Poll: What newsletter strategies work best for investment and wealth managers?

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Newsletters are an important part of marketing for many investment and wealth management firms.

You’ve got lots of options. 

  • Print newsletter vs. e-newsletter
  • Quarterly, monthly or weekly frequency
  • Market commentary and/or other topics
  • Articles that you write yourself vs. articles written by a writer whom you hire, so they reflect your firm’s views vs. articles that are mass-produced by a firm that sells the same content to others

I’d like to learn your opinion on what works best. Please answer the poll in the right-hand column of this blog. 

Also, feel free to leave a comment below.

FINRA’s limits on registered rep use of ghostwriters

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Registered representatives, if you distribute an article with your name, FINRA wants you to contribute most of the content.

That seems to be the minimum requirement, according to comments I’ve received from other financial marketing writers in LinkedIn’s Financial Writing/Marketing Communications Group. Your compliance department may have stricter requirements, so check before you publish.

“Misleading Communications About Expertise,” a FINRA regulatory noticed dated May 2008, appears to lay out the rules. It says, “Registered representatives may not suggest (or encourage others to suggest) that they authored investment-related books, articles or similar publications if they did not write them. Such a publication created by a third-party vendor must disclose that it was prepared either by the third party or for the representative’s use.”

However, what does it mean to write an article?

It appears that ghostwriters can be involved if they aren’t providing the information for the article. In other words, if the rep provides the article’s substance–either through an outline or an interview conducted by the ghostwriter–and if the rep oversees revisions to the article, then it’s okay. At least that’s what I took away from the comments of writers who interact more closely than me with compliance experts.

Again, be sure to check with your firm’s compliance department before you publish.

If you’ve had experience with this topic, I welcome your comments.

“10 Easy Secrets of Good Grammar”

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“10 Easy Secrets of Good Grammar” by Martha Brockenbrough gives useful advice.

Many will be surprised by number 2: ” ‘I’ isn’t always the more educated choice.” But she’s got it right.


I don’t agree that “semicolons are easy to use,” even though I’m getting better at them.


But don’t rely on my comments. Read Brockenbrough’s article now!

My top tips for LinkedIn newbies who want to attract financial clients, referrals, and jobs

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LinkedIn is gaining power as a source of clients, referrals, and jobs, just as websites have become essential for companies. If you don’t have a LinkedIn profile, it’s almost if you don’t exist. 

In its most basic form, LinkedIn can be a gentle, low-key way of reminding people that you exist. You can also use it to meet new people. These are my main goals for LinkedIn. It has generated some business for me, but NOT as the result of my aggressively asking for it.

In this post, I share my personal top tips for raising your profile using LinkedIn.

1. Put up a profile, any profile

Just list your name and geographic location and geographic location if you’re not sure what information you want to share. If a former client remembers you from your last job at a different investment management firm, LinkedIn provides an easy way for them to find you. 

2. Flesh out your profile and show your personality

After I filled in the basics, I gave my LinkedIn profile a makeover, following the advice in Guy Kawasaki’s “LinkedIn Profile Extreme Makeover.” The main idea is to give more of a sense of who you really are in your profile. If you’re a LinkedIn novice, you should also read Kawasaki’s “Ten Ways to Use LinkedIn.” 

3. Link with others to stay in touch

You must build your network on LinkedIn to get maximum benefit. If you’re comfortable with LinkedIn’s security, you can let it access your email address books so it can identify your contacts who are already on LinkedIn. Then you can send them an invitation to connect.

After you connect, your contacts will automatically see your very recent updates on their LinkedIn home page. This is a big advantage in keeping you “top of mind” as a potential service provider, referral recipient, or employee. 

4. Update your status

On your LinkedIn home page, have you noticed the box that says “Share an article, photo, video or idea”? Updating this box regularly is one of the most valuable steps you can take. I know because I’ve actually gotten work from a client who was inspired by my update to contact me.

If you’re a blogger, it’s a great idea to link to a blog post from this box. Are you an advisor? You could mention an interesting article you’re reading or a new white paper on your firm’s website (but check with Compliance first). If you’re a job hunter, be wary of sounding desperate. It’s better to mention some positive activity you’re engaged in rather than to say repeatedly “___ is looking for a job as a research analyst.”


Here’s one of my updates as a sample: 
Susan blogged: Statistics to calm nervous investors: Research on dollar cost averaging http://bit.ly/qKf3p 

5. Participate in LinkedIn Groups 
Participating in LinkedIn Groups and asking and answering questions on LinkedIn will also raise your profile.  Plus, what you learn from others can help you do your job. I’ve found data and people to interview through LinkedIn.

NOTE: This post was updated on 12/15/18 for changes in LinkedIn.

 

Statistics to calm nervous investors: Research on dollar cost averaging

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Are you–or your clients–nervous about buying stocks? You may find comfort in statistics from “(Re)Entering the Market: The Costs and Benefits of Dollar Cost Averaging” by Gregory D. Singer, director of research, and Ted Mann, analyst in Bernstein Global Wealth Management’s New York office. Their article appeared in the CFA Institute’s Private Wealth Management e-newsletter (August 2009).

The bottom line, according to the authors’ research

…if you have a sum of money to invest for the long term, entering the market all at once will usually prove to be a better strategy than dollar cost averaging. The odds that you will reap greater wealth in the end are in your favor. But dollar cost averaging is reasonable insurance against the risk of investing in a falling market.

The authors highlight the downside of dollar cost averaging. “If the market rises while we are ‘averaging in,’ we miss out on potential gains. And those forgone gains could be substantial.”

As evidence, they present average 12-month rolling returns for the U.S. stock market from 1926 to November 2008 for three strategies of investing a lump sum.

  • Invest All at Once: 12%
  • Dollar Cost Averaging: 8%
  • Hold Cash: 4%

I find these numbers tremendously reassuring, even though past performance is no guarantee of future results. The case for investing all at once is even stronger following 12 months of a down market, with returns of 15%, 10%, and 3% respectively.

However, dollar cost averaging does preserve wealth during the bottom 20% of markets. In this bottom quintile, it “resulted in an average of 11.6 percent more wealth than investing all at once.”  So it sounds like a great strategy for declining markets. The hitch? No one can reliably predict when those markets will occur.

Over the long run, investing all at once should outperform dollar cost averaging and holding cash.

The authors concede that investing entire lump sums immediately isn’t for everyone. Their research suggests that the potential benefits from dollar cost averaging fall after the first six months. Moreover, “Beyond 18 months, averaging in doesn’t make financial sense (unless it’s part of a program like payroll deduction, where the money becomes available only over time).”

What do YOU think? When would you recommend investing lump sums all at once vs. dollar cost averaging?

How to punctuate bullet-pointed lists

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Have you ever used a bullet-pointed list in a memo, report or PowerPoint presentation? Are you punctuating your lists correctly? Or maybe you’re not as compulsive as I am about these picky points.

Anyway, here’s what one reference book, The Grammar Bible, says:

If a sentence follows the bullet, place a period at the end. Words and phrases that follow bullets need no ending punctuation. It is never necessary to place the conjunction and before the last item in a bulleted list.

Examples

Wrong

The following asset classes are used:

  • Large-cap equities,
  • Small-cap equities, and
  • U.S. Treasuries

Right

The following asset classes are used:

  • Large-cap equities
  • Small-cap equities
  • U.S. Treasuries

Does this make sense? If it doesn’t, then post a comment with a sample bullet pointed-list. I’ll give you my suggestion on how to punctuate it.

 

 

Note: This post was revised for a grammar mistake on August 29, 2012, and expanded on May 26, 2014.

Image courtesy of adamr at FreeDigitalPhotos.net.

Guest post: Attaining and Sustaining High Productivity in Investment Management Marketing

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Investment management firms need optimal internal collaboration to achieve the best possible communications, marketing, and client service as they cope with anxious clients, tight budgets, and lean staffing. Tips for how to achieve this goal are the focus of this guest post by Jacqueline L. Charnley and Christine M. Rostvold, founders of Charnley & Rostvold, a marketing communications firm.

“Productivity is never an accident.  It is always the result of a commitment to
excellence, intelligent planning and focused effort.”
~  Paul J. Meyer


Now more than ever, investment firms need to become well-oiled machines, leveraging every possible resource to produce the highest quality communications and service.  Timely and relevant content, whether for reporting or sales, needs to be developed, produced and distributed…all too frequently with too few resources.  What are best practices to attaining and equally as important, sustaining high productivity in marketing and communications?  How can counterproductive politics be minimized, good decisions be made and stressful deadlines be met in the face of rapidly fluctuating workloads?

Know Your Objectives and Plan to Achieve Them
First, management must document key objectives and agree on a plan to achieve them.  Communicate both the goals and the plan to everyone on the team and to senior management.  Document priorities (by product, by client, by consultant) and adhere to those priorities.  Stay focused by making it okay for anyone to question whether an activity is a fire drill or is on plan.  At the same time, recognize when deviating from the plan is a good idea.

Train People for Success
One firm is known for promoting people to roles where the individual’s past experience is not relevant to the new role.  Then when the individual fails, the firm simply moves to another candidate.  Instead, know the required skill sets for the new role in advance.  Know what can be trained and what cannot be.  Measure the individual against criteria required to do well in the role, and train and support that person to be successful.

Document Your Procedures
In a recent survey, members of  the Professional Association for Investment Communications Resources (PAICR)) shared that only 57% had written procedures for their firms and only 56% for their marketing departments.  You need procedures that are current and easy to follow.  In addition to being written, procedures need to be updated regularly.  Empower employees and trainees to question existing procedures, and to rewrite them to reflect their most current (and useful) form.

Commit the Time to Communicate, to Train, to Debrief
Time is one of the biggest obstacles to regular communications, training and debriefing.  Other priorities will always come first until you recognize and commit to the importance of communicating your plan and procedures, to train people to succeed and to debrief after major projects as to what worked, what didn’t work.  Debriefing leads a team into greater and greater productivity and away from politics and failure to produce.

Evaluate Systems and External Resources
New systems and technologies to enhance productivity are constantly being brought to market.  One of the biggest time and resource drains is updating and proofing data.  There are systems that can connect and update client files, presentation books, database responses and RFPs instantly and provide tracking.  Software and service systems can help with project management and communications.  Commit resource and time to stay on top of what is available.

“You can catch more flies with honey than with vinegar”
Keep your culture positive and supportive.  Constantly ask what can be done differently to help clarify and streamline a direction or process.  Avoid blame games when something does go wrong.  Instead, find the solution that will make it go right the next time.  Evolve from your own experiences.  Critique in private, praise in public.  Celebrate victories and accomplishments.  Celebrate being a productive team.

What financial advisors can learn from the "60-Minute Naked Truth Salesletter Formula"

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Having a hard time writing your first sales letter? The “60-Minute Naked Truth Salesletter Formula” can get you started. But you should tweak his formula to reach your audience and to keep your compliance officer happy.

The formula 
Here’s my interpretation of the formula. You can read more details in Michel Fortin’s explanation of Dean Jackson’s formula in “60-Minute Naked Truth Salesletter Formula.”
1. Start by completing the following sentence: “I’m writing to you because I want you to…”
2. Complete the following sentence with a bulleted list: “The reason I’m writing to you specifically is because I think you want…”
3. List your services’ features and benefits.
4. List your prospects’ top 10 questions or objections–and your answers to them
5. Explain how you guarantee results or remove risks. Obviously this step poses challenges for financial advisors.
6. Write a “call to action,” giving steps the reader can take to connect with you or your company and describing exactly what the reader will get.
7. Give your reader a sense of urgency, so they’ll act soon.
8. Supply testimonials. This is another step that financial advisors–especially investment managers–should skip because of the SEC prohibition against testimonials. 

Pros and cons of applying this formula 
The pluses of this formula include
* Making it easy for your readers to understand what you want and how it’ll benefit them–Too many financial advisors get hung up on features instead of benefits. Or they fail to anticipate objections.
* Organizing your information logically  
* Developing a good understanding of topics that you need to discuss with prospects
* Ensuring that you include an action step, the “call to action,” in your letter 

The drawbacks of this formula include
* Landing you in trouble with your compliance officer through discussion of guarantees or testimonials (although it’s easy enough to skip Steps 5 and 8)
* Sounding too formulaic and too much like a late night TV ad for something that grinds, chops, and does everything else
* Creating a letter that’s so long no one will read it

I learned about Michel Fortin’s blog post in an email from marketer Sonia Simone of Remarkable Communication. Thanks, Sonia!

Related posts:
*  Focus on benefits, not features, in your marketing
*  Your mail has three seconds to grab your reader’s attention
*  “Institutional investing” isn’t as great as you think

Behavioral Finance – A Three-Part Model for Client Relationships

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Behavioral finance can deepen your client relationships during market turmoil, if you recognize your clients’ emotional right-brained reactions before you offer insights based on your analytical left-brained analysis. By applying a three-pronged process of Recognize-Reflect-Respond, you can adapt to new information in a thoughtful and effective framework.

Gayle H. Buff, president of Buff Capital Management, proposed this model in “Behavioral Finance: So What?” her June 15 presentation to the Boston Security Analysts Society (BSAS). Buff has 20 years of experience working with individual investors and is a past president of the BSAS. As a member of the CFA Institute’s Speaker Retainer Program, she has spoken about behavioral finance to CFA societies around the world.


Continue reading my article, “Behavioral Finance – A Three-Part Model for Client Relationships,” in Advisor Perspectives.

Behavioral finance can deepen your client relationships

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Understanding behavioral finance can improve your client relationships. That’s the lesson I took away from “Behavioral Finance: So What?”, a June 15 presentation by Gayle H. Buff, president of Buff Capital Management, to the Boston Security Analysts Society (BSAS). Buff has 20 years of experience working with  individual investors and is a past president of the BSAS.

Like financial advisors, clients of investment and wealth managers don’t act with complete rationality. They react with their emotional right brain in addition to their rational, reflective left brain. However, Buff said, to optimize our ability to make informed decisions, we need to use both sides of our brains. Advisors who understand this, can tailor their interactions with clients to take advantage of this. 

Behavioral finance experts have identified loss aversion, uncertainty aversion, and overconfidence as a few of the key investor tendencies that reflect the influence of the right brain. During the past year’s financial crisis, Buff observed many instances where fear of uncertainty trumped fear of loss. Some of her clients wanted to sell their investments, even if that potentially meant locking in losses.

Behavioral finance helped Buff respond effectively to her clients who wanted to sell. Understanding that clients’ “sell” requests were intensely emotional, “I don’t take it personally or as them telling me I’ve done something bad,” she said. Instead of arguing with them, Buff listened to her clients’ fears. “Talking about what makes us afraid makes us less fearful,” she said.

It isn’t easy for most advisors to follow Buff’s strategy. “We often want to rush in with facts,” she said. However, advisors need first to acknowledge their clients’ feelings. Only after doing that does it make sense to give clients an alternative perspective on the issues. The advisor who takes this two-step approach will find their clients more receptive.

In fact, if advisors and clients can work through a financial crisis, they may end up with a much deeper relationship. One of the big advantages may be enhancing clients’ understanding of risk. Prior to the past year’s financial crisis, most clients overestimated their risk tolerance said Buff.

Buff listed five areas that advisors should explore with their clients, including clients’
1. Capacity to tolerate market volatility and economic risk
2. Characteristic defensive posture in the face of anxiety and uncertainty;
3. Vulnerabilities, passions, strengths, weaknesses, and dreams
4. Ability to process, integrate, and adapt to new information a new experience
5. Commitment to working collaboratively and synergistically as one-half of the advisor–client relationship

This blog post only touches on a tiny portion of Buff’s material, which included a bibliography on complexity theory and adaptive systems, behavioral finance and investor psychology, and the intersection of theory and practice. However, she speaks on behavioral finance to CFA societies around the world, so she may come to your area.

By the way, it has been my pleasure to get to know Gayle through volunteering with her on the BSAS’ Private Wealth Management committee. I’ve seen her dedication to financial education.