Cre­ate a schedule:

We write our newslet­ter, “The Week Ahead,” on Mon­day; and edit it by Tues­day, because we must sub­mit it to com­pli­ance no later than Wednes­day for dis­tri­b­u­tion by the next Mon­day at 5 p.m. (We also include a printed copy of the newslet­ter in meet­ing pack­ets to dis­cuss dur­ing our client meetings.)

Make it personal:

One of the most pow­er­ful aspects of our newslet­ter is the per­sonal touch that every­one feels upon read­ing it. It’s almost like a com­pany Face­book page.

• Share pho­tos: We try to include pho­tos in every issue, mostly of client events, client birth­day cel­e­bra­tions, or con­fer­ences that we attend. We have included pho­tos of base­ball games, wine din­ners, clients’ new­born chil­dren, me pre­sent­ing at a recent con­fer­ence, and port­fo­lio man­agers we have recently met with. The pho­tos have become so pop­u­lar that when we omit­ted pho­tos in last week’s pub­li­ca­tion, we had sev­eral clients com­plain to us, ask­ing, “Where are the photos?”

• Share per­sonal thoughts: In addi­tion to includ­ing pho­tos, I write the lead col­umn, “From Where I Sit” (FWIS). Some weeks FWIS is about an impor­tant mar­ket devel­op­ment, such as aus­ter­ity mea­sures in Europe or the down­grad­ing of U.S. debt. Other weeks, the col­umn focuses on a lighter or sea­sonal sub­ject such as “giv­ing thanks.” In all instances how­ever, I try to keep the mes­sage short (100 to 300 words) and personal.

Pro­vide strong content:

While you want to set a per­sonal tone, the newslet­ter must offer valu­able infor­ma­tion or it just becomes clut­ter. Here are the sec­tions we include:

• Dis­play your research: In the left col­umn of the first page, we list all my broker-dealer research department’s recent pub­li­ca­tions with links to access them. We also include other note­wor­thy pub­li­ca­tions, such as recent pieces pub­lished by Black­Rock; or other port­fo­lio man­agers we respect. Indeed, your local whole­salers will be happy to pro­vide you with plenty of content.

• Mar­ket update: After the FWIS col­umn, we fea­ture a weekly mar­ket update that focuses exclu­sively on the week’s activ­i­ties in the mar­kets. The mar­ket update dis­cusses what drove the action. A quick chart shows returns of the major indexes and returns for the week and year-to-date. We use an out­side mar­ket update that is already compliance-approved and costs us about $300 per month.

• Did you know: This sec­tion cov­ers a vari­ety of top­ics: We might share inter­est­ing trivia, or high­light recent awards or other recog­ni­tion we’ve gar­nered. For exam­ple, in Novem­ber we posted the fol­low­ing“News tid­bit”: Did you know that the aver­age Thanks­giv­ing din­ner, accord­ing to the Amer­i­can Farm Bureau, will cost 13% more this year?

• Per­sonal finance cor­ner: Run­ning 100–300 words, this sec­tion focuses on issues such as whether you should lease or buy a car; the impor­tance of long-term care insur­ance; credit card reward pro­grams, or best travel and air­line websites.

• Please take our sur­vey: We always link to a sur­vey. Our the­ory is that you should be able to com­ment on our firm, just as you can com­ment on inter­ac­tions you have with hotels like the Four Sea­sons or your local car deal­er­ship when your car gets ser­viced. We use Sur­vey­Mon­key and review the feed­back once a month in our weekly team meeting.

• Impor­tant dates: Finally, we include a cal­en­dar of impor­tant dates such as: office clo­sures, upcom­ing sem­i­nars, and client events. For the lat­ter two, we include an oppor­tu­nity to RSVP and a description.

As you can see, the over­all tone of “The Week Ahead” is not busi­ness or “salesy” in nature. We use it as a way to con­nect with clients and keep them informed.

For more ideas, you can see a sam­pling of our newslet­ters on our web­site under the “Client Com­mu­ni­ca­tions” section.

Good luck to you, and happy pub­lish­ing! Have fun keep­ing in touch with your newslet­ter, and proudly dis­play it to your clients dur­ing your review meetings.

You’ll be glad you did.

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Tags: Conversations, Credible Sources, Critical Reading, Debra Taylor, Economist, Effective Marketing, Email, Financial Advisors, Fortune, Horsesmouth, Investment Advisors, Lawyer, Macgray, Marketing Efforts, Marketing Tool, New Insights, Page Newsletter, Prospective Clients, Recent Article, Time Commitment
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Using Pinterest for Financial Services

Wednesday, April 18th, 2012

by Shauna Trainor, Covenant Group

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Tags: Aite, Amount Of Money, Bank Of America, Communicating With Friends, Covenant Group, Credit Unions, Financial Advisors, Financial Services Sector, Linkedin, Marketing Materials, Merrill Lynch, Newspaper Column, Pinboard, Posting News, Printed Marketing, Saving Money, Senior Analyst, Skeptics, Social Networks, Visuals
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Template for a mid-year letter

Wednesday, April 18th, 2012

Below is a tem­plate for a mid-year let­ter to go to clients. Please make sure you read the accom­pa­ny­ing post, Guide­lines for An Effec­tive Mid-Year Let­ter.

Please remem­ber that this let­ter is intended as a tem­plate only, be sure to take the time to mod­ify this to reflect your per­sonal views.

June  22, 2009

A mid year note to clients

For many of us, the July 1 Canada Day hol­i­day is the offi­cial begin­ning of summer.

It also marks the half-way point of the year.  Look­ing for­ward, I am cau­tiously opti­mistic -  and want to share some thoughts on why that is, where mar­kets stand today and what we can look for in the period ahead.

Where we are today

If you’d asked fore­cast­ers in early March about prospects for the econ­omy, you’d have heard some very dire pre­dic­tions — this was when the con­ver­sa­tion about the pos­si­bil­ity of a depres­sion or Japan-like lost decade was at its loudest.

While we still face sig­nif­i­cant chal­lenges and there’s no short­age of neg­a­tive fore­casts, it does appear that the worst is behind us:

• Although we are still see­ing some tough news on job losses and cor­po­rate earn­ings, it appears that global economies have gen­er­ally sta­bi­lized and early March was the point of max­i­mum fear and pes­simism. Since the mar­ket bot­tom on March 9, we have seen global mar­kets rise by about 40%
• Con­sumer and busi­ness sen­ti­ment has shown mod­est improve­ment and some impor­tant eco­nomic indi­ca­tors have gone from neg­a­tive to neu­tral and in some cases pos­i­tive.  Much has been made of the so-called “green shoots” point­ing to early signs of recovery.
• While busi­nesses are still cau­tious, access to lend­ing has improved and we are see­ing some pos­i­tive prospects for a resump­tion of eco­nomic growth. The cur­rent fore­cast is for the U.S. to exit its reces­sion in the sec­ond half of this year and for mod­est growth in 2010, fol­lowed by a return to stronger growth in 2011.

Select one of the two arti­cles below to insert here

As an exam­ple of the improv­ing out­look, here’s a June 16 arti­cle from the Wall Street Jour­nal on an upgraded fore­cast for the U.S. econ­omy by the inter­na­tional Mon­e­tary Fund :

WSJ​.com — IMF Upgrades Its View of U.S. Econ­omy*

or

The arti­cle below from the June 19 Globe and Mail, titled “IMF sees eco­nomic slump mod­er­at­ing”, is an exam­ple of the more upbeat think­ing on tim­ing of a U.S. recovery.

http://​www​.the​globe​and​mail​.com/​r​e​p​o​r​t​-​o​n​-​b​u​s​i​n​e​s​s​/​c​r​a​s​h​-​a​n​d​-​r​e​c​o​v​e​r​y​/​i​m​f​-​s​e​e​s​-​e​c​o​n​o​m​i​c​-​s​l​u​m​p​-​m​o​d​e​r​a​t​i​n​g​/​a​r​t​i​c​l​e​1​1​8​8​6​05/

Rea­sons for cau­tion in the near term

In my con­ver­sa­tions with clients over the past while, the num­ber one ques­tion relates to the out­look for the period ahead and what we should be doing in our port­fo­lios as a result.

Hav­ing said that the worst appears to be behind us doesn’t mean we won’t see con­tin­u­ing chal­lenges in the econ­omy and stock mar­kets in the period ahead.

As I said at the out­set, I am in the cat­e­gory of “cau­tiously opti­mistic.”  Here are some of the things that make me cau­tious — note that some of these will be pos­i­tive in the mid and long-term, but are prob­lem­atic in the short-term.

• Amer­i­cans have responded to declines in stock mar­kets and house prices by reduc­ing spend­ing and increas­ing sav­ing. Lower con­sumer debt is pos­i­tive long term but given that the con­sumer accounts for 70% of the U.S. econ­omy this lim­its growth prospects in the near term.
• The U.S. hous­ing mar­ket is still a mess, with 20% of Amer­i­can mort­gages “upside-down” cat­e­gory, where the mort­gage exceeds the value of the house.  House prices do show signs of bot­tom­ing but it will take some time for the hous­ing mar­ket and U.S. gov­ern­ment poli­cies to work through this.
• Many of you have read about “delever­ag­ing” by busi­nesses and finan­cial insti­tu­tions. This is a fancy word for reduc­ing debt — and while decreas­ing debt lev­els will increase sta­bil­ity and reduce pain in a down­turn (a good thing), it will also lead to lower earn­ings than we saw in the past few years.
• Reduced debt will par­tic­u­larly hit the prof­its of many U.S. and Euro­pean banks, which are also elim­i­nat­ing high risk oper­a­tions. While this will result in fewer acci­dents and lower volatil­ity in earn­ings, it also means that some of the sources of wind­fall prof­its from trad­ing and cap­i­tal mar­ket activ­i­ties over the past decade will dis­ap­pear going forward.
• With the global econ­omy still oper­at­ing well below capac­ity, in the near term many com­pa­nies will strug­gle for rev­enue growth and will also be fac­ing pres­sure on mar­gins; this will inevitably hurt profitability.
• Gov­ern­ments are fund­ing their stim­u­lus spend­ing with record issuance of new debt and bud­get deficits. At some point, this will have to be repaid — and also runs the risks of fuelling infla­tion down the road.

Why I’m opti­mistic in the mid-term

While these chal­lenges are real, I believe they are fun­da­men­tally man­age­able and that they are out­weighed by the mid and long-term pos­i­tives. I don’t believe any­one can pre­dict mar­ket move­ments in the short term and so avoid doing so myself — instead I try to focus on prospects for the econ­omy and mar­kets look­ing out eigh­teen months to three years.

When I do that, there are numer­ous rea­sons for optimism:

• The coor­di­nated action by cen­tral banks and gov­ern­ments around the world appears to have sta­bi­lized the econ­omy and pre­vented the pre­cip­i­tous decline that many had feared. We’ve never seen the level of inter­na­tional coop­er­a­tion on the eco­nomic front that exists today.
• Some of the most extreme fears about the global bank­ing sys­tem now appear exag­ger­ated. The stress tests of bank bal­ance sheets in the U.S. gave most banks a clean bill of health and some have started repay­ing the funds they received ear­lier this year (although these stress tests also high­lighted con­tin­ued prob­lems with a few large finan­cial institutions.)
• We’re going to come out of this with a more solid, bet­ter reg­u­lated global finan­cial system.
• The focus on energy self-sufficiency and clean fuels has unleashed a frenzy of entre­pre­neur­ial activ­ity around the world, with break-through tech­nol­ogy being devel­oped by many small and mid-size com­pa­nies. In the past year, For­tune Mag­a­zine has devoted con­sid­er­able space to pro­fil­ing some of these com­pa­nies, here’s a link to an arti­cle on green firms of the future.

6 green tech firms of the future — Green Wom­bat*

• Many of the build­ing blocks that led to opti­mistic fore­casts a year ago are still in place — the impact of tech­nol­ogy on pro­duc­tiv­ity and prof­its, record lev­els of research and devel­op­ment around the world, the emerg­ing mid­dle class in China, India and other devel­op­ing coun­tries, con­tin­ued growth of trade and the global move to open markets.
• Canada’s econ­omy is well posi­tioned for the future, despite the cur­rent issues with the man­u­fac­tur­ing sec­tor and com­mod­ity prices. Our banks and real estate mar­ket never par­tic­i­pated in the excesses seen else­where, our man­u­fac­tur­ing sys­tem is going through the nec­es­sary adjust­ments to com­pete going for­ward (albeit some of these are very painful) and as we see a return to global growth we’re likely to see com­mod­ity prices rise in response.
• Most impor­tant for investors, the bulk of the bad news appears to be fully priced into cur­rent stock val­u­a­tions. Many vet­eran money man­agers with strong track records are iden­ti­fy­ing excel­lent val­ues and a num­ber have said recently that they are able to buy good qual­ity assets at prices well below their real value.

What I’m rec­om­mend­ing today

While the eas­i­est prof­its may be behind us, I still see good oppor­tu­ni­ties in qual­ity stocks with attrac­tive div­i­dends, with strong cov­er­age should prof­its decline. Even after the recent runup, for exam­ple, the div­i­dends on all the Cana­dian bank stocks are well over 4% and the div­i­dend on BCE is over 6%.  The div­i­dends on these stocks not only gen­er­ate good income but also pro­vide a buffer should mar­kets move down.

As well, I like the value in invest­ment grade cor­po­rate bonds and high yield bonds. While the greater volatil­ity in these requires a stronger stom­ach than gov­ern­ment bonds, the gap between the inter­est rates on these and gov­ern­ment  bonds is at his­tor­i­cally high lev­els, even after nar­row­ing over the last while.

Going for­ward, expect con­tin­ued volatil­ity and head­lines that will cause alarm. As a result, I am focus­ing on well known com­pa­nies with strong bal­ance sheets and on build­ing bal­anced, diver­si­fied port­fo­lios — one of the impor­tant lessons from 2008 was the crit­i­cal impor­tance of true diver­si­fi­ca­tion across dif­fer­ent asset classes. I am also mon­i­tor­ing any signs of sig­nif­i­cantly higher infla­tion or a pat­tern of cor­po­rate earn­ings com­ing in below fore­cast, either of which would cause a rethink­ing of our port­fo­lio strategy.

In light of what’s hap­pened in the last year, all investors need to take a hard look at their risk tol­er­ance and finan­cial sit­u­a­tion. I would be happy to sit down to update your finan­cial plan and dis­cuss any changes aris­ing from this process.

In con­clu­sion, I want to express my thanks for your patience and under­stand­ing through what has been an excep­tion­ally dif­fi­cult period. All of us have found our­selves chal­lenged over the past nine months — and I look for­ward to being able to look back on this last while as a once in a life­time test of our dis­ci­pline and resolve.

Best wishes for a relax­ing and rest­ful sum­mer — and remem­ber, should you have any ques­tions what­so­ever, my team and I are here to take your calls.

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