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A Will Alone Won’t Cut It

Only four in 10 Americans have a will, according to figures from AARP. And oftentimes people who have a will call their estate planning efforts good enough.

In addition to having to review their estate planning documents in light of the Tax Cuts and Jobs Act, clients must have other documents and plans in place to call their estate planning efforts complete.

CNBC reported in the article, “12 Financial Planning Documents to Handle Health, End-of-Life Care,” that your clients might need more. Clients should have the following documents in place and updated:

Healthcare proxy. Have your clients pick a person who can make medical decisions for them and then a back-up person in case their primary choice is unable to do it for some reason. Encourage clients to choose people who have the same ideas about quality of life, CNBC reported.

Living will. Ensure clients have a document that establishes what type of care they’d want in case of incapacitation, and make sure they put it in an easy-to-access spot for their family members. Should they get sick and they have their living will in a safe-deposit box, it won’t be easily accessible for family members in that time of stress.

Durable power of attorney. Have clients pick somebody who can pay bills and take care of other financial matters in case of incapacitation. The CNBC article reminds us that banks might have separate forms that need to be updated regularly.

Diminishing capacity letters. Bringing the topic of diminished capacity up to clients now, before their capacity starts to diminish, and creating a plan of action can help curb any confusion about what to do in the future. Ask clients to sign documentation of the plan so you have a specific course of action on who to contact and work with should this happen to them.

Pet trusts and letter of final wishes. Perhaps your client is the last living spouse and the dog or cat would be left all alone upon his or her death. Your client can establish a pet trust to provide for his or her pet’s needs and a letter of final wishes that determines who gets custody of the pet and the pet trust, Forbes reported in an article, “Estate Planning: Include Your Pets.”

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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Outbound Versus Inbound Marketing: Which Strategy Is Best for Financial Advisers?

There’s a battle raging in the corner of your business labeled “marketing.” It’s between two completely different methods for spreading the word about your firm and getting prospective clients in the door: outbound marketing versus inbound marketing.

Which strategy should win out? Which is going to win you the best results from your marketing efforts?

As someone who makes a living helping financial advisers leverage content as part of inbound marketing strategies, I’m admittedly biased. I believe that content should serve as the foundation for your marketing strategy.

But that doesn’t mean outbound marketing doesn’t have a role to play—and as biased as I am, I’m also professional enough to know there are some situations where outbound tactics will win.

Let’s take a closer look at this debate and help you determine which methodology is appropriate for your firm.

But First, The Difference Between Outbound Versus Inbound Marketing

You can’t make an informed decision about which strategy will win in your firm’s battle for the best marketing approach if you don’t truly understand each side of the fight and the differences between the two. Outbound marketing is traditional, old school stuff. It’s where marketing and advertising started, and it’s what a lot of businesses still rely on today. Outbound is:

  • Cold calling (or cold emailing or messaging)
  • Direct mail
  • Paid advertisements (online or off) or paid publicity
  • Trade shows/seminars
  • Interrupting someone to get their attention
  • Incurring a tangible, direct cost to acquiring a lead or client
  • Creating an advertising system that’s dependent on budget

Now let’s compare that with inbound marketing:

  • Content creation (written, visual or audio)
  • SEO
  • Social media
  • Public relations
  • Supporting events
  • Community involvement
  • Public speaking
  • Word of mouth

Inbound marketing earns someone’s attention. It gets their permission to communicate with leads and has low monetary cost of acquiring clients. It’s more dependent on messaging and connection than ad spends, and does not always cost money to do.

The Advantage Goes to Inbound If You’re Short on Budget

The internet has made inbound marketing possible—and massively popular and often profitable—because the cost of distribution of the tactics in this marketing methodology is often free. Think back to that list of outbound tactics. With each one, there’s a cost associated and therefore a limit to how widely you can spread your message. There are only so many stamps you can buy so you can send out your direct mail because your budget is only so big, right?

But with inbound marketing, most of the time, you get free supplies and free distribution channels. It’s popular not because some millennial said, “Hey man, blogging is cool,” or “All the kids are on social media these days,” but because it’s an incredible opportunity for unlimited reach without spending a dime. It’s just a smart business decision to invest in inbound marketing, which of course, content marketing is a part of.

You get a lot more bang for your buck and you also have what essentially amounts to unlimited upside. Your reach is virtually limitless because you’re dealing with digital space.

That being said, you must understand that these marketing methodologies could have a place in the overall marketing strategy for your firm if you want to be a successful marketer. There’s nothing wrong with either type of marketing. Both work.
They’re both very different, but that doesn’t mean there’s a “right” and a “wrong” here. It depends on your business, your goals, strengths and services or offers.

Use Both These Marketing Methodologies, But in the Right Order

I think the “outbound versus inbound marketing” debate is, ultimately, the wrong one to have. A far better question to ask is, “in which order should I layer on my marketing tactics?”

Start with inbound. Add on the direct mail or social media ads or whatever kind of cold outreach and paid advertising you want to do after you build a solid, organic ecosystem that houses a hyper-engaged audience of people who showed up to hear from you because they’d miss your message if it was gone.

Starting with content helps you build trust, relationships, and connections. But why? Why is this the case that we get these outcomes, and why specifically does content deliver these results where outbound marketing may just not do the trick?

Because 50 percent of people under 40 don’t trust financial advisers; 65 percent of investors distrust the financial advice industry as a whole; and 66 percent of the children of clients will fire their parents’ adviser when they inherit their assets.

I’m sure you’ve heard some of these stats before, and they’re daunting numbers to face. To succeed in the modern world, you have to change the way you communicate. You have to find new ways to attract clients.
Traditionally, most financial planning firms get stuck asking for referrals as the only way of building out a prospect pipeline. That’s really limiting; your ability to generate prospects lacks diversity this way.

And putting outbound or direct marketing tactics first tend to breed even more distrust than is already there. Neither buying the attention of potential clients (through ads) or interrupting and demanding attention (through cold calls or messages) builds authentic connections that allow prospects to feel like they know you (let alone like you).

Think about it: if someone’s first impression of you is as someone trying to sell something (as an ad implies), is the power of your later communication going to be strong enough to convince them you’re there for the relationship, not just to make a sale off their business and trust in you?

Which Would You Rather Do: Create a Space Where People Can Like and Trust You, or Just Keep Selling?

That’s where content marketing makes a difference because you earn your prospective client’s attention. You create, publish, distribute and promote content to attract the right people with the right message and the right time.

Content marketing creates a space where people want to come to you and work with your firm because they trust and like you.

If you sell a product or focus on transactions, you can likely succeed without high-quality content as part of your marketing strategy. You can get away with just scraping information from site visitors using cookies and ad pixels, then use retargeting ads to interrupt a separate web experience those people were having at a later date.

I’m sure this has happened to you—where you’ve visited a site and then that site’s ads follow you around everywhere. Is it effective? Sure. I know it is, because there’s more than one thing I’ve bought after seeing countless ads for it. But that was with a thing, not with a relationship.

If you focus on relationships rather than transactions, you should really consider how you can develop a connection with those site visitors before you make your hard sell. Content allows you to establish yourself as a trusted partner, communicate why you versus the thousands of other financial advisers out there and build a relationship before you ask for anything in return.

You don’t need to sell anyone if you create useful, helpful content. The right content can expand your reach, establish your authority, increase your influence, attract prospects and leads and, most importantly, build trust between you and the people you want to serve.

If I had to declare a winner in the outbound versus inbound marketing debate, I might call it a draw—as long as inbound marketing gets your attention first, and you look to build on it with outbound tactics once you’ve established trust with the people you want to work with.

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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Connecting with Clients Who Aren’t Tech Savvy

Many of us tend to stereotype clients of a certain age as “too old” to be tech savvy. After all, the average age in terms of tech savviness gets younger every day. But what if you take a different perspective? Perhaps clients are never too old. Indeed, maybe they would even welcome the opportunity to step up their use of technology!

Let’s start with this scenario: You want your clients to be knowledgeable and comfortable using technology for a review meeting. That way, if they relocate to a warmer climate or are no longer physically able to come to the office, for example, you can still stay connected. Plus, you may believe (as some planners do) that technology-based review meetings are not only more concise but also higher quality. So, what does it take to prepare clients who may not seem tech savvy for a technology-based review meeting?

Beta Best Practices

A good place to start is with a beta approach. Here, there are a few best practices to keep in mind. First, brainstorm a list of two to five clients who you think would be good candidates for a beta test. Reach out to them, explaining to each one the value of conducting a remote review meeting using technology. Then, simply ask them if they would like to participate. If no, end of story. If yes, it’s time to get started.

For this example, we’ll use the iPad as our technology of choice, although there are certainly other options that could work. You’ll need to set up your iPads using the appropriate links so they provide a secure connection. Remember, less is more. The goal is to make it easy for clients by having only the essentials available on the iPad.

Once the iPads have everything they need for clients to connect to a meeting, send them to beta users for the sole purpose of the review meeting. To help familiarize clients with how to use it, include easy-to-understand instructions either with the iPad or directly on it. You might also schedule a phone call to provide a short training session. Now, it’s time to put it to the test.

Try the iPads for one meeting shortly after the training—maybe even the next day. Ask for feedback! If your clients like it, plan on using the iPad for the next review meeting. If not? Simply have them return the iPads to you.

Hidden Benefits and Risks

Of course, there are some clients who don’t even own a computer. You might find that these individuals are the ones who may ask you to talk with their tech-savvy kids. That’s a good thing—and a great opportunity. The kids may see you as taking a novel approach to supporting their parents. On the other hand, what if this strategy is so wildly successful that clients start contacting you 10 times a day? As mentioned above, be sure to establish that the iPad is for review meetings only. Any communication in between meetings can be handled the traditional way—a phone call.

Finally, what if your clients talk to others about how they have reviews with their planner via iPad and from the comfort of their own homes? Positive word of mouth is always a good thing. Plus, innovation presents your firm as young and vital.

Technology Supports Human Connection

Individuals born with technology in hand will be more sophisticated than those who adopt it in their 40s. But millennials are actually the ones who have the most to gain from ideas like this. Who knows where the concept of providing an iPad could lead? What would it mean for clients who adopt this idea to be reminded of you with a beautiful photo, a joke of the day or an inspirational quote? These simple reminders can support the human connection if the foundation is properly laid—in this case—by using an iPad as an enhancement to human relationships.

Now, I know this particular approach won’t be for everyone. If not, what novel idea can you try that can help you stay connected to—and show how much you care about—your clients?

Joni Youngwirth_2014 for web

Joni Youngwirth is managing principal of practice management at Commonwealth Financial Network in Waltham, Mass.


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It’s Not Just About Salary: Purposeful Staffing

I routinely get calls or questions from advisers about compensation for a staff position or junior adviser. Whether it involves hiring/retaining a junior person, or a staff member trying to make a case to their firm about how underpaid they are, the conversation is less about salaries (although it does come up) and more about incentive or variable compensation and bonus. Instead of providing a number or formula, I’ve been asking what would it take that person to leave your firm and why are you doing things? If you know what kind of firm you’re running, and what your goals are, you can be purposeful with compensation.

What Behavior Do You Want?

Over the years, I have lived by a simple rule when it comes to compensation: compensation, especially with variable comp, should be used to drive better behavior. More importantly, advisers shouldn’t have to stick with the same variable comp structure every year as priorities and goals may change. I ask the adviser to think about the goals of their firm, more importantly the leading indicators of success and tie the metrics around those indicators.

As I said, the conversations are changing lately—they are becoming broader. Today, we start with a conversation about work environment. We answer and discuss:

  • Is there a clear vision and purpose for the firm (Do you know where you are headed)?
  • Does the employee have/want the opportunity to grow and is the path laid out for them?
  • Is there a sense that the employee is fulfilled?
  • Is the employee valued?
  • Is compensation really the issue you are trying to solve for?

In my mind, staff more often leaves a business for reasons other than compensation. The biggest reason is always around the vison of the firm and where they fit.

Purposeful Staff

In our most recent paper, “The Purposeful Advisory Firm,” my co-author Raef Lee and I discussed the concept of value engineering for advisory firms. The idea was that an advisory firm has a few levers they can pull that can determine the firm’s direction. Moving a lever in the right direction can propel the firm toward successful enterprise or to a lifestyle firm. I think the people (staff) lever is the most important.

How you use talent can be the key to your success, so it is critically important to understand, communicate and plan for the direction of your firm before you discuss variable compensation with the staff. How can you decide on a number if you don’t know what you are paying for or the direction that the compensation will take your firm?

Lifestyle Versus Enterprise: Questions for You

Before you get into the dollars and cents of a compensation plan, I think it is important to ask questions that can help move that value lever:

  1. Do you aspire to take your firm to the next level? (In addition, can you define what that next level looks like?)
  2. Do you have the appetite for adding (and managing) more employees?
  3. Do you have it in you to fire yourself as adviser and hire yourself as CEO?

If you answer yes to all three of these questions, you are heading down that enterprise path. You will be busy with defining roles, job descriptions and creating a path for all your team members to grow within your firm. Yes means looking at a team approach to the client service model and possibly a chief operating officer hire. The enterprise variable compensation will look at the big picture of the firm and how you are building it for the future.

If you answer no, then the lifestyle approach may be calling you. And figuring out that variable compensation is going to be even more important. You should create a plan that reinforces longevity, continuity and service. The lifestyle firm cannot afford huge turnover that will force the adviser back in the day-to-day operations of the practice. Morale and culture are very important to retain existing clients and strengthen the brand of the no-doubt personality driven firm.

Consequences

Not having a purposeful compensation plan in place leads to employee retention issues. A purposeful plan leads to maximizing the hire for the future direction of your firm. I am often accused of sounding like an attorney (or an economist). When someone asks me about compensation, instead of a direct answer, I now say, “It depends on you.” What kind of firm do you want to be?

Editor’s Note: Join SEI and FPA for a webinar titled, “The Renaissance in Charitable Trust Planning,” at 2 p.m., Eastern, April 18. Register for the webinar here. Also, a version of this blog post first appeared on SEI’s practice management blog, Practically Speaking.

John Anderson

John Anderson is the managing director of Practice Management Solutions for the SEI Advisor Network. He is responsible for all programs focused on helping financial advisers grow their businesses, create efficiencies in their operations and differentiate their practices. He is also the author of SEI’s practice management blog, Practically Speaking.

 


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In Estate Planning, Encourage Clients to Be Open With Adult Children

It was the morning I was to return to Denver after a weekend trip to my small Southern Colorado hometown. My mom and I were having coffee when she said, “Anita, we have to discuss some things.” She got up from the table and went over to a filing cabinet and pulled out a manila folder full of papers.

I realized what the papers were as soon as she’d sat back down. Apparently, she’d devoured the book I’d given her called The Other Talk A Guide to Talking to Your Adult Children About the Rest of Your Life.

My mom is a miracle worker with money. And as she laid out each piece of paper and explained what it was, I realized she’s managed to conduct another miracle—planning the entirety of her and my dad’s estate planning without having us do or pay for it. She’s planned out every detail of her funeral down to what seems like a party complete with a playlist. She’s written instructions as to what we are NOT to do (none of that darn crying, no obituary in the paper, etc.) and she’s even paid for it all already.

Of course, I’ll have to disobey her instructions when that time comes. I couldn’t even hold in my tears as she was explaining what was what because the thought of a world without my queen, my hero, my best friend is unbearable. But she has a way of discussing death as though it will be her last business transaction—one that she’s already put in the work for—and one that I should definitely not live in denial about.

“This is where everything is so you know when the time comes,” she explained as she put the folder neatly back in its drawer.

In editing this month’s Journal of Financial Planning—which is all about estate planning—I got to thinking about this talk with my mom and how it would be helpful if all parents would be this transparent with their kids.

So, I did some research and compiled a list of what you could do to help your clients be as open and honest with their kids as my mom was with me.

Encourage them to have the family talk. The talk I reference above wasn’t the first time my mom has sat me down to discuss this topic. I am the youngest of four children, and she’s sat all four of us down in the same manner to discuss her and my dad’s end-of-life documents and planning. On numerous occasions, she has brought the four of us together to talk about the properties and insurance policies and what will belong to whom and given us each the relevant documents.

Maybe your clients aren’t as open with their kids, but they can still sit down with their children to discuss their wishes and their end-of-life plan so that their kids can get on board. They can also discuss the financial and medical power of attorney appointment at this meeting.

Encourage them to be open with their kids about their decisions. Our mom has told us the rationale behind her estate planning decisions so we understand why certain assets will be given to certain siblings. We are all in agreement with these choices. My mom’s openness and honesty has made it easy for us to accept and honor her decisions. Plus, since she’s incredibly brilliant, her reasons for making each decision are sound.

Encourage clients to make a binder for each child. I got this idea from Bob Mauterstock at an FPA Annual Conference session he had in Boston. He encouraged the attendees to have their clients put together binders for each of their adult children so they can have all the relevant documents they need. My mom absolutely loved this idea and has also made binders for each one of us that contains all the documents relevant to whatever assets she has plans to leave us.

The emotional aspect of estate planning isn’t easy, but knowing my mom has done all of this and has kept us in the loop will make this incredibly difficult transition—both emotionally and financially—a little less intense.

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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Creating the Ultimate Toolbox

How do you know that you are using the wrong tool for a particular challenge? Many financial planners run into similar situations—not knowing what tools they need and when to use them in order to be successful. So why is understanding what tools you need so important? Because financial planners and agents who do not understand the appropriate tools to use, why and when to use them and how to use them effectively are doomed to come up against repetitive obstacles.

Abraham Maslow said it best when he said, “If the only tool you have is a hammer, you tend to see every problem as a nail.”

Creating the Ultimate Toolbox

Recently, I’ve had a number of my clients request the Advisor Solutions’ “A-to-Z” Assessment Test which is an assessment to help individuals determine which tools they need in order to overcome their particular challenges. It has become abundantly clear that it doesn’t matter if I’m speaking to a first year rookie or a twenty-five year veteran, everyone has challenges but they don’t realize there are solutions.

Let’s take a look at a step-by-step approach to creating the ultimate toolbox.

Step 1: Confronting the Challenge(s)

Few planners want to confront their business challenges head on. The following is an example:

Marie is a rookie planner with less than two years in the industry, who after taking the assessment test admitted that when a prospect tells her that they “already have a planner” she simply asks if she can keep them on her quarterly mailing list. In other words, she is not getting past this objection which makes her sales efforts that much more difficult.

Jayne is a financial planner with 30 years of experience who spends most of her day putting out fires and dealing with client servicing. Whenever a client calls and needs something she stops what she is doing to address the client’s request. In other words, she is not prioritizing her interruptions which make her time management system reactive rather than proactive.

Although each of these clients is very different in terms of experience and client base, they do share a commonality: they have accepted their challenge as “just the way it is” and believe that there is nothing they can do about it.

Step 2: Search for the Solution(s)

Unfortunately, both of these planners would have continued in their limiting belief of accepting their situation had they not yearned for solutions.

After several weeks of coaching, Marie ended up with a system for handling objections using a tool called the Objection Resolution Model, a four-step process for overcoming any objection. Once I explained the model and role played numerous objections for her she realized that this was a much better solution than simply keeping people on her mailing list.

Jayne now has a system for prioritizing interruptions and tasks using a tool called the Adviser Solutions’ Time Matrix To-Do List which labels whether tasks are now, today, this week or whenever items.

It didn’t take long for each of them to realize they could take control of their situation by simply finding the correct tools.

Step 3: Applying the Tools and Evaluating the Results

Knowing what to do and actually doing it can be two very different things. That’s why it is so important to apply the tools that you find right away and to continue to use them until they become a habit.

Next, you must evaluate the process. Both planners did and have now created a new normal.

What’s in Your Toolbox?

The aforementioned tools are just two of 26 I’ve explained in my book 101 Advisor Solutions: A Financial Advisor’s Guide to Strategies that Educate, Motivate and Inspire! Just think what you could do once you mastered all of these tools. So, what’s in your toolbox? If you still have challenges than you need solutions for now is the right time to create your ultimate toolbox.

If you would like any of the tools mentioned in this piece, request them for free from our Melissa Denham, our 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 Tips to Protect Your Practice from Cybersecurity Threats

Spring is finally here and this time of year always brings a renewed focus on getting healthy for summer beach vacations. But now that a fresh season is among us, it’s time for us to also focus on the cyber health of our practices.

According to Security Magazine, there is a hack attack every 39 seconds on average. As a firm, we at Kestra Financial are always doing whatever we can within our internal systems to protect the privacy of our partner firms and their clients.

However, there are a few things you as an adviser can do proactively for added protection.

Train your staff to be vigilant. Businesses often don’t realize the biggest threat to their cybersecurity health is, unintentionally, their employees. To help mitigate this threat, train your staff to be weary of emails that claim to be from trusted partners but don’t appear to make sense (these are likely phishing attacks). Also, warn your staff to not type username and password information into a website simply because it asks for it. This is the most common way our advisers get breached. Odds are, if something doesn’t feel right, it probably isn’t. When in doubt, proceed with caution.

Practice safe web behavior. Do not type sensitive information into websites without an “https” prefix included as part of the URL. Always use strong passwords that are at least eight characters or longer and include a mixture of symbols, letters and numbers. As a rule of thumb, if your password is in the dictionary, it is likely not strong enough. Also, be sure to never use the same password across multiple websites.

Beware of ransomware. When it comes to cybersecurity, it’s not just about privacy, but also access. Sometimes, instead of stealing your data, hackers will encrypt your computer and hold it for ransom until they are paid. Nowadays, it is fairly simple for hackers to conduct clandestine, international transactions, especially with anonymous digital currencies such as bitcoin. With this in mind, your backup strategy is almost just as important as your cybersecurity strategy. On a recurring basis, practice backing up your data and then re-uploading it back into your system. If you have a strong backup strategy, you can make yourself immune to ransomware attacks.

Avoid using obscure, free software downloads and file-sharing utilities. This is frequently how hacking activities start and spread. Free video conversion utilities are especially common and should not be downloaded unless they have been purchased from a trustworthy source. Even if only one employee downloads a virus, it could spread across the firm.

Heed warnings. If you are using a browser and get an error message noting an invalid web certificate, you should never continue. Websites oftentimes get hijacked, and the only way to know if your website is actually the one you were looking for is if there is a valid certificate. For example, hackers can screenshot what the Gmail login page looks like and fool you into thinking you’ve landed on that page, even though they’ve redirected you to their site. When a website masquerades as another website, it is called the “Man-in-the-middle attack,” and it should be avoided at all costs.

In conclusion, if you suspect that you’ve been hacked or your data has been stolen, act quickly. At Kestra Financial, we encourage our advisers to contact us for assistance whenever they suspect they may have fallen victim to cyberattack.

Kevin Witt

Kevin Witt is the chief technology officer for Kestra Financial, where he leads the company’s drive to provides its advisers with innovative tools and technology that will empower their success. Kevin’s team is responsible for the design, development and implementation of a wide portfolio of applications used by employees at the Kestra Financial home office and advisers in the field.

Editor’s Note: A version of this post appeared on Kestra Financial’s blog and can be found here