Continuous Client Service – It’s Time to Differentiate Yourself

It’s happening again!  Today, we launched Part 2 in our End-to-End Excellence Series – Continuous Client Service – Lock in Loyalty and Build Your Business to those of you who registered to receive it. (Hopefully you all registered for Part 1 last month – Sales & Onboarding – Your Last Chance to Make a Good First Impression).  It’s not too late if you didn’t.

Client service is becoming a differentiating value proposition. Done right, it can help you build trust with your clients, strengthen relationships and create a long and mutually beneficial partnership.  In the video and our advisor article, we describe the Five Essentials to Continuous Client Service:

1. Assume nothing and segment your book

2. Conduct impactful client reviews

3. Engage in frequent and tailored client touches

4. Track progress against client goals

5. Explore alternative communication channels

Now I know your days are packed with client meetings, prospecting and firm management.  You may find it challenging to devote so much time to building a continuous client service experience.  But I argue that these activities demonstrate your competence, build trust with your clients and enable confident decision-making.

Almost everything you do touches on the service experience.  By implementing the five essential elements to continuous client service, you can go a long way toward meeting – what we believe are – reasonable client expectations.

Don’t miss out – you can still register online and receive the video and its accompanying article and client review checklist.

Just a quick final note - the page will automatically update when new comments are added.  Please do not refresh your browser.

Now let’s get started with the Q&A!

Are you happy with your current client service and review process? Would you change anything based on what you saw and read today?

Information provided by SEI Investments Management Corporation, a wholly owned subsidiary of SEI Investments Company.

For Financial Intermediary Use Only. Not for Public Distribution.

Sales & Onboarding – Are You Ready to Dive In?

I hope so. Today, we  launched the long-awaited premiere of Sales & Onboarding – Your Last Chance to Make a Good First Impression to those of you who registered to receive it.

This is Part 1 in our End-to-End Excellence Series. Sales, onboarding and continuous client service are three closely tied stepping stones in what we call “The Client Service Continuum” (we’ll go over client service in Part 2).

I hope you enjoyed watching the video – I had fun making it. (Didn’t catch it? You can still register online to get it.) More importantly though, I hope you learned why creating a strong sales and onboarding process is more important today than ever before. There are so many benefits to having one:

• Improve client retention
• Create the perception you’re easy to do business with (and hopefully, perception is reality)
• Differentiate yourself from the competition
• Reduce the chance for operational errors
• Free you to focus on revenue generation

Don’t start over; retool

Now I’m not telling you to go out and change your entire process. If you have been successful in the past, you may just want to review our materials to see if there is anything you missed.

But for those of you who want more of a focus on building long-term, loyal clients and advocates, I encourage you to review the 9 steps outlined in the video companion article and follow our implementation timeline.

Yes, it will take resources and some more planning on your part, but in the end you’re saying to your new clients, “We’re excited about the relationship and committed to your success.”

Don’t miss out – you can still register online and receive the video and its accompanying article and implementation timeline.

Now let’s get started with the Q&A!

Are you happy with your current sales & onboarding process? Would you change anything based on what you saw and read today?

Your Living, Breathing Brand.

You might notice that Practically Speaking looks a little different today . This change reflects SEI’s  recent update to the look and feel of its web properties and materials – something marketing folks call “rebranding.”

Most people think that a brand is simply a logo or advertising, when in reality, it’s much more. A well-developed brand communicates who you are and what you stand for, how you are unique, and why a prospect should work with you. In the case of SEI, we now look like the company we’ve always been.

For those of you who haven’t had the opportunity to visit our corporate headquarters in Oaks, PA, it’s truly a unique culture. We don’t have offices or cubicles; all of our desks are out in the open to help with creativity and collaboration. Our power cords (or “pythons,” as we affectionately call them) dangle from the ceiling like something out of an Aliens movie. We also have really funky artwork that helps stimulate conversation. But you had to come to our campus to truly “get it.” Until now.

By extending our campus to the world digitally and in print, we help you feel like you’re stepping into SEI. Our website, brochures, presentations, and yes, even Practically Speaking, now showcase how our unique environment has been built to enable the success of our clients.

So let me ask, do your website, brochures, business cards and more accurately reflect who you are and what your firm stands for?

Your brand

If you use one of those canned websites or that blah (and overused) stock photography, chances are that the essence of your firm is not being communicated through your marketing materials.

Here are some easy ways to improve your brand:

• Hire a photographer to use real images of you, your staff, your office, and client events to enhance your website and your brochures.

• Make sure your content is up to date with current information and stats.

• Upgrade your brochures and website so they are unique to you. After all, it’s these resources that are going to provide a first impression of your firm. You certainly don’t want it to look like every advisory shop in your town, or on the web, for that matter.

• How does your 10-second elevator speech sound? Do you stumble on the words and the benefits? Practice! Make sure you can clearly and quickly articulate why a prospect would work with you.

Both our strategic partners and I spend a lot of time reviewing websites and brochures. It’s amazing to me how many advisors ‘ websites and materials don’t reveal a compelling brand.

What does your firm’s brand say about who you are and the services you offer?

Set Yourself Apart by Walking Out.

Last week, I spoke at a Broker-Dealer conference. I really enjoy attending these meetings and, by all accounts, so do most advisors. These conferences have the potential for great networking and a real opportunity for learning about what’s going on in our industry.

I tried to sit in on as many of the breakout sessions as I could – and usually I pick up a good nugget or two. But this time was different. In fact, at one breakout, I broke with professional courtesy and snuck out before it was over (and I never do that). What caused me to do such a thing?

The theme of the breakout was a practice management session on building a better business and setting yourself apart in this challenging market (sounded great and right up my alley). What it really was about was product (and only product). The panel discussion featured one speaker after another talking about how “this product” was the next big thing to hit your business and how it would differentiate your practice. To hear it from them, all I needed to do was sell their product and I would have truly satisfied clients, thousands of referrals and significantly increased AUM.

Since when does a tactical, dynamically allocated, income-focused (with growth) product – that has a guarantee – and is fully liquid – and at the same time is uncorrelated with the markets – and is produced by the low-cost provider – a differentiator (I may have gotten the product pitches a bit mixed up)? It can’t be a differentiator if everyone has access to the same products, right? More importantly, do you think your clients seek your advice and counsel because you can offer XYZ fund, ABC Life Insurance Co.’s annuity, or some other investment vehicle? Of course not.

You are the value-add

Here’s the best advice I can give you after being in this business for over 25 years: Don’t differentiate yourself by touting some investment provider’s products. Differentiate by being you! The product is a commodity. Investors are seeking advice to achieve their goals. They are seeking understanding and communication.

There’s no real magic bullet. In order to differentiate yourself, you need to:

• Provide a top-notch client experience. Return phone calls, hold consistent client service meetings, and conduct value-added events.

• Be a wealth manager. Provide holistic advice, not the hot fund or strategy of the day. Wealth managers hire investment specialists for their teams while working with the clients themselves, not the other way around.

• Be transparent. Make sure the client understands the strategies, investment vehicles and — most importantly — fees. It’s okay to make a living by providing advice; don’t hide it, don’t skirt around it. Cost is only an issue when value is not perceived.

• Communicate. Be in front of your clients’ issues. Use your CRM (or calendar) to remind you of upcoming events and special dates so you can be proactive.

You’re better than a product. And you’re much more than a product salesperson. You provide a service – and that service has a tremendous impact on people’s lives. Don’t fall into the trap of looking for the next product to set you apart. You already have the tool to differentiate – it’s you!

Obama / Romney 2012: Both Lose (At Tax Preparation Time)

I was taught long ago that I should never discuss politics or religion in an open forum, so this post is still about growth, being a better advisor, and creating more efficiency in your business.

This political season is serving up a timely sales tool that can help you cement relationships with both existing clients and prospects.

A few months back, both candidates for POTUS released their tax returns (estimated 2011 for Romney and 2011final for Obama). As you know, both the Obamas and Romneys have access to some of the best professionals possible. However, it seems that they both need a new advisor – one that would be proactive with their taxes. (Someone like you?)

Since both sets of tax returns are available on line (yes, you can Google them), I had Dean Mioli to do a quick Tax Observation Analysis. Dean is a CPA/PFS, CFP®, CIMA®, CLU and is the director of investment planning on SEI’s Investment Services team. To our amazement, Dean quickly found numerous items that both families could take advantage of to reduce their taxes — items that potentially could add up to thousands of dollars in tax relief. There were numerous things that either family could do but according to Dean, both families:

• Gave large gifts of cash instead of other items like appreciated stocks,
• Failed to fully utilize the tax advantage of tax-free income and instead paid tax on interest income, and
• Failed to avoid alternative minimum tax.

If you have looked at my profile on LinkedIn, you noticed that I am not a CPA. In fact, I have never even attempted to do my own taxes (including the 1040EZ). That said, just because I’m not a CPA doesn’t mean that I can’t read a 1040 and make proactive observations that I can share with a prospective client and it shouldn’t stop you, either. What better way is there to begin to set yourself apart than to start with opportunities to reduce their federal tax bill? This is something that no one else probably has ever done for them and it puts money right back in their pockets!

Some tools to get you started
A few days ago, Dean co-hosted a webinar entitled “Help Turn Tax Pain into Tax Gain.” In the webinar he and Steve Konopka (also from our Investment Services Team) walked advisors through three critical things to review on a 1040 and strategies to help clients keep more of what they make. Dean also wrote a great article called “Top Five Tax Considerations for 2012.” You can access them both online. 

1040: Ask for it by name
The 1040 is a goldmine of information and many of us review it to review what happened last year and the year before. Some advisors will review the return to estimate where the client has additional assets. When is the last time you created a 1040 Tax Observation for a prospect (or client), showing them opportunities to save additional dollars?

You don’t have to prepare taxes to know and understand taxes. Being proactive gets you out front in the conversation and differentiates you. When discussing your value add, use the example of the two presidential candidates. Rather than having yet another conversation about the markets or the economy, why not talk to the prospect about what they want to hear, that you may be able to help them reduce their bill to Uncle Sam?

I keep saying this, but I truly believe that 2012 could be the most significant year for growth your business has ever had. Investors are pulling their heads out of the sand and looking around after three horrible years in the markets and the economy and really don’t like what happened to them and to their portfolios. I’ve seen research that suggests that 85% of high-net-worth (HNW) investors would make a change, but only if they could finds a new advisor that is differentiated.

To be clear, a differentiated advisor is not switching from one investment product sale to another. The differentiated advisors offer real advice and understand the client at their level. In almost every survey, high-net-worth investors say taxes are at the top of their concerns, yet many advisors to not proactively review their clients or prospects tax returns.

When you meet your next prospect, are you going to ask them for their 1040?

Your Staff Doesn’t Want You to Grow.

2012 could possibly be the single best year you’ve ever seen for your business. Markets, while still volatile, are up year-to-date, the economy appears to be coming back (albeit slower than many of us would like) and consumer confidence as measured by Gallup’s Economic Confidence Index is at a four-year high.

Investors are starting to pick their heads up out of the sand. They’re mad about the last four years, angry at the markets and the economy and really mad at the person that didn’t put them in those investments! They are looking for change, better advice, and someone who can help them achieve their goals. They are looking for a great advisor — they’re looking for you! Sounds like a great opportunity for all us. So what is holding you back? Is it your staff?

Think a minute about your practice.

According to PriceMetrix, the average advisor has about 177 households that he/she manages (down by 8% from 2010, but that’s for another post.) That’s 177 households that need:

• (At least) An annual meeting prepared for and scheduled

• Accounts rebalanced

• Custom portfolios monitored

• Trades to place and data to reconcile

One or more clients may have a special request (something like wanting some of their own money back to pay for college or — gasp — to live on!)

So maybe you don’t have 177 households, but let’s say you have half that — you still have a lot of work to do. Why would your staff want to add more clients and work to their already overburdened day? No matter what they tell you, they don’t.

Growth unchecked can be unprofitable.

Last year, the SEI Advisor Network added 400 new advisors to the list of advisors that we do business with. As much as I would love to say we were all thrilled, our internal salespeople took the brunt of the work and were challenged by the additional administrative work. The on-boarding of a client (in any business) is usually a daunting task and takes a coordinated effort with a discovery, analysis of a client’s issues and concerns culminating in the setup of a client’s account.

Realizing that the administration of the on-boarding was taking a very valuable asset (our people) away from their most important roles (talking to clients), something had to be done to create efficiencies and improve performance of our teams. A very simple version of what we did was:

• Standardize. (We were amazed (and concerned) that our internal salespeople had completely different ways of doing the same onboarding tasks. We created teams to identify work flow processes and look for areas that were redundant and needed better automation. We empowered the salespeople to look for ways to improve their efficiency and free up time.

• Communicate. We met often to discuss what was getting in the way of progress and flow. Communication is key, especially communicating the benefits of the projected end results.

• Streamline. We found outsourcing and automation to be key tools to streamlining workflow processes. Our salespeople, the ones doing the actual jobs, found simple solutions to automate the tasks that were being repeated (and now everyone does it the same way) and they found a solution to outsource some of the other tasks which freed up their time to devote to working with clients.

Our business is no different than yours. We have growth goals and we rely on great relationships with our biggest asset, happy clients. Think about your office today:

• Are you empowering your staff to look at their workflow and find solutions to make their jobs better and more efficient?

• Do the workflows for things like preparing for a client discovery, service meeting or marketing events include standard templates that live in your CRM and can be used by everyone or do you re-create the wheel every time?

• What do you outsource? Things like rebalancing, tax lot accounting, and statement generation need to be done, I get that. But are YOU or your staff the ones that HAVE to do it? Every single thing that takes you or your staff away from being in front of clients and prospects takes away from your highest value: Providing solutions for your clients that will allow them to meet their goals.

Start today. It doesn’t have to be complicated. Sit down with your staff, and whiteboard one of your core processes. Is there room for improvement? Can you save some time in the day? What could you do with a few more hours in the day? Maybe fit a few more new clients into your practice?

Fee-based: Time to Make the Switch?

Last month, I wrote a post called What Side of the Ledger Are You On?  which covered the latest PriceMetrix study on the State of Retail Wealth Management and the different directions advisors are being pulled in.

Let’s be honest – running a successful practice is challenging. And if you haven’t considered the switch from increasingly scrutinized commissioned products to a fee-based platform, now might be a good time to weigh your options.

There’s something to be said for a greater certainty of knowing what you’ll be earning this year.

The biggest potential upsides for the switch include:

1. Deeper client relationships – now you’re offering a more holistic approach to financial planning based not on a financial product, but on your clients’ life goals.

2. Increasing AUM and referrals — your role shifts from product salesperson to trusted advisor.

3. A more predictable revenue stream and a more salable practice.

But don’t take my word for it. There’s a webinar on Monday, April 30, presented by my colleague Chris Rice, who is the Managing Director of Business Transition Services at SEI. If you’ve ever thought about switching to a fee-based business model before, I highly recommend you attend.

You can register now.  Chris will be providing actionable steps you can take today to get the process started. When you consider the potential to double your firm’s recurring revenue, it’s worth looking into.

Your Morning Cup of Links: Peer Pressure

Last year, we conducted a poll asking advisors: “What source do you most value when learning about industry best practices around growth and other objectives?” More than 91% said “Our peers.”

Advisors put “learning from each other” at the top of the list on how to grow their business and create efficiencies in their businesses. In that spirit, our “cup of links” posts have become fairly popular (and frankly, easier for me to produce). Over the last six months or so, I have had numerous links forwarded to me from advisors and co-workers suggesting that they warrant an inclusion in the next post. Below are some of the articles that we have found interesting that you may have missed. Grab a cup of coffee and take look. Thank all for your submissions and keep them coming.

Whiteboard Animation: Brokers vs. Fiduciaries: HighTower Video on YouTube

One of the best videos that I have ever seen that explains your fiduciary responsibility. This YouTube clip from Hightower needs to find a way to your clients’ mailboxes right away.

Female clients more likely than men to make referrals: Investment News

Most of us grow our business by referrals. Of course, we are asking for them, but are we asking the right person?

Asked and Answered: Boost Your Business by Understanding the Wealth Cycle: Financial Planning Magazine

One of the biggest challenges for advisors looking to grow their businesses in this post-crisis environment is to understand the changing client. If you are trying to grow your business using the same old techniques and strategies, it’s not going to work. This article explains what we call the client wealth cycle. (OK, this one is a little self serving, as the article interviews me.)

First Quarter 2012: The Rally at Six Months: SEI

The last six months have been pretty strong, what comes next? This article details some of the factors that investors should monitor as the rest of the year unfolds.

A Swift Kick, and a Helping Hand

Last weekend, I had a discussion with an advisor in a very successful firm. I usually avoid “shop talk” during the weekend, but the conversation was very interesting and as the wine was flowing, I kept asking questions and we dove deeper in to her business issues. It wasn’t till later that my wife suggested (and by suggested, I mean kicked me under the table) that our conversation was not Saturday-night-appropriate.

What I found interesting is that this firm, over $500 million in AUM with a long-term planning background, a great investment platform, and a solid business-focused leadership team was not tracking to its 2012 goals. What was fascinating is that their marketing plan was working (bringing in prospects), they were getting referrals and yet they were not closing business at the pace they were expecting or had achieved in the past.

I wanted to finish the conversation, and will do so soon, but it occurred to me that many of you are having the same issues. How about a group effort to solve some of them?

Here’s a list of my follow-up questions — would you add any? (You can post in the blog or in any of the LinkedIn groups; I will put them together in a follow-up post.)

• I read a quote last year that has really stuck with me: “The fundamental DNA of the investor has changed over the last four years.” What have you done to change your value proposition to meet the needs of the changing prospect?

• If you have had prospects say “no,” have you done exit interviews to find out why? Have you asked where they are going for advice?

• Have you lost touch with your niche? What materials, research, technology and tools do you use to keep up with your target market? What is on their minds right now?

• What does your office say about you? Is CNBC on the screen in your waiting room, Registered Rep on the coffee table and a Dalbar (or Ibbotson) chart on the conference room wall? In other words, do you come off as an investment person or planner? And is that consistent with your value proposition? (By the way, take a real look at this. Get an outside opinion if you think you may be too biased.)

• How do you engage with the prospect prior to the meeting? Do you have a conversation away from the office in a neutral location or is their first experience with you in your office?

• Are you acknowledging the volatility of the last few years or showing prospects how you performed? How do you address performance of the markets?

• Are you having “dream” conversations or real conversations about expectations for the future? Which tactic worked for you and is it working now?

• After Madoff and other ponzi schemes, how do you address security of an investor’s assets?

As I did this weekend, I could go on way too long with questions. Sooner or later, someone will kick me again.

In the spirit of social media and networking, let’s all try to take a stab at this. Now it is your turn. Leave a comment on this blog post on Practically speaking, send me an email with your questions at Janderson@seic.com or post a message in a LinkedIn group. How can we help this advisor? What questions would you ask?

The Retirement Asset Tsunami: Sink or Swim

Last week, I participated in a webinar discussing “Fresh Directions in the Retirement Market.”  There was some really good information on retirement income products, as well as tips on taxes and distribution planning.

Personally, I think we could have used just one slide for the entire webinar – it showed $2.7 trillion rolling out of 401(k) plans alone over the next 20 years. That number does not include assets from other plan types like 403(b), 457 and SEP plans. $2.7 trillion over the next 20 years!

Just wondering, would that be considered a tidal wave of new assets headed in your direction? A tsunami maybe? What’s bigger than a tsunami? Whatever it is, it is heading your way. Look at the demographics (or in my case, the mirror) for the graying of America. Nearly 7,000 boomers turn 65 every day and by 2025, nearly one in four Americans will be over the age of 60. In my mind, you can do one of two things: ignore it and miss out on an incredible opportunity, or embrace it and substantially grow your practice.

Lukewarm at best

Last year, an article in Financial Planning Magazine stated that “Only a tiny sliver of the advisor community is making retirement planning the cornerstone of their business.” Yet, it quoted a survey that found that “Seventy percent of advisors who have invested the time and effort required to become specialists in this field have enjoyed ‘significant’ growth in client revenue since 2008.”

This seems like a big disconnect to me. If we know there is a huge market, the demographics are in our favor, and we know advisors are winning, then why aren’t we jumping in with both feet? I think there are a few reasons:

• Patience. Most advisors don’t want to work with a client until the bigger “money is in play”.- Yet according to Cerulli Edge’s retirement edition, the “existing advisor” will get 77% of rollover assets vs. a new advisor. Why not start with younger clients and position yourself early for the rollovers?

• Procrastination. Again, according to Cerulli, 50% of accumulators under age 60 have not considered how they will manage retirement money. Investors don’t feel the need until just before retirement. Educate your clients about the need for planning today for their retirement tomorrow.

• Psychological. According to a poll that SEI conducted with with webinar attendees, 66% of advisors said, when describing the recovery of their clients’ retirement portfolios, “The dollar amounts are close to even but the psychological scars run deep.” We are used to discussing accumulation with our clients but it is much more difficult to discuss draw down of their portfolios. Educate yourself to the opportunities, products and what is going on in the minds of the “soon to retire.”

Reality check

It is the psychological area that we should really consider. Today’s clients have been whipsawed in the markets and will appreciate a realistic conversation about retirement income and the challenges of inflation and taxes. They don’t want to be “sold” a product, but expect a plan that can allow them to reach their retirement goals. Above all, avoid the “dream talk” that many sales people use to describe retirement. The last four years have opened the eyes of investors and forced them to look at reality. They will appreciate your honesty and candor.

Rather than saying “How do I succeed in the retirement market?” maybe you should ask “How can I win relationships with investors before they make retirement decisions?” Do you want to ride the tsunami or be washed away?

Are you focused on what is coming at you?