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?

What T-Ball Can Teach Us About Running a Successful Advisory Practice

The t-ball season is about to come to an end for my youngest son and it can’t come fast enough for his coach (me). This year’s squad of five year olds is pursuing an undefeated season. Of course, since all kids in our league get to bat around in the inning and we don’t track outs or keep score, every team in undefeated so far this year. Each year, we coaches start the season with dreams of teaching the kids perfect throwing mechanics or the proper swing; in the end, we are satisfied if the kids don’t play in the dirt and run towards first base instead of third when they hit the ball.

One of the biggest challenges is keeping the kids focused on the big picture — the game – which is kind of like running an advisory practice.

One of the best things about being in this business is that we are independent business owners and no one can tell us what to do or how to run our business. One of the worst things about being in this business is that no one tells us what to do or how to run our businesses. We trade the demands of the company’s bottom line for flexibility in our schedules; we trade the scale and structure of a large company with following our own passions. I heard a quote last month that really hit home: “There are very different skill sets for being a great financial advisor and for running a great financial advisory firm.” For successful advisors, it is all about focus. For me, it gets down to the question, are you running a successful advisory practice or a successful advisory business? Too few of the advisors are running businesses. They:

• Get distracted by a hot new fund, product or piece of technology that they see at a FPA or BD conference

• Focus their businesses on the things that they cannot control (like the financial markets or the economy)

• Create headaches for themselves (and staff) by not creating or following workflows and checklists

• Don’t invest in their businesses by allocating enough of their revenue to marketing

• Give advice, but don’t follow it.

Lessons to take off the field

With our last two games approaching, our t-ball team is focusing on holding their positions when an opposing batter hits the ball. While it’s pretty funny to watch 5 year olds running into left field chasing a single ball, they are learning that if everyone is in left field, there is no one to get the batter out at first. They are learning the discipline they need to play the game the right way and to work as a team. They learn discipline by not chasing every ball in the air. Each player is learning that his/her position is important and that others are counting on them to perform. They are also learning the benefits of working with a coach who can help them maintain focus and be in the right positions to win.

Recently, I met with an advisor who decided that he needed help with his focus. He created an advisory board made up of key stakeholders in his business. The board consisted of his largest COI referral source, a very experienced wholesaler from his platform provider, his admin, his OSJ, and a representative from his broker-dealer. The board meets every quarter (in person and via video conferencing) to discuss major and minor changes in the advisor’s business. Branding, marketing, scheduling and even the financials are discussed. This team of professionals forces the advisor to be prepared — to think and act like a business — as well as make sure he maintains focus on the big picture.

Are you as focused as you should be? Or are you chasing every ball? Think about creating a board or hiring a coach.

And the best part? Just like t-ball there can be snacks at the end!

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?

Is LinkedIn the Missing Link in Your Growth Strategy?

A few months back, I wrote a post called “Holiday party small talk; don’t say you are a financial advisor.”  The post generated quite a lot of comments, both positive and negative, but only a few are on the blog post itself. In fact, if you look at the bottom of most of the posts on this blog, there aren’t a lot of comments at all.

You might think that these posts go out to cyberspace and you’re one of the only readers. But you’d be wrong. Over the last year of blogging, there have been many things I have learned, but one of the most important is that you don’t just blog it and they will come (and comment). You have to go where your audience already is and where they feel comfortable engaging. In my case, I’ve found that LinkedIn is actually is one of the more powerful tools available to get a message out (and grow). It’s free and many of your peers are not taking full advantage of it. You can make it work in your favor, if you’re willing to invest a little time.

Are you active or passive?

No, I’m not talking about the age-old active vs. passive investment discussion. Many of you, if not most of you, have created a LinkedIn profile. You filled in some work history, maybe added your college or even high school. (I didn’t add Earlville High School in Earlville, IL to mine, as I didn’t have a stellar academic record and they would probably not want to acknowledge my existence). You may have even added your job description and specialties to the profile.

Unfortunately, this is where most of you stopped. You sat and waited to see if anything happened (besides the random connection request from your daughter’s ex-boyfriend’s brother). Based on that experience, you wrote the site off. But then you heard about a successful advisor using LinkedIn as a tool to grow his/her business. And it is just that – a tool. A hammer is no good unless someone picks it up, and tools like social media are no good unless you become more active.

The power of groups

Any group that has me as a member… ok, is a good group. (Apologies to Groucho Marx.)

When we started our blog, we made a conscious effort to make sure we got as many readers as possible. As you can see on the column to the right of each post, there is a very visible box where you can subscribe. If you haven’t subscribed yet, go ahead and subscribe now, I’ll wait. (Make sure you click the link in the confirmation email.)

I also make sure it is posted on the relevant groups I belong to in LinkedIn. The groups give me immediate access to triple or even quadruple the amount of advisors we currently work with. They allow us to get a (hopefully) differentiated message across a crowded marketplace and help us learn what the market is looking for and how to respond. I have also met and networked with quite a few new advisors and people in our business as a result.

Here are a few ways to use LinkedIn proactively, spending just 15 minutes a day.

1. Put your best foot forward. Big results from small efforts. How does your profile stack up against others? Do you paint an accurate picture of who you are and what you do? Based on your profile, would you hire you?

2. Know your (potential) audience. Look at your best clients and your ideal clients.

• What groups have they joined and what groups do they have in common? (If you see an appropriate group, join it.)

• What are they saying and how are they saying it? (It will be important in conversations to use similar words.)

3. Make it a two-way street. Push out content on a regular basis if you have it, but also make sure you proactively look at other posts and make comments and recommendations. Try out the LinkedIn Answers section - when people vote on your answers as being the best, you can become a featured expert on the site.

4. Time your comments and posts. Yes, this is a bit of “strategery” I’ve figured out through trial and error. Typical LinkedIn groups publish a daily email with activity from the previous day’s activities. Avoid posting comments on Friday, Saturday or Monday. Fewer people read the post on the weekend and your comments may get lost in the Tuesday email, which typically has the most discussions. Sunday is a great day as the emails show up on Monday morning and you usually have little competition.

Make social media part of your day. Everyday. Just 15 minutes will really help you clarify your message, further the knowledge of your niche and introduce you to more prospects.

So, what do you think? Got 15 minutes a day to commit to growing your business? Any other tips you can pass on? Want to connect with me on LinkedIn?

Image credit: Trevor Leyenhorst

Getting Your Future Clients in the Door (No Crystal Ball Required)

If we could predict the future, I would bet many of us would not be working today (I’m thinking some place tropical, on the beach and lots of umbrella drinks. But that’s me; you can have your own fantasy). Predicting the future can’t be done, but wouldn’t it be nice to know exactly in just what century the Cubs will win the World Series again or what business will be like in the next 10 – 20 years?

While I can’t tell you the future, I can tell you a little about our future clients. Generation X and Y might surprise you (I last wrote about Gen X,Y and Z over the summer). Recently, high net worth individuals between the ages of 18-35 were surveyed about their advisor preferences*. It was found the majority of them, 60%, feel they need very little advice when making major financial decisions.

Now, that number doesn’t exactly sound great- especially when only about 35% of Boomers and Seniors feel this way. So, what does this mean? Are we headed for a rocky path in the future? Will it be harder to get clients?

The way I see it is “No.” Even though these youngsters are the least likely to feel they need advice, they are the most willing to pay for advice. Around 70% will pay!

In other words, if we can get them in the door and show them how we can help, we have a good shot at keeping them there. They do see value in our services and do not have a tight wallet.

Here are a few ways to get them in the door:

1. Start with your Boomer clients’ children. They are most likely within this age group. Start forming the relationship they want by listening and approaching them as individuals and not an extension of their parents. Use technology (including social media); they will expect you to communicate with them the way they communicate with their peers.

2. Be realistic and honest, but reassure them about their financial picture. Many of them have only known the volatile economy that we have today and they need a little perspective. Start with a goals-based approach to investing that segregates the shorter-term and longer-term assets.

3. Map out a financial plan with their custom goals and give them an idea of the services you offer. This age group is known for being collaborators and they like to be involved in their finances. Just go the extra step to pull them into your practice.

4. Create a service plan that fits into their lives. Don’t expect these generations to fit neatly into your quarterly face-to-face service model. Their lives are flexible and changing; you need to accommodate your services model to their schedules. Consider using webinars, FaceTime (or Skype) for meetings.

5. Be transparent. This generation is used to fully understanding the pricing models of what they buy. They expect clear value for their dollars. Make sure they understand how you get paid and why your services are valuable.

Most advisors have books filled with clients who are beginning or are in the draw down stage of their lives. If we don’t replace the assets, the business can’t continue. Focusing on the next generation of clients can allow for business continuity as well as succession.

*Data provided by Phoenix Marketing International. Over 7,000 affluent households were surveyed from August 2010-June 2011 on a wide variety of questions, including investing attitudes and behaviors. High net worth refers to individuals with investable assets between $1-5million.

Seven Questions to Ask When Reviewing Your Clients’ Estate Plans

2011 just ended as another challenging year. Most of us are happy to be rid of it and look forward to hopefully better things on the horizon. Although it is really just another month, January (and early February) is a time when advisors force themselves to:

• Do a year in review
• Prospect for 2012 meetings with clients
• Discuss performance and positioning for the year
• Assess risk for the client’s portfolio, as well as their own business

But what about beyond 2012? Will your clients (and their families) move forward with you?

Case in point
Last year, a wealthy client of an advisor I know passed away. The client was part of a book the advisor had purchased so he didn’t have a great relationship the client’s spouse and the rest of the family, but he did enjoy a fairly close relationship with the client. The relationship was strong enough that the client mentioned that he wanted the advisor to “look after” his family when he was gone.

Not too long after the client’s passing, along came the transfer request from the large faceless trust company that was written in as successor trustee of the client’s trust — a trust that was written years ago! The advisor was devastated that he wasn’t able to follow through with his client’s wishes , not to mention losing the family relationship and the assets. Unfortunately, as with most cases, the trustee required their own trust company to manage the assets of the trust.

Estate plan review
You probably don’t have a lot of great news to discuss in your year in review meetings with clients this year. The markets were choppy and flat, the economy is still stuck in neutral, Europe is still in crisis. Why not take time in your review meetings this year to look at their estate plan and do a beneficiary check for all your clients? When you send out the meeting reminder for your quarterly or year-in-review meeting, ask the client to bring in their estate plan documents.

1. If a corporate trustee is named, do they require that they manage the assets?  Be sure to review the trustees and successor trustee of each trust.
2. Does the titling of their accounts reflect the trust titling? If a couple has a revocable living trust but have their accounts and assets (including real estate) titled jointly or singly, they have not funded their trust and will face probate issues.
3. Does everything “add up?” Do the beneficiary designations on IRAs, insurance policies, annuity contracts, pensions, qualified and employer plans reflect correct titling and the intent or succession in the estate plan documents? Many families go through the planning process but miss the last part in terms of re-titling accounts and updating beneficiary designations. It also gives you a total picture of the family’s entire net worth.
4. Are the documents up to date? Are they more than five years old? Have there been major changes in the family since they were drafted? Generally, older documents do not have HIPPA language in medical directives (living wills) or in the case of trust documents, do not provide clear direction in the case of incapacity and how that is determined. A good rule of thumb is that estate plan documents should be reviewed every five years or in the case of changes in the family (marriage, divorce, death of a spouse or life partner, relocation, retirement, promotions, sale or purchase of a business, assets in multiple states, inheritance, serious illness/disability of a family member or partner, adoption or birth of children, grand children etc.).
5. Is the named trustee really capable of becoming trustee, if no corporate trustee is written?
6. Does the cost structure of the successor trustee  seem expensive?
7. Can you play a role? Look for a relationship with a private trust company that will appoint you as investment advisor for the trust.

Our job is to be forward thinking. For the client, they will have confidence that someone knows them and understands them is working with their family. For the advisor, you will have a longer, stronger relationship with the family that can last for many years.

What questions will you ask?