By David Miller

It probably goes without saying that it is always a good idea to thank our advocates.

Your advocates are those people that rave about your services. For them, it truly is a kneejerk reaction to talk about you each and every time the topic of money or advisors come up.

Advocates understand your process for introducing other individuals like themselves and they follow that process out of respect for you and respect for their friends, family and associates. If they don’t mention you and your services they feel they are doing their friends a disservice.

Advocates see the opportunity to introduce someone to you as a service you provide to them. They don’t consider it a favor to you and they understand that everyone doesn’t become a client. It is a process of determining if there is a mutual fit and they know that anyone who is lucky enough to become a client of yours will be considering it as an accomplishment.

You might now be thinking: “Wow, do I even have any advocates?” Most likely you have a few and of course by following our program you can have many more.

Regardless, lets get back to the topic at hand. What do you do when an advocate calls and introduces someone to you? Your primary objective is to reward the activity and not the outcome. Your client has just made the effort to pick up the phone, call you, and proceeds to tell you about someone they know who they feel needs your services. After a call like that, and I am sure that during the call they rave about your services and the relationship you have with them—is it sufficient to simply say thanks and hang up the phone?

We recommend that you send them a card; the nicest card that you can possibly find. In the card you write a short note addressing the action and thanking them for the trust and confidence.

“Bill, Thanks again for the trust and confidence you have demonstrated in the services I provide to you. I am looking forward to meeting Sally and Bob –they sound like interesting people. We will see you next week at our semi-annual review. Sincerely, David”

This is not an elaborate gesture, and nor does it have to be. It can be very simple. It is always nice if you can refer to something personal about the existing client but the most important thing is that you are thanking them for the relationship that you both share, and the trust that they feel in the services and the advice that you provide. You are not thanking them for the business!

The question often arises: “Should I let my client know if the referral becomes a client?” I don’t think this is relevant. In doing so, you run the risk of appearing to thank them for the business, and you are slipping back into the role of a salesperson. The perception is that you just found someone else to sell to, whether that is true or not. Professional advisors recognize that one of the cornerstones of trust is congruency, and by placing the value on whether or not the referral becomes a client is not congruent.

So remember: take the time to thank your advocates and then make sure your note refers to the activity and rewards the client for what is truly important—a long-term trusting client.

For questions and comments join the Pareto Systems Group on LinkedIn and participate in the discussion.

By David Miller

The ‘elevator speech’ is a sales technique that has been around an awfully long time.  Although it may certainly have its place for specific types of salespeople, I for one sometimes feel it is extremely ill-suited in the Financial Advisory world. 

If you truly wish to have that consultative style practice, where referrals are the norm, it might be wise to abandon some of the sales approaches that were imprinted onto our psyches from day one in the business.  The elevator speech is one of those approaches.

For an advisor looking to attract affluent clientele, the very notion that I can compel or predispose someone to become my client because of some snappy banter upfront, is unlikely at best. 

I’ve heard Financial Advisors many times, and in various social situations, attempt to do this very thing.  As an observer, it seemed that if they accomplished anything, it was probably turning the listener off and inspiring them to seek better conversation elsewhere.

The irony of it all is that people are attracted to things that they cannot have, or that are ‘hard to get,’ so why do we work so hard to ‘chase’ with the elevator speech, when we really should be working on trying to ‘attract’ instead? 

That said, if you think about it, the elevator speech completely goes against basic human nature.  Further, although the words have been prettied up greatly, the elevator speech basically announces to the world that you are on the hunt for clients.  This is not attractive to me whatsoever. Is it to you? 

So what then is the alternative? This is a recurring situation, in a variety of business and social interactions where we are asked what we do for a living.  How best to make that compelling and attractive?

The answer lies in trying to paint a picture, in as few words as possible, that describes your business in a way that the listener wants to be a part of.  You then stop talking about it.  You then start asking that person questions about their life and their business.  Trust me, even if you don’t say another word because the person is telling you their entire life-story, they will recall you later as that amazing conversationalist at the party.  You know, the one with the exclusive Financial Advisory practice?

An example of some anti-elevator phraseology (delivered in a low-key and casual tone, and of course with a smile):

“Oh, well. I am a Financial Advisor.  I have a practice in town here that intentionally has a smallish number of very terrific clients, and you know, ever since I started working with people that I like, it’s a lot more rewarding for me, it’s more exclusive, and I am really enjoying some terrific relationships with my clients.  You know, I really wish I had taken this approach years ago.  It is just a really exciting time to be in this business.  Well enough about me.  How about you Dorothy? What do you do?  Oh really? How interesting, please tell me about that.”

So, to dissect that suggested phraseology, you have just described an attractive situation that any reasonable person would want to be a part of, but you made no overtures to doing business together.  You alluded to your approach by talking about the great relationships you have formed, which displays your integrity.

You also projected great scarcity for yourself in the process, and you have made yourself attractive.  Anyone reading between the lines sees someone who clearly does not need the business, and your probing questions about them show charm and confidence.

I know of a young advisor that used this exact approach.  He worked previously at one of the ‘Baby Bells’ (phone company), and continued to network with his past colleagues, and some other local groups, and in seven months had seven clients that all had three-million or more each in investible assets.  This last fact was by design as well, for he had set an ideal client profile for himself that stated his target market was people in the three-million plus range in investible assets, and he stuck to it religiously.

This advisor had incredible discipline and word started to get around.  Every time one of his ex-colleagues asked him what he was doing these days, he stated his anti-elevator mantra, and then started gathering F.O.R.M. information on whoever he was talking to (Family, Occupation, Recreation and Money).

Because of his discipline, you can imagine it was only a matter of time before someone said: “You know, I am not that satisfied with my Financial Advisor right now. Are you taking on new clients?”  He would reply: “Well, that possibility is there for sure, but it has to be a good fit for me, and for you of course. How about you give me your number, and I will call you when I am at the office.  I have an initial meeting process I use whereby the two of us can mutually determine whether or not we might be a good fit for each other.”

After this, they would get back to having fun, or business, or wherever it is they happened to be.   It is an incredibly disarming approach, and unlike what many have come to expect in those all-too frequent situations.

For questions and comments join the Pareto Systems Group on LinkedIn and participate in the discussion.

By David Miller

Tax season is over and soon I am going to head in to see my accountant for a review of where we are at. Perhaps we will also do some planning for the coming year. Interestingly, even before I open the door, I know exactly what is going to happen when I walk into her office.

The very polite and respectful receptionist will ask me who I am and who I am there to see. After I give her my particulars, she will tell me that my accountant will be a few more minutes finishing something up and will be out shortly. She will then offer me a cup of coffee and I will decline because I do not drink coffee. When I say: “No thank-you I don’t drink coffee,” she will say: “If you would like some bottled water it is in the fridge over there. Feel free to help yourself.”

How do I know this will happen? Let me assure you, I am no Nostradamus; however, I know it will happen just as sure as I am telling you now, because it has played out exactly like that for the last twenty times I have gone into her office. That said, I am fairly certain nothing has changed since the last time. Is there anything terribly wrong with this? Well not really; everyone is respectful and it is consistent. I may love to get some fresh water and have a drink while I wait and I can easily take it into the meeting with me and continue to sip on it as we discuss my situation.
But here is the vital question: Have they illustrated that they are paying attention to me and that they value me as a client? Do I feel special? Of course the answer to both these questions is a resounding “No”. I really never feel like I am anything more than one of many. In other words, there is really nothing special about me.

What would be an optimum experience for a client coming into your office?

A client walks into your office and is greeted by the receptionist. She knows the client’s name and is expecting him. She lets the client know that you are finishing something and that you will be free in just a few minutes. (Book your appointments far enough apart so that this is always possible.)

Your receptionist then asks the client if they would like a cup of green tea. She asks this because in a previous appointment she took the time to ask the client what they prefer to drink. She could have even been as specific as to ask what brand the client prefers. When the client is asked if they would like a cup of green tea, his response is palpable. His face lights up, his tone changes, he sits forward and feels engaged. You have catered to your client as a unique individual and he is responding. He may even ask: “Do you have the peppermint green tea you served me last time?” Your receptionist responds: “That is just what I was going to suggest. Would you like it in a teacup or a mug?”
How does the client feel? As one of many? Not likely.

Shortly after the client is served their tea, you walk into the reception room. You offer your hand and say: “Hello John. How are you today? Did you get your green tea? Why don’t you bring it back to my office and we can begin our meeting.”

I know how this would make me feel. It is consistent and congruent, and I would feel that I am far more than just a one-dimensional individual that helps pay your bills. I am important to you as a client but also as a person. You pay attention to every detail and you are the person I want advising me now and in the future. And the next time that someone asks me if I am happy with my financial advisor I will rave about you. I might even bring up your name the next time I share some green tea with a friend. Such is the memorable power of consistency.

For questions and comments join the Pareto Systems Group on LinkedIn and participate in the discussion.

Take action:

Sign up for the May 26th webinar with Duncan MacPherson and special guest, Brad Prodger, Director, Worldwide Advisor Platform at Microsoft. Duncan and Brad will discuss how advisors can use CRM to increase productivity and profitability. Click here  for more information and email Duncan@paretosystems.com to register.

By David Miller

Looking for referrals? Be referable!

It would seem that one of the golden rules of conversation around the globe is the fact that in everyday conversation, people always tend to discuss the things that exceed their expectations, or that fall below their expectations. People seldom discuss the things that simply meet their expectations, for the simple reason that those types of things do not make for a very good anecdote.

As an advisor, you have a suite of services that you offer, and that people expect, when they hire you. These are things like review meetings, phone calls to clients, estate planning, investments etc. etc. You can do all of those things extremely well, but does that make you referable? For sure, during a job well is commendable, but if you limit yourself to these core deliverables, you have effectively shut yourself out of the areas where most referrals tend to come from.

Savvy advisors realize that those core deliverables that are expected of them are simply meeting expectations, and that in itself does not make for an interesting conversation. In fact, that is why the advisor was hired. He or she is compensated well for those core deliverables and life goes on. In other words, the likelihood that clients are out there chatting up that kind of advisor is slim.

Contrast that to an advisor that does all those core deliverables very well, but then goes above and beyond that for his best clients. That advisor keeps meticulous records on all his clients’ recreational details, and then plots service activities around what his clients like to do. Perhaps that is a wine tasting event, or maybe a nice client dinner several times a year, or maybe even renting a movie theatre one day and filling it up with clients and their families. You get the idea; when people’s expectations are exceeded in these ways, they will tell the story for days to come.

We worked with one advisor that called those service deliverables his Tabasco items. He said that any time he does those types of Tabasco service activities, he usually sees referrals follow shortly after. For good reason too.

Any time that clients are out there telling stories about how well they are treated, the people listening are contrasting that story with their own situation. If they are not as well served, and if the story is compelling and attractive, they get a nagging feeling that they are in the wrong place, and then they might think: “Why doesn’t my advisor do that kind of thing?”

These are the moments where the majority of referrals, or introductions, are born. To the listener, the grass looks greener indeed, and it is in these situations where an introduction often comes to life and results in a phone call to the more superior advisor.

Where it really starts to get interesting is when the advisor discusses his or her Introduction Process on a regular basis with those coveted clients that are receiving this top-notch service.

As we discussed in last week’s tip, with a dedicated Introduction Process, the clients begin to understand that these moments occur all the time whereby a chance encounter with a friend or family member reveals a situation where that person is not as well served by their current advisor. They also begin to understand that they are in a unique position to help. Better yet, the client knows precisely how to handle the situation, the correct steps to take, and how to get their friend or family member in front of the superior advisor.

No one is out there talking about how great your last review meeting was. That said, take a good look at your service matrix, and if it is lacking those types of Tabasco service items, identify which clients are deserving of such attention, and then start laying on the service. They will talk you up any chance they get. It’s human nature after all.

For questions and comments join the Pareto Systems Group on LinkedIn and participate in the discussion.

Take action:
Visit our new and improved website at www.paretoplatform.com and watch the video describing the Pareto Platform powered by Microsoft Dynamics CRM.

Tax season is over; your clients are wondering what is going on with the markets while your thoughts might be on what is going on with potential changes to regulatory law. On top of this, your practice is facing challenges ranging from staffing and workflows to trying to provide a sense of stability in very unstable times. Running a business is hard enough during Bull Markets; it can be even more challenging during a prolonged recession. More stress is not a great formula for growth.

Our own financial services practice has taught us some powerful lessons in the past year. We have had to constantly modify and “tweak” methods and systems that have been proven for over a decade. Mostly, we have had to assess our workflows and how we leverage our most valuable asset: our time. Being efficient while we help clients and prospects cope in a strange new world has been the key to surviving and growing.

For anyone that has worked with Vestment you know that we want advisors to stay in PMS: that is, Prospecting, Meeting with clients, and Securing the relationship. Time spent outside of this is only preventing growth and limiting the number of clients you have and the quality of the services you provide. This is why people on your team fulfill all the other efforts. Efficiency in your workflow is the key to building your practice and you staying in PMS. This is why we are so dependant on these “other efforts”.

There are a lot of other efforts. Our own financial services group has over 1,000 steps in the workflow. I set up our CRM software to defined and assign each step to the right person on the team while allowing me to monitor any activity in the practice at the click of the mouse. This system allows me to manage the practice no matter where in the country I might be as long as I have Internet access. Your workflow systems are ultimately dependant on your technology systems, and that is where the rub is…

What happens if the technology systems go down? I know, because it did a few years ago when a worm infiltrated. Two and one-half weeks and $12,000 later we had recovered our data and fixed the computer architecture. This did not count the lost costs in our inactivity while we were trying to piece together everything from our calendars to client records!

I was not going to let that happen again. The first step was buying a secure router. The next step was setting up three separate computer servers, one for general company files, one for our CRM system, and one for our confidential client files. Each server had a Raid backup drive and each raid had a USB hard drive for redundancy. What was the final step? I created a complete parallel system (secure router, three servers, Raid drives, and so on) at our home that does a full backup every night. On top of this, I replace all our team’s computers every three years.

It is very complex to manage and maintain, but the system is secure, and we have not had a failure since. Unfortunately, unless you personally have my background in technology, outfitting your practice like this will cost a lot of money.

What is the counterpoint out in the field in most of the advisor offices we have visited? Mostly old computers, old operating systems, few (if any) backup systems, online backup systems that will recover your data but could take 30 or hours to restore your systems if such a failure occurred, and niggling monthly costs of third party tech support teams.

Perhaps one of my most incredible experiences in assessing technology with a client was two years ago in an East Coast advisor’s office. One highly successful advisor and three team members to support him created over $900,000 in GDC annually. It was a great organization and wonderful people.

Unfortunately his chief of staff was using an old Dell. It was running Windows 2000 as an operating system on 512K RAM with a slow DSL connection to the Internet. On top of that, her computer worked as the server for managing all the data storage and Internet access for everyone and everything in the office. The result? You would type the letter “E” and could count “1, one thousand, 2, one thousand, 3, one thousand” before the “E” would appear on the computer screen.

So, what do you do? There is an undeniable need to improve efficiency, stabilize the computer systems, minimize tech costs, while still keeping current with a constantly changing technology environment (iPad anyone?). There is also a fairly large cost to pay to match what Vestment has done internally.

Recently I interviewed Randy Olson of IVDesk (www.ivdesk.com) and learned a lot has changed since Vestment’s system was infected. Randy showed me I needed to put my head “in the cloud” to break out of the costs and system support issues faced by advisors.

Randy’s company had taken all the Microsoft Office Suite, Advent, Juncture, your portfolio manager and other financial services packages and made them work on any computer via the Internet. The software is kept up to date with the latest releases, and even my Apple MacBook Pro could run PC based Advent and Juncture software through Firefox!

Did I need backups to our data? Cloud based technology systems manage this on the Web with the same kinds of redundant backup systems used by Google. Was I not able to make it to the office due to flooding? No problem, I just stop at the coffee shop that has wireless Internet and BLAM! I’m in my system.

What if I have a problem? No problem: IVDesk has a 24 hour 7 day a week live person hotline to get me past my challenges, even if I am trying to dress up a fancy graph in Excel for a client. Most Cloud delivery systems in financial services have some form of fast acting support.

Is it stable and does it work long-term? I was astonished to find out Randy’s company had been serving the financial services industry for 8 years, and that they had never have a client leave them!

Cloud technology is systematically being adapted by many large organizations in the industry. Merrill Lynch created an energy-saving risk management platform, Wall Street has a hosted Electronic Settlement Network that offers pay-as-you-go FX trade processing, and Pareto Group has had Cloud Based CRM for years, and is now partnered with Microsoft to offer Cloud based CRM customized to the practice management needs of financial planners. Most independent Broker Dealers are offering an increasing number of applications through their websites that are “Software As A Service” (SAAS) through the web.

The combination of a controlled monthly cost for technology, little to no service or maintenance fees, not having to manage the updates to all the systems is combined with a secure backup system. We think this is becoming an important piece of the practice management pie for Financial Advisors.

Who would have thought that the speed of your Internet was more important than the speed of your computer? After all, our focus should be on serving our clients, not managing our technology!

Net-net? We have to get our head in the Clouds.

p.s. If you would like to listen to my interview with Randy, please visit

http://vestmentadvisors.com/zen-of-bus.php

Peter M. Vessenes, RFC

Copyright Peter Vessenes April 2010