How Four Different Advisors Lost a $3 Million Referral

The following is a guest blog post by Dan Richards, founder of ClientInsights, a leader in providing financial advisors with video-based content for their own use and for use with clients.  Dan’s advisor newsletter is on my must-read list; start receiving his emails by visiting his site and signing up at the bottom of the page to get his insights delivered to your inbox now.

Do you have a clear process for how your assistant responds when a call comes from a potential client? If not, then it could be costing you business.

Last week, I spoke to a highly successful entrepreneur who had read one of my columns in the Globe and Mail and contacted me to describe another instance of how advisors are falling short when it comes to communicating with prospects.

A simple request for information

Now in his mid-fifties, Bob has spent the last 20 years building a successful transportation and logistics management company. Like many entrepreneurs, the bulk of his assets have been tied up in his business – but his situation was completely altered last spring by a generous offer from a U.S. entrant looking to establish a beachhead in Canada.

With the sale closing this fall, Bob recognized that he needed help on managing the sale proceeds. He asked his accountant, his lawyer and a close friend for recommendations on financial advisors and financial institutions.

Bob got five referrals in all. To begin the process, he called the office of each of the advisors he’d been referred to, asking for some background information. Bob consciously avoided speaking directly to the advisors and asked for their assistants instead, since he wasn’t ready to get into the details of his situation.

And that’s where it got interesting.

Sending the right message about your practice

The responses fell into three categories.

One advisor’s assistant mailed a cardboard folder with the firm’s name and logo, containing three pieces of paper – a bio of the advisor, an overview of his team and a one page summary of his process.

“That really made me wonder how interested this guy was” Bob said. “I tried not to be too critical, but his response seemed pretty feeble.”

At the other extreme, three advisors sent thick folders packed with recent material they had sent clients and with examples of research reports and economic outlooks produced by their firms.

“I saw those three as being in the category of ‘throw enough mud at the wall and hope something will stick” was Bob’s observation. “It really felt like they were tossing anything and everything in there that they could, in the hope that I’d either be impressed by the sheer volume of information or that something would strike a chord.

“Most of the stuff they sent wasn’t really that relevant or interesting. In fact I almost missed the one piece in there that was new information, a fairly detailed brochure on tax strategies for business owners.”

A stark contrast

The experience with the last advisor was a different proposition entirely.

In response to Bob’s request for information, the assistant to that advisor (let’s call him Don) said:

“I’m terribly sorry; Don doesn’t like to send out information without having a clear sense of exactly what people are looking for. I wonder whether I could schedule a five-minute phone conversation for you and him to talk – how is tomorrow morning at 9 or 10 o’clock?”

At 10 the next morning, Don called and Bob explained his situation and mentioned who had referred him. Don asked a few questions and said:

“Bob, thanks for taking the time to talk. Based on what you’ve told me, I’ll have one of my team put together an information package that we’ll courier to you. Should you be interested, I’ll also include an invitation to a small client breakfast coming up next month to talk about what’s happening in the markets. This is something I do every couple of months for any clients who are interested.”

At the end of their conversation, Don said:

“If it’s okay with you, I’d like to follow up early next week to briefly review the information in the package and answer any questions you might have; this should take no more than 10 minutes.”

The next morning, the couriered package arrived in Bob’s office, containing a leather bound three ring binder, with tabs dividing half a dozen documents describing Don’s background, team, approach and firm, as well as a couple of articles he’d written for a local business publication.

Bob’s closing comments on his experience:

“Of the five advisors, Don was clearly the most organized and disciplined about how he deals with potential clients. And if he’s organized and disciplined about his communication, chances are that he’s also serious and disciplined about how he manages his clients’ money.

“By the time he called, I was already leaning in his direction, even before he sent me the follow up package. Something else noteworthy was that he was the only advisor who followed up with a call – perhaps because none of the assistants for the other four advisors had asked for my phone number or email address.”

The end of the story

Bob did end up meeting with Don as well as the advisor who’d included the information on tax strategies for business owners. He ultimately decided that Don was the right fit for him and after two lengthy meetings and some reference checking with two of Don’s clients who’d been in situations similar to his, he opened an account.

The message from this experience is crystal clear. Five advisors had impressed an accountant, lawyer or existing client to the point that they received a referral. In times past, when a referral typically led directly to a prospect signing on, that would have been enough. But advisors need to recognize that today, getting a referral is no longer sufficient – more and more, referrals are the beginning of the client acquisition process, not the end. In essence, while at one time a referral won you a new client, increasingly today that same referral merely gives you the chance to compete for a client’s business.

Think about what would have happened if Bob had called your office – would he have received the answer that he got from Don’s assistant or the response from the other four assistants he spoke to?

At your next team meeting, open the floor to a conversation about how to handle calls for information such as this one. After all, the next call that comes in to your assistant could be from a multi-million dollar prospect just like Bob.

Are the Myths about Growth Stunting Your Advisory Practice?

New Webinar, Study Shine Light on the Truth About Growth

All advisors want to grow their businesses. I am often asked what’s working for other advisors, or if I know the secrets to exponential AUM or revenue growth. Frankly, if I knew of a magical secret that would allow advisors to really grow, do you think I would be sitting in the office writing a blog?

So while there may be no magic, if you’re interested in growing your business and want to learn best practices of advisory firms around the country, you’re in luck.

Next week, I’ll be hosting a webinar with Dan Inveen from FA Insight.  Dan will be reviewing highlights from the “2012 FA Insight Study of Advisory Firms: Growth by Design” and discussing the five key trends the research reveals about growth:

• Growth offers multiple benefits that extend beyond firm owners

• Unchecked, growth can detract from firm value

• Growing right is a function of how resources are deployed

• Sustainable growth starts with a plan for how to achieve it

• Sound management practices are key to implementation

The Growth by Design study comes out every other year and I always look forward to reading the results. I know this will be beneficial to every advisor who wants to find ways to grow his/her practice. You might be focusing on the wrong things (and it’s those “wrong things” that we’ll be exposing in our webinar).

Register now and join Dan Inveen and me next Monday, September 24th at 4pm EST for our webinar “Myths About Growth: The Truth Exposed.”

Looking forward to seeing you on Monday.

Why Your Firm Needs a Full-time Marketing Professional

In a recent guest blog post, Jen Tierney, our summer intern, discussed why financial advisors would benefit from hiring a summer intern to focus on marketing.

Jen was right. A summer intern can help you get all of those marketing to-do’s checked off your list.

But what do you do when your summer intern is happily back at college, and you’re back to trying to implement your fall marketing calendar?

You could try to go it alone, and carve out time from meeting with clients to plan upcoming events and mailings. Or, you could have your assistant help – but aren’t you all busy with your day jobs?

You’ve got a few choices, but the holy grail of advisor marketing is hiring a full-time marketing manager. It’s a person who can spearhead all of your events, mailings, website, social media, PR and more. What, you’re not doing all of those things? Maybe it’s because you don’t have a marketing professional on staff!

I hear a lot of advisors say that they’re not big enough to hire a full-time marketing professional. You certainly don’t have to be a wirehouse advisor to get marketing support down the hall. You just have to be committed to growing, and having a marketing professional on staff is one clear path to do so.

Let’s take a look at an advisory firm that gets it right.

I recently met Desiree’ Kinney, Director of Corporate Marketing & Business Development for our client, Jerry Lynch CFP, President of JFL Total Wealth Management. JFL has one of the busiest marketing calendars that I’ve seen, and it’s because they have a dedicated marketing resource devoted to seeing that it happens.

Here’s how Desiree’ adds value:

• Referrals: To help support and streamline the referral generation process, Desiree’ maintains a referral tracking list and also regularly monitors the frequency with which they ask each client for referrals – starting with the A clients on down to the C’s.

• Client Events: JFL focuses on smaller, more intimate events (retirement dinners, cooking events, golf clinics, etc.), as they’ve tended to have a high success rate. Desiree’ is involved every step of the way, especially in the concept development process initiated upon creation of the annual marketing calendar and plan. This involves creating innovative new event ideas, surveying clients for interest areas, and securing speakers (if applicable) as well as venue arrangements. For public seminars, Desiree’ is also instrumental in planning the events and has been successful at securing outside speakers (such as a tax expert), and has proactively reached out to their COI network to identify presenters.

• Social Media: JFL uses Twitter and Facebook, but focuses much of its social networking on LinkedIn to find qualified leads. Desiree’ reviews the client’s LinkedIn connections prior to review meetings for professional updates and referrals. During the review, the advisor asks about those contacts and requests introductions.

• Mailings: Desiree coordinates about 2-3 mailings a month, with the goal of educating investors and securing new business. Topics include retirement, investments, tax planning and more, and JFL sends printed or email copies not only to clients and prospects, but also to centers of influence.

For advisors considering hiring a full-time marketing professional, Desiree suggests, “Hire a people person” who will get to know your clients intimitately and help facilitate organic growth and long-term sustainability for your firm – something essential in such a competitive market.

So what about you? Do you have a Marketing Manager/Director on staff and if not, why not?

Eye-catching Performance? Prove it.

Several articles caught my eye over the last few weeks that point to a trend that I think is going to have huge consequences to almost everyone in our business. For any advisor who manages client assets, it seems the target is clearly on your back and if you are not prepared, the penalties could be very costly for your business and livelihood.

Performance is in the eye of the beholder

In “New Ways to Weigh an Adviser”, the Wall Street Journal’s Jason Zwieg asks, “How good is your financial adviser, anyway? Chances are, nobody—including your adviser—knows for sure.” He goes on to discuss two companies and the CFA institute that are focused on ways to standardize how performance is presented to prospective (and existing) clients.

According to Zwieg, since there are really no standards:

“…one firm might show you the performance of a ‘representative’ portfolio, or a single account chosen for specific attributes. (It isn’t likely to be a stinker.) Another could show you a ‘model’ or hypothetical portfolio. (It might not have existed for the full period and might not reflect fees and trading costs.) You might see decades of ‘back-tested’ returns for the firm’s favorite strategy. (But you might not be told the firm has been using it for only a year; nor will you necessarily see the failed strategies the firm used in prior years.”

His advice (and my takeaway) is that advisors are going to have to publish their self-managed performance, and whatever the new standard will look like, I’m sure it will take into consideration actual — not cherry-picked — portfolios. The standard will require real history, not what you would have picked when you looked in the rearview mirror.

Proof is in the packaging

In Investment News, the article Advisers who manage mutual-fund and ETF portfolios may be doing their clients a disservice quoted a Cerulli report showing that “adviser-as-portfolio manager programs that use packaged products” dramatically underperform packaged programs or a simple (70/30) blended benchmark of stocks, international stocks and bonds.

While the study quoted only takes into consideration the last two years, the message seems to be clear that the individual advisor’s abilities to manage portfolios and add value by investment decisions are being questioned by the public, the press and now research firms, as well.

SEC is stepping in

Lastly, recent articles in Investment News and Financial Advisor note the SEC is alleging that a well known and large San Diego-based RIA misled clients about his investment strategy’s back testing and certain assumptions he used for in creating the strategy. (By the way, he did a masterful job on his site refuting the claims.)

However the case settles, it’s evident that regulators are trying to make sure advisors have a clearly defined investment process, sufficiently back tested and that the performance that is touted does not make any claims that can’t be backed up (in a court of law or with an arbitrator).

Check yourself before you wreck yourself

These articles should be a wakeup call for any advisor that is managing money in today’s environment. Ask yourself:

• Are you prepared to explain, in detail, your investment process and the assumptions built into risk and return projections? Can you show your back testing, research reports on each asset allocation decision, manger or fund? Would you be able to have a defensible argument in a court or in front of an arbitrator?

• Do all of your clients have similar applications of your investment process? Do they each have a written investment policy statement? Can you articulate why two separate clients may each have a 60/40 allocation, yet they have completely different funds or managers? Or why one moderate risk client has a 40/60 allocation and another has a 60/40?

• Would you be comfortable publishing your five-year composite performance numbers for ALL the accounts that you manage in an “advisor-as-portfolio-manager” capacity?

You could probably say that these questions are a bit self-serving, as I work for a firm that sells an outsourced investment management offering. But that doesn’t change the severity of the issues that we all face. If the press, a prospective investor or the regulators show up on your door step tomorrow asking for your investment process, what would you show them?

Image courtesy of FreeDigitalPhotos: http://www.freedigitalphotos.net/images/Indoor_Sports_g219-Dartboard_On_White_Background_p99774.html

Kicking Off Your Fall Marketing Calendar

The family vacation ended a few days ago and my kids started school this week (kindergarten and second grade). That laid-back “summer pace” that we all lived in prior to Labor Day has quickly changed to the faster “let’s pile on as much as we can and finish the year strong” pace. It is amazing to me that a few days on the calendar can change everyone’s business tempo.

I’m not sure about you, but I like it. It’s almost like the excitement of the NFL season starting back up (cue the music).

My guess is that many of you are certainly feeling the same excitement – fielding calls from clients, setting up review meetings, and hopefully beginning marketing activities for the upcoming months. Speaking of marketing activities – what’s on your roster this fall?

Don’t fall behind this fall

Whether it’s seminars, newsletters, networking or LinkedIn, it’s important to get your fall marketing activities planned and start notifying your contacts soon. Use a white board in your office or break room, a worksheet or marketing calendar to keep you on track (if you don’t have one, just email me: janderson@seic.com).

It’s also important to be consistent. If you always hold your annual client appreciation dinner in November, stick with it — and make sure that you send your save-the-date or event invitations soon.

You can cheat off my paper

If you’re looking for some ideas, check out what our marketing calendar looks like. Here’s what’s on tap here at the SEI Advisor Network this fall:

• Monthly webinar series (4th Monday of the month) with topics such as growth examples from top financial advisors (more on this September webinar soon), business planning, and  a discussion around tax planning resulting from the Presidential election.

• Monthly newsletter (What’s New @ SEI) – Shows what’s happening with investments, technology, and practice management. (Second Tuesday of the month)

• Enhancements to our advisor website

• Updates to FINRA-reviewed presentations you can use with your clients

• Plus, conferences, articles and much more.

Feeling behind?

So, how can you get started if you’re late to the game? Here are some tips for financial advisors looking to boost their marketing efforts:

Mix up your content – use a variety of mediums (video, email, in-person events, and more).

Leverage content from third parties, such as SEI – this includes compliance-approved presentations and commentaries that you can share with clients.

Promote your activities now.  Have your assistant call to invite clients to upcoming events, update your website with your schedule and hand out a calendar of upcoming events in your client review meetings.

Focus on your strengths. If you’re not comfortable with public speaking, don’t do it!

Use social media. If you’re a novice, start with LinkedIn; dedicate time to updating your profile and finding new connections.

Keep at it

Superbowl-winning teams don’t succeed overnight. You need to practice, watch tapes, play the game – and repeat. Marketing is the same way.

What’s been working for you and your practice? Are you trying something new this fall?

Image Courtesy of Morguefile: http://mrg.bz/WAsSJx

“Lego” the Clients that Make You Inefficient

Just about every day, I get an “urgent” newsflash email that Broker Team “A” moved to wire house ”B” or that a large RIA moved from one independent broker dealer to another. I rarely read further, but when I do, it amazes me that in many cases, the firms are really just trading advisors. Wire house “B” or the independent broker dealer who just lost a big advisor actually gained a larger advisor (from some other firm) just a week or two before – it’s like advisor musical chairs.

This got me thinking about moving. And as I took a barefoot step on a big pile of sharp Legos©, I had an epiphany (or at least an idea for a blog post).

Moving on and up

Throughout my 20s and 30s, I was fortunate to be affiliated with some good companies who offered me the opportunity to grow with them. Being single at the time, it was easy to move on and move up. One of the ancillary benefits that I found with all the moves was that I was able to discard all the “useless items” that I accumulated from the previous move. I was able to clean house (literally) and move to the next place with only what I needed and wanted to take.

But when I look around my house today, I see 10+ years of accumulation and not a great job of weeding out. I also see a wife and two small children (thus the Legos©) who are adding to the increasingly filled shelves and closets. I bet there are many advisory firms that take a similar look around and ask, “How did my business get so cluttered and how do I make it simpler, like it used to be?”

The sum of its monster parts

Jonathon Powell from CEG worldwide uses a phrase that I love – he calls the average advisor’s business a “Franken-business.” Just like Frankenstein’s monster, it’s made up of a lot of random parts or clients. The business grows and grows without any focus or niche; it becomes cluttered with all types, sizes and personalities of clients. Then one day, just like the movie, the monster kills the master. Is this what you have worked years and years to build? Does a highly fractured, unorganized and inefficient practice have significant value when you decide to transition or sell your business? Did you set out to become monster-chow? I doubt it.

Cleaning house (mentally)

I recently spoke with some advisors that went through a broker dealer change from a “captive” relationship to an independent BD. We were discussing the concept of client segmentation and they were well ahead of the game. They said that before they left their previous broker dealer, they looked over each and every client in their books. They realized it was a perfect opportunity to “clean house” and only take those clients they wanted to take.

If you pretended you were going to change BDs, what would your book of business look like after the move? Ask yourself (or better yet, include the staff):

• Which clients would we keep?

• Which clients do we like to work with?

• Which clients listen to our advice and value our relationship?

• Which clients fit our niche or targeted segmentation?

• Which clients are my Lego© clients? (The pain in the… foot clients)

If you really want to do this right, use a client segmentation worksheet and look at the revenue, AUM and client psychographics of your book and truly understand what parts you have and what parts you need to change. (Don’t have a client segmentation spreadsheet? Contact me: janderson@seic.com)

Now I’m not suggesting you fire or transition any clients that are not in your ideal profile; that decision is up to you. What I would suggest is that you can change your service model and relationship for those who don’t fit your target. Either way, doesn’t it make sense to understand just how cluttered your practice is and how it would look if you “cleaned it up”?

Put this exercise on your “to do” list. And if you forget, you’ll be reminded whenever you see a news flash that one advisor left his/her broker dealer for another. (And those reminders will come almost daily.)

Have you done a moving day drill?

Photo courtesy freedigitalphotos.net http://www.freedigitalphotos.net

Freeing Your Time with Intern(al) Support

The following is a guest blog post by Jennifer Tierney, our SEI Advisor Network Marketing Intern and a Senior at St. Joseph’s University in Philadelphia majoring in Marketing.

This summer, I interned on the Marketing Team for the SEI Advisor Network. SEI runs a summer intern program and co-op program throughout the year. Typically, interns work three to five months in various departments of the company. An SEI intern is given one long-term project or several smaller projects within a specific department to work on throughout his or her time at SEI. Interns are offered professional development opportunities in the form of panel discussions to learn about the roles of other employees, discuss current events, and problem solve through case studies. Interns gain experience by breaking into groups, discussing cases, and then are required to create and deliver live presentations. SEI interns have legitimate responsibilities (not just filing and faxing) which make us more accountable and dedicated to the work we are given.

During my summer internship with the Marketing Team for the SEI Advisor Network, I was given the task of exploring how SEI could expand its social media presence to connect with more advisors and to provide them with investor-ready videos to provide to their clients. More frequently referred to as the “YouTube Intern,” I have spent weeks immersing myself in the world of social media – exploring new social media initiatives and researching how our group can best implement a social media strategy for YouTube and Twitter. It may seem simplistic in nature, but I can assure you, my experience at SEI has awarded me with priceless hands-on experience that I will be able to apply to any job opportunity I have in the future.

At this point, you are probably thinking to yourself, “Okay, but how does this apply to me?”

If there is one thing that has been expressed to me over and over again since I started here at SEI, it is that financial advisors suffer from a severe lack of time. They struggle to conduct all of the day-to-day administrative tasks in addition to the aspect of their jobs that is most important- meeting with their clients. College students are starving for experience and you are most likely starving for an extra set of hands. See the connection? So, hire an intern!

Consider a Marketing Intern – They can take on the worry of making sure your newsletter is sent out on time. They can monitor your LinkedIn account for new connections and market information. A marketing intern can even plan an event for you, perhaps a client appreciation night or a “lunch and learn”. Let interns manage or monitor your social media sites if you have them; after all, if there is one thing a college student knows, it’s social media (and all of my research signals that it is the wave of the future). By turning over some of your responsibilities to an intern, it is a win-win situation. You get some time back to focus on what really matters and they get much needed experience.

Where do you go to find an intern? Start with the local colleges or universities that are around you. I attend Saint Joseph’s University and contacted our career development center which allows businesses to post internships and employment opportunities for students. Most schools will have a similar department that offers students resources for finding employment and internship positions.

If there is one thing that is drilled into the mind of every college student, it is the importance of internships and experience. It is no longer sufficient to have one or two experiences on your resume but rather you need multiple job experiences prior to graduating to stay competitive. If one thing is for sure, there is no shortage of students willing to take on an intern role.

Here are some helpful tips when hiring a summer intern:

- Reach out to local college and university career development centers.

- Hire a full-time intern in the summer or a part-time intern throughout the school year.

- Give your intern one main project to focus on; this will give them direction, a center of focus and an increased sense of commitment.

- Offer the opportunity for them to receive course credit.

- …and make sure you pay them! Offering a paid-internship increases their sense of accountability, serves as motivation, not to mention you will have prospects knocking on your door.

Not only can an intern help during his or her internship, you may very well find a good future employee match for your firm. It’s almost like “testing out” your next employee before hiring him or her. Take a look at this article from Workforce.com to see how financial advisors are hiring interns for their practices.

What about you? Have you hired interns in the past? What have your experiences been?

Go Social or Go Home

Building online influence (and business!) through reputation, relevance and relationships

One of the more hotly discussed areas of our business is all the discussion around social media. Most of us know the benefits of “being social.” But how do we do it effectively and how do we know if it’s working?

Last week, we held a “Go Social” webinar and it should come as no surprise that over 500 advisors signed up to hear how to make social media work in their practices. Stephanie Sammons, CEO of Wired Advisor, was our guest speaker and she did a fantastic job providing insights and simple steps to get started.

Advisors agree – we’re moving slowly, but moving

During the webinar, we asked a number of “quick poll” questions and got some interesting answers:

• The majority of advisors on the call were “tiptoeing” into social media

• 94% said that they were planning on using social media more in the next year

• While broker dealer concerns are top of mind, more advisors were worried about coming up with frequent and relevant content.

Sound familiar? The quick poll answers are very similar to the conversations that I have every day with advisors around the country.

We’ve made the webinar available in case you missed it. Plus, you can register to access our complete “Go Social” toolkit. (Totally worth it, if I do say so myself.)

Too many questions, not enough time

Our webinar ended before we could get to everyone’s questions (we had a great audience and were thrilled at the attentiveness and interaction). I suggested that we would be able to answer some of your questions here on Practically Speaking.  Unfortunately, many of them were targeted at specific broker dealer issues and legal opinions that would not pertain to most of you. But, I did have two that I thought would be very interesting to this broader audience.

Q. Is it possible that individuals are experiencing social media fatigue? An enormous amount of time and energy is being expended on social networking interaction — is it sapping everyone’s energy?

Great question. This is a good point when it comes to social networking in general. I think the difference lies in how you target and how you interact. For example, if you are at a party with 100 guests and you tried to talk to everyone, you would be pretty tired at the end of the evening (and you probably weren’t the best conversationalist with any one of them). However, if you focused on only those guests that fit a specific profile (demographic, employment, etc.), you could narrow your focus (and energy) to make the best possible impression.

It’s the same with social networking. Don’t try to be everything to everyone. Know your niche, your ideal client and focus on getting that message right. If you get rid of the noise, you can get rid of the fatigue.

Q. I send my clients a weekly market update email and a quarterly newsletter. Is that enough?

I am on the mailing list for many newsletters and I get lots of market update emails from advisors. While there is nothing wrong with them, I don’t really believe it is enough. To make them compliant and easy, they usually end up being fairly cookie cutter and bland. (Frankly, if I was that interested in market updates, I could look up the weekly return of the Dow or the S&P well before I got an email.)

The word “social” in social networking is the key. Put some personality in your work; let me know how you are doing, what you are reading and what you are thinking. Clients are buying you, not the returns of the indexes.

Get in while the getting’s good

Social media is not going away. I loved Stephanie’s quote at the end of our webinar: “Marketing is the expense of doing business.” You can choose to market one at a time or leverage thousands with social media. It is really up to you.

Get started by downloading our “Go Social” toolkit, reading “The Interactive Adviser” in Investment News (written by yours truly), or connect with me via LinkedIn.

Get out there already.

Olympic Winners: Four Ways Advisors Can Tap Their Success

The following article is a guest post by Ellen Rogin, CPA, CFP® – a wealth advisor, abundance activist,  and a nationally-known expert on living a life of success and prosperity.

The personal stories of the athletes are one of my favorite parts of watching the Olympics. I love hearing about their journey to get to London, their struggles and triumphs. I am also fascinated by the training the athletes commit to in order to make the Olympic team.

Over and over in interviews the athletes share how important the mental preparation is to their success. There is so much that we can learn about creating prosperity and success from these athletic superstars.

Mental Training Just As Important as Physical Training

Did you know that the United States Olympic Committee (USOC) has four full-time psychologists on staff to help their elite athletes with mental conditioning? Here’s what they say on their website: “Both research and our experience strongly suggest that as athletes move up into the elite ranks, mental training skills become as important as the physical side of the sport.”

Four Ways to Tap Success of Olympic Winners

The USOC suggests mental training guidelines which could just as easily apply to building wealth.

1. Mental training can’t replace physical training. Similarly, picturing abundance isn’t enough; you must also take responsible actions with your money.

2. Physical training and physical ability are not enough to succeed consistently. The right mindset is crucial for both athletic success and financial success.

3. A strong mind might not win an Olympic medal, but a weak mind will lose you one. Having the right mindset might not ensure that you’ll hit every one of your goals, but a weak one will make it harder to hit your targets.

4. Thoughts affect behavior. Our thoughts and beliefs affect everything we do. Our thoughts are like the rudder of a boat – they guide our actions. Right thoughts + Right Actions → Right Results.

Recent Training Research

Dr. David Hamilton (Institute of Sports Science research) writes about recent research carried out at the Institute of Sports Science at the Justus Liebig University Giessen in Germany. They compared five different groups of people. The first group did 100% of a training program physically, the next group did 75% of the training physically and 25% of the training in their minds, the third group did 50% physically and 50% mentally, the fourth group did 25% physically and 75% mentally and the last group did not train.

Ready for this…

There was only a very small difference in physical improvement between the group doing 100% of the training in the gym and the group only doing 25% of the work in the gym and 75% of the training mentally.

Picture Your Financial Goals and See Opportunities

This type of mental training is not just effective for physical activities. We can use mental training for our financial success as well. There is a small part of the brain called the reticular activating system (RAS) which acts as a filter for important information between your conscious and subconscious mind. This is what helps us to hear our name being called across a crowded room, but ignore the background noise of glasses clinking. We have the ability to actually help to program our RAS. The more you program your RAS with thoughts and pictures of your goals, the more likely you are to be open to seeing the opportunities to help create these goals.

3 Keys to Programming your RAS

1. Choose a Time When You Are Calm

2. Focus on What You Want

It is crucial that you focus on what you want to have happen as opposed to what you don’t what to happen. Your RAS is not very discriminating. If you focus on what you don’t want, for example if you say to yourself, “I don’t want to have to worry about money,” your RAS will focus on worrying about money. Instead, focus on “I have financial freedom.” Create a specific mental picture of what financial freedom looks like to you. For example: Where do you live? How do you spend your time? Who is with you?

3. Feel the Sensation of Success

Here’s another crucial part of the formula. As you are picturing your goals, make sure to feel the emotion you will feel when your goal happens. If you are not sure how you will feel, before you start the visualization process think back to a time when you felt very successful. How did you feel then? Happy? Excited? Calm? Actually feel this emotion as you are creating your mental picture of accomplishment.

This visioning process will train your mind for success. It is so easy in today’s economy to focus on volatility and problems. Stop it! If this is what you focus on, you will find lots of evidence to support your experience of problems. Instead, if you look for the opportunities that arise in times of change, you will find those.

As Henry Ford said: “If you think you can do a thing or think you can’t do a thing, you’re right.”

Your Morning Cup of Links: Why Cubs Fans Aren’t the Best Fans, Advice for Young Advisers, and Rock Stars on Mars

Today’s Cup of Links has great tips for you on referrals, mobile, social media, and guidance for junior-level advisors — as well as an inspirational story that has nothing to do with our business, but everything to do with how far we can go (literally) when we put our minds to it.

My summer reading has been getting shortchanged this season as we are navigating summer camp schedules, BBQs and a random trip or two to the beach. We are planning our annual trip to Maine in a few weeks (and yes, we will pack the GPS). I’m sure I will come back with plenty more to share, but in the meantime, here are some “must reads” (and a must listen) from the last few weeks.

Fans Are Great, But Advisors Need Timely, Informed Referrals – Bank Investment Consultant

Any time a writer starts an article by referencing the Chicago Cubs, you know I am going to read it. The article started strong, saying some of the best fans in the world are Cubs fans. But then the author goes on to say that although we are evangelical about our beloved team, that we typically can’t convert non-Cubs fans. Our “referrals” are falling on deaf ears.

The good news is that the same isn’t true for creating fans of financial advisors. As you know, it’s all about timing of the referral, or introduction. Here’s one highlight from the article that rings true:

For one thing, as enthusiastic as someone may be about his or her financial advisor, the important thing is not that he brings up the advisor in conversation, but that he brings up the advisor at the appropriate point in a specific conversation. If what you want is to attract IRA rollovers, it’s much better that your clients bring up your name when someone they know mentions that they are about to leave his or her employer than it is that they mention your name every so often.

Wealthy Investors Turn to Mobile, Social Media in Droves – On Wall Street

Last week, we were pleased to have over 500 advisors register for our Go Social! webinar (in case you missed it, I’ll be posting the webinar replay, as well as some of the top questions asked, on the blog soon). Obviously, social media is on the minds of financial advisors right now. And here’s why. Your CLIENTS are there! Investors are using their mobile devices and tablets not only for social networking, but also for checking their finances online.

We have been addressing the demand by creating a BusinessBuilder Mobile App for advisors to be able to share the latest client reports while on the go. We’re also looking at ways to enhance investor’s client experience online. How are you keeping up?

Young Advisers Face Client Worries about Age – Dow Jones

Now I’ve written a lot about why the “Next Gen” is important – why you want to court the next generation of clients, and why they are the key to your firm’s succession plan. Here’s a different angle that’s worth reading – the perspective of younger advisors, and what they specifically need to do to be taken seriously in the workplace. Here are the three key concepts that I gleaned from the article:

1. For younger advisors to be successful, they should tout not just their own professionalism and education, but also leverage the firm’s experience as a whole.  After all, it’s the mentorships around them that will help shape the type of client service that the advisor provides to investors.

2. They’ll be around for a while. Younger advisors will be in the business for 30+ years. So without the possibility of their advisor retiring anytime soon, your clients will enjoy the fact that they will have a dedicated, long-term relationship with their advisor. This is important in a business built on relationships.

3. If you care about your clients, they’ll notice – and it will break down any perceived walls that may or may not have existed because of your age.

Crazy Smart: When A Rocker Designs A Mars Lander – NPR  (listen to this one don’t read it, it is better)

I heard this story on NPR a few days ago and had a “driveway moment.” A driveway moment is when you are sitting in the driveway listening, but don’t want to turn off the car until the story is over. Many of you heard that the Mars rover “Curiosity” landed without a hitch overnight on Sunday. This story is about the lead NASA engineer who led the team that designed a unique approach to the complicated landing.

“His father told him he’d never amount to anything but a ditch digger, a remark he still carries with him years later.”

I think this is a story about finding your passion and putting in the work to succeed. Something we can share with our clients when we ask “what is your passion?”

What are you reading?