Financial Advisor Marketing & Technology

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Alliance Builder From Advisor Products Increases Referrals And Link Popularity On Advisor Websites

Using the Advisor Products BackOffice, financial advisors can now add a new type of page to their sites that’s preconfigured for exchanging links with allied professionals.

Alliance Builder is a great way for a financial advisor to build referral relationships with other professionals and also increases an advisory firm website’s “link popularity,” an important factor in boosting search engine rankings.

“Your site's ranking in Google search results is partly based on analysis of those sites that link to you,” according to Google’s guidelines for webmasters. “The quantity, quality, and relevance of links count towards your rating. The sites that link to you can provide context about the subject matter of your site, and can indicate its quality and popularity.”

Alliance Builder makes it easy to add an “Alliances” or “Partners” page to your site in minutes.

A lot of firms would probably want to exchange links with your firm, including:

· Estate planners · CPAs
· Business valuation experts · Bankers
· Mortgage lenders · Geriatric care specialists
· Life insurance agents · Health benefit consultants
· Business consultants · Divorce lawyers
· Labor attorneys · Psychologists
· Elder care attorneys · Architects
· Contractors · Auto insurance brokers

Alliance Builder not only lists the names of companies and colleagues who refer business to you, but it also enables them to submit the information that they want posted on your site.

You simply email or call your referral sources with the URL for the “Alliances” page on your website.

Your alliance partners come to the “Alliances” page and can input their company’s name, a brief description of their firm, and their website URL.

You are notified by email whenever an alliance partner submits a request to create a link on your site’s Alliances page. You can edit the text they wrote, approve it as is, or reject it.

This makes it really easy for referral sources to be listed on your site.

While Advisor Products wants to make it easy for you to gain link popularity, some important caveats must be mentioned.

Just because you post a link to your colleague’s firm on your website’s Alliances page, doesn’t mean he or she will reciprocate. For you to gain link popularity, your alliance partner must follow through and link to your website.

Moreover, you don’t want to abuse a link exchange program by allowing just anyone to post a link on your site.

Like most search engine optimization techniques, link popularity is not as simple as exchanging links with just anyone on the Internet. In fact, Google, the dominant search engine on the Web, penalizes you if you engage in “link schemes” and you could actually hurt your search engine visibility by engaging in gimmickry.

“Some webmasters engage in link exchange schemes and build partner pages exclusively for the sake of cross-linking, disregarding the quality of the links, the sources, and the long-term impact it will have on their sites,” ,” according to Google’s guidelines for webmasters. “This is in violation of Google's webmaster guidelines and can negatively impact your site's ranking in search results.”

We’ve seen some advisors create link exchanges with other advisory firms and we do not want to encourage this.

While linking to other financial advisory firms—even if they’re a few hundred miles away and don’t compete with you—you may sound like a clever way to gain link popularity, excessive use of such a gimmick is bound to catch up with you. Such search engine optimization tricks have been around for years and eventually the search engines get wise to it.

Also, don’t think you can link to the local barber shop, dress designer, or auto mechanic and benefit from it. Google is smarter than that.

Instead of gimmickry, keep it real. Exchange links with referral sources and other professionals with which you do business or want to do business. Look for firms that have content on their sites that is related to what you do, even if it may not be directly related to your financial advisory practice.

For instance, a local builder may not seem to be directly related to a wealth manager like you. But builders know that people doing construction need loans and financial advice and they may be interested to add a page to their site about the personal financial aspects of constructing a new home or office building even if they do not link to any advisory firms now.

Please also keep in mind that search engine optimization is a complicated field. Search engine algorithms are complicated and take many factors into consideration in ranking your site and link popularity is just one them.

Advisor Products hosts websites for about 1,200 independent advisory firms and Alliance Builder is just our latest innovative feature. For more information about our services, go to or call us at (888) 274-5755.

Visit Us At Schwab IMPACT

Please stop by the Advisor Products booth (No. 145) at the Schwab IMPACT® Conference next week to say hello.

We'll be talking about advisor marketing and practice management and showing demos of new features in AdvisorVault, Online Reporting For PortfolioCenter® and Axys®, and our Video Library System.

· AdvisorVault enables secure document sharing with clients and other professionals.

· Online Reporting for PortfolioCenter or Axys dramatically streamlines batch uploads of reports at a low price.

· Advisor Video Library automatically private labels videos about wealth management that we produce and posts them to your website.

Correction To My Twitter Webinar

My webinar, Twitter For Advisors, on Friday, May 8, contained an error.

In the presentation, I incorrectly said that if you keep your tweets private and approve all of your followers on Twitter, other Twitter users could not see your followers. That's incorrect.

While approving your followers allows only approved followers to see your updates, any other Twitter user can still see your followers.

It’s important for financial advisors to keep this in mind. I incorrectly advised in the presentation that, if you create a separate profile for clients only, other Twitter users could not see them. Even if you protect your updates using the checkbox in the “Settings” menu in Twitter, any other Twitter user can still see your profile and the list of your followers.

Twitter’s terse "Help" on its "Settings" page is unclear, and it was only after testing the "protect updates" feature that I discovered this serious flaw in using Twitter to communicate with your clients. Keep in mind, this is very different from the way LinkedIn works. LinkedIn lets you make connections private so that no one outside of your network can see people in your network.

And keep this issue in perspective: Finding prospects on Twitter and marketing to them remains an intriguing new way to generate new business and network with other professonals. The presentation is still valuable to advisors and this was only one of the many points discussed in the one-hour session, which was focused on Twitter basics along with finding and marketing to prospects on Twitter.

However, I'd now recommend against tweeting clients because competitors could visit your profile, see your followers, and request following them. Since many, if not most, Twitter users automatically follow back anyone who follows them, your clients could wind up following your competitors.

I contacted Twitter’s development team to let them know that financial advisors and other business owners are unlikely to use Twitter for communicating with clients unless this feature is cleaned up, and I’ll let you know about any response. It’s hard to imagine that Twitter will not correct this flaw.

Are You Too Sexy For Social Networking?

In the 1992 pop hit, “I’m Too Sexy,” by Right Said Fred, lead singer Fred Fairbrass insists he’s “too sexy for Milan, New York, and Japan.” It’s a silly statement.

Just as silly was a statement by one of New York’s most prominent estate planning attorney, who told me he’s too sexy for social networking. I won’t name him because he’s a close friend and he’ll never come to our house for dinner again.

But he only had a couple of glasses of wine when he said that all of the requests to connect that he’d received on LinkedIn were from people who wanted to sell him something, socio-economic climbers who’d benefit from knowing him. He wasn’t connecting with people from which he could learn, get referrals, or derive some other benefit from knowing virtually.

This was my first reaction, too, when I first started using LinkedIn and again when I first used twitter. But once you use these tools, you figure out how the privilege of giving away information benefits you as long as you target the right people.

My lawyer friend is actually right about one thing: LinkedIn connections that you want to connect with probably won’t seek you out. You have to seek them out.

If you wait for your target client to seek you out, you won’t see the value in social networking. You have to go to them. On LinkedIn, this means looking at other people’s connections to see who among them you want to know.

For instance, say you’re an estate planning attorney or financial advisor and corporate executives with stock options, deferred compensation plans, and restricted stock are your target clients. You want to connect with senior executives at numerous companies in your area or industry about which you’re an expert.

In LinkedIn, you could click the “Search” the pull-down menu next to the “Search Companies.” If you want information about executives at Research In Motion, for instance, you click on “see more” in the “Current Employees” section at the top of the page and you’ll get a list of hundreds of executives. If you only want top executives from RIM, use Advanced Search to filter for “Senior Vice President.”

You can request a connection with top executives at just about all of the 1,000 largest companies in the country.

Is that like cold-calling? Not if you have information valued by these executives.

If you request connecting because you have a white paper about the latest tax court ruling on restricted stock sales, or offer a service that tracks insider stock trades by executives at his company every day, he may value that.

Or, better still, network with people you know. If you have a client or college buddy who is a top executive at RIM, for instance, why not connect? You can then ask that friend to introduce you to a colleague at RIM. If you know the SVP for handheld software development, you can look at his connections. You might find that the SVP for channel sales went to the same high school as you or previously worked with someone else that you know and you could ask for an introduction to that person.

The same rules apply to Twitter. A lot of the people who want to “follow” me want to sell me something—search engine optimization, social networking tools, financial planning software. And that’s okay. Sometimes they actually have valuable information for me.

But at the same time I’m actively reaching out to financial advisors on Twitter and Linkedin and streaming news about personal finance, regulators, and marketing. I’m updating people I connect with about my latest blog posts about advanced marketing techniques and events in the economy.

To make social networking work for you, figure out who your target clients are and what information you could easily send them regularly for free to prove your value to them. Shortly after you do that, you’ll stop complaining that only product salespeople want to connect with you and realize that you’re not too sexy for social networking.

For more information about Twitter and social networking, please read my latest column in Financial Advisor.

And please register for this week’s session of the Financial Crisis Webinar Series on Friday at 4 p.m., when I will speak about Twitter for advisors.

Compliance Issues Posed By Linkedin, Twitter & Social Networks

Yes, advisors can use Linkedin, they can blog, and they can even tweet on Twitter. Whether you’re a register rep or an IA rep, you can network online with friends and prospects, but you do have to follow the same compliance rules that govern other advertising materials.

To prepare for a webinar about compliance issues posed by social networking sites, the subject of this Friday’s Financial Crisis Webinar, I interviewed Brian Hamburger and Dan Bernstein of MarketCounsel, a compliance consulting firm serving independent advisors nationwide. (The 4 p.m. webinar on Friday is free but you must register to attend.) Below are some of what these experts said.

With regard to Twitter:
When an IA rep uses Twitter to send a link to an article from an online magazine, newspaper, or other site to clients and prospects "following" him, that communication is subject to SEC advertising rules. However, Bernstein says that merely sending a link is not advertising—as long as you don’t give your opinion.
· If a rep sends links to articles, however, it could be deemed advertising, which means some broker/dealers may require pre-approval of a tweet with a link. It depends on your BD. Many BDs allow reps to re-circulate articles. Most BDs will permit it, so long as the rep does not add content. Your BD may require you to print it out and retain each tweet in hard copy.
· IA reps have it a easier than registered reps. There is no preapproval required of IAs in any of the SEC rules.

On the topic of blogging:
· Yes, advisors can write blogs. Twitter is a microblog. However, a blog is like any other communication, and a rep needs it pre-approved, which makes blogging difficult.
· Some BDs regulations do not allow blogs. But it is a manpower issue and cost issue.
· Blogging is easier for IA reps because they do not need pre-approval of the material.
· A blog from an IA rep can discuss typical clients and situations that are hypothetical. You can “make up” a client and talk about his issues and problems and how you solved them—as long as you disclose that these are hypothetical abstracts and not real situations.
· Blogging about the economy, financial planning, or market commentary is less likely to pose compliance problems, but market commentary must avoid predictions.
· Commenting on your blog is permissible. But any commenting should be screened, so that you can take down a comment or edit it.
· You must be able to remove blog comments that are testimonials from clients.

If an advisor is using Linkedin:
· A "recommendation" on your Linkedin profile by a client does indeed constitute a testimonial and, thus, violates SEC rules prohibiting RIAs from using client testimonials in advertising.
· If a client writes a recommendation praising you as a moral or religious person, it will be construed as a testimonial—even if it does not address your skills as a professional investor.
· The testimonial prohibition is commonly thought to pertain specifically to clients. There is not a lot of guidance about using testimonials from non-clients. But the fact that there has not been many enforcement actions for using testimonials by non-clients indicates that using testimonials from non-clients may be within SEC rules. But the SEC may ask you to remove such recommendations from Linkedin. For instance, if you are on the board of directors at your church or synagogue, another board member could write a recommendation for you in your capacity as a board member and that would probably not be construed as a violation of the rules.

Because social networking is so new, there is no body of enforcement actions and rulings that you can reference. The SEC will be busy in coming months addressing the many issues posed by advisor use of social media .

The Elephant Wrecking Your Revenues

What did you do today? Did you email your clients links to a blog post written by an economist analyzing the Fed's plans for spending $1 trillion? Did you post a new article on your website about the crisis? Did you snail mail prospective clients a handwritten-note attached to your latest newsletter? Did you schedule an online meeting with a client, prospect, or referral source to go over new opportunities likely to emerge in a recovery?
Every minute you passively watch your firm’s revenue shrink is another moment in which you failed to find a way to grow out of the economic maelstrom.

There's an elephant in the room. It’s the global financial crisis.

If your firm's website looks exactly the same as it did before the crisis, then you're acting like there is no elephant.

When a prospect comes to your site, he's going to wonder why you're acting like there's no elephant in the room.

If you’re not constantly addressing the massive shifts in the economy with clients, prospects, and referral sources, then you're blowing the chance to bring in new clients and recoup losses on your asset-management fees.

If you're not actively communicating with people now about events in the global economy, then you're missing opportunities.

If you are not moving toward a more transparent relationship with clients, then you are not changing with the times and will be left behind. You will be crushed by the elephant.

At Advisor Products, where we make websites, newsletters, brochures and other marketing materials, we’ve seen larger RIAs spend more on custom marketing websites since the crisis exploded in October. We’re setting up one or two firms each week on our Client Portal system, the most advanced system available to help advisors communicate with clients.

It's generally larger RIAs that are upgrading to more sophistciated products, and Advisor Products has experienced strong sales growth since the crisis began. Independent advisory firms that were strong before the crisis seem likely to emerge as even stronger competitors after the crisis.

Advisor Products is seeing a big increase in adoption of our vault for advisor clients. AdvisorVault is built on a Microsoft SharePoint platform and allows advisors and clients to drag and drop documents from their desktop to a virtual drive. It offers many features that, as far as I know, are unavailable on any other vault for advisor clients, and AdvisorVault is integrated with the two leading desktop software applications. It makes client relationships "stickier," something advisors need right now.

While Advisor Products has experienced growth in the adoption of email newsletters as well as high website tools, we’re also seeing some advisory fims discontinue subscriptions on hard-copy newsletters. I think discontinuing any form of client communication right now is a bad idea. Sending fewer messages to clients right now sends a bad message. This is a time to increase–not cut–client communications if you hope to quickly reverse damage done to your bottom line by the market meltdown.

To once again thrive after the economy stabilizes, advisory firms must change their marketing message to target prospective clients who are more fearful than they were ever before. These are people who will be much less trusting and you must direclty address the new mindset.

Another big change in the way you market and communicate with clients is that educating people is much more important.

In the bull markets of the past 30 years, when 10% annual retuns were normal, advisors were told by some "experts" that clients did not want to be educated. These experts said clients wanted you to handle all the details and would be bored any effort to try to explain strategies and educate them about what you are doing with their money. That was condescending nonsense then and it is clearly nonsense now.

In the new era we have just entered, educating clients is more more important than ever. Clients will insist on understanding every detail of what you are doing with their money.

You're going to need financial content that explains the details about your strategies to attract prospects and show your transparent style of comunication. To see what I'm talking about, take a look at four of the 17 articles Advisor Products made available for use on advisor websites and newsletters since March 1.

With the giant Wall Street firms mortally and morally wounded, now is the time for independent advisors to seize the opportunity. Merrill Lynch, Goldman Sachs, Smith Barney and the other giants of Wall Street ruined by losses on the mortgage debt crisis have demonstrated to the world that they cannot manage their own money. So why will people trust them with theirs?

Investors have been too shell-shocked to move from the brokerage giants that have always dominated delivery of personal financial services. But as the economy continues to stabilize in coming months, money will be in motion. Research shows that the vast majority of investors are planning to move their money and find new advisors. If you don't get your message out, you will miss the opportunity of your lifetime to expand your client base.

Tomorrow, Friday, March 20, at 4 p.m. EST, Jerry Lezynski, the Director of Marketing SEI Investments, which manages more than $25 billion in turnkey asset management solutions used by 6,500 independent advisors, speaks at the Financial Crisis Webinar Series about how you can market your advisory firm to make the most of the situation. Join us.

Six Marketing Ideas From A Guru

I recently called marketing genius, Harry Beckwith, to find out what he thinks advisors should be doing to respond to the terrible market drubbing.

Beckwith has authored several marketing classics, including “Selling The Invisible,” “The Invisible Touch,“ and “What Clients Love.” I’ve interviewed Beckwith before and he can be depended upon for common sense fundamentals. While brilliant, he admits that there are no cure-alls, no panaceas, no instant answers to succeeding in these tough times. But he does have sound advice for coping with the economic maelstrom.

1. Tell Your Story. Send clients articles written by third-party sources that explain there is no escaping the damage to your portfolio. “Take the opportunity to educate clients so they know there just has not been a safe asset class,” says Beckwith. “It’s all been battered.”

2. Publish. This is an important time to reinforce your status as an expert with clients. Write an article about the financial crisis for a trade publication, local business publication, or the local newspaper. Then distribute the clip to clients. Sure, you’re not a professional writer. But if you can get one article published every few months, It will enhance your credibility. Beckwith and I both agree that books by William Zinsser are the best primers written on writing. He suggests “Writing To Learn.” Beckwith also recommends contacting the local journalism school to find a student who can write articles for you.

3. Note This. Beckwith says sending a personal note to clients is a smart touch. If you’re mailing statements, articles, or newsletters to client, attach a handwritten note. Adding personal touches to client communications now is important.

4. Never Eat Lunch Alone. “This is a business where you need to be face to face with people,” says Beckwith, invoking the title of a successful book. “Ultimately, people are buying you.”

5. Set Expectations. Clients don’t expect you to pull off unnatural feats. “As long as you set realistic expectations about what you can do, people will be satisfied,” says Beckwith. Don’t promise too much. But deliver what you say you will.

6. Seize The Moment. Independent advisors are in an unusually strong position to capitalize on the crisis. “The biggest brands in financial services have been sullied,” says Beckwith. To take advantage of your competitive strengths, Beckwith says advisors must emphasize the personal nature of their relationships and their personal service.

Beckwith says he remains optimistic despite all the bad economic and financial news. “This is a historic confluence of unique factors that will require more work to dig out of,” says Beckwith. “We got out of Hooverville and we’ll get out of this."

Beckwith’s most recent book, "You, Inc.", was published in 2007. He is now writing his fifth book, which is about positioning and due for release in 18 months.

Taking The Snake Oil Out Of Search Engine Services

Companies providing search engine services are often snake-oil salesmen. Making your website appear at the top of search engine rankings and effectively advertising your services on the internet is dependent on a complex formula. The complexity involved lends itself to claims to having a magic potion for success. While it would take a book or two to give you the whole story, here’s an abridged version of what advisors need to know about search engines.

1. Search engine marketing (SEM) and search engine optimization (SEO) are two different things. People who work in SEM and SEO cringe when these two terms are used interchangeably. SEM is pay-per-click marketing, like Google AdWords, the Web’s most popular SEM product. With Google AdWords, you bid on search terms (keywords) that you think people will use to find a firm like yours. When someone actually uses the terms that you placed a winning bid on in a search, your ad appears in the results of the search in the “Sponsored Links” areas at the top and right side of the results page. Coming up with the keywords that will trigger your ads on Google requires:

· time, thought, and an understanding of AdWords campaign techniques

· well-defined target clients and niches

If you want to create your own SEM campaign, read AdWords For Dummies by Howie Jacobson. I’ve interviewed Jacobson and he’s funny and personable, and his book is easy to read. (The interview will be published soon.) But just knowing Google AdWords won’t be enough to succeed. To create a successful AdWords campaign, you must first have a strategic marketing plan. You must know who your ideal clients are. That’s the tougher part of creating an SEM campaign. You can learn some basics of keyword advertising by watching Google's AdWords videos

2. Search Engine Optimization (SEO) is a constant battle that most advisors don’t want to fight. The operative word in this phrase is optimization. SEO is an effort to optimize your website to attract traffic from search engines by writing the right words on your website. Google, Yahoo! and other search engines are always scanning the Web with “bots” and use complicated and unique algorithms to rank them. The algorithms rank your site based on how frequently you keywords are repeated in your site’s copy. So an advisory firm that uses the phrase, “Florida Power & Light executives with stocks options” on its site repeatedly would have a good chance of coming up high in search results if an FP&L executive searches for advice about his stock options by using that phrase in a search. Other factors influence the optimization of your site for search engines, including:

· URL. It is itself an influential search term in search engine algorithms.

· Frames. Search engines don’t like sites with frames.

· Originality. Search engines don’t like copy duplicated on other websites.

· Change. Search engines like new content (or content that has been altered).

· Broken Links. Any broken links hurt your ranking.

· Links To You. The more sites that link to your site, the better.

The algorithms weighting the many factors used by search engines in ranking sites are secret, change periodically, and experts differ about their relative importance in influencing site optimization. But because SEO is so byzantine, the field is rife with snake oil salesmen who collect money and may not do very much., a reputable SEO company, published a ranking of SEO factors and an in-depth guide, which can help you better understand this important but complex area of internet marketing.

Advisor Products offers advisors SEO and SEM services offerings. If we host your website, you’ll find our search engine services priced fairly, and they are implemented by search engine specialists. Because of our focus on providing marketing solutions to independent advisors, we add value as domain experts when compared with other providers that do not know the financial advisory business. Moreover, with a 12-year record of integrity in serving independent advisors, you have the comfort of knowing we’re not selling you snake oil.

If you have questions about SEO or SEM for advisors, please feel free to ask me. That's what this blog is for.

Highlights Of Survey Results About Advisor Marketing And CABs

  • 27% of advisors said they don’t need a client advisory board to know what their clients want.
  • 57% of advisors believe their clients will give them referrals now despite big losses in portfolios they manage.
  • 58% of advisors say their website is fairly effective, effective or very effective in marketing to prospects, while only 38% say their website is fairly effective, effective or very effective in communicating with clients.
  • Many marketing vehicles are not being used by a majority of advisors, although the vehicles are at least fairly effective when used.

These were some of the findings of a survey we took in advance of last week’s webinar about client advisory boards. Bruce Peters, founder and CEO of CABHQ, was our featured speaker and he had plenty of material to work with from our survey.

Although 288 registrants signed up for the free session, just 43 filled out the survey. The survey was too long. We’ll keep surveys shorter in the future. Please respond to the surveys. Understanding your needs is important to us.

While the number of respondents was small, the survey results give us a good indication—albeit unscientific—about how advisors feel about issues they were questioned about. From my experience, once you have more than 35 advisors respond to a survey the overall results do not change much whether an additional 100 advisors or 1,000 respond.

I believe that the one-quarter of advisors that responded to question one by saying they don’t need a client advisory board to know what their clients want are mistaken. A formal feedback loop lets you know what your clients are thinking. Without formally asking clients what they’re thinking—through surveys, a CAB, or other means, you’re just guessing.

In question six, 57% of advisors say they believe clients will give them referrals despite large losses in their portfolios. If you are among the 43% of advisors who believe your clients will not give you referrals now, it may be worthwhile to examine why you feel this way. Could you do a better job of focusing client relationships on retirement planning, estate planning, risk management, and articulating and planning to achieve long term goals? How can you become less dependent on investment performance for referrals? Can you do a better job of educating clients about market risks?

It’s unfortunate that 43% of respondents to question eight say that establishing a client advisory board would require too much work amid the crisis. With clients in trouble, this is arguably the perfect time to set up a CAB. It would provide an opportunity to demonstrate your commitment to making your firm great even in the worst of times. CAB members are more likely to bond with you now, in difficult times, than ever. This is precisely the right time to elevate communication and show clients you care.

Answers to questions 10, 11, and 12 could be the topic of several blogs. One interesting finding is that 58% of advisors say their website is fairly effective, effective or very effective in marketing to prospects. Yet only 38% say their website is fairly effective, effective or very effective in communicating with clients. That makes sense. Advisors are not yet utilizing Web 2.0 tools available to them to facilitate client service and engagement. According to the survey, 75% of advisors say they do not provide clients with an online vault, 89% say they do not write a blog, 67% are not using online meeting software, and 67% are not providing webinars for clients. While websites have been better for marketing than for client service, the growing use of client portals, online vaults, personalized content delivery, and other Web 2.0 tools will make the Web a much more important tool for serving clients.

While face to face quarterly or annual meetings remain by far the most effective way of communicating with clients, it’s interesting that personal notes run a close second and are among the most widely utilized tools for keeping in touch with clients. We’ll dig deeper into this in future surveys to determine if handwritten notes are more effective than emails. Your feedback on the use of personal emails with clients would be welcome.

For marketing to prospects, the most widely used vehicle of those listed is a website, followed by personal notes. Both are rated as having about the same effectiveness. Interestingly, brochures, seminars, and webinars are all used by fewer than half of those who responded. The low utilization of these proven marketing vehicles is noteworthy. While the great majority of advisors are not using these marketing tools, some of them appear to be fairly effective. For instance, 52% of those surveyed do not have a brochure, yet 36% of advisors say their brochure is either fairly effective, effective or very effective. Similarly, 40% of advisors are not using email newsletters but 40% say they are either fairly effective, effective, or very effective and the results show hard-copy newsletters are rated as slightly more effective while 40% of advisors do not utilize them.

This indicates many marketing vehicles are not being used by a majority of advisors, although the vehicles are at least fairly effective when used. A minority of advisory firms are able or disciplined enough to invest time and money needed to benefit from these marketing efforts. Those that do reap the rewards.

Advisors Eschewing Conventional Wisdom

During last Friday’s webinar with guest speakers Bill Bengen and Greg Brousseau, we conducted a series of polls. The results are surprising.

Based on answers to our polls, advisors are sticking with the traditional buy-and-hold asset allocation doctrine that has dominated the profession for two decades. Advisors say they have not reduced equity allocations. But they are looking for a less dogmatic approach. Here are the results of the poll from the webinar attended by about 120 advisors.

With 74% of those polled saying they have not significantly reduced equity allocations,
the great majority of advisors have adhered to a strict buy-and-hold strategy.

Yet many advisors are questioning the most fundamental precepts of traditional portfolio management. More than a third of advisors say Modern Portfolio Theory and The Efficient Market Hypothesis are not a valid basis for managing portfolios.

While conventional wisdom has been that a buy-and-hold strategy is the best course of action for long-term investing, two-thirds of the advisors polled say it is wise to make judgments about the future direction of the market. I believe we are witnessing the beginning of the end of the traditional buy-and-hold appraoch to asset allocation. My column in next month's issue of Financial Advisor magazine provides a new approach being put forward by one of the best thinkers among institutional money managers. Please see the magazine's website after December 1 to read about a new approach that could be influential as advisors move into the era of "Post-Modern Portfolio Theory." (I've never seen this term used before. Have you?)

Just how pessimistic are advisors? The good news is that a majority (59%) of the advisors we polled believe the economy will remain in poor condition for one or two years, while only 4% believe the American economy will remain in poor shape for more than five years. However, a significant number of advisors polled (40%) said they believe poor economic conditions will plague the nation for a three- to five-year period.

73% of the advisors polled believe now is a good time to buy stocks. Market sentiment polls like this are actually reverse indicators. The optimstic sentiment could mean that too few advisors have capitulated, and that the market must drop further before hitting bottom. Finally, in what may be the most significant finding, last Friday’s poll revealed significant dissatisfaction with the industry’s membership organizations. At the suggestion of one of our guest speakers, Bill Bengen, CFP®, who is best known for his groundbreaking research into “safe” withdrawal rates for retirees, I asked advisors attending the webinar whether they have been well served during the financial crisis by the industry’s educational apparatus. The answer: 48% of the 110 advisors participating in the webinar disagreed. This means that almost half of the advisors at the session believe they’ve not been well served by the industry’s professional educational system.

I don’t understand why the membership organizations have not produced weekly programs to help financial advisors deal with one of the worst financial events in the nation's history and certainly the worst financial crisis since the advent of personal financial planning. These groups have far greater resources than I do, can reach a much larger audience, and are paid by their members to provide this kind of support. Moreover, even though I’ve been conducting these webinars for over a month now, no one from the educational arms of the major membership organizations has called me to ask how they can help, whether they can provide some expert speakers, offer continuing education credits to attendees, or just to say thank you.

I'm grateful for the many kind words of support from advisors who have attended the webinars. Your encouragement is motivating.

Thank you for placing me in a position to be able to help during this difficult time.

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