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Overcome 4 Business Challenges with Tech and Training

Advisers are being sold technology to solve their problems at every corner, said Greg Friedman, founder, CEO and president of Private Ocean.

“Technology is so oversold to all of us,” Friedman said at a recent FPA Retreat 2017 session.

It’s a combination of technology and staff training that is the key to managing business challenges, Friedman said. He knows this because during his time in the industry, he’s seen some things.

“I am the poster child for every problem this industry has,” Friedman said, who started Friedman and Associates in 1991 at age 28 with two associates—his twin toddlers—and now the company has “evolved through all stages.” Private Ocean—the result of a merger between Friedman and Associates and Salient Wealth Management—now has 24 full-time employees and seven advisers.

Friedman gave attendees tips on how to solve the four common business challenges—business development, marketing, time management and efficiency.

Utilize available technology. Prospecting becomes easier if you have software that can show you how you are possibly connected to prospects. Friedman uses Relationship Science, which allows planners to plug in a name and see all the connections that adviser potentially has with that prospect.

Marketing automation is another helpful piece of technology. When prospects enter their email on your site, the automation will automatically send the prospect something and then notify you when you have a bite, Friedman said.

Don’t forget CRM.

“CRM is core,” Friedman emphasized. “I don’t care which ones you use, but use one.”

Develop and reward employees. Friedman said having the staff on board is a must for success.

“Having that data and having those systems means nothing if people don’t know how to use it or know how to get clients,” he said, also suggesting that firms provide ongoing sales training and coaching. If advisers are uncomfortable with “sales” training, call it “relationship,” “communication,” or “consulting” training.

Designing a compensation structure that rewards top advisers while not penalizing advisers who don’t meet goals is a way to motivate advisers, Friedman said.

Implement service models effectively. It’s unsustainable to give an eclectic mix of clients the full range of your services, so pick the clients who may not be a match for you and figure out a way to gently steer them to a more appropriate firm or planner.

Also, define what your services are and make more efficient assignments, giving the simple client cases to junior associate advisers and free up time of your more experienced advisers to take on the more profitable, complex clients.

Outsource when needed. Private Ocean outsources some of its marketing efforts to a company called Set Wave, which helps it use social media in the most effective ways.


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Safeguard Yourself Against Litigation

When unhappy clients lose money and decide to sue somebody, chances are that somebody is you.

“You don’t have to have done something wrong to get sued,” Greg Severinghaus, marketing manager and senior underwriter of Markel Cambridge Alliance, said in a breakfast session April 25 at FPA Retreat at Chateau Elan in Georgia.

Markel_Greg S

Greg Severinghaus of Markel Cambridge Alliance presented the session, “Improve Client Relations to Limit Litigation” at FPA Retreat 2017.

Severinghaus said many advisers he works with don’t think they could ever get sued. They tell him they’ve got good client agreements and they get good results. But then they get sued for something frivolous or something that wasn’t their fault.

For example, he said, an adviser he worked with interviewed with a married couple who never even signed on as clients who eventually sued him.

“We spent $50,000 defending him,” Severinghaus explained. That was a small claim, he said. The bigger claims run into the millions.

Severinghaus said there are many areas in which advisers get sued most, and he offered tips on how to safeguard yourselves:

Execution errors. Advisers frequently get sued for making trade errors. This is the most frequent source of loss for advisers who manage assets.  To safeguard from this, Severinghaus suggested advisers put basic policies and procedures in place to reduce the magnitude of errors. For example, match every order against confirmations and promptly resolve discrepancies.

Also, keep a log of erroneous trades to look for patterns and promptly address them.

Finally, maintain a discretionary fund to address erroneous trades before they get worse. Fix errors as soon as possible.

Client selection and deselection. Focus on onboarding clients who will take your advice. Steer clear of clients who are overspenders, who won’t take your advice, who are unwilling to take effective risk, who are not in need of the services you provide, who are unethical or who are high maintenance.

Clients who overspend are particularly prone to bring lawsuits against you.

“When the money runs out, they’re going to blame somebody and it’s always the person managing their money,” Severinghaus said.

Documentation. This is the biggest piece in defending yourself against litigation. Document everything—every client interaction and meeting—especially if the client did not take your advice. At your quarterly meetings, have the client sign documents noting they understand the reports and your recommendations.

Clients don’t always tell the truth, Severinghaus said, so having proof of what was said at your interactions is key.

“Competent behavior requires ongoing documentation,” Severinghaus said.

Wire fraud. This is a hot-button topic in recent years. More advisers are getting duped into wiring their clients’ money to clever hackers who have enough knowledge of the clients to be convincing.

If you suspect an email is fraudulent, pick up the phone and verify with your client that it was in fact them who contacted you. Don’t trust voice recognition either. When a client calls asking for something you think may be out of character, ask them if you can call them back with the number on file just to verify.

Also, ask questions fraudsters won’t know, and don’t send pre-filled wire instructions.


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All Business is Personal: 3 Tips for Addressing Difficult Client Conversations

“Hi Jim. I wanted to inform you that your funds will be transitioning from an A share to a C share, which means you will actually pay less in fund fees, however, my fee cost will be increasing just a big. Let’s set up a time to discuss.”

Now there’s an email nobody wants to send or receive. As the financial industry evolves and advisers are held to an increasingly higher standard, you may have to take a new approach to difficult conversations with your clients. The ability to engage clients in these discussions is critical in building and retaining a successful practice.

Here are three tips based on the research of G. Richard Shell, award-winning author and creator of the University of Pennsylvania Wharton School’s “Success Course,” on how to better approach challenging conversations and ensure you’re creating Demonstrations of Value (DOVs).

Talk About Client Goals First
When times are tough, take a positive approach by focusing on their goals while still acknowledging the concern. For example, you could say, “I know you set up this portfolio to save for Katie’s college education. She’s starting high school next year, so we still have four years until tuition starts. I know the markets have been rough, but I believe we’ll still be able to achieve your goal. Here’s why.”

By leading the conversation with knowledge of your client’s specific needs and concerns, you can better address the need to maintain an objective view throughout market challenges and not let emotions cloud a commitment to a longer-term strategy.

Help Them See the Big Picture
Your client comes to you with big news. She and her husband are ready to buy that house on Lake Winnipesaukee they’ve been talking about for years. While you share her enthusiasm, you want to make sure that she’s putting this decision into context.

During this conversation, you have an opportunity to demonstrate your knowledge of your client’s plans and needs. How long do they plan to own this house? Will they need to consider space for additional family members later on? Is this where they’d like to retire one day? If yes, how does that fit into their overall retirement plan?

When you help them consider the questions that matter, you reinforce your value more deeply than their investment positions. You can help be a leader when it comes to a family’s important life decisions.

It’s About More Than Money
Get to know your clients beyond their portfolio. While it may seem obvious, occasionally our time gets the best of us and we don’t focus on the details that could make a difference.

Keep notes on their hobbies and interests, where their priorities are, how old their kids are and family anniversaries and birthdays. Knowing these specifics can help foster a relationship that goes beyond just business, creating a partnership that can withstand even the toughest financial environments.

Are you ready to demonstrate your value in a collaborative client relationship? For more tips on how to boost your communication skills, learn about the 3Cs to enhance your negotiation skills.

JohnEvans

 

John Evans
Executive Director, Janus Labs
Janus Capital Group
Denver, CO


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5 Steps to ‘Connecting the Room’

One of life’s simple pleasures for me is something that others might dread: public speaking. For more than 20 years I’ve had the honor and privilege to speak in front of a wide range of audiences—investors, financial advisers, insurance agents and wholesalers.

A rookie financial adviser client of mine explained that he had held his first seminar and it had resulted in setting several appointments with qualified prospects. However, he was disappointed overall because he said that the audience barely said a word during his entire presentation. Even when he would ask them a question or attempt to interact with them, the room was silent.

If this has ever happened to you, please know that it happens to most speakers at some point in their careers. To combat that challenge, I’ve developed a solution that I refer to as “connecting the room.” If you apply this technique, I’m pretty sure you will never just hear crickets during your presentation again.

The following is a step-by-step process for connecting the room.

Step 1: Ask Strategic Questions

It’s no secret that the audience tends to be more engaged at listening when you ask them questions. That’s why it’s important to map out your questions prior to your presentation so that you have a strategy ahead of time.

Typically, I tend to start off a new subject with a question. An example of this was years ago when I prepared one set of questions for each section of my presentation. Instead of reading the Power Point slide titled “Inflation Eats up Your Purchasing Power,” I simply asked a strategic question to the group of retirees, which was, “How many people here paid more for their last car then they did their first house?”

Step 2: Get the Audience to Take Action

Another great way to help the audience connect with one another is to collectively ask them to take action by raising their hand. After I asked the earlier question, I paused and said, “Let’s see a show of hands of who can relate to that. Please raise your hand if you can.”

Immediately, several hands went up.

Step 3: Make a Connection

Next, pick out one person who seems to be paying attention or actively listening so that you can ask them to tell their story to the crowd. Ask, “What is your name?” then simply turn the dialogue over to them by saying something like, “Joe, when did you buy your first house? What type of home was it (ex: rambler, townhouse, split-level, etc.)? Was it here in town or somewhere else?” Let this individual share the limelight for a moment then continue asking a few more questions. Examples might be, “What was the biggest purchase item aside from your home that you bought?” and “Do you think you the prices for items like that will continue to rise?” Your final question should be a closed-ended question which elicits a “yes” or a “no” so you can emphasize your point. Finish the interaction by thanking the person, “Joe, thanks for sharing! Who here can relate to Joe’s story? Let’s see a show of hands.”

Step 4: Connect the Room

Usually a group tends to listen more intently when a speaker is dynamic and uses dialogue, versus a speaker who is static and utilizes a monologue. If you sprinkle in interactions throughout your presentation, your audience will be waiting for them. Use as many as you can—as time permits—to solidify your messaging and to strengthen your connection with those in the room.

Step 5: Make Your Point

Before moving on from one topic to another be sure to ask a summarizing question. Here is an example, “Does anyone know why things are more expensive today than they were when you bought your first house?” Let someone offer an answer and then explain your point of view. You could say something like, “The reason things are more expensive is because inflation eats up your purchasing power!”

Transitioning from one topic to another is often the best time to engage with the audience and have the group collectively relate to each other. Be sure your questions are catered to the demographic to which you are speaking and that the questions support your point of view.

Why Connecting the Room Works

When you use this technique, watch what happens to the people in the room, they speak more freely and are more apt to want to speak with you afterwards and hopefully they are on their way to becoming one of your clients. If they feel comfortable then they feel connected!

To schedule a complimentary 30-minute coaching session with me at, email Melissa Denham, director of client servicing at Advisor Solutions.

Dan Finley

 

Daniel C. Finley
President
Advisor Solutions
St. Paul, Minn.

 

 


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Everything in Moderation: The Fine Line Between Sufficient and Excessive Passion

Could you have too much passion for your career? On the surface, that statement sounds ridiculous. Over and over, we hear everyone from professors to mentors to successful business people talk about the importance of being passionate about our livelihood. They insist that passion is an essential ingredient of professional success. In fact, many would argue the greater the passion, the better off you are.

So what’s the downside? I would imagine most of us don’t see much downside. When you love your job and you’re good at it, there are many reasons to give it extra attention. But we’ve all likely seen someone take this to extremes. When I see excessive passion, I can’t help but think of the maxim, “Everything in moderation.”

Ever worry someone you know has fallen so deep in their work that they’ve gone down the rabbit hole of excessiveness? There are a few telltale signs. Consider whether you have come across people who are:

  • So passionate about their latest idea for their business that they can’t hear the input of others? Every passion needs the balance of reason. Outside perspectives help people see new ideas from multiple angles. When people could gain input from trusted third parties and yet ignore it, they may be letting passion lead them by the nose.
  • So passionate about their livelihood that they get more satisfaction from work than anything else? These types of people preserve any free time for work endeavors in lieu of time they could spend on family, on hobbies or on their health. They simply love their work too much to see a problem with their behavior. If passion for work consistently trumps everything else, it’s going to eventually evolve into a lack of life balance. Some individuals may even rationalize their over-commitment to their livelihood as benefiting the family—without seeing how it’s actually creating rifts).
  • So passionate about their career that they loath the concept of retirement? When so much of a person’s self-identity is tied up in helping clients, trying to strengthen the firm’s reputation, and pushing for a higher level of financial worth, retiring may not be anywhere on their to-do list. People who fall in this category love their own perception of the role they play in the lives of others. But they could be wrong, as I discovered during a recent conversation with a newly retired adviser. He was amazed that none of his clients seemed to miss him after he retired. Somehow, he assumed they would be begging him to come back. The truth is we are all dispensable.

The real question you need to ask is this: when others think of the situations above, do they think of you? Passion can play out in wonderful ways; it can help your business thrive. Enthusiasm is catchy and can attract new clients and help you stay on top of all the news and updates you need to know to ensure that you have a successful firm; but if you go too far—if you burn yourself out or ignore the other parts of your life that deserve your focus—that’s when it’s time for a change. You may want to balance your passion with a bit of moderation.

Joni Youngwirth_2014 for webJoni Youngwirth
Managing Principal of Practice Management
Commonwealth Financial Network
Waltham, Mass.


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Why Clients Choose You

Why would a prospect end up choosing you over another adviser?

There’s really only one thing that a prospect is looking for when they begin the conversation with you. If they believe you can provide it, it’s much more likely that they’ll become your client.

What Prospects AREN’T Buying

Despite what most advisers think, people aren’t working with them because of their:

  • Superior investment selection
  • Comprehensive financial plan
  • Account aggregation software
  • Years of experience
  • Credentials after their name, etc.

We’re all proud of those things and they play a role in the decision to work with you, but they’re not the reason people choose you over everyone else. Prospects aren’t buying the products or features you provide. They’re actually not buying the benefits either.

They’re Buying Transformation

The one thing that they are buying is the transformation that they believe they will get by working with you.

What do I mean by that? It doesn’t matter what people are buying. Whether it’s a candy bar or new car, we’re all looking for the same thing: we’re living in a current state and we want to move into a desired “after state.” We believe making the purchase i going to move us into that place we want to be.

Imagine what your prospect’s thinking. Why are they talking to you? Why are they looking for a financial adviser? I can definitely tell you that they’re not calling you because everything is perfect with their finances.

They’re calling you because they are discontent with some aspect of their financial life. They’re not completely happy with everything they’re doing. They have a problem that they don’t know how to solve and they may be frustrated, worried or confused. The fact is they’re looking for an adviser because they are in a place that’s less than ideal.

And that’s your ideal prospect. Why? Because you know that you have the solutions they’re looking for.

Where Do They Want Go?

If their existing state is discontentment, then they need to move into a place of contentment.

This is the entire value of your service business summed up in one sentence: you are helping people move from their before state to an ideal after state.

If you can clearly communicate this in a way that they understand, you’ll never have to sell anything ever again.

What’s The Next Step?

Take out a sheet of paper and write down answers to these questions.

  • Where are they now?
    1. What are their problems?
    2. Why are they looking for help?
    3. What’s their emotional state?
  • Where do they want to be?
    1. How will this change after working with you?
    2. What will they have?
    3. How will they feel?
    4. What will they leave behind?
    5. What kind of person do they want to become?

Once you’ve written these answers, you’ve taken the first step to discovering the transformation your ideal client is looking for. Start using these things you’ve discovered as you talk with prospects moving forward. Pay close attention as you talk about their desired “after state.”

dave-zoller

 

Dave Zoller, CFP®
Financial Adviser
Streamline My Practice
Warrenville, IL


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4 Elements of Social Media Guidelines

If you’re not using social media to promote your firm and content, consider this: 22 percent of the world’s population uses Facebook (not to mention 79 percent of Americans) and nearly 1 in 3 internet users with a college degree are on Twitter.

When financial advisers use social media well, it can boost their overall marketing strategy considerably. When they don’t, it can be an expensive, potentially career-ending disaster.

But don’t let that scare you. Just establish firm rules of engagement in these areas before posting anything.

1. Compliance

Watch out for these potential red flags:

Promissory language: Don’t promise success and don’t say you can get any better results than anyone else.

Testimonials: This one’s also kind of obvious, but it has some finer points. In the SEC’s guidelines, they lay it all out, but it basically boils down to this: keep the testimonials off your Facebook, Twitter, Linkedin or other self-run social media sites, even if the clients post it themselves. But reviews from other people on sites like Yelp, Google Reviews or Angie’s List are OK.

Out-of-context numbers: I made a good number of mistakes in this area when I first entered the financial world because I assumed anything that was acceptable in a blog post was acceptable on social media.

After a few panicked phone calls from clients, I learned this lesson: don’t post any market statistics. They can easily be taken out of context and viewed by someone as promissory.

2. Approval Process

Giving anyone (including yourself) total freedom to post anything on your social media accounts whenever they want is not a great idea. You’ll want to implement an approval process.

At Mineral, we developed a social post template that makes it easy to share social post ideas with your team and track the approval process. (I set up a “View Only” version of our sheet that you can check out for yourself. If you want your own, in the File menu, just click “Make a Copy.” We also have an Excel version.)

But a social post template alone won’t solve all your approval problems. You’ll need an approval workflow that takes your posts from creation to publication.

Here’s ours:

Creating posts should fall to your creative team (if you don’t have one, a more creative or social media-savvy team member will do). But final approval should be reserved for the people who will ultimately be held responsible if a bad post goes up.

Jud and Kim (our CEO and president, respectively) reserve the right to final approval. It’s their necks (and business) on the line.

Don’t have the time or interest to approve every piece of content that goes out the door? That’s okay, just understand that you’re basically handing over the reins of your firm’s public image, so you need a professional you can trust.

3. Personal Profiles

During a speech by Trump in early March, Dan Grilo, a principal at Liberty Advisor Group, posted something stupid about the wife of a fallen soldier and landed himself in some very hot water.

He posted from his own personal account, but people still began associating Liberty with Grilo’s tweet. In the end, he was fired and Liberty issued an apology, InvestmentNews reported.

Set up some suggested guidelines for what employees should avoid talking about, even on private social media channels (the big three are inflammatory political statements, market predictions and offensive language). You could require guidelines or you could just use Mr. Grilo as an example.

People can and do get fired for stuff they post on their personal accounts. It happens all the time. See this Oxygen article on things people have been fired for posting on their social media accounts.

4. Interactions

Social media is a two-way street. And that’s a good thing! If you don’t respond to people tweeting at you or posting on your wall, you could miss out on prospects and end up looking rude.

Make sure engagement notifications are sent to a phone, computer or Slack (using social integrations) so you don’t miss anyone reaching out.

When someone tweets at you or posts on your wall, you have two options: one of the final approval people could handle interactions so engagements move smoothly, or you slow down the engagement process and use the approval workflow.

This could be done easily and quickly in Slack (an app directory site where we have a #social channel to kick ideas around for posts and responses).

Bonus Rule: Keep Records of Everything

As FINRA wisely cautions, you should keep records of everything you do on social media. To do that, you’ll want to use a social posting and archiving service like Social Assurance or Hey Orca that keeps an audit trail.

Social media is fertile ground for adviser prospects. Who knows? Your next $1M-plus client could find you because of a simple retweet. Just make sure you think about these four areas before you post.

zach-mcdonald

 

Zach McDonald
Editorial Director
Mineral Interactive
Omaha, Neb.