t4 Marketing Innovations Blog

Budget Pig

The world economy is under the spotlight again this week with the G20 meeting in London. Many economists say we need a Bretton Woods agreement for the 21st century although few expect to get one. Clients have never been more cautious, and many financial advisers I come across are a little at a loss as to how to develop business in the current market. Trust in old investment paradigms is shaken and people are spooked.

I read about the rather strangely named Oechsli Institute in the States doing some research that suggested only 13.4 percent of advisers have increased their personal “face time” with clients in this climate. And that’s very bad news indeed when you consider this sobering statistic: Following the 2002-2003 market decline, according to research by the Spectrem Group, it took up to four years before investors were happy with their advisers again. Ok this data is from the US but I reckon the principle stands in the UK.

There’s a huge lag between market recovery and relationship recovery. Research from the US shows clients wanted to hear from their advisers much more often and it took many years before they were comfortable again.

Difficult markets can be the best time to win new assets. Investors are starving for good advice and compelling propositions combining solutions with close communications. When the dust finally settles, there could well be a very large group of winners and losers as the financial advisery market shakes out.
It seems clearer than ever before that it’s about the relationship. In the most part, investments have been commoditised. It seems clients are cautious about financial markets and trusting their advisers – with this in mind what advisers do over the next year to be proactive will define the rest of their careers. The stakes are high…

Here are 10 thoughts to help make you a winner

1. Communicate.
It’s such a basic, but many advisers don’t do as well on this as they could do. A recent survey suggested that failure to return phone calls is the most common reason for high-net-worth clients to part with their financial advisers.
Don’t go into take cover mode because the news is bad. People are upset and worried . To put yourself in front of clients in an environment like this is to open yourself up to a lot of negativity but a little human outreach goes a long way.
It is all about communication. If you’re not communicating with your clients, you’re going to lose money. There is plenty of research to show that how advisers deal with problems, difficult times or complaints can really make or break a relationship.

2. Set up reviews with your clients.
Re-profiling your top clients and asking such questions as: What is most important to you about your finances at the moment? Are we meeting your requirements? Is there anything else we can do to improve communication between us?

The client you’re working with today is not the same client they were before last September. here isn’t a normal anymore. You are likely to find changes in what’s important to them in terms of risk tolerance and what they want out of their relationship with a financial adviser. This has to be formalised. You can’t make assumptions.

3. Focus on referral marketing.
In a difficult market, nothing carries more weight than a referral from a trusted source. This could be the most critical thing a financial adviser could do at the moment. Hand out business cards and brochures to your clients and other connections in your network, asking them for referrals. Put the things in place for your clients to talk about you and your firm. Create the mechanics.

4. Get your story right.
How easy have you made it for your clients to talk about you and what you have to offer? Think of it as a refined elevator speech or one-minute commercial: Explain in a way that clients can understand what it is you do, who you do it for, and how you help your clients achieve their goals. “A lot of advisers don’t see value in something like this, but it can be extremely important.

5. Maximise your reach.
There are plenty of advisers rushing from call to call. There are ways to work smarter on this one. One thing you can do is to take advantage of conference calls and webinars as a way to reach clients. This sort of technology helps you reach clients in an organised fashion and they are accessible and very affordable.

6. Develop client loyalty.
There are many things that affect client loyalty. Probably the biggest factor for strengthening loyalty is solving a problem and communicating the solution clearly to your client. If you can do this well you could cement things with clients big-time..
Ask for feedback – you can do this in a quite formal way with email questionnaires – after inter-actions or as a matter of course. You could be surprised at what you will learn and how it will build relationships, improve your approach or nip problems in the bud.

Clients don’t actually leave financial advisers due to poor performance they leave because of lack of communication and lack of attention. In times like these everywhere clients look, they see a leadership void. This is your time to shine. Your actions over the next 12 months could define your business over the next 10 years.

7. Go after all of a client’s assets.
There is no better time than in a difficult environment like this one to press this key point. Set up an appointment and pursue this tack: ‘I can’t be a full solution provider unless I have all of your assets.

This is a great opportunity to talk to clients you have partial relationships with. The clear message here is that you can’t truly protect the downside or manage risk if you only have a slice of their net worth.

8. Reassess your business model.
Take a hard, honest look at your business model and your own state of mind. What’s working? What’s not?

In my experience what some savez advisers are doing at the moment is taking a hard look at their current business and making any necessary changes. If they haven’t used back office systems or business technology properly they are now. If they haven’t been investing in lead generation programmes they’re doing it now..
Think outside the box. What other things can you do or offer to demonstrate added value? It could be as simple as a conference call where people can call in and participate. It will take some time, some preparation and there are some expenses associated with anything. But what will people remember when they get through this crisis? The guy who took the extra step.

Consider also updating some of your marketing approaches. Do you make use of blogs and email marketing? Are you using social networking sites like LinkedIn and Twitter? Are you connecting with all the business groups and networks in your area you could do?

9.Show leadership.
Don’t let the pundits on TV become your clients’ de facto adviser. It’s important that you represent the voice of reassurance and reason – not them.
I read about one American adviser who at the peak of the financial panic last year sent his first e-mail blast to clients in spite of the fact that he had always prided himself on individual communication. His message? “We want to talk to each of you. We’ve put together a plan. Turn your TV off. We’ve got this under control.” Translation: leadership.

Again, make use of regular newsletters and a calendar of contact strategies throughout the year. Use email, webinars/telephone conferences and ordinary cheese and wine or full seminar events to communicate – whatever you can make work for you.

10. Use your skills of empathy.
No one knows how long the volatile markets will last so it is extremely important to guard against becoming emotionally drained yourself. Clients and prospects right now have a lot of fears – fear of change, fear of the markets – and the only way you can connect with that person is to have quite an emotional conversation – which can be difficult for us Brits. If you don’t have that capacity, you can’t be effective. We always think we deal with inanimate things: stocks, gilts & bonds, and pension funds. We sometimes forget how much of an emotional business this is.