"Exploring the Social Media Networking and Media Landscape"

/in , , , , /by

Financial advisors should learn about social media, whether or not they participate. 

“Exploring the Social Media Networking and Media Landscape,” a presentation by John Stone of Revenue Architects, got advisors talking at the Schwab Impact conference. Stone looks at social media with an eye to how they can help grow revenues. You can view Stone’s slide show below.

Social  Media for Schwab Advisors

View more presentations from John Stone.

Thanks to Kristen Luke for suggesting John as a speaker and Bill Winterberg for sending me to the Impact 2009 slides, where I initially discovered John.

Advisors, now’s the time to build clients’ NON-financial emergency funds

/in , , , /by

Financial advisors, encourage your clients to set up a non-financial emergency fund, says Kol Birke, financial behavior specialist at Commonwealth Financial Network. The fund will help them to make better financial decisions. Plus, it’ll strengthen their bond with you.

A non-financial emergency fund consists of family, friends, and activities such as volunteering and exercise. These relationships and activities are resources your clients can draw on in difficult times that will help focus their minds on positives, so they aren’t as easily rattled by market downturns or other stresses. 

In fact, psychologist Barbara Frederickson has shown that positive emotions widen individuals’ receptiveness to a broader range of options, so they can choose the best one. If you can help your clients feel more positive emotions, they’re less likely to react to a market downturn by saying “Sell, sell, sell.” That kind of single-minded “Sell” response served humans well when they were fleeing wild animal attacks. It’s less appropriate in today’s complex world.

Advisors can help clients build their funds by asking what activities are soothing, nourishing or enriching.  In other words, what they do to blow off steam, and what do they do that provides most meaning in life.

Now is a great time to raise this topic with clients. They’re past the shock of the market decline. Yet the decline is fresh enough in their minds that they’re receptive to new techniques to make them more resilient emotionally.

A nice side effect of creating positive emotions through your clients’ non-financial emergency funds is that it makes them feel more connected to you. That will serve you both well.

To learn more about this topic, contact Kol Birke at kbirke@commonwealth.com or 781.663.9663.

"Turbulence Can Improve Portfolio Diversification"

/in , /by

“The only problem with diversification is that it’s never been tried,” said Mark Kritzman, president and CEO of Windham Capital Management, in a July 21 speech to the Boston chapter of the Quantitative Work Alliance for Applied Finance, Education and Wisdom (QWAFAFEW). If he gets his way, investors will achieve truly diversified portfolios by applying his concept of turbulence.

Continue reading my article, “Turbulence Can Improve Portfolio Diversification” in Advisor Perspectives.

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

/in , , , , , /by

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

/in , , , /by

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

/in , , , , /by

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.

"Helping Advisors Grow"

/in , /by

Now more than ever, advisors want to grow their businesses while keeping a lid on expenses. For many, this requires thinking more strategically about how they operate. George Tamer, Director, Institutional Sales, at TD AMERITRADE Institutional, oversees a team that works to help registered investment advisors create operational efficiencies by assisting them on workflow processes, technology usage, and best practices.

Continue reading this Q&A with George Tamer on “Helping Advisors Grow. It appeared as sponsored content in Advisor Perspectives.


Guest post: Dale Carnegie and Your Clients

/in , , , /by

This is a guest post from AdvisorBlogger’s Lawain McNeil, which originally appeared on March 11. It’s an excellent reminder that it’s important to treat clients as individuals.

In 2009, I made a resolution to re-visit the book How to Win Friends and Influence People by Dale Carnegie. Of course, everyone has heard of this book (it has sold over 15 million copies). Its influence has been far reaching and helpful for many. Thanks Dale Carnegie.

Why do I mention him today? I think some of the principles of How to Win Friends and Influence People can be helpful in dealing with clients in the current state of the market. Even though the market was up the last two days, clients are still concerned about their investments. This will be very present to them when they open their quarter-end statements and see negative numbers and lower account balances. Yes, you will have clients that will want to argue with you regarding their investments. You will have clients that will want to change their allocation to a different allocation or strategy due to the market (even though they signed an investment policy statement saying they were a long-term investor). You will have clients that are afraid and just need reassurance.

So, as you prepare to talk, write, visit and meet with clients, revisit the words of a timeless classic and see if the Carnegie Principles can help you communicate more effectively with your clients.

DALE CARNEGIE’S HOW TO WIN FRIENDS and INFLUENCE PEOPLE

Fundamental Techniques in Handling People

1. Don’t criticize, condemn or complain.
2. Give honest and sincere appreciation.
3. Arouse in the other person an eager want.

Six ways to make people like you

1. Become genuinely interested in other people.
2. Smile.
3. Remember that a person’s name is to that person the sweetest and most important sound in any language.
4. Be a good listener. Encourage others to talk about themselves.
5. Talk in terms of the other person’s interests.
6. Make the other person feel important – and do it sincerely.

Win people to your way of thinking

1. The only way to get the best of an argument is to avoid it.
2. Show respect for the other person’s opinions. Never say, “You’re wrong.”
3. If you are wrong, admit it quickly and emphatically.
4. Begin in a friendly way.
5. Get the other person saying “yes, yes” immediately.
6. Let the other person do a great deal of the talking.
7. Let the other person feel that the idea is his or hers.
8. Try honestly to see things from the other person’s point of view.
9. Be sympathetic with the other person’s ideas and desires.
10. Appeal to the nobler motives.
11. Dramatize your ideas.
12. Throw down a challenge.

Be a Leader: How to Change People Without Giving Offense or Arousing Resentment

A leader’s job often includes changing your people’s attitudes and behavior. Some suggestions to accomplish this:

1. Begin with praise and honest appreciation.
2. Call attention to people’s mistakes indirectly.
3. Talk about your own mistakes before criticizing the other person.
4. Ask questions instead of giving direct orders.
5. Let the other person save face.
6. Praise the slightest improvement and praise every improvement. Be “hearty in your approbation and lavish in your praise.”
7. Give the other person a fine reputation to live up to.
8. Use encouragement. Make the fault seem easy to correct.
9. Make the other person happy about doing the thing you suggest.


Here’s how AdvisorBlogger describes its mission: “AdvisorBlogger is a website dedicated to providing valuable and timely resources for financial advisors through the use of blogging, podcasts, video and other rich media formats. Our goal is to become a leading online resource for the independent advisor community.” 

Focus on benefits, not features, in your marketing

/1 Comment/in , /by

Focusing on the benefits your clients will receive from your financial services is much more effective than touting your firm’s features. In other words, focus on you, the client–not us, the firm.

I found a great example of this when I looked for gyms near me.

Gym 1 said, “Gym 1 is a premiere fitness, athletics, and rehabilitation facility that features the highest caliber trainers, equipment…”

Sounds impressive, doesn’t it? But does it get you excited about joining a gym?

Now read the beginning of Gym 2’s ad. 
     We’ve helped our members: 
     -fit into their clothes 
     -make their exes jealous
     -look amazing at their wedding

Sure, some people would opt for Gym 1 over Gym 2. But clearly Gym 2 makes more of an emotional connection with the reader.

You can find similar contrasts in wealth management.

For example, one firm says, “Our company has been in business for 60 years.” Prospective clients may read that statement and ask “So what? Why should I care?”

They might re-word that as “Your money will be managed by a firm that has weathered up-markets and down-markets for 60 years.”

A reader of this blog post suggested a nice alternative: “If you’re like most of our clients, you’ve spent a long time building your success. We’ve been assisting people like you make informed decisions to protect that success for more than 40 years.”

Note: I updated and fixed the spacing on this post in Jan. 2017.

Image courtesy of Stuart Miles at FreeDigitalPhotos.net.

"Media Opportunities Are There for the Asking. Choose Your Niche."– guest post by Lisbeth Wiley Chapman

/in , , /by

With more than 20 years of industry experience, Lisbeth Wiley Chapman of Ink &Air knows how to get national exposure for financial advisors. Her MediaStar newsletter  features practical tips that’ll also boost your visibility. Here’s her guest post on “Media Opportunities Are There for the Asking.  Choose Your Niche.”


Advisors often dream of a client list full of like-minded people such as wooden boat enthusiasts, Ford Mustang collectors, or fellow Triathlon competitors.

Or they covet a regular column in a publication for a vertical market — all the dry cleaners in the U.S., contractors in New Jersey, or all the civil engineering firms in New England.  Every group mentioned above has a publication.  You can access that publication.  It takes effort and time, but not money.

Just Ask!
You might be amazed at the results.

Here are four case studies of unlikely successes where advisors were able to get invitations to write for target market audiences in athletic and trade publications.  One caveat:  most opportunities in an economic downturn will be in a web-based publication.  Don’t let that dissuade you.  You are still being presented to an audience of readers as an expert and you can easily send your clients a URL to access your clip.  It’s your job and it’s easy to make sure your clients, prospects and centers of influence know you were a trusted expert and served as a source.

We’ll call him John Jones, the advisor I met at a meeting of financial advisors. He wanted to be the financial advisor of choice of all the construction companies in New Jersey.  he wrote the editor of the largest trade newspaper for contractors and suggested a column.  They said yes, and the rest is history.  His practice is made up almost entirely of owners of construction companies, large and small and his column did generate referrals.

How Can You Find More Clients Who Fit Your Profile?
Replicate your best ones.

Anne Barry, a client of Ink&Air, who consulted to small and medium 401(k) plans, wanted to multiply her best client, a civil engineering firm.  “They have a lot of chiefs and some Indians, and their 401(k) plans are relatively rich.  I called the editor of Civil Engineering Magazine, and he said he would never run a story about sorting through competitive 401(k) proposals in his magazine, which focused solely on the technical aspects of civil engineering.  As I was politely thanking him, he said, “But, our sister publication Management Engineering, would be very interested.  Here’s the editor’s number.  My client was able to get a full-page story and picture about what to look for when comparing 401(k) plan proposals.  Who knew?

Don’t Believe the Experts.
Nothing is Impossible!

Jeff White heard me speak at the FPA national conference last fall and corrected me during my talk.  He said it was not “nearly impossible” to get small newspapers to run financial advice stories, and that he had done this successfully with 10 or 12 weekly newspapers in a New England state.  I had indicated during my talk that such publications did not have the space for personal finance and rarely covered it.  The advisor produced columns and sent five to eight at a time.  He made it entirely up to the publication as to when and whether he got his fully attributed columns into the newspapers and frequently there was space and his information ran.  He did get referrals from this effort.  Don’t believe me, try it and see.

Follow Your Passion to Clients You Know, Like and Understand
But you have to ask for the opportunity…

Following your passion makes sense.  Ben Perry is  a financial advisor and triathlete who told me that his dream clientele would be other athletes who participate in triathlons.  I Googled “Triathlete Publications” and got a mish-mash of state-specific running publications.  I called one and was referred to the publisher of seven state running publications.  He was delighted that my client could offer a financial column for runners, written in terms that an athlete could understand.  I never expected a “yes” and should know by now that the most amazing things happen when you simply ask for an opportunity.

Related posts: