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Communication: The Foundation of Your Business Results

We all know what it feels like when there is a breakdown in communication—not being heard, not saying what needs to be said or receiving false information all leads to uneasiness. For your business to function at a high level you must have a consistent communication plan and all associates must commit to it.

We all know the importance of client communications, but do we neglect this vital need for our own employees? It is easy to get caught up in the day’s responsibilities and forget to effectively communicate with our team. Yet, when internal communication breaks down, challenges brew. Efficiencies decrease, errors increase, stress levels rise and employees can become dissatisfied.

There is no one-size-fits-all solution; you need to create a plan that works for your business. Be sure to include the following critical elements:

  • In-person and electronic communication
  • Frequency and location
  • Ownership, attendance and participation
  • Purpose and agenda
  • Priority system
  • Action plan and follow-up

In-person gatherings should be purpose-driven—having meetings for the sake of having meetings is a waste of everyone’s precious time! Monthly and quarterly meetings are often more project-driven and strategic in their purpose, whereas daily and weekly huddles are more task-driven and tactical in nature. Consistency is vital to effective communication; if a team meeting is established for Tuesdays from 10 to 11 a.m., then no associate should schedule anything during that time frame. As to location, planning sessions should be conducted off-site so you can focus on strategy and eradicate interruptions.

While all should be encouraged to participate, team meeting responsibility should be owned by one individual and should be agenda-driven to maintain consistency and organization. This helps ensure that nothing falls through the cracks and that all associates stay knowledgeable about specific project updates. Some agenda items will remain constant while others will come and go depending on the business focus.

In today’s changing world, it is critical to include standards regarding electronic communication. Using a networked contact management system (CRM) and calendar should be a foundational element of your plan. Multiple calendars and different systems to capture notes waste time and create confusion. Every associate should update the CRM as activities are completed or new ones are assigned, and all should be expected to enter client updates daily.

One of the most frequent communication challenges is not understanding priorities. We recommend establishing a simple system to ensure that all team members know what the real priorities are for the day or week. Use three simple words with clear definitions in order to be efficient and to meet expectations. You might choose words such as urgent, important and low to represent the priority, or simply be sure that every task is assigned with a specific deadline.

People are the most important element of your business, and a lack of good communication is the number one reason problems occur. A consistent communication plan can make a difference to both the revenue and efficiency arenas of your business; the plan can even mean the difference between associate retention and departure. So ask yourself, what actions do you need to take to drive more effective internal communication?

Sarah E. Dale, President of Know No Bounds, LLC

 

Sarah E. Dale
Partner
Performance Insights
Atlanta, Ga.

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Krista S. Sheets
President
Performance Insights
Atlanta, Ga.


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The 3Cs to Enhance Your Negotiation Skills

A new calendar year represents a fresh beginning and an opportunity to think anew about the adviser-client relationship. Financial advisers know that their annual planning conversations with clients may need to address sensitive topics related to the changing regulatory environment, particularly as we near the proposed timing for implementation of the Department of Labor’s Final Rule. These issues will certainly be on the agenda if you are transitioning to a fee-for-service model.

But the ability to engage clients in potentially difficult discussions is always key to building a successful business.

Central to these discussions is the ability to negotiate—a skill I have spent years cultivating through personal successes and failures, and through teaching thousands of business leaders and professionals at the University of Pennsylvania’s Wharton School. I consulted on a Janus Labs program, titled the Science of Negotiations, to prepare advisers to have better planning meetings. The core tenets of the program, and negotiating generally, are what we call the three Cs: commitment, candor and credibility.

Commitment: We know that as a financial adviser, your commitment is to serve as a trusted counselor to your clients. Working in a client’s best interest isn’t something new that rules require—it’s what you’ve always done. You need to convey this commitment clearly and consistently in order to build and maintain the kind of trust that allows for open dialogue. By reminding clients of your commitment to them, and connecting your actions to that commitment, the value of your relationship and services should always be top of mind for them. This way you can raise sensitive issues when the client can hear and process them fully, not simply because a deadline requires it of you.

Candor: We’re big proponents of the “radical candor” used at Silicon Valley companies like Facebook and Google. For advisers, this means demonstrating that you care personally about each client, while also directly addressing how DOL-related changes will affect them. Be a straight talker. Don’t beat around the bush: be clear that this is a difficult subject but the new services you offer are commensurate with what the client needs. Telling clients about the products and services you are not recommending is also important. Transparency is key. When you reveal information that’s not necessarily in your best interest, but is clearly in the best interest of the client, you build trust.

Credibility: Openly and willingly revealing information about products and fees increases your credibility, and research shows that credibility is the single most important asset of effective negotiators. Your credibility rests on expertise, competence and trustworthiness. It means that: 1) you bring your clients valuable knowledge and insights; 2) you apply your expertise to their benefit with skill and diligence; and 3) you consistently use your expertise and competence to create long-term value as a trustworthy counselor.

Strong negotiation skills will help you communicate more effectively in all your interactions. Demonstrating that you are credible, candid and committed will put you in a position to better navigate the sensitive topics that are inherent to financial advice, including fees and regulatory concerns. And this is a good time to start strengthening those skills, as you begin scheduling the conversations that will guide your client relationships throughout the new year.

For more information on how to use The Science of Negotiations for meaningful conversations with your clients, please contact your Janus Director or visit www.janus.com.

G. Richard Shell

 

G. Richard Shell
Legal studies and Business Ethics Professor
University of Pennsylvania’s Wharton School
Philadelphia, Pa.


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Creating a Childlike Curiosity

We have all heard the saying, “Curiosity killed the cat,” that implies it is better to mind your own business. However, as advisers/agents do we truly believe that that is the best course of action to make a connection?

I think it’s safe to say that most of us think we ask a lot of questions. Unfortunately, I’ve found that many of the questions that we ask are merely designed to uncover facts and not to truly understand the prospect or client’s situation and how they feel about it.

Young children have a genuine and innate curiosity when they want to get to know someone and they seem to have no problem asking a multitude of questions. Let’s take a look at how this type of curiosity can benefit you and your prospects/clients.

Gives you time to think. During one of my group coaching critic sessions, in which we role-play with our group members as if they were on the phone with prospects, I noticed that one adviser used what I call a “curiosity question.” It was, “That’s interesting could you tell me more about that?” This was in response to a prospect who gave him an objection about how he didn’t like to use certain investment products and thus wasn’t interested in setting up a meeting. After using his curiosity question, his prospect relaxed, opened up and ended up telling a story about his investment experience. This gave the adviser more time to think about what direction he wanted to turn the conversation.

Uncovers important information. The prospect revealed some interesting information about his concerns regarding a financial adviser he had worked with because years ago that adviser put him into a product that he perceived as expensive and it had lost him money when he was told that it was safe. As a result, he felt that he was misled and that consequently all advisers would mislead him. This helped my adviser client truly understand that his prospect’s real objection was trust and not about a specific product at all.

Shows that you care. After listening to the real objection about trust, the adviser acknowledged what he had heard by summarizing how it must have made the prospect feel. “That sounds frustrating, was it,” he posed. The prospect quickly shared with him how frustrated he was and the adviser in turn showed he cared by being even more curious and asking, “Why is that? Why do you think some advisers don’t take the time to fully explain their recommendations?”

Creates a connection. By now the adviser was creating a connection because he was open to getting to know the prospect and the prospect was connecting because he felt that he was being heard.

After a lengthy conversation the adviser inquired, “I’m kind of curious, if we met and I did give you a second opinion on the investments you own, would you be open to speaking with a couple of my clients to hear what type of experience they have had working with me? It’s free and maybe it would help you see that all advisers are not alike.” It didn’t take long for the prospect to simply reply, “Yes, I would like that.”

Why Childlike Curiosity Works
It’s no secret that people want to be heard. The reason that childlike curiosity works is because when you truly exude through your choice of words and tone that you care, prospects are more open to telling you a lot more about themselves. Everyone has a story, so get genuinely curious and find out what it is.

If you are ready to learn this and other valuable techniques for connecting with prospects and clients, email Melissa Denham, director of client servicing, to schedule a complimentary 30-minute coaching session.

Dan FinleyDaniel C. Finley
President
Advisor Solutions
St. Paul, Minn.


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4 Tips to Help Grieving Clients

Amy Florian, CEO of Corgenius, was a 25-year-old with a 7-month-old baby when her husband John kissed her good-bye for the last time to go on a business trip.

A car hit his car and John died instantly.

Florian was devastated. She had money from a life insurance policy she needed to invest so she sought out a financial adviser. He did right by her in terms of investing her money well, but he just didn’t understand what she was going through. He sometimes made her feel like a number in a portfolio rather than a whole person.

“I stayed with him for some time because it was clear he knew how to invest my money,” Florian explained. But then she switched. She found a planner who made her feel more comfortable.

Widows oftentimes feel uncomfortable with financial planners as shown in the fact that more than 70 percent switch advisers after their husband’s death. It’s helpful for your clients for you have the skills to help them deal with their grief.

Helping Them Through
Baby boomers are getting older.

“We had a baby boom,” Florian said. “We’re in for a death boom and we’re not prepared.”

You are going to have to deal with your client’s grief at that first appointment with them after their partner dies. It’s going to be difficult.

“It’s awkward,” Florian explained. “It’s uncomfortable.”

But with these helpful grief support tips, you will help your clients. It is important, Florian said, to note that grief happens whenever there is a transition, whether it’s death or moving to a new city.

Ask open-ended, invitational questions. Some examples include: What happened? Who was with you? How did you find out? Then after a few months have passed: Last time we talked you said you felt a certain way, do you still feel that way now? Grieving people want somebody who will listen.

Stay away from the standard responses, “I’m sorry,” or “I know what you’re going through.”

Know that there are two main styles of grief: instrumental grievers, who focus more on their heads (things like logistics and specific events); and intuitive grievers, who focus more on their heart (the experience of everything, what they are feeling).

Have boxes of tissues everywhere, but never hand them a box of tissues when they are crying as doing so will send the message that you are making them uncomfortable and you want them to stop. Say, “You could use any of these tissues if you’d like, it’s up to you.”

Let them know that your office is a safe space and that they can cry. Encourage them to feel their grief, because that is the truly strong thing to do.

Have them write down their fears. Ask them what’s the worst thing they can imagine happening to them right now and have them write it down. Studies show that when you write down fears, you take away their power.

“I’m teaching you to do the right thing for your client,” Florian said. “It’s what we all should be doing, we just haven’t been taught.”

AnaHeadshot

 

Ana Trujillo
Associate Editor
Journal of Financial Planning
Denver, Colo.

 


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The Value of Vulnerability

Over the past two years, I have had the pleasure of working with a very successful team of financial advisers. As their success has increased so has the amount of advisers that were added to their team. Currently they have nine team members.

Each week we focus on a specific exercise to increase their sales skills that I have designed for their weekly coaching session. The advisers learn the exercise, role play it and I, along with the two principal partners, would critique them. We continue to utilize the same exercise for weeks or even months (if need be) until each team member can do it seamlessly.

During a recent team coaching session, one of the principal partners told the group that they were not making a good connection during their role plays because they were not opening up and sharing their feelings about the subject at hand. In other words, they were not allowing themselves to be vulnerable. He went on to say that the value of vulnerability is that the prospect makes the realization that you have been in their shoes; consequently, in many cases, you are then able to make a connection.

The following is a simplified step-by-step process in finding the value to be vulnerable.

Ask Great Questions: Once you determine that the subject you are talking about is something that is very important to the prospect, it’s time to ask additional questions to uncover how they feel about the subject. Try something as simple as this:

Adviser: “What concerns you most about losing money now that you are retired?”

Uncover the Prospect’s Story and Feelings: At this point, it is important to listen, acknowledge what you heard and ask more questions so you can uncover the prospect’s story and feelings. Here is an example:

Prospect: “Well, I don’t really want to lose anything. In fact, I’m not sure what I would do if I did lose some of my retirement investments.”

Adviser: “I completely understand, but how do you think you’d feel if we had another 2008 and your current portfolio reacted like your portfolio did back then?”

Make a Connection: Next, we need to make a strong connection by talking genuinely about how you feel about the subject.

Prospect: “I would feel sick! I wouldn’t know what to do if I lost 20, 30 or 40 percent of my money. I lost a lot of money back then and it took years to get it back.”

Adviser: “I would feel sick too!”

Get Vulnerable: At this point, you need to explain why you feel this way by telling the prospect what you have experienced in the past. Here is a brief example:

Adviser: “My dad retired in late 2007 and I asked him the same type of question that I asked you about how he would feel if he lost money. He said he wouldn’t be able to handle even a 10 percent loss. Since I knew the market had had a great bull run, I recommended that we get very conservative and reposition a good percentage of his assets into something that wasn’t tethered to the market. We did that and he missed the bear years.”

Ask for the Order: In this example, if the prospect is giving you indications that they can relate by smiling, nodding or agreeing that you did the right thing! Try this close:

Adviser: “We have had a seven-year bull market; how would it help you most if we at least take a look at some alternative strategies so we reduce your risk to the stock market?”

Prospect: “I think that would give me some peace of mind. Let’s do that.”

Why Genuine Vulnerability Works
As the saying goes, “It’s simple but it’s not easy.” The “simple” part is opening up and telling the prospect what you or someone you know has experienced around the subject matter. The “not easy” part is having that topic be something that you genuinely care about. In other words, if it’s not from the heart, you are not going to make a connection. Conversely, genuine vulnerability works because you are discussing something that is important to you and if it’s also important to them then you have the foundation to form that connection.

If you want to learn more about the value of vulnerability, schedule a complimentary 30-minute coaching session with Dan Finley of Advisor Solutions by emailing Melissa Denham, director of client servicing at Melissa@advisorsolutionsinc.com.

Dan FinleyDaniel C. Finley
President
Advisor Solutions
St. Paul, Minn.


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How to Make Buckets Work for You

In light of the recent fiduciary ruling by the Department of Labor, you may be wondering how using a bucket strategy can help you act in your clients’ best interest.

Investment research firm Morningstar defines the bucket approach to retirement planning as a strategy that funds cash-flow needs while the client maintains a diversified portfolio of stocks, bonds and cash. Morningstar offers this helpful video interview with Harold Evensky that further dives into the bucket strategy.

Basically, buckets provide a way for you to ensure that your clients’ short-term income needs are safe from market ups and downs while meeting their long-term growth objectives with market exposure. Buckets provide a way for advisers to create personal plans specific to their clients’ financial goals and needs while helping them understand that plan regardless of their previous financial experience.

Weathering Market Storms
One of the greatest benefits of bucketing is the safety net it casts for when the market inevitably rises and falls. When the market isn’t performing, clients may panic and be inclined to abandon the plan they had previously made for one that will make them feel safe and secure in that moment. Buckets, however, give them a clear picture of their retirement plan down the road. Seeing that they meet their income needs and that their investments will have time to recover from a downturn will help them stick with their bucket plans, which will greatly benefit them down the road.

In addition to bringing peace of mind by providing a visual for their income down the road, buckets provide clients with a steady cash flow in the present. Buckets are a systematic way for a steady income because each year is planned, as opposed to scrambling to liquidate assets so that they have enough money even while the market is struggling. Having that steady, certain income ensures that clients will be able to give great thought to when they sell investments and that ensures that they are selling them at the optimal times. This way, investments are serving at the greatest benefit to bring in the most income.

A Personalized Approach
Bucket strategies can be personalized to each client. Based on their risk profile and financial goals, you and your client can generate strategies with any number of buckets and any lengths of time. The flexibility of buckets even after the plan has been set is an added security because assets and investments can be adjusted, or have time to adjust, while the market weathers its ups and downs.

One of the most traditional methods of retirement income planning, Monte Carlo simulation, does not allow for personalized strategies, and yet, they produce the same rate of returns with the same amount of risk. There is no one-size-fits-all in retirement income planning, and clients forced into such a mold can feel anxious about their funds in retirement. Creating a strategy specific to each client will inspire trust in you and bring them peace of mind knowing that their retirement income plan was created with their unique circumstances and needs in mind.

Seeing is Believing
Bucket strategies can give clients a simple visual. With their personalized strategies, clients will have a better understanding of how their assets and investments will be used during their retirement.

In addition to the simple visual that a bucket strategy offers your clients, buckets create a plan that is easy for clients to understand. They will be able to see exactly where their money is, how it is being invested and how their plan will support them throughout retirement. With this simple, easy-to-understand approach to retirement income planning, clients will be confident in themselves, their finances and, in turn, you.

As your clients approach retirement, it’s important for you to provide them with an income plan that can give them financial security in a volatile market, a simple, understandable approach and a strategy that has been created with their unique needs in mind.

FPA partners with Last Advisor to offer “Bucket Bliss,” a software tool that offers a robust, state-of-the-art financial application designed for advisers to build individual bucket strategies while implementing a comprehensive retirement income plan for their clients. FPA members receive a special rate which can be accessed here.

madison-taylor
Madison Taylor
Clearfield, UT
Social Media and Marketing Director
Last Advisor
1-888–799-4328

Editor’s note: A version of this post originally appeared on the Last Advisor blog on August 15, 2016.


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The Art of the Referral

You will hear this your entire career: increasing your ability to gather referrals will make your practice more successful. Establishing referrals early in our career is even more important. But the reality is that many of us don’t put a lot of emphasis on referrals and do not learn this early in our career. How great is a warm referral from a credible source like a client or another professional?

There are two reasons why we lack successful referral methods. First, there is risk in the referral—there is risk for you and there is risk for the person making the referral. Second, it can be awkward asking for it because people feel the sales aspect of it. As great as it sounds it is simply not that easy.

How do we present a more effective referral? First, we can focus on who it is coming from. Work on developing a professional relationship with a person who can provide consistent dependable referrals that fit your perfect client profile—that may be a CPA or estate planning attorney. Identify that person and develop the relationship with the emphasis on what you provide compared to another adviser. Attention to detail, technology in your practice or an advantage you will bring to that professional. This type of relationship, and referrals from these types of professionals, are invaluable.

Take the sales feeling out of the asking for the referral. Don’t use the typical cliché “is there anyone else you know who could benefit from my service or our relationship?” This has been used hundreds of times. Put your asking for the referral into context so the client doesn’t feel it as a sales ploy but a real offer to help.

Try this: ask the client if they are the beneficiary of someone’s estate. Ask them if they understand how the estate is set up to transfer—most think they do but really don’t. Ask them if the beneficiaries are clear on the transfer of their estate. There are many things they may not be aware of but need to understand. Now instead of saying “Great, please refer me to them so I can help,” say, “Let’s bring them together so we can make sure it is crystal clear and nothing is left for interpretation.” This will bring the referral right to you in a no risk opportunity. A review of information for your client with the referral in the room to help facilitate that explanation will show the true value of your detail and help you gather more referrals. This is a unique approach that many advisers don’t take advantage of.

Building a successful referral method will take time, but if you start to perfect this early on in your career it will be promising and fruitful from the start.
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Scott Huff
CEO of Yourefolio and an IAR of JK Investment Group
Cleveland, Ohio

 

Editor’s note: FPA members receive $200 off Yourefolio software, plus a money back guarantee.