Financial Advisor Marketing & Technology

Marketing & Technology For Independent Financial Advisors


Archive for the ‘Practice Management’ Category

Reducing The Rate Of Client Failure

Why do some advisors annually get fired by 10% of their clients or more while other advisors consistently lose just 2% or 3%?

With the impact of the financial crisis hitting advisory firms and clients alike, the answer to this question is critical and may not be that complex.

Clients fire you because they feel disconnected from you and your firm. They leave when you lose credibility, when you fail to touch them in meaningful ways, when you fail to confront their crucial financial issues with them.

Clients don’t fire you because of investment performance. They fire you because they feel you let them down and do not provide enough value.

When a client fires you, it’s not just you who loses. They, too, often lose. Clients that fire you may hire an advisor who is not as devoted or competent. Or they may try to manage their money on their own, which may lead to failure. When a client fires you, it’s often not just you who has failed. They also fail.

What can you do about it? How can you stem your attrition rate and help more people by giving them good financial advice?

The answer doesn’t lie in a new financial product; we have enough products. The answer is not in a new market-timing strategy; we all know diversification is the wise course because no one can predict the future.

The answer is in your communication with clients. It’s in your ability to draw people out, to make it safe for them to share with you their greatest fears, and your desire to actively listen and then meet their demons head-on with reason and intelligent solutions. The way to retain clients is to be deeply engaged in ongoing financial conversation with them about their greatest fears and dreams.

So I asked one of the world’s foremost experts on crucial conversations for help—the authors of The New York Times bestseller, Crucial Conversations: Tools For Talking When The Stakes Are High. To my amazement, the authors were intrigued and have designed a way for financial advisors to better understand how to conduct crucial financial conversations with clients.

Published in 2002, Crucial Conversations, has influenced millions of business leaders. “This is a breakthrough book,” said Stephen R. Covey, author, The 7 Habits of Highly Effective People. “I found myself being deeply influenced, motivated, and even inspired.”

The authors of Crucial Conversations, Kerry Patterson, Joseph Grenny, Ron McMillan, and Al Switzler, established a consulting firm, VitalSmarts, which has developed dozens of corporate training programs for dozens of Fortune 500 companies.

David Maxfield, a respected academic, was named head of research at VitalSmarts. Maxfield has taught at Stanford University and the Marriott School of Management at Brigham Young University. He is the recipient of Motorola University’s Distinguished Teaching Award and Stanford University’s Dean’s Award for Innovative Industrial Education. Maxfield is also the author of the 2007, Influencer: The Power To Change Anything.

Maxfield has been working with me to research how well financial advisors handle crucial conversations with clients. On July 10, at what promises to be a special session, Maxfield will lead a presentation at The Financial Crisis Webinar Series in which he will teach advisors the basic skills needed to conduct crucial conversations with clients. You can reserve a place at this free webinar now by taking a 10-minute survey designed to measure financial advisors’ ability to conduct crucial conversations with clients.

The full impact of the financial crisis has not yet been felt by advisors. Investors have been paralyzed by fear. Many advisors are likely to be fired in coming months as the shock of the crisis subsides. Please take the survey and join us as we all heal the wounds of the meltdown and try to learn from it.

Password Management And Form Filling

At a recent webinar I conducted, I briefly showed attendess a program I use for password management. An advisor today emailed me a question asking me about that program.

Incidentally, if you have questions for me, please post them as comments on my blog. Don't email them to me. A lot of other advisors who read the blog regularly can probably benefit by seeing your question or may be able to answer it. I'm trying to create a community here and would genuinely appreciate your help by posting your comments and questions. About 1,000 unique visitors come to my blog every day and it would be great if you were all more visible and kept me in line.I've seen a nice increase in the last week or two in comments and appreciate that.

But back to the password management issue: The program I showed at the webinar recently is RoboForm. It's an inexpensive application that runs on your desktop. It's integrated into Internet Explorer. I've used it to store passwords for my bank account, Amazon, and dozens of other websites for about 10 years.

With RoboForm, you create one "master password" that gives you automatic access to all of your other passwords. You'd better never forget that password!

RoboForm automatically stores the URL of each log-in page—for Google, brokerage and credit card accounts, a back-up service you use, etc.

When you want to log in to a password-protected website, you can pull down a list of passwords in RoboForm. RoboForm will navigate you to the website, automatically fill in your user ID and password on the site, and log you in.

The image on the right shows you the way RoboForm is embedded in my browser. The upper left corner of the image shows you the RoboForm toolbar in my browser. When I click on the "Logins" buttons, I see a list of all password-protected websites for which I have stored log-ins in RoboForm. When I choose any of the sites on that list, RoboForm automatically navigates to the log-in page, fills in my credentials, and logs me in.

RoboForm has a number of other useful features, including:

  • Password Generator to automatically generate "strong" passwords that would be impossible for you to remember
  • Auto-fills forms for you. Insert your credit card numbers, Social Security number, phones, and other identification information one time in RoboForm and it stores it and fill it in when you come to sites requiring that information.
  • Secure note storage.

Any password or other information you store in RoboForm can be encrypted. I’ve never had a security issue.

RoboForm requires a few weeks of active use to master but you can get started using it immediately. The company also makes version that runs on a USB thumb drive, RoboForm2Go, allowing you to carry around stored passwords that are encrypted. Just plug in the USB drive and you can use your passwords on any PC and leave no trace of them behind.

I don't use this RoboForm2Go, but I trust RoboForm and can see why some advisors might find this useful. I would probably "wear a belt and suspenders" if using RoboForm2Go by running it on a USB drive that can be "killed" if lost, something like the Kanguru Defender.

A Breakthrough In Advisor-Client Communications

Do your clients know all the work you do for them? Do you sometimes wait weeks or even months for clients to send you documents, fill out forms, or provide you with answers to important questions? When a client asks you to work with his lawyer or accountant, do things fall through the cracks?

These common problems create inefficiency and can make your advisory firm look bad to clients. So Advisor Products attacked the problems and we have solved it!

To-Do Manager, a feature in the Advisor Products Personal Client Portal platform, bridges the gap between advisors and clients. Utilizing the power of the Web, To-Do Manager creates more meaningful communication between your firm and your clients to help you both get things done efficiently.

Now, To-Do Manager has been integrated with XLR8, a leading web-based CRM system, to create straight-through processing of client to-dos from your CRM system to your clients.

Whenever your firm has a task a client must handle, you can assign it to the client in the XLR8 CRM system and it is displayed as a to-do in your client’s personal financial portal. You and your client can track the to-do and comment on it until you mark it “achieved.”

For example, if you need a client to send you his will by the end of the month, you can assign that as a to-do for the client in XLR8. When you check off a box designating the task as a client to-do along with the due date, XLR8 programmatically exports the task description to the client’s personal portal. If a client has a question or comment about the to-do, the client’s response is tracked in the client’s portal and also deposited in XLR8 for your records. The entire conversation about each to-do is recorded in both the client’s portal and XLR8 because of this two-way XML integration, and each of you are notified when there’s a communication about the task.(See a one-minute video.)

Asset management fees have been slashed by the bear market while firms still have the same number of clients, making efficiency improvements mandatory. Meanwhile, the Madoff scandal and a slew of other Ponzi has required firms to be far more transparent in the way they serve clients. The To-Do Manager/XLR8 integration accomplishes both of these key goals.

Fewer items will fall through the cracks. Moreover, you are providing a way for clients to achieve near- term tasks that must be handled if they are going to accomplish long-term financial goals. And, by tracking and displaying all of the achieved To-Dos, you help each client through each task, showing them a running list of valuable service items you’re providing.

The interface of the Advisor Products Client Portal system with this XLR8 represents a breakthrough in client communications because it transforms a CRM system in to a client communication tool. While CRM systems have long been used by advisory firms to manage and track their contacts and, to a lesser extent, to track workflows and tasks assigned to staff, this integration transforms the XLR8 CRM system into a tool for managing and tracking tasks assigned to clients.

XLR8 is a customized version of Salesforce, the world’s largest CRM system, which was created by Moulton Strategic Partners (MSP) specifically for advisory firms. MSP is a consulting firm that implements many of the most popular CRM systems used by advisors. It works with many of the largest, most successful RIA firms in the nation.

Salesforce, a web-based system, is best known for its open architecture and flexible configuration tools. Just today the firm announced it was positioned in the leaders quadrant of Gartner's CRM Customer Service Contact Centers Magic Quadrant.

With XLR8, MSP leverages the power of Salesforce to provide most of the functionality advisory firms commonly need in a CRM. MSP consultants further customize the system by documenting an advisory firm’s processes into the system and then embedding those processes into XLR8.

The Advisor Products Personal Client Portals platform is the first web based, open-architecture system dedicated solely to enhancing client communications. The client portal platform provides interfaces with almost all of the leading portfolio management software systems. Integration with other CRM systems and financial planning applications are in development.

The client portal allows your advisory firm to assign other professionals To-Dos for easy collaboration with estate planning attorneys and tax accountants, and you can also enable clients to assign you to-dos. More integrations are on the way and Advisors Products will continue to improve communications between advisors and their clients.

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.

Imagine It, Then Make It Happen

It was July 3, 2003 and I just hired Sharon Hoover as my business coach.

Sharon asked me to write a note before our first coaching session.

My assignment: Explain where I wanted to be in a year.

Assume that everything worked out just the way I wanted. What did that look like? Here’s what I wrote:

It’s July 3, 2004. I wake up and work out for 75 minutes with my trainer, a blond 30-year old in a pink Danskin tank-top.

I take a cold shower.

I work in my home office from 9 till noon, writing and editing.

At noon, I have lunch with Mindy on the deck, having just completed the renovation of our kitchen, den, and my new home-office. Mindy complains that the pool will not be finished for Register for webinaranother month.

I go into the office at 1:15. I have a few phone meetings, assign stories to a staff writer, and meet with a new client. At 5:30 I leave.

The note went on for about three pages and the exercise was a real eye-opener. The old cliché, “all roads take you where you want to go when you don’t have a destination,” was true. All I had to do was articulate my goals and then I could drive my business and my life in the direction I wanted to go.

Of course, it’s never as simple as that. My wife and I ran out of money and never got the pool done. Worse still, I never hired the trainer. But I did join a gym and start working out. And I did start working less by hiring writers who could help me.

But Sharon’s advice was good. “Start with the end,” she had told me. It was the first of many lessons she would teach me over the last six years.

Let’s try it out right now.

Imagine that it’s Friday, March 6 at 4 p.m. EST, the end of another bad week. The market lost further ground, a client fired you, and you didn’t ever get to the chores you promised your spouse that you would attend to. Life’s lousy.

Then, imagine that you show up at the Financial Crisis Webinar Series and hear Sharon Hoover offer advice about some of the problems you’re facing. And next week, instead of being overwhelmed by the crisis, you start doing some simple things that you’ve always known you should but never take the time to do. Suddenly, you’re not feeling as overwhelmed. All you needed was a reminder.

Sharon isn’t a miracle worker. You probably already know many of the things she says. But she will reinforce ideas that will empower you to take control of your fate. She will help you pronounce the words out loud that explain the challenges you face and find the solutions you must implement.

Join us this Friday at 4 EST to hear Sharon Hoover speak about the most common problems advisors are now facing and solutions for managing them.

Kanye West, Passwords, And Computer Security

Work it harder, make it better,
Do it faster, makes us stronger

Kanye West, Stronger

Okay, so Kanye West probably wasn’t thinking about computer security when he wrote the song, Stronger. But that is a great song and a great way to make a point about creating "strong" passwords.

I need you right now to know how easy it is for hackers to crack you. Google "password cracker software" and you get the idea.

As an advisor, you probably store client data on your office computer network, or maybe you provide clients with access to their accounts online. Since most passwords that people create are regarded by security experts as “weak,” it would be wise to take Kanye’s advice when it comes to passwords: “Work it harder, make it better.”

An estimated 40% of passwords are guessable by cracker programs. These programs run “dictionary attacks.” They programmatically go through every word in the dictionary to guess your password.

Some cracker programs combine personal information about a target with the dictionary words. So if a hacker steals your computer or hacks your office, they may snoop around to find your date of birth, phone number, kids’ names, and other personal data. Then, they use the cracker program to guess your password by creating combinations of your personal data with the dictionary words. Such an attack can literally last days, running through many, many combinations of personal data and random words.

Some of the most common ways you might create weak passwords are when your passwords use:

· nothing—you leave the password field blank
· the words: password, passcode, admin, or guest
· words in the dictionary
· a sequential string of keyboard letters like “qwerty”
· your name or email address
· your spouse’s, child’s, or pet’s name
· your birthplace or date of birth
· your license plate number (or spouse’s)
· your phone number
· spelling your name backwards
· Social Security number
· a curse word

If any of these weak password-creation ideas sound familiar, you’re vulnerable.

What you can do is to fight back. Use techniques for creating strong passwords, and tell your clients how to create strong passwords.

To make passwords stronger, let’s turn to Kanye's big hit again.

My favorite line in that song is: Let's get lost tonight! You can be my black Kate Moss tonight.”

That random phrase can be the basis of a good password. Simply take the first letter and punctuation from every word—Lglt!YcbmbKMt—and make that your password.

In fact, that tactic–using a verse from a song, poem, famous quote or some other random phrase that is forever committed to your memory–can be the basis of a great strong password.

Strong passwords are comprised of the following:

· Capital letters and lower case
· Numbers
· Non-alphanumeric characters and punctuation (!, (, @, #, ), $, %, ^, &, or *)
· 12 to 14 characters

The best passwords appear to be a random string of numbers, letters, and special characters. But they can be a memorable phrase or based on a phrase that has meaning to you, or based loosely on the first address you lived at as a child. More examples:

· 6590160thst,FNY: 65-90 160th Street, Flushing, NY (my first address as a child)
· BOit44thPotU.S.: Barak Obama is the 44th President of the U.S.
· Mf.iWShi'912'99: My favorite period in Wall Street history is '91 to '99

Some other password tips:

· Use one password for low-security applications such as magazine subscriptions and crossword puzzles.
· Remember that email is not secure and that emailing your passwords is unwise.
· Consider using a password-generation and memory program. I use RoboForm ( and love it.

And, as Kanye would say, “Don’t act like I never told ya’.”

Improving Efficiency Of Client Intake

The first time I saw a ticket kiosk at the airport, I was indignant. “How dare they make me ticket myself,” I thought. “Next thing you know, they’ll ask me to fly the damn plane!"

Soon enough, however, I tried the self-service ticketing machine. And guess what? I loved it! Now, when I walk into an airport without a self-service kiosk, I’m indignant. How dare they make me wait on a long line just to be ticketed!

The reason I’m telling you about this is because we just added a self-service option to our client portal platform. It enables advisor clients to fill in forms that until now had to be filled in by you or your staff.

On a day when the U.S. auto industry has been pushed closer to the edge of disaster by the Senate, I am not expecting this news to get much coverage. But it is a significant step toward making client intake more efficient by using the Web, a new trend that must continue.

For more people to gain access to professional financial advice, the Web must be used to increase efficiency at advisory firms. Since clients must collect all their demographic data anyway, allowing them to fill it in on their own makes sense, and it is unlikely they will mind doing it. Just as airline passengers no longer find self-service ticketing a hassle, advisor clients will come appreciate not having to come to your office to give you this data. Doing it online is convenient, time saving, and efficient.

To create our customer-driven form-filling machine, we’ve partnered with Laser App, a leading form-filling application. When your clients fill in their data at your website, you can review it. Then, you import it into Laser App, which feeds 21,536 at about 300 brokerages, clearing firms, and other institutions.

Laser App provided us a list of 135 data fields commonly used in the forms it supports. We created an online form with those 135 fields. When a new client signs on with you, you ask him to fill in his personal data. After reviewing the data, importing directly into the Laser App’s desktop application is simple.

In addition, you can also import the data filled in by a client into a Comma-Separated Values (CSV) spreadsheet in Excel. Many CRM, financial planning, and portfolio accounting systems accept data from a CSV file, and you can thus import the personal data filled in by a client’s into these applications.

Clients no longer have come to your office to provide all this data piecemeal, and your staff will no longer spend as much time on this chore.

To learn more about our form filling tool, please view a video about our portal system and click on "Form Filling" in the index of the video.

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