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Are You in Retirement Without Even Knowing It?

Advisers deal with pre-retirees every day. Some of these clients are anxious to quit working, but many more say they’d like to work in some capacity once they retire. The 2015 Work in Retirement: Myths and Motivations study, conducted by Merrill Lynch and Age Wave, found that 7 in 10 pre-retirees want to work in retirement. In fact, it’s becoming so common that people now talk about “Retirement 1,” “Retirement 2,” and “Retirement 3,” with each stage representing a reduced schedule and set of responsibilities.

For advisers, this is easy to understand: “dying with your boots on” is an industry norm. Work in retirement may be different or happen at a different pace, with many tenured advisers putting in fewer hours and taking more time off, including sabbaticals. In any case, there’s a clear trend of advisers staying in the business longer—or not leaving at all.

The problem is when you slip into retirement mode without even realizing it.

Maintaining a Viable Lifestyle Practice
Many advisers are comfortable with the idea of running a lifestyle practice but bristle at the suggestion that they’ve entered “Retirement 1.” Whatever you call it—Retirement 1 or a lifestyle practice—there are several key points to consider if you want to keep your business healthy.

  • Am I still growing? By definition, healthy businesses are growing businesses. In our industry, that’s generally measured by assets under management or overall production. At a certain point in an adviser’s career, it becomes difficult to recruit new clients. Existing clients pass away or move into the distribution phase. Attracting new business to replace lost AUM becomes challenging as clients seek an adviser who will outlast them. When AUM starts shrinking, the business owner needs to assess whether the practice has begun to die on the vine, making it less attractive to potential buyers.
  • Am I keeping up with industry developments? Regulatory requirements, new technology, marketing strategies, emerging products that deliver answers to complex client issues—staying on top of all the developments in our industry requires a certain amount of time and commitment. Downshifting to a lifestyle practice shouldn’t mean letting your focus slip or becoming nonchalant about certain aspects of the business.
  • Do I have a documented continuity plan? No matter what kind of practice you have, going without one borders on unethical. The need for a continuity plan is well known, but unfortunately, many advisers still don’t take this essential step to provide for their firm’s (and their clients’) future.

A Personal Choice (But it’s Not Right for Everyone)
Mid-career advisers may observe the attractive lifestyle of more tenured advisers and think, I want that, too! For their part, millennial advisers entering the industry may look around and assume a lifestyle practice is the norm. But if significant growth is on your agenda (and for many younger advisers, it is), the activities that will get you there generally require putting in some evening, weekend and summer work.

Of course, how you balance work and life is ultimately a personal choice. In the independent world, as long as you’re compliant and your clients are protected, it’s no one’s business but yours. Just be sure you’re making the decision deliberately rather than simply falling into it.

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


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Don’t Have a Bad Online Presence

If you don’t have a website or LinkedIn profile—or you have them but they’re not very strong—then you’re doing the equivalent of inviting prospects and clients to a meeting in a messy office space.

Consumers are hesitant to make even minor purchases (shoes, household appliances, etc.) from companies with a bad online presence because they view those companies skeptically and can’t build initial trust. How do you think this same scenario plays out with someone looking to entrust someone with their life savings?

There are many various studies you can find regarding an investor’s purchase journey and the importance of having a strong website and LinkedIn profile. A strong online presence allows potential clients the opportunity to: (A) get to know you a bit before contacting you; (B) build a level of trust regarding your expertise; and (C) provide them a mechanism for contacting you. But you don’t need to read those studies—common sense should tell you that if you’re going to trust someone with something as important as financial planning, you want to know the financial planner is legitimate. Not existing online or having a weak online presence sends the prospect a signal that you might not be legitimate. Would you trust a professional service provider if you couldn’t find any information about them online?

Taking simple steps like ensuring your web content is up-to-date and reflects your value proposition can help people decide to take the next step in their journey toward finding a financial planner. 

Jeremy Jackson

 

Jeremy Jackson
Owner/founder
SKY Marketing Consultants
Kirkwood, MO

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Financial Planning Association members can get 50 percent of SKY Marketing Consultants‘ digital audit services (a discount of up to $300). For more information visit MyFPA

Look for the Journal of Financial Planning’s July issue for more marketing tips for financial planners. 


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The Experience Story: In Reverse

It’s no secret that telling a great story can help prospects better understand your recommendations. Story-based selling is the art of using metaphors, analogies or stories to do just that. However, what is little known is that you can have a similar effect when you set the stage by having a prospect share an experience about themselves or about someone they know who has used a particular product or service. Many times you get them to buy into the products or services you are about to recommend based on a story they have just shared with you, so that there is little need for you to go down the path of a typical closing. This process is a reversal of sorts as the standard practice is for advisers or agents to have to share their existing client’s experiences in order to “sell” to a prospective client. So I refer to this as “the experience story: in reverse.”

During a recent group coaching session on story-based selling, I had asked all the attendees if they told stories during their presentations to help close the sale. I had coached on this material dozens of times before, asking this question each time, but what was new that day was what one adviser said, “I don’t tell them stories but instead I have them tell me stories.”

She went on to explain that the reason she did this was so that the prospect could eventually tell her the benefits that the individual in their story received from having a product or service. Once that occurred, the prospect often came to the conclusion that they could also receive the exact same value. In other words, they sold themselves on why they should buy.

Let’s take a brief look at how this process works:

  • Uncover the Prospect’s Experience: It’s important to begin by asking a great question to identify if the prospect has any personal experience or has known anyone who has had an experience with what you are about to recommend. The key is not to formulate your question around the product or service but rather about a situation or scenario that would prompt the need for that product or service. An example of what NOT to ask would be, “Have you ever known anyone who had long-term care insurance?” However, DO inquire, “Have you ever known anyone who went into a nursing home or assisted living?” Remember to make this question common enough to ensure that they will have some type of a story to tell you.
  • Invite the Prospect to Share their Experience: Once the prospect answers your question, invite them to tell you more. Some examples of good “cue” questions would be, “Why did they go to the nursing home or assisted living in the first place? How long were they there? What do you think it cost them to stay there? How do you think they paid for it?” Make sure you sprinkle in these types of questions to more readily “cue” the prospect to share more of the story and create a strong dialogue.
  • Uncover the Benefits and Tell a Story: After you let their story unfold, it’s time to help them uncover the benefits of the product or service that you will be recommending. Use questions such as, “Do you know what it currently costs for one month in a nursing home or assisted living situation? What do you think it might cost in ten to fifteen years if you or a loved one would need to stay in one? How would you pay for it?” At this point, explain your own experience of helping a client who was in a similar situation and the recommendation you made to them. Here is an example of how to make a seamless transition, “I am here to help assist my clients so that don’t have to worry about the cost and here is why…” Then, explain the product or service and how it has helped your current clients.
  • Ask for the Order: All that is left to do at this point is to help them come to the conclusion that they can benefit from this product or service just like your existing clients. Simply, ask a question such as, “Based on what we just talked about, what do you think is the best course of action for you?”

Why the Prospect Will Buy
If you have followed these aforementioned steps, the prospect will typically come to the conclusion that they want to buy because they want the same benefits as your clients. You have strategically led them to uncover their own need(s). In this case that was to be financially prepared for either themselves or a family member to go into a nursing home or assisted living facility, as well as the solution, with this example, long-term care insurance.

If you read this article and would like helpful techniques about how to create your own experience story: in reverse, email Melissa Denham, director of client servicing at melissa@advisorsolutionsinc.com to schedule a free complimentary consultation with Dan Finley.

Dan Finley

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

 

Daniel Finley presents an FPA webinar titled “Beyond the Production Plateau: The Solution to Your Business Evolution” from 2 to 3 p.m., EDT, June 8. Register for the webinar here


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Could an SBA Loan Take Your Business to the Next Level?

Raising capital in the various stages of your business can be tricky, time-consuming and frustrating process. Many small businesses need access to low-cost, long-term financing but have a difficult time getting banks to work with them. The Small Business Administration (SBA) exists for this reason.

So could a SBA loan help your business? Perhaps.

A 2014 Forbes article praised SBA loans for providing affordable financing to small businesses. However, the downside is that the process of getting SBA financing is highly document intensive and potentially time consuming. This didn’t stop the 14,718 businesses that utilized the 7A program (a loan less than $5 million) in the fiscal year of 2015. Due to the complexity in getting these loans, many companies used SBA Loan Packaging Firms to help them with the process. The SBA doesn’t actually make direct loans, according to a an article in Entrepreneur, but rather provide a loan guarantee to entrepreneurs, backing 75 percent of your loan if you ever default on your loan.

A small business by SBA standards is any business that makes less than $5 million a year after tax profit. There are 28 million small businesses in America that account for 54 percent of all U.S. sales. As a small business owner you provide 55 percent of all jobs and 66 percent of all net new jobs since the 1970s. Franchised small businesses in the U.S. account for 40 percent of all retail sales and provide jobs for some 8 million people. The small business sector as a whole occupies 30-50 percent of all commercial space, an estimated 20-34 billion square feet.

By guaranteeing to the bank 75 percent of your loan, the SBA fosters small businesses’ long-term success. It recognizes the role small businesses play in the national economy and aim to “aid, counsel, assist and protect the interests of small business concerns, to preserve free competitive enterprise and to maintain and strengthen the overall economy of our nation,” as the Small Business Association succinctly put it in their mission statement.

Before SBA was founded by Congress in 1953 and even today, it could be tricky for a young company to obtain the kind of capital needed not just to start a company, but also to grow their business. The federal government realized the important role small businesses play on a national level both by job creation and the fostering of innovation. They serve as building blocks for the national economy and are a key component of the local economy.

As a business owner, forecasting growth is key, if you want to take your business to the next level. Planning and preparing for events in the future and taking financial risk can yield sizable returns. The ability to invest money in your company to grow is key, and often neglected, can be a significant piece to reach of the puzzle to reach your growth goals. However, it takes time, money and preparation, all resources small businesses might not have.

Loan packagers, such as SBA Loan Group, could make the process significantly easier for a small business. Through SBA Loan Group you can borrow money on a low interest rate (less than 6.25 percent) and pay it down over a long time period (10-25 years).

We would first look at your tax returns and financials and make sure that you qualify for an SBA loan. Then we would gather all the data needed for a loan, pre-underwrite the data to make sure it meets SBA requirements, prepare and file your application with one or more banks that we work with. We will then obtain a letter of intent, and assist you in finalizing and funding the loan. We are then paid a success fee at the closing of the loan.

Since the government backs the program, the process can be relatively complicated and require significant documentation, which means it can take 8-12 weeks before you actually get the loan. Although, most banks today do require personal guarantees for business loans, all SBA loans requires personal guarantee from any individual who owns more than 20 percent of the borrowing company.

There are two types of SBA loans 7(a) and 504. The 7(a) loan can be used towards all legitimate purposes that relates to building a business. For example, working capital, purchasing inventory, acquisitions, sales and marketing, hiring personnel, purchase of real estate for the use of your business and all other general purposes. A 7(a) can be for up to 5 million dollars. The other program within the SBA, 504, is specifically for purchasing real estate and /or alterations to the real estate, these loans can be for up to 14 million dollars. When purchasing real estate, both 7(a) and 504, only require only 10% down.

If you are interested in finding out more please click this link to fill out the short form and we will contact you or feel free to call us at (646) 699-1344 any time.

TJHeadshotTonje Gjorven
Loan Manager
SBA Loan Group
New York, N.Y.

 

Editor’s Note: Other Financial Planning Association content that might be of interest to you includes: 


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The Power of the In-Home Meeting

In my blog, and its companion Journal of Financial Planning article titled, “How to Deliver Empathetic Service and Gain Client Loyalty,” it’s emphasized that a client transforms from a revenue stream to an asset in the presence of loyalty. Each loyal client that tells others of his or her experience with an adviser’s service package represents a vine of fruitful relationships.

The common thought is loyalty begins after the planning and investment solution is executed, service experiences occur, and benefits result. In fact, client loyalty can begin during the sales process.

Bringing Balance to a Fledging Relationship
A relationship has a greater chance of success when there is balance between the two parties. Unfortunately, a wealth management relationship is inherently imbalanced because the prospect is asked to divulge private financial, family and personal details while the adviser is not expected to reciprocate.

The typical meeting in which the prospect sits across a table from the adviser (or worse on the other side of a desk) introduces unnecessary barriers to making the fact-finding process more free flowing. An in-home meeting strips these barriers away.

A Powerful Tandem
An advisory firm’s marketing program reaches a higher ROI by increasing the sales yield from one funnel stage to another. My last blog suggests that during the interest-qualifying stage, the adviser prepares a tailored education presentation (free of charge) for the client’s number one identified need, anxiety, or aspiration. (Note: the recently released FPA/LinkedIn study “Financial Professionals and the Future of Thought Leadership and Social Media” confirms how important education is to clients: 76 percent of respondents rate it “Somewhat Important” to “Critical”.) This allows the prospect to “test drive” the adviser’s services and measurably de-risk the impending relationship decision.

Taking this one step further, conducting this “test drive” in the prospect’s home significantly increases the yield in turning a prospect into a client. This combination sparks client loyalty.

The Real Productivity Measure
An adviser may view an in-home meeting as an inefficient marketing step given the overhead of driving to and from the prospect’s residence. While this meeting takes, say, three times as long to conduct from beginning to end compared to one where the prospect comes to the adviser’s office, this is a misplaced analysis.

The marketing plan’s ROI should be measured on the time it takes a lead entering the funnel to becoming a client. Using this more realistic business measure, an in-home meeting often dramatically decreases the time to a successful close.

Prospects appreciate the increased effort to come to their home and it conveys important messages such as: “I’m valued as a person not just as a business transaction,” and “My needs and anxieties merit this attention.”

Visiting a home is also a treasure trove of information for an adviser:

  • Neighborhood demographics
  • Family lifestyle
  • Family structure
  • Family interactions
  • Hobbies and collections

Keys for Successful In-Home Meetings

  1. Standardize the structure. Formulate a workflow process for conducting the meeting such as a pre-meeting mailing, an agenda, a presentation leave-behind and a checklist of next steps.
  1. Make the offer. For some people, an in-home visit pushes privacy concerns. If there’s reluctance, explain the meeting’s purpose, particularly the decision at hand (for example, “You’re entrusting your wealth and peace of mind to me, and I want you to be as comfortable as possible”). Highlight that it is a standing offer for any future meeting.
  1. Remove the hosting stress. The meeting’s purpose is to provide education on the prospect’s top need or concern and not about creating stress for the meeting itself. Offer to bring refreshments such as coffee plus baked goods if your meeting is in the morning, a light snack if your meeting is in the afternoon, or dessert if your meeting is in the evening.
  1. Meeting precision. Conducting the meeting with precision conveys the value of your prospect’s time. This means being on time, managing to the agenda and having organized materials.

It’s a Relationship!
While financial services is the content, what’s actually being bought and sold is a relationship (see my blog post titled “Your Product is You”). Face-to-face meetings are critical components of due diligence. For the prospect, this involves the adviser’s personal presentation, relatability, trust, care and concern. These core decision criteria come alive when an adviser invests his or her time in a meeting at the prospect’s home.

A prospect contemplates a substantial financial commitment when seeking an investment relationship—for a high-net worth family, this will be thousands of dollars per year. Taking the time to meet in a prospect’s home expresses appreciation for this opportunity and shines light on the adviser’s service role.

Kirk LouryKirk Loury
President
Wealth Planning Consulting Inc.
Princeton Junction, New Jersey


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Managing the Business Development Process: A Key to the True Ensemble

According to a recent report by Cerulli Associates, financial advisers today are more likely to join an established RIA than to create their own advisory firm. Another study by InvestmentNews came to the same conclusion. Are these results surprising? Perhaps for some, but the talk regarding the emergence of ensemble firms has been around for more than a decade. Whether due to aging founder advisers who want their firms to continue after they’re gone, or to advisers who want to grow the top line, there is indeed a hiring frenzy by existing firms.

What happens after the frenzy has been satisfied and additional advisers are in place is another story. Unfortunately, “buyer’s remorse” can sometimes set in: Firm leaders who have failed to anticipate and prepare for the changes resulting from having additional advisers in the firm cannot achieve the intended results. So, what can be done to prevent this scenario?

As the leader of your organization, you should, of course, carefully craft the vision and business plan—and then drive that plan into reality. But one key to forming a true ensemble is the need to manage the business development process—sometimes referred to as the sales process.

Manage the Process
As advisers join your firm, they will need leadership and management to help them grow. You may find that it doesn’t cut it to go back to “business as usual” and focus your time as a financial adviser on only serving your clients. Be it loosely or with formality—and whether or not you call it “sales”—the business development process within a firm needs to be managed. To do this, consider the following:

  • Have individual advisers set revenue goals. This will yield the forecast on which future expenditures of the firm can be based. At least some of these expenditures should be for marketing efforts designed to gain new clients.
  • Track all activities. It is all too easy to service existing clients endlessly and never get around to prospecting. Keeping track of advisers’ revenue-generating activity will help provide some needed structure and balance to client-servicing activities.
  • Coordinate marketing events. This will ensure that firm-sponsored events and expenditures are embraced by all advisers within a firm.
  • Recognize success. Advisers need to be recognized for their achievements, as well as coached in areas where improvement is needed.
  • Evaluate techniques. By evaluating the effectiveness of different revenue-generating approaches, future time and energy can go into those prospecting activities with the highest return on investment. This is often referred to as tracking and assessing the effectiveness of endeavors of the sales funnel.

A Word to the Wise
If you love being a financial adviser and working directly with your clients but hate managing others and/or focusing on others’ growth, you might want to “stick to your knitting” and remain in a solo practice. And if you think that growing your business is as simple as finding another adviser to join your firm, think again. All work is a process—including business development.

Remember, you might establish a multi-adviser firm by hiring more advisers. But a key to forming a true ensemble includes actively managing your business development process.

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


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Quick Tips to Client Gifting

At the end of each year, most organizations send expressions of gratitude to their clients and partners. Gifts abound! How can you stand out? FPA can help you make it count!

Corporate gifting with those bright colors and pretty packages can be seen as not much more than a marketing ploy–or worse–a bribe! You want your gift to show sincere appreciation for your business relationship. Here are some tips to ensure your gift is noticed and valued.

  • Forget the chachkies. The surest way to have a gift end up overlooked and probably discarded into the trash bin is to send something that will never be used. You might think that $1 teddy bear with your logo on its shirt was super cute and a great way to save money, but will your clients really even notice it? And do you really want a stuffed animal on your desk?
  • Don’t get too personal. You may know that your favorite client has been eyeing that beautiful crystal decanter and tumbler set with the brass inlay that allows for a tasteful monogram, but for a business relationship, this may not be the best approach. First, it reveals that you may know a little too much about your client’s private life. Second, it does not allow for your generosity to be shared (more on that later). Third, this is one expensive gift!  Which leads me to my next point.
  • Don’t be overly lavish. If you cannot afford to spend a large amount on every client you have, you shouldn’t spend it on just one. No matter what industry you are in, people within it know each other…and they talk. You do not want to send the message that Client A is more valuable to you than Client B. That just destroyed all the goodwill you had intended! Not to mention, many company policies do not allow gifts over a certain value to be accepted.  And worse, a client may end up feeling like you are trying to buy their business. Out the door went that warm fuzzy feeling again.
  • Give a gift that allows your clients to share in your generosity. As I mentioned above, a sharable gift is a better bet than a personal one. Good executives know that the people who work for them deserve as much thanks for being a good business partner as they do. This can be challenging in really large offices, but even a small basket of fruit or cheese and crackers will go farther than a bottle of wine. Make the gift you give something that everyone in the office can ooh and ahh over… and enjoy!
  • Personalize your message. While it is tempting in this busy world to sign all your cards with a generic “Thank you for your business,” statement, the sincerity of your gift gets lost. Take a few moments to add a personal tidbit that will add warmth and express genuine appreciation for those who help sustain your business. They are important to you; make sure they feel that way.

And to thank you–our very appreciated and valued FPA members–we have partnered with some amazing gift companies. Click on the logos below to learn more about special FPA member discounts and all the tasteful and beautiful options that they offer. Happy gifting!  Our best to you and yours.

                                 
 
Buffy
Buffy Fletcher
Corporate Relations
Denver, Colo.