New York City: “I don’t know whether I’m feeling ‘Madoffed’ or this economic meltdown has taken a serious toll on my confidence,” said Charlie, “Whatever the reason I’m not performing at the level I should.”

Charlie is not alone. A quick glance at our research illustrates a trend line from 2007 to 2009 regarding affluent client acquisition that is not good. Findings tell the story (the percentages indicate the financial advisors who brought in 10 or more clients over the past 12 months):

10 or more:	2007	2008	2009
$250,000	26%	12%	3.2%
$500,000	12%	7.9%	1.3%
$1MM or greater	7%	3.9%	1.3%

From a statistical vantage point this signals advisor paralysis. You can consider this a leading indicator, for if advisors don’t stop playing victim and start going on the offense, there will be fewer advisors in the future.

Our “Winning in Tough Times” mantra; Your actions over the next 12 to 24 months will define your business for the next ten years cuts both ways. Invert that statement in the spirit of Charlie Munger and you will probably be taking a glimpse into the future.

The irony is that this environment, as challenging as it may be, is the perfect storm for Rainmaking. We have seen advisors bringing in assets at a pace and level they have never experienced. Affluent investors are beyond dissatisfied, many are disgusted. And not only with Wall Street, politicians, and regulators, if their advisor has been playing the role of victim, they’re also disgusted with their financial advisor.

Voila – the Rainmaking opportunity of a lifetime! You have no competition (98.7% of your colleagues are not Rainmakers), you have dissatisfaction at record levels (you must have dissatisfaction in order to sell intangibles), which have created opportunities nearly everywhere you turn on the affluent playing field (people are incessantly talking about our financial crisis). You couldn’t make up this scenario if you tried.

In this environment, spending all day talking to existing clients is not good for an advisor’s sanity, much less the future of his business. Whether you realize it or not, most of these conversations revolve around events that are outside of your control and you find yourself playing defense. Even with clients who understand that Wall Street’s meltdown is not your fault, a twinge of guilt will seep into your psyche. Too much of this will zap the energy and enthusiasm from even the best advisors. It’s become all too obvious that this is occurring more than anyone would like to admit.

Regaining your MOJO is a two-step process. First, it requires that you flip the switch in your mind and make a commitment to focus your energy only on things that you can control. This alone will allow you to be proactive rather than reactive. Whether it’s taking time to exercise, enjoying activities with your family or at work, being proactive is always a tonic to one’s attitude.

Second, as a financial advisor, it is important that you make the necessary adjustments to your daily routine. Again, the idea is to regain control by being proactive. I recognize this is easier said than done, but by simply blocking time for making outbound calls to clients (servicing — playing defense) you will limit the number of inbound calls that force you to react. Then by allotting another block of time for getting out of the office and executing one or two high-impact Rainmaking activities (playing offense), you will find yourself very naturally reaffirming your value.

As a Rainmaker told me recently, “My value was reaffirmed. I couldn’t believe it, my two new clients weren’t even getting their calls returned from their advisors. Their comment to me was ‘I don’t care if you beat this guy’s performance; I just want you to communicate with me and guide my family through this mess.’ It feels so good talking with clients of other advisors – when I’m Rainmaking I’m reminded of how well we serve our clients compared to the competition.”

Not only did this advisor land two new affluent clients, $1.5MM and $2.3MM respectively, he understands the psychological importance of prospecting in today’s environment. He’s using his offense to keep his mojo on track.

I am not advocating that you neglect your clients. Hardly! But you cannot do your clients much good playing the role of a victim. What I am strongly recommending is that every day you need to get out of your office, engage in conversations with non-clients, apply your affluent sales skills, and aggressively go after new affluent relationships.

After all, the prospecting stars are aligned and there is NO competition.

“The sure way to miss success is to miss the opportunity.” — Victor Chasles

Providing superior client service is perhaps the greatest missed opportunity among financial advisors.  Just stop for a moment and consider these statements:

• Your clients are the lifeblood of your business…
• When you build your clients’ loyalty and confidence; you will uncover significant opportunities for new business and high quality referrals…
• Providing your clients with superior service and advice means your work is more satisfying and drastically reduces your need to look for new clients…
• The more time you spend in client-facing activities, the more income you will generate for your practice and yourself…

To some, these phrases state the obvious.  After all, top advisors leverage these concepts everyday; they work hard to spend as much time with their clients as possible.  Unfortunately, most advisors spend less than half of their time in client-facing activities.  What’s more, the majority of financial advisors lack a client communication plan — a simple calendar for scheduling and tracking basic contacts.

Sure, there are many seemingly reasonable excuses for this lack of client attention.  From poor organizational skills to a shortage of time to lack of financial resources, the list appears endless. Yet, this one area of practice management separates many high achievement advisors from the rest.

To jump start your success, you need to focus on “Delivering the Ultimate Client Experience.” This concept includes 6 specific activities for streamlining and elevating your approach to client service.  We want your clients to view you as an indispensable resource — a trusted advisor worthy of overseeing more assets and receiving increased referrals.  Here is how you begin:

1.  Determine your client segments — Unless you work exclusively with a highly scrutinized clientele, segmenting or re-segmenting your clients is an important first step to “Delivering the Ultimate Client Experience.”  Not all clients want, need or deserve the same level of attention.  Develop your service model to cater to the needs of your ideal clients and those who have the potential to be ideal clients.

2.  Build a communication calendar — At a minimum, your top clients expect and deserve 24 touches each year.  These contacts are at the heart of “Delivering the Ultimate Client Experience.”  Your touches should include letters, emails, calls, meetings and special events.  Some of these contacts need to be highly customized while others may be less personal.  And though you may think you make 24 contacts to each of your best clients during the course of a typical year, you shouldn’t leave it to chance.  Build your foundation for superior client service by designing a communication calendar which outlines year-ahead or at least quarterly touches.

3.  Monitor the amount of time you spend with current and future clients — Advisors who spend more than 50% of their time in client-facing activities have happier clients and higher incomes than those who spend less.  In “Delivering the Ultimate Client Experience” you should color code your calendar to monitor the amount of time you are dedicating and spending with clients and prospects.  Most electronic calendars, like Outlook, give you this option.  If you use a paper-based calendar, use different color pens or highlighters.  This simple technique will help you budget your time going forward and measure your results as you look back.

4.  Turn your clients into advocates — Advocacy is a process for turning your clients into promoters of your business.  Advocacy leads to new business and asset opportunities as well as highly qualified referrals and references.  When advocacy is communicated properly and frequently, your clients see it as a mutually beneficial and highly professional attribute of your business.  To “Deliver the Ultimate Client Experience”, you need to make sure advocacy is part of your client service offerings.  As the year gets underway, build advocacy discussions into your review meetings and continue with this dialogue throughout the year.

5.  Define (or refine) your Client Management Process (CMP) – Your CMP is the primary strategy you utilize to manage and monitor the financial side of your client relationships.  It could be comprehensive financial planning, asset allocation, estate preservation, retirement income planning or any of a number of other specialties.  “Delivering the Ultimate Client Experience” requires your process be well-defined and delivered consistently.  Though you may choose to offer or outsource related services, your professionalism and expertise are best evidenced by the way you implement your Client Management Process.

6.  Offer “something special” from time to time — Although consistency is at the heart of all the client care initiatives mentioned so far, it never hurts to add in a few surprises.  You could host a “thank you” event and invite your top clients.  You could send a handpicked gift along with a personal note to a client on the anniversary of your first working together.  Saying thank you and memorializing special relationships is an important element of “Delivering the Ultimate Client Experience.”  Consider how you could offer “something special” to each of your top relationships during the year.

“Delivering the Ultimate Client Experience” should not be viewed as a laborious chore; it is an opportunity which will lead to your future success.  Challenge yourself to implement the 6 activities outlined above and your business will thrive.  Remember, your clients are your greatest asset, treat them well and the results will be more than you could possibly expect.

If you would like to learn more about “Delivering the Ultimate Client Experience”, sign up for our free 6 day e-course: http://www.encoreadvisor.com/public/197.cfm.

I am constantly amazed at the disparity between advisors in a down market. Some are doom and gloom, Chicken Littles and others are laughing all the way to the bank. One of the great things about my job, is that I get to see inside the offices of dozens of multimillion dollar advisors every year. This gives us a great look at what is working in the bear market and what is not.

 

Here is what I know: many successful advisors see the current market as an unprecedented opportunity to capture more business. In fact, we will probably never see an opportunity like this again in our lifetime.

 

Here are 6 things successful advisors are doing to keep their clients calm and attract clients in the bear market. A quick look will also show you why some advisors are having so much trouble.

 

1. Full, comprehensive, CFP®-level, financial plans for all their clients.

 

This will date me, but 19 years ago, I was legal counsel to the IDS Mutual fund Board of Directors. In that role I would have access to the thought process and business strategies of the management team. Of course, IDS (now Ameriprise) was the first national broker dealer to promote comprehensive planning. The statistics they had were nothing short of amazing: investors with plans invested more money, were happier with their advisors, stayed clients longer, were less likely to sue, and by the way, the advisors made more money (a lot more money!). What’s not to like about these results?

 

Even with these results, they were having a hard time getting their advisors to do comprehensive plans.

 

It seems little has changed. Fast Forward 16 years, we had another broker dealer call us because they wanted Vestment Advisors to do gap analysises and business plans for their top 20 advisors over two years. (We call this a SWOOP® report for Strengths, Weaknesses, Opportunities, Obstacles and Plan). Once again, we were taking an intimate look inside the kimono of the top advisors in the country. 

 

Here is what we discovered: only about 10% were actually doing comprehensive planning in some form that came close to CFP® guidelines. This was true, even though, 100% were holding themselves out as financial planners. Why is this a problem? These advisors are not  meeting client expectations; they are not gathering all the client’s assets; and they are not building client loyalty during down markets.

 

 

The advisors doing the comprehensive, soup to nuts, financial planning have clients who are weathering this storm. They may not like the storm, but they do like their advisor and they don’t want to can him or her, just because the market is down.

 

These investors know there is more to their financial future than just accumulation. That is just one part of the puzzle. They also need to think about distribution, protection, estate planning, and of course taxes.  Their advisors are keeping things into proper perspective for them. Or as I tell our audiences: get your clients eyes off the market and on to the plan.

 

If you properly position your services in the mind of the client, they will know that the markets have an impact on their future, but the biggest issue is where are they now, in relation to their plan?  For most clients, they should still be on track. Or if off track, your financial plan will let you know how you have to make adjustments.

 

Now for the doom and gloom advisors, here is what they are doing differently: they may be calling their deliverable a “plan” but it is an investment plan, not a financial plan. Typically it will include some asset allocation models and maybe some pretty boxes showing the client where they live on the efficient frontier. Typically this leads to product sales, individual equities, bonds or managed money.

 

Is this good for clients? Well, sure, but it is only a part of the picture. Presented this way, it encourages clients to be glued to the CNN news, watching the market reports. It is also misleading to investors, because investors believe they are getting a full, comprehensive plan, and they are getting something much less.

 

I predict these investors will be the ones suing their advisors.

 

2. On going communication with clients

 

The prospering advisors have done a great job in advance of the market demise to position themselves as the point of education for their clients. The advisor is first source the client turns to for information about the markets and economy. They do not look to the evening news to do their thinking for them.

 

One of our advisor clients near San Francisco, calls their A clients every 6 weeks, during good markets! During bad markets, it might be every 2 to 3 weeks. Most of these calls are informal, friendly “check ins” and have nothing to do with their finances. They do set the tone and create loyalty and camaraderie.  They have been communicating with clients this way since they started their firm many years ago. When I asked him how his clients were fairing, he said they weren’t happy with the market, but they were not alarmed either. In fact, they were pretty calm, a remarkable response considering the meltdown.

 

Another firm we know, also near San Francisco,  has been hosting quarterly educational meetings for clients and guests in their office conference room for many years. It is large enough to hold over 24 at one time. They usually will have an informal discussion on the economic forecast, or other financial topics and take questions. Part of what is so intriguing about their low-cost system, is they don’t bother to promote it much to clients. The clients already know which days these educational sessions are being. There is no RSVP required—clients just show up and bring friends. Before the market crash, they would get about 12 attending in a quarter. The last once they held—twice as many people were there. This firm also reported their clients were amazingly resilient.

 

I loved this approach—it was cheap, easy and efficient.  Furthermore, it gave the clients a great sense of comfort—they knew right where to go to get their questions answered.

 

 

Surprisingly, few advisors are communicating with their clients via e-zines. Some are even down right homey, referring to their children’s wedding or a recent trip. The few of these that I have seen, all have something in common: they are written by the advisor himself, they are not ghost written by a product sponsor company. This gives the advisor to once again show their expertise and their differentiation while calming the investor’s fears.

 

Special meetings are also being used. These are less stress than you think. Hire out the local country club, or even the meeting room at the Library. For your content use some of the powerpoint presentations that vendors are creating. John Hancock has one that is very popular with the multimillion dollar advisors.

 

 

3. The WOW experience. We still believe in giving clients the WOW experience, something so powerful they can’t get it elsewhere. If you have been reading my articles on this subject, you know it is the little, inexpensive things that really make a difference in how the client perceives you.

 

One advisor from New York had heard me recommend little touches like hot cider (which smells great on a cold day) served in nice china tea cups.  This is a big switch from most firms that are serving instant coffee in Styrofoam cups.  She went out and got her office outfitted. Later she called me to say she picked up a $1.5 million dollar account from a widow. This advisor swears it was the hot apple cider that closed the deal!

 

 

4. Manage the client’s expectations.

 

Out of all of our recommendations, this is probably the most important. It never ceases to amaze me how many advisors don’t take the time to really know their client and uncover all their expectations. These would be expectations that go beyond their portfolio, but also on their relationship with their advisor.

 

Successful advisors have already made it a practice to use an Investment Policy Statement for every client.  In creating these documents, they have already had the “life boat drill” with their clients. The advisors have previously run through the horrible imaginables, and gotten a feel for how the clients will react to a severe market downturn. Once they have discussed the options, the advisor created an IPS to document the client’s desires and spelled out how the client would want their portfolio handled during down turns.

 

Bottom line—there are no surprises for the investor.

 

The one thing I learned working for the directors of a big Mutual Fund Company—Directors and Investors HATE surprises. Our job is to manage their expectations in such a way, they are never surprised.

 

One great way to do this, I learned from my good friend Mark Bass. He says this to every new client. “I want you to know, over time, something we do will lose money. I don’t know what it is, but I do know it will happen.”

 

I would tell clients: “I can’t promise you returns, no one can, but I can promise you great service.”

 

 

5. Use Alternative Investments.

 

Successful advisors have been using alternative investments like oil and gas, REITs, notes and the guaranteed returns of VAs.

 

 

When it comes to investing, clients want to feel like winners. When the market is up, they do feel like they are winning. But when the market is down or sideways, they feel like losers. This is never a great mindset for your clients and is a sure way to be looking at an arbitration claim if it goes on long enough.

 

What I like about Variable Annuities is if the market is up, the client feels like they are winning, of course. But if the market is down or sideways, they also feel like they are winners—a great mindset for your clients.

 

Now, I know a lot of people, including Suze Orman, think VAs are straight from the devil.  I happen to disagree.

 

For some clients, the additional expense of the VA guarantees are well worth the money. I think of them as guard rails over the Mississippi River in Minneapolis. Some people are willing to pay for them and some are not. Just make sure your clients know VAs, and other alternatives are available and let the client decide what they want to do.

 

The clients whose advisors put them in VAs are now quite happy with those guaranteed 6 and 7% returns. They really feel like they are geniuses!

 

6. The Advisor has a Great Attitude.

 

One of the key differences I have seen in being able to keep your clients in this market is the attitude of the advisor.  A few weeks ago, I was doing a conference call with a group of top producing reps and the president of their broker/dealer.  The difference in the advisor’s attitude was remarkable.

 

One advisor from Florida, who had been doing all the things I mention in this article, was actually cheerful and up beat. He reported that they had only had 3 phone calls from clients and none of the clients he had proactively called were wildly upset. They were picking up a lot of new clients and he was sleeping soundly at night.  He credited their financial planning process with keeping clients calm during the down market.

 

On the other end of the spectrum, we had another advisor on the call who was all doom and gloom, a real Chicken Little. It was like listening to Eyeore on downers. This advisor was sure the sky was falling, we had never been in such terrible markets, it would go on forever and he had no idea how much worse it would get or what to say to his clients. Other advisors tried to cheer him up to no avail.

 

I almost felt sorry for Mr. Doom and Gloom. I realized he was getting all of his advice from CNBC and his clients were probably even more depressed than he was, because his mood was catching. No wonder his business was in trouble.

 

The best thing you can do for your clients is have a good attitude yourself about what is happening in the markets. Create a short story (3 to 5 minutes) on how the markets got to where they are and how long these down turns usually last. Finally, explain the stock market is “On Sale”. We all love to bargain hunt at Nordstrom’s—now they can do the same thing on Wall Street.

 

Your attitude should be empathetic, willing to listen to the client’s concerns, and (here is the important part) cautiously optimistic. The attitude you portray will greatly impact how your clients feel.  Naturally your calm clients are the ones who will be referring you business.

 

Personally, I don’t look at my own portfolio, because I know about market cycles and I know the direction it will be going. I chose sound companies and I know they will rebound. I also don’t listen to network news. Twenty minutes of Shepard Smith on Fox was enough to have me looking for Valium.

 

 

In short, I know there has never been a better time to gather new clients, love ‘em up, and help them reach the financial future of their dreams. These new prospects are unhappy and much more likely to switch advisors now than in an up market. No one wants to make changes when things are working.

 

Use the market to your advantage! Solidify your current base of clients and get new ones in the process.

It’s no secret that for many years now, Pareto Systems has advocated using a regular call rotation with your best clients.

There are a variety of compelling reasons to use this inexpensive and powerful client service strategy.  By calling clients, you convey your proactive approach.  By calling clients when you do not have to share any specific news, you demonstrate your sincere interest in your clients.  If you keep meticulous notes of these conversations, you can build huge dossiers which remind you what matters in your clients’ lives.  These dossiers will never leave you stranded for things to talk about when you call.

Client Information Must Be Chronicled to Make it an Asset

We have seen far too many professionals who rely on their memories to store these client details.  Although this is quite functional for some, the information you learn about your clients is not really an asset of your company until the details are documented.  And make no mistake, this information is proprietary.  By documenting the information in an easily accessible database, nothing slips through the cracks.  You are able to invest every conversation into the next one. The Pareto Platform provides a place to record all types of client information and it ensures that your entire team has access to up-to-date details that allow them to provide consistent and personalized service.

Recognizing and Responding to Moments of Truth

Peter and Andrew are professionals who completed The Pareto System – Customized Implementation program.  Peter and Andrew maintain a regimented call rotation and they always note misfortunes or milestones that are occurring in their clients’ lives.  They are exceptional at the art of demonstrating to their clients that “yes, we are paying attention.”  They are especially adept at identifying and responding to “moments of truth” in their clients’ lives.  Moments of truth are those times when people are experiencing significant changes, challenges or celebrations – anything that is important in clients’ lives.

Two real-life examples from Peter and Andrew demonstrate the value of recognizing these moments of truth during the course of a regular call rotation.

On a quarterly call with one terrific client, Peter and Andrew learned that this client’s wife had been in the hospital for an extended stay and was now at home on bed-rest.  The client admitted that he was having a difficult time.

Peter and Andrew also had a gentleman client who was a golf fanatic.  Sadly, he became ill and for the last four months of his life, he was confined to the house.  He became incredibly frustrated at this change in his lifestyle, which he called his “incarceration.”

Take a minute and think how you would respond to these situations.  Would you have the necessary information about these clients to respond in a precise and meaningful way?  Is the information documented so that in the event of your absence, your staff could respond to these situations?  Peter and Andrew had detailed information on both of these clients and so were able to offer them honest, caring support during these difficult periods.

After hearing about the first couple’s misfortune, Peter and Andrew had a brainstorming session.  They sent their clients the mandatory get-well card, of course – and then they went the extra mile.  They hired a chef, and the chef went to the couple’s house and pre-cooked and froze a week’s worth of gourmet food. This thoughtful gesture only cost about $200, yet the value to the clients was incalculable.  The husband was so grateful; he nearly broke down in tears when he called to thank Peter and Andrew.

When Peter and Andrew learned that their golf-loving client was housebound, they purchased a handheld golf game and had it sent by courier to the client’s house. He was so tickled by their thoughtfulness that he remarked to his wife: “It made my day”.  After the client passed away, his wife made a point of telling Peter and Andrew that he adored that golf game, and played it incessantly; the game was a perfect distraction. The wife also made sure Peter and Andrew knew that her husband had told her to put her complete trust in them, because he was sure she would be well looked after.

Why Don’t More Professionals Deliver Service Like This?

Going the extra mile paid off for Peter and Andrew.  We are surprised that more professionals don’t practice a regular call rotation and exceed expectations. Perhaps the primary reason is that such activities usually don’t provide instant gratification.  Many professionals are still salespeople at heart and do not see the value/payoff.  They still work with the idea that if it does not impact the next paycheck, it isn’t worth bothering with.
Money Flows from Service

Once it is understood that revenue stems from service, you have a chance to understand something even more valuable.  Those in this business that enjoy substantially larger incomes do so because they deliver unexpectedly large degrees of service, and they do it on a consistent basis.  The way to generate unexpected service to your best clients is to ask yourself (and them for that matter), what do they expect?

Once you’re clear on what your clients expect, you can then meet those expectations consistently.  After that, you can move on to the fun part and ask “What can I do now that my clients won’t expect?”  As I’m sure you’ve experienced, it’s always the unexpected service that gets talked about, and it’s always ‘getting talked about’ that increases your professional value and your revenues.