From the December 2004 issue of Investment Advisor • Subscribe!

Watching the Signs

Good marketing doesn't end when you sign up a client. Use annual reviews to strengthen your relationship

In our previous two articles, we discussed how to use wealth signs of affluent investors to uncover "ideal" affluent prospects and turn them into clients. This month, we'll explain how to enhance relationships by using "signposts" that will help you to tap into a client's wealth sign during the client review. To review briefly, a survey by the research firm Iconoculture found that affluent investors generally fall into one of five wealth signs called The Good Life, Artisan, Unplugged, Legacy, and Wellville.

Client reviews should be an invaluable part of your business strategy, as they are an opportunity to deepen relationships, gather incremental assets, and obtain qualified referrals. By focusing on a client's wealth sign and appealing to their unique passion points during the meeting you'll reap a number of benefits. Not only will you have a more productive discussion about their goals, you'll also be able to present investment options in a manner that is consistent with the client's interests.

Before you meet with your affluent clients, use the following "signposts" to structure the meeting and to tap into your clients' wealth signs and passion points.

Signpost No. 1: Set the Stage, Then Stick to It

A critical element in the client review is to have a detailed agenda and to stick to it. Be sure to remain focused on the client's overall objectives and avoid getting bogged down on short-term investment performance. Above all, create the right atmosphere for a successful client experience. Use these tips to properly set the stage for the appropriate wealth sign.

The Good Life. When greeting the client, tell your assistant to "hold all my calls." This will show that you feel the meeting, and the client's time, is important. Skip the ceramic mugs for this group and serve upscale coffee in china cups. Also make it a point to congratulate clients on how well they've done with getting closer to their goals.

Artisan. Make sure the agenda doesn't look too stark. Instead of holding your meeting in a formal conference room, opt for a location in the office that is more comfortable and inviting.

Unplugged. A detailed agenda will be important to this group--and make sure you stick to it. Ditch the tie before meeting with them. Let them know that you've been working hard on their portfolio (on the weekend or after hours).

Legacy. This group will be more responsive to a traditional service approach. So make sure to provide a very formal agenda and choose your conference room for your meeting site. Also, before you start the meeting make sure to spend some time asking about their family.

Wellville. Utilize a simple agenda and make sure the ambience of the meeting area is bright and stimulating. Strive for a feeling of movement in the meeting, and don't let yourself or your client feel rigid. You can accomplish this by having water or coffee set off to the side so everyone is comfortable getting up and moving around.

Signpost No. 2: Be Sure to Sketch the Journey

During the meeting, you should guide the client through the investment process, not just take her there. That's because many affluent investors view the quest to achieve their financial goals as a journey and their advisor as their scout along the way. Focus on these passion points to present the journey in a manner that will appeal to your clients.

The Good Life. Expand on their goals and infuse passion into your discussion. Get the clients even more excited about where they are going, make them feel they deserve to reach their goals, and when you find you can attain their goal sooner than you were planning, emphasize it.

Artisan. Your presentation should be well structured, visual, colorful, and engaging. More than that, however, vividly tell a story of the journey.

Unplugged. Discuss the journey in a commonsense way. Use details when appropriate, and encourage the clients to ask questions. But don't make graphs too elaborate-keep a clean, simple look. Be sure to seek out their feedback along the way.

Legacy. Ask if they have any concerns with the way the journey is proceeding. Make the discussion as personal as possible: When discussing legacy goals, use names (not "your son" but "John"). For charitable goals, explain how the charity will benefit. Stories should be forward- looking and emotive.

Wellville. Keep the journey simple but enlightening. Use language such as, "This is what we've learned."

Ask for feedback to make sure clients are comfortable with what you are presenting. Make this stage interactive--keep them involved.

Signpost No. 3: Investment Review and Presentation

A critical part of any review is the discussion of the client's investments and asset managers. Use a standardized approach when reviewing managers and focus on the same fundamentals you used to hire a manager when discussing their current status. Use these tips to guide your presentation through this process.

The Good Life. Explain that you've been very selective and have used a rigorous process to pick the right managers for them. Emphasize the exclusive access the client has gained through their investment with the managers. Be sure to share with the client any third-party accolades of the manager, and explain how your investment strategy is going to help them realize their dreams.

Artisan. When reviewing existing investments, give a visual color-coded action step for each investment. For example, Green = Stay the course; Yellow = Watch list; Red = Remove. Note what is unique about the investment approach the manager takes, and use descriptive words. Also paint a picture of how the solution is going to help them reach their goals.

Unplugged. Discuss what has gone into your evaluations of the managers (for instance, research or time) and be sure to make the investments sound logical. You must be prepared to prove the value they are getting for the fees they are paying. To do this, you may wish to have additional analytics available in an appendix for those clients who want more backup.

Legacy. Emphasize the personalized aspects of their plan and be more forward-looking by stressing the future. The presentation of investment solutions should be formal. Ask if they would like you to explain any part of the portfolio to other family members. If they have charitable goals, research the charity to give them an update on how that charity is doing and share any news on the organization.

Wellville. Emphasize the asset allocation strategy that is being used for these clients. Ask about assets outside of what you manage in order to view their assets holistically. Make sure they feel comfortable that you've got things covered so their time is freed up to do other things.

A number of studies have found that their relationship is the key criterion that affluent investors use to select and keep an advisor. You should make a conscious effort to continually enhance the relationship you have with your key clients. Take the time to understand a client's wealth sign, and use every contact as an opportunity to tap into their passion points. In doing so, you'll be able to foster deeper relationships, retain and generate additional assets, and obtain more qualified referrals.

Jackie McCarthy is vice president and marketing strategist in the wealth management program at JPMorgan Fleming Asset Management in New York. McCarthy can be reached at jackie.a.mccarthy@jpmorgan.com. Findings from the Iconoculture study are contained in a marketing kit entitled "The Culture of Wealth in America Today," which is available from JPMorgan by calling 800-218-4782.

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