Opportunity Amidst Crisis

*The following is from Registered Rep. Magazine's Practice Management Newsletter.

San Diego: "I'm getting the feeling that this crisis is never going to end," groaned Steve. "It seems that nothing I'm doing with my clients is relevant in the midst of a 1,000-point drop in the Dow in a matter of minutes."

Steve was exhibiting the characteristics of apathy -- which is the first cousin of defeat -- throwing his hands up in frustration and saying, "There's nothing I can do!" Everyone, even the savviest financial professionals, was floored by the wild gyrations of the Dow Jones on that eventful May 6. To put Steve's comments into context, all of this occurred only a few hours before my presentation and he was still in the processing mode, but going down the wrong path.

A crisis that seems to never end can be nerve-wracking even for the best of us, but much more so for those who fail to take deliberate "crisis control" action. Financial advisors should view the recent events (Greece, 1,000-point swings, Goldman Sachs/SEC, etc.) as both a wake-up call and an opportunity.

The Wake-up Call: Financial advisors need to be working feverishly to become the "go-to" financial coordinator for their affluent clients. This requires extreme diligence, both with managing their practice and managing client relationships. There can be no complacency, no resistance to making the requisite changes that ensure you, as a financial advisor, are overseeing the multi-dimensional aspects of your affluent clientele's financial affairs.

The Opportunity: Every crisis is a two-sided coin: problem versus opportunity. The aforementioned wake-up call describes the ongoing challenge, but the opportunity is uncanny. Why? Because it's disguised within the wake-up call. The more the media beats the drums of financial doom, the more this financial crisis spreads its tentacles, which provides the media the fuel to beat the drums of panic, and the more nervous the affluent investor becomes. All of which heightens their awareness of the need for first-rate professional advice and guidance.

Since that momentous 1,000-point trading error day, numerous advisor blogs and forums have been singing the praises of financial advisors who weren't inundated with calls from panicking clients. This sounds like nirvana to any advisor flooded with calls from panicked clients, but there is a danger lurking in this smugness.

From the perspective of the New World Advisor, today's elite as defined by our research on meeting today's affluent investors expectations, I'd highly recommend that you view these turbulent times as, yes, a pain in the a--, but also a real window of opportunity. As I outlined to Steve, advisors can capitalize on this ongoing crisis by conducting a thorough re-evaluation of their current state of affairs on three fronts.

Let's take a quick look at each to get you started…

1) Your Practice/Team

What services are you providing? For instance, comprehensive financial planning and its execution are extremely important to today's affluent investor and should be at the core of your practice. The same is true for financial organization; keeping your client's financial documents organized and current. Alas, though nearly 80 percent of advisors claim that planning is an integral part of their practice, only 25 percent of today's affluent feel as though they have a comprehensive financial plan.

How competent is your personnel? Your practice/team is only as strong as its weakest link. Are roles and responsibilities clear and understood? Are you conducting performance reviews? Is everyone pulling his or her weight?

This ongoing crisis creates the perfect window of opportunity to add services you heretofore have not provided. It is also the time to address performance issues of all personnel, and re-align roles and responsibilities if necessary.

2) Managing Relationships

Each new chapter within this crisis affords an opportunity to strengthen your client relationships. How? By meeting face-to-face and explaining what is occurring and how you are protecting them, by calling them and explaining the same, by meeting with them socially, and so on.

It is also the perfect time to strengthen your referral alliance partners. You should, if possible, meet with each on a personal basis and help them understand what's happening, how you've responded, how clients are protected, and help them in explaining this to their clients.

3) Rainmaking

Eight of 10 affluent investors have enough dissatisfaction with their financial advisor(s) that they would consider making a change if they knew of a better alternative. Whether it's Goldman Sachs and the SEC, Greece, market volatility, or the media fanning the flames of panic, nervous affluent investors are in a perfect frame of mind to meet with you for a second opinion. You want to be penetrating your affluent client's centers of influence.

Hold a series of small events focused on "Economy & Market Update" as this ongoing crisis has made these events the second-most favored (intimate social events are number one) by today's affluent investor, and the second-most likely where they would bring a guest. Make certain you have each client bring a guest you've selected, and also invite your strategic referral alliance partners.

Deliver one second opinion daily.

It's ludicrous to suggest that advisors should be enjoying this financial crisis. Today's world of financial services is extremely unsettling to everyone. However, there is a sliver lining amidst all of this pain. As I explained to Steve, this is the opportunity to very carefully fine-tune your practice in a manner that will enable you to capitalize on these challenging times.

Business in Social Settings

*The following is from The Oechsli Institute's Performance Edge Newsletter, written by Stephen Boswell.

Greensboro: “I’ve got a wealth of social connections, but have been reluctant to go after the business. I just don’t feel comfortable putting these people in an awkward position”, said Fred, an advisor who recently called our office.

Fred is one of many advisors who struggle with the idea of putting social contacts into their pipelines. You may be asking, if this makes people uncomfortable, why don’t they focus their efforts elsewhere? Well, because social connections often represent an enormous (and fairly quick) prospecting opportunity – low-hanging fruit, if you will.

However, there are many reasons why social prospecting hasn’t played a bigger role in many advisors’ marketing strategies. Our 2010 Financial Professional research gives us insight into a few of the common stumbling blocks:

 

The reason for overcoming the aforementioned fears is simple. People that like you, trust you and respect you professionally are one step away from being clients. You should be the person they trust most to handle their family’s financial affairs. The key is introducing your services properly; in a non-threatening, non-salesy, “doing a favor” kind of way.

In our coaching, we see several core mindset issues that hold people back from mastering social prospecting:

- Social Self Consciousness: Being intimidated by approaching people of wealth.

- Poor Sales Skills: Not being sure how to approach social contacts the right way.

- Fear of Being Salesy: Not wanting to appear like a salesperson is a major issue – Closely aligned with poor sales skills and social self-consciousness.

- Low Confidence: This is often conveyed as “Not wanting to put your relationship in jeopardy if something goes wrong”. Many advisors don’t feel confident enough in their service offering.

From Fred’s perspective, the issue was part sales skills and part confidence. With a combination of serious self-awareness (recognition of strengths and weaknesses) and intensive performance coaching, Fred went through a metamorphosis. He rededicated himself to stepping outside his comfort zone and deliberately practiced his affluent sales skills in two core areas:


- Verbiage: Fred was intent on mastering the language he would use in approaching his social contacts. We scripted some basic bullet points and he practiced until he “owned it”.

- Timing: Week by week, we helped Fred activate his “Rainmaker Antenna”. We knew that he was having frequent conversations with his social contacts regarding their family and their business. Each of these conversations had one or two natural points for him to introduce his professional services.

Here’s where opportunity meets preparation. Within one week, he was speaking with a doctor friend of his who started complaining about upcoming tax changes. So he offered to meet and share some thoughts on what his team is doing for some of their current physician clients. Then he found out that a small business owner at his club was preparing to sell some real estate, so he mentioned the work he’d done with other business owners and suggested they meet to ensure that their family was on the right track.

These are two of countless opportunities that heretofore Fred, like so many advisors, let slide. However, the new and improved Fred – self-aware –deliberately practicing his affluent sales skills –allowing himself to go far outside his comfort zone has offered second opinions to eight different social contacts, four of which became clients in a relatively short period of time. And he did all this without being perceived as a salesperson.

Fred’s story isn’t an anomaly; this kind of transition can be yours – if you dare. Step outside your comfort zone, practice your sales skills and you too will reap the rewards of high impact social prospecting.

5 Ways to Guarantee an Unproductive Summer

The following is from Registered Rep. Magazine's Practice Management Newsletter.

Nashville: "I've always found it difficult to do much serious business during the summer," Gerry said to me after a talk I gave. Then he asked, in a way as though to get confirmation, "Don't you think the summer is a time when you should scale back business activities?"

Gerry did not get the confirmation he was seeking. However, when I asked him to list his role models within the world of financial services, he responded immediately: Warren Buffet and Charlie Munger. After complimenting him on his selection and reinforcing the importance of modeling ourselves after elite performers, I suggested he approach this summer by applying some thoughts by Charlie Munger.

So, in the spirit of Charlie Munger, the following are the five ways that I outlined for Gerry that will guarantee that he has an unproductive summer (the polar opposite of an elite advisor):

1. Don't Read - As an advisor in today's volatile world, it's not important that you have a historical perspective, a depth and breadth of industry knowledge. In the words of an affluent focus group member, "I like my advisor, he's a good guy, but he doesn't have a clue." Wow!

Reality:
In Munger's own words, "In my whole life, I have known no wise people (over a broad subject matter area) who didn't read all the time - none, zero. You'd be amazed at how much Warren reads - and at how much I read. My children laugh at me. They think I'm a book with a couple of legs sticking out." One of the most important criteria for the affluent when meeting a financial professional is their impression of the advisor's competency and professionalism. Reading on a regular basis not only increases your knowledge base and makes you a well-rounded person; it makes you more interesting.

2. Don't Prospect - Rainmakers stop prospecting during the summer, they stop working on their sales skills and take a break from social prospecting. In addition, today's affluent investors aren't concerned about their families' financial health during the summer.

Reality:
Putting your prospecting on hold because of the summer is the equivalent to Peyton Manning not training during the off-season. In addition to constantly working on their skills, rainmakers understand that opportunity abounds in today's environment. Some of our latest 2010 Q1 research on affluent investors states that most investors would welcome a second opinion if they had such an option. Also, it’s important to note that the more affluent a prospect, the more likely they are to want a second opinion. This is the opportunity of a lifetime - so take advantage!

3. Don't Attempt to Spend Time With Your Clients (they're on vacation) - Your affluent clients don't want to socialize with you during the summer. After all, they are planning on skipping town and none of them will be having barbecues, playing golf, or going to the pool.

Reality:
A common misconception is that everyone is traveling. While some clients do make travel arrangements during the summer - like all holiday periods, it is a time for socializing – such socializing is one of the most potent rainmaking activities. Being able to connect with your clients on a social level will not only earn loyalty, but it will afford you an opportunity to meet their friends.

4. Don't get to know your clients personally - Your clients do not want you to know anything about them personally. They only care about their investments and want the relationship to be strictly business. Sure...

Reality:
Our research shows that your affluent clients want you to know as much about them personally as professionally. They want you to take a genuine interest in them. Knowing your clients' hobbies, interests, and other hot buttons will afford you opportunities this summer to provide them with presents and activities geared to their personal likes.

5. Don't hold any intimate (social) client events - Your clients have no interest in attending fun events during the summer. They have their own plans, go on vacation, and or go into hibernation and have no interest in coming to a social gathering. Duh?

Reality:
There are numerous creative ways to leverage the outdoors during the summer months for intimate client events. Look to hold a barbecue or take a few clients to a baseball game where they can bring some friends. Summertime is a social time and a very natural way to hold a few fun events and penetrate your top clients’ centers of influence.

It's one thing to have role models, but for a role model to be anything other than a hero we admire from afar, we must hold ourselves accountable to making the necessary adjustments. Charlie Munger doesn't shut down during the summer!

Gerry has since renewed his commitment to summertime rainmaking. As a starting point he's selected two heroes that are worthy of everyone's admiration. Incidentally, Charlie Munger considers Benjamin Franklin his greatest role model and like Franklin, he is curious, patient, practical, and a life-long learner. So, my dear friends, have a summer that would make both Charlie and Ben proud!