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Help Your Clients Fund College with Less Debt

Perhaps some of your clients aren’t able to set aside money in 529 plans to fund their child’s education. In that case, they themselves or their children may have to take on debt to pay for college. The following tips can help clients in this situation take on a minimal amount of debt.

“It may not seem easy to graduate debt-free, but it can be done,” said Stuart Ritter, a financial planner and vice-president of Baltimore-based T. Rowe Price Investment Services in the Money magazine article, “4 Secrets to Graduating from College With No Debt.”

Have them explore if their kids can get a head start. Do your clients’ children have options to enroll in Advanced Placement courses or dual college and high school credit courses? Although college students are considered full-time students at 12 credits, there’s no way a person taking only 12 credits per semester can graduate in four years, unless they have some college credits going into college. Money magazine reported that earning credits at local community colleges then transferring to a four-year institution might be a better financial bet.

Have their kids plan out their courses. Fred Amrein, ChFC®, shared on Investopedia.com that clients should ensure their kids are planning their courses appropriately to be sure they are on track to graduate on time. He suggested mapping out courses at the end of each semester while registering for the following semester.

Ensure kids pick the right major. Amrein wrote that changing majors is a costly proposal. Ensure your clients’ have a thorough discussion with their kids regarding their choice of major and if it’s appropriate for them. Also include in this conversation whether their kid’s major and career choice can adequately cover any student loan debt they might incur.

Explore tax strategies with your clients. Things have changed with the new tax bill, and your clients may have access to more tax benefits than before. It’s up to you to help them figure out whether they can utilize tax strategies to help them pay for their child’s education.

“Examining cost, debt, and potential income are important parts of the college decision-making process,” Amrein wrote on Investopedia.com. “At the end of the day, having your child graduate on time with manageable debt is a great accomplishment.”

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Ana Trujillo Limón is associate editor of the Journal of Financial Planning and the editor of the FPA Practice Management Blog. Email her at alimon@onefpa.org. Follow her on Twitter at @AnaT_Edits.


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Getting Comfortable with Being Uncomfortable

When a planner asks me if they are a candidate for coaching, I always find myself saying, “Never wait to succeed!” Unbeknownst to them, what they’re actually telling me is that they’re in a comfort zone and they’re not sure if they are ready to go beyond it.

Unfortunately, those who stay in their comfort zone rarely reach their pinnacle of success. Conversely, those who strive for excellence and never settle for mediocrity, they do what others won’t.

Remember feeling uncomfortable when trying new endeavors in pursuit of your business goals is a temporary situation. You soon realize that what may have seemed awkward initially turns into your new normal. The secret to getting to the next level is getting comfortable with being uncomfortable. In order to do that you must first understand the Comfort Zone Model.

Understanding the Psychological States of the Comfort Zone Model

The Comfort Zone Model states that when people are faced with a difficult situation they will overcome and rise to the occasion by learning or growing; thus, lifting out of their comfort zone. However, I believe that many planners are stuck in complacency unless they have a strong enough reason for change. The following are three psychological states of the Comfort Zone Model and how it may pertain to you as a planner.

Level 1: Comfort Zone. The “comfort zone” is described as a psychological state in which things feel familiar and as a result there is a low level of anxiety, stress and feeling of being in control. Planners tend to get to settle in their comfort zone when they have created a book of business and gross production level which is acceptable to the company they work for, themselves and in some cases their peers.

However, change is inevitable. Eventually, the market will go down, clients pass away or transfer to other planners, and in some cases the firm you work for will increase their minimum gross production standards. When any of this happens, many planners are forced out of their comfort zone. Or, they are forced out of the industry.

Level 2: Optimal Performance Zone. Although stress and anxiety can play a large part in why a planner has to step out of their comfort zone, the act of doing these new activities can also create new anxiety and stress. However, if the planner continues focusing on learning and refining new ways of growing and maintaining their business they will soon find that they are in what is referred to as the “optimal performance zone”—a psychological state in which the planner is hitting peak performance.

The secret to staying in this state is to continuously want to want to work on your business while working in your business. When a planner is focused on improving their business they learn various tools, techniques, strategies and solutions that help them work smarter. As a result, they typically start to quickly see positive results.

Level 3: Danger Zone. As I had previously stated, some anxiety and stress can improve a planner’s performance because it propels them towards learning and growth. However, if too much anxiety occurs it can be paralyzing. This is referred to as the danger zone—a psychological state where disbelief lives and all actions cease. Performance therefore declines as anxiety and stress increase.

Take for instance Gail Z., a 25-year veteran who was told on Thanksgiving that if she didn’t achieve the company’s minimum gross production number by the first of the year she would be let go. This immediately put her into the danger zone” and the only thing that got her out of it was having a strategic plan to follow which helped her accomplish what seemed to be an unreachable goal.

Finding Your Psychological Zone

Obviously, it’s important to be aware of what psychological zone you’re in at any given time. If you feel complacent and not motivated you are most likely in your comfort zone. Beware of complacency because too much of it can have an adverse effect when you are faced with a situation like Gail was.

The place you want to find yourself is in a constant state of forward movement. Being willing to be comfortable being uncomfortable is paramount and will no doubt offer you a leg up as it forces you to continually think on your feet and come up with out-of-the-box solutions.

If you are ready to take your business to the next level, schedule a complimentary 30-minute coaching session with me by me by emailing Melissa Denham, director of client servicing.

Dan Finley
Daniel C. Finley is the president and co-founder of Advisor Solutions, a business consulting and coaching service dedicated to helping advisers build a better business.

 

 


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5 Marketing Tips for the Brand-New Firm­­­

You’ve got a lot going on if you’re a financial adviser who wants to launch—or just launched—a brand-new financial planning firm. The compliance, the regulations, the tech stack, the operations and administrative tasks—­­­it gets overwhelming fast. And that’s before you even consider how you’re going to spread the word and market your brand-new business.

But by focusing on the little steps that make a big impact, you can gain traction while using your available resources wisely. This is my best advice for advisers with brand-new firms who want to know where to focus their first marketing efforts.

1.) Leverage Your Biggest Asset: Time. Yes, things might feel hectic right now—but if you just started your business, you probably don’t have a full load of client work to get through right now. Take advantage of the most precious resource you can have at your disposal: time!

You don’t need to hire anyone to handle your marketing at this stage of the game. It might make sense to work with a marketing professional to help you nail down your strategy and plan, but you are more than capable of knocking out the to-dos associated with execution of said plan.

There will come a day when you literally don’t have the time to market yourself. For now, make sure you schedule time into your calendar for marketing activities. Those activities could include:

  • Attending networking events or joining local communities of business owners
  • Signing up for directories and professional associations
  • Creating a compelling website that converts visitors into leads
  • Building relationships and connections with reporters and influencers who can help share your story far and wide

…and a lot of other little tasks that you could put on your list. That brings me to my next piece of advice.

2.) Focus on Your Strengths. Are you the world’s biggest introvert who would rather shave off their eyebrows than attend a networking event where you know no one and be forced to make small talk all night?

Networking shouldn’t be a huge part of your marketing strategy then. Don’t put it on your list of marketing tactics to try. It’s common sense, but you’d be amazed at how often advisers doggedly pursue marketing strategies that make no sense for them.

Focusing on your strengths isn’t an excuse to avoid learning something new or to get out of the hard work of doing great marketing, rather it’s a guideline to help you avoid getting bogged down in something that won’t serve you well.

If you have a knack for storytelling but don’t understand how to use live video on Facebook or Instagram stories, then you can learn how to leverage those tools to amplify this skill you already have (telling stories).

Going through your strengths and weaknesses and appropriately—and honestly—categorizing them takes a lot of self-awareness. That’s a skill in itself, and if you feel you may be lacking I highly recommend starting there.

Enroll in a personal development workshop. Identify your strengths and double down on them. Know your weaknesses and be mindful of them. You don’t necessarily need to “fix” them, but you need to be aware so you can focus your energy in places where you can get the most bang for your buck.

3.) Then Focus on Your Strategy. If you’ve read this far, you might be wondering, “Yeah, but what do I DO? What, precisely, should a brand-new financial planning firm’s marketing to-do list look like?”

The thing is, I can’t tell you the exact right thing to do in this article because I don’t know your strategy (and you probably don’t either at this point). I can tell you that if you’re asking, “what should I do?” you’re asking the wrong question and getting stuck in one of the biggest mistakes I see advisers make.

Questions about what to do are questions of tactics. And tactics are useless unless you create a strategy first. Your marketing strategy is like the framework of a house. Wanting to know all the tactics to try first is like walking onto a house with a foundation but no walls and trying to hang pictures.

A marketing strategy is made up of elements like:

  • Your messaging. What are you saying and why? How are you showing up in the world?
  • Your positioning. What place in the market do you occupy, and is it a space where no one else exists?
  • Your branding. What do you want your firm’s reputation to be out in the world? What do people say about your business when you’re not in the room?
  • Your promise. What promise are you making to the people who give you their attention and trust? (A hint: this isn’t about what you do, literally. Your promise is not “financial planning.” Your promise is about a specific outcome a client will receive as a result of your service, and that outcome is probably more about a feeling, emotion or status than anything tangible.)

A good marketing strategy and clear understanding of your audience will allow you to fill in the blanks on the following statement: “We do [WHAT] for [WHO] because [WHY].”

Let’s talk about the “who” in that sentence next.

4.) Decide Who You Are For. You marketing will fail unless you understand who your marketing is for. Who do you want to help? What kind of change do you want to guide those people to make? Why are you the person to take them on this journey? And, equally important, who are you not for?

The more specific you can get with who, the easier it will be to answer those “what” questions in your marketing: what do I do, what tactic do I try, what should I spend money on, what methodology should I use, what platforms should I be on, and so on. Who your audience is largely helps point to the right answers for these questions.

A quick note on this: it is far easier to help someone who wants to be helped, than to seek out a group that stubbornly refuses to change (even though you know they need what you can offer).

When considering your audience and the change you want to help them make, seek out the people who are already open to some kind of change. If your target audience is people who don’t think they need financial planning (even if they would get more benefit from financial planning than anyone else in the world), you’re going to have a hard time with your marketing.

Trying to convince people they’re wrong is tough. Don’t believe me? Go post your political opinion on Facebook with the goal of getting your relatives to finally see the light and understand how wrong they’ve been about their beliefs for the past few years.

5.) My Favorite Marketing Tactics. Look, I get it. You came here for the tactics and I’m preaching about strategy. I don’t want to leave you hanging, so I’ll quickly share my favorite marketing tactics to leverage, especially if you just started your firm:

  • Blogs and article writing. It’s fast, it’s cheap, and it’s an amazing no-barrier-to-entry way to get your ideas to spread. Blog once a week. You have the time right now.
  • In-person networking. A lot of young advisers I talk to don’t want to do the legwork of in-person networking because they’re trying to build virtual businesses. So? Old-fashioned stuff still works. Join a BNI group, find a niche community, volunteer for causes your target audience cares about and reach out to advisers who might make good referral partners. Pound the pavement and always seek to make connections.
  • Online relationship-building. Look for relevant Facebook groups (i.e. groups where your target market is). Follow influencers and interact with them. Find reporters you might want to work with and reach out to introduce yourself and offer to help. Start your own community.
  • Start sampling. No, you can’t give out samples of your product at the grocery store, but you can let people try before you buy. Host free workshops or webinars.

This stuff works better if you can show up to where your audience already is. You don’t need to build from scratch. Go find someone who has the audience you want (but who isn’t an adviser—they shouldn’t be direct competition) and partner up with them.

You don’t want to build on leased land for too long, but leveraging people who already have the audience you want can help you kickstart your own audience growth, since some of those people will follow you back to your own site, platform and brand.

All this being said, I can’t emphasize it enough: tactics are the wrong things to think about if you’ve just begun to market yourself. What you tweet or which networking group you show up to this week feels productive, but often it’s just busywork if it’s happening randomly instead of strategically.

Take the time to lay a strong foundation. Know who you’re for (and who you’re not), what your promise is and how you want to position yourself in the market. The tactics will reveal themselves after that.

KaliHawlk
 Kali Hawlk is the founder of Creative Advisor Marketing, an inbound marketing firm that helps financial advisers grow their businesses by creating compelling content to attract prospects and convert leads. She started CAM to give financial pros the right tools to build trust and connections with their audiences, and loves helping advisers find authentic ways to communicate in a way that resonates with the right people.


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To Find Differentiation, Focus on Your AND

I wrote in my last post about how financial planners need to find ways to avoid using challenges as excuses for poor marketing and the importance of starting simple before adding too much complexity to their marketing efforts. In this post, I want to focus on one specific challenge that many financial planners face when it comes to articulating and promoting their value: commoditization.

Commoditization can be defined as the process by which goods that have economic value and are distinguishable in terms of attributes (uniqueness or brand) end up becoming indistinguishable from their competition in the eyes of the market or consumers. Every lucrative profession must eventually face the specter of commoditization, as the success of individuals or organizations in an industry prompts a flood of new entrants looking to get in on the action.

And financial planning is far from immune. Even given the contraction in the industry and profession over the past decade, there were still more than 300,000 financial advisers in the U.S., including all channels (as of January 2017). Yes, this number includes all of the different tiers and types of “advisers,” and the case could be made that true financial planners are a cut above the rest. The case could also be made that a good portion of the American consumer public does not grasp that there’s a difference at all, much less what that difference is.

The mantle then falls to financial planners to dramatize that level of differentiation, not only as it pertains to separating themselves from competing planners, but also in helping consumers understand the problems you can help them solve. Yet, if that was easy, we wouldn’t have a commoditization problem in the first place. The process of finding differentiation can require profound soul-searching, and may force you to dig as deeply into the weaknesses in your practice as you delve into your strengths. You may even find that what got you here (your recipe for past success) won’t get you there, and that can be a tough pill to swallow.

That said, I believe it’s a process that’s worth your time, as knowing who you are, who you are not and why your clients should care will serve as the foundation of your marketing for years to come. The following are a few tips to help you get started.

Do you remember the Coke Zero advertisement in which a young man is shown in a variety of different situations asking “and?” when receiving a reward (like an ice cream cone)? (FACT: describing commercials always makes them sound far worse than they actually are, so there’s a link above to watch it). The commercial does an excellent job of visually and verbally illustrating Coke Zero’s tagline of “real Coke taste AND zero calories,” but is also a useful way to think about differentiation.

In other words, what’s your AND? What do you, or your firm, offer that makes you truly different? Many planners and even large financial services organizations are still providing prospective customers with a laundry list of benefits, with a few awards sprinkled in, and calling it “marketing.” These are often lists of the things that every organization or individual does: “creation of a personalized financial plan,” “maximizing client investments” or “minimizing taxes.” If a prospective client was being direct, they would likely respond to these messages by saying, “You had better do those things.”

Essentially, planners are focusing on the baseline, what’s expected, when they should be focused on what sets them apart. As your differentiator must be unique (obviously), I can’t tell you exactly what you will find, but I do believe that, as a true financial planner, the act of planning itself (and why you spend the time to do it) could play a significant role. To most consumers, financial planning is not about investment selection or rate of return—it’s about the peace of mind that comes with knowing that they have done the work to prepare to fund an uncertain future. This makes the financial planner much more than someone with whom they are completing a transaction; the planner becomes one of the few critical trusted confidantes that their client can call upon in a time of need.

Great marketing does not ask prospects to sift through the message to find the benefit or feature that speaks to them. Great marketing shows the prospect that what the organization or individual cares about most is solving their most important problem. Find that problem, articulate your solution, and you will have found your AND.

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Dan Martin is the Director of Marketing for the Financial Planning Association, the principal professional organization for CERTIFIED FINANCIAL PLANNERTM (CFP®) professionals, educators, financial services professionals and students who seek advancement in a growing, dynamic profession. You can follow Dan on Twitter at @DanW_Martin and on LinkedIn at www.linkedin.com/in/danmartinmarketing.

 


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Helping Clients’ Children Understand Student Loans

Many students entering college might not know enough about the costs of borrowing money for college.

That’s where you come in. Advisers can stand out by helping families graduate to a higher level of knowledge about a young person’s financial future.

You may be aware that when students first apply for federal financial aid, they must complete an entrance counseling session. Specifically, undergraduates borrowing under the Direct Subsidized Loan and Direct Unsubsidized Loan programs, and professional or graduate students applying for the Direct Subsidized Loan, Direct Unsubsidized Loan and Direct Plus Loan programs, must take an online, 20- to 30-minute tutorial that describes what they need to know before borrowing for college.

With student loan defaults surpassing $120 billion in the first quarter of 2016, researchers from Kansas State University’s Personal Financial Planning program undertook a study to examine whether effective student loan entrance counseling leads to higher financial knowledge and, ultimately, greater likelihood of repayment.

The Good News

After a robust statistical analysis (the details of which we will skip), the researchers found student loan counseling can contribute to increased borrower financial knowledge, which in turn increases both the borrower’s confidence and ability to situationally apply that knowledge to make better borrowing decisions. Further, increased confidence and ability lead to better financial management and ultimately to a reduction in expected student loan debt.

Now, The Bad News

One-third of students reported not remembering the entrance counseling and many reported that the entrance counseling was not useful. Financial advisers seeking to become their clients’ CFO or family wealth adviser can use this apparent deficiency to add value to their most important relationships. With the fall semester top of mind for many households, advisers can offer to help their clients’ children manage their balance sheet, and in particular, any liabilities they will face upon graduation. There are some immediate, actionable suggestions advisers can make including:

  • The repayment of federal student loans must not be taken lightly and needs to become the highest budgetary priority when due;
  • The easiest way to ensure payments are made in a timely fashion is through an auto debit program, rather than bill pay or payment by mail; and
  • There are a number of repayment options, some tied to income, that may be more beneficial for recent graduates compared to the standard 10-year repayment option.

Advisers looking to set themselves apart should consider incorporating these services into their business model. Offering assistance will not only help bridge relationships with the next generation, but will let existing clients know how much advisers care about each family member’s well-being and future success.

For more tools and tips, visit our Wealth Management program.

Editor’s Note: A version of this blog post appeared on the Janus Henderson Blog. You can find it here

Matt Sommer

Matt Sommer is Vice President and leads the Defined Contribution and Wealth Advisor Services team at Janus Henderson. In this role, he provides advice and consultation to financial advisers surrounding some of today’s most complex retirement issues. His expertise covers a number of areas including regulatory and legislative trends, practitioner best practices and financial and retirement planning strategies for high-net-worth clients. 

 


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3 Tips to Prepare Proactively for Clients’ Cognitive Decline

As a financial planner, you may not be able to team up with your clients’ doctors to assess their cognitive decline, you can proactively plan for cognitive decline in case it does happen. Cognitive decline can affect your clients’ finances in several ways.

“Cognitive decline is becoming one of the most pressing challenges faced by families,” Daniel Kern and Renée Kwok wrote in the recent Financial Planning magazine article, “Cognitive Decline: The Boomer Issue that Families Aren’t Discussing,” which also reported that financial literacy scores decline by about 1 percent per year after age 60.

A resource co-produced by FPA and AARP called “A Financial Professional’s Guide to Working with Older Clients,” (available at AARP.org) provides these tips for practice planning:

1.) Encourage clients to rehearse lifestyle changes. Help clients identify some of the transitions they’ll have to make as they age—for instance, will they need to downsize where they live, how often they travel, or their hobbies? Also, what kind of help might they need as they age?

2.) Develop a disaster plan when your client is healthy. Identify worst-case scenarios and put a disaster plan in place. For example, have a plan for what to do if your client has a stroke that leaves them cognitively and physically impaired. Educate the family members on this plan and determine caregivers. Ensure estate planning documents are in place, and get permission to contact their loved ones and to share information in writing in case disaster strikes.

3.) Keep an eye out for symptoms of cognitive decline. Pay attention to whether your client has any changes in behavior or becomes forgetful. Are they losing focus? Are they excessively forgetful? The permission you obtained in writing to contact the family will also come in handy if you need to discuss your concerns with their loved ones.

Ana Headshot

Ana Trujillo Limón is associate editor of the Journal of Financial Planning and the editor of the FPA Practice Management Blog. Email her at alimon@onefpa.org. Follow her on Twitter at @AnaT_Edits.


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4 Steps to Use Public Speaking to Attract More Clients

Financial planners are always looking for a way to find new clients. However, many people fail to find effective marketing methods to do that.

This situation does have a solution. As a public speaking and marketing consultant, I find that most financial planners can become more successful by using public speaking in their marketing plan.

Here, I’ll outline the many speaking opportunities that you can use to attract more business. There are thousands of groups in need of a guest speaker at their meetings and conferences. A few examples include: business groups, charity groups, associations, corporations, conferences, conventions, organizations, schools and colleges, professional groups, churches, special interest groups and many other types of groups and organizations.

Now, let’s take a look at an example of a possible small marketing plan that uses public speaking. Imagine if a financial planner started by giving a 30-minute speech each week to different groups with an average attendance of 50 people per group. In a period of 50 weeks, you would have spoken to 2,500 people. Also, you would have the chance to answer their questions and shake hands with them. Just imagine how many potential new clients and customers you might attain from giving 50 speeches each year about your products or services.

Also, you might acquire many referrals as you start speaking to a variety of groups and organizations. Furthermore, this is just a starting point. Many ambitious financial planners with large financial goals can start giving 50 to 200 speeches each year and they can start speaking to much larger groups.

So, you might be wondering, why isn’t everyone using public speaking to get more business? Well, there are two main obstacles that keep people from using public speaking. First, public speaking is a very common fear for most people. The second obstacle is that most of us were never told that public speaking is a great marketing tool for attracting new customers. So, as a result, we never bothered to learn how to use public speaking to gain more clients.

But, there is good news. We can learn to conquer these two obstacles.

When I coach many kinds of business people in my seminars and teleseminars, I use what I call the “Four-Step Plan.” All four steps are very important if you want your public speaking to be successful.

Step No. 1: Know Your Reason or Goal for Becoming A Public Speaker. Think about the specific goal that you want to achieve by giving speeches. For example, you might want to get 100 new clients or earn an extra $100,000 in the next year. Now, each person may have their own goal, but make sure that you have a specific goal to aim for. Having a specific goal will motivate you to put in the effort required for making your public speaking successful.

Step No. 2: You Must Have a Slow and Safe Way To Practice Public Speaking. Since public speaking is a very common fear, you’re going to need a slow and safe way to build our confidence as speakers. This can be accomplished in small supportive groups or seminars, where people can practice giving speeches at their own pace.

Step No. 3: Be Willing to Use Public Speaking All The Time. Here, you have to decide if you’re willing to use public speaking on a regular basis. For example, if you give one or two speeches each week, you’ll discover that you have given between 50 to 100 speeches in a 50-week period. It’s this kind of commitment that will make public speaking an effective marketing tool for getting new clients and customers.

Step No. 4: The Business Side of Public Speaking. This involves learning how to make public speaking profitable by: getting paid to speak, giving free lectures in order to get new clients and referrals, getting speaking engagements at local community groups, business groups, associations, corporations, conferences, conventions, organizations, schools and colleges, professional groups, churches and many other types of groups and organizations. You will also start developing a strong “pitch” that will get groups interested in having you speak on your financial topics.

Overall, it’s important to know that public speaking can make you a well-known financial planner. It is also a great way to put you in front of many potential new clients. Finally, you will also have the chance to speak at a variety of groups and organizations that have the ability to make many referrals to you.

Edward Martin

Dr. Edward Martin is a public speaking and marketing consultant. He offers seminars and teleseminars on, “How To Attract New Customers And Clients By Using Public Speaking.” For more information, call Dr. Martin at 818-314-2054 or email him.