How do you strengthen as well as preserve your practice's reputation, when your broker-dealer is having "issues"?
Everybody is having issues - virtually no one and no single firm escaped the financial tsunami that hit Wall Street in 2008. This is the year to re-build and re-affirm your relationships with clients, especially important if your broker-dealer seems to have more than its fair share of negative news.
Still, you can strengthen your relationship with clients by following these steps:
Make extra efforts to communicate with clients more intensively.
Call and meet with key clients. Explain how headlines on your firm do or do not affect your practice before clients ask. Communicate more than usual around investment needs and listen for concerns about the firm and respond accordingly.
Ensure that clients are focused on you as the investment expert, not on the firm's strengths and weaknesses.
Make it clear to clients that you bring unique advisory skills to money management. Deliver the message that you are the maestro and the firm is your orchestra by emphasizing how you crafted a customized investment program utilizing "best of breed' products and services. You can change the composition of the orchestra - products and investments - at will. Clients will then understand that you are in charge of tempo and arrangements. The firm is secondary.
Clients are more likely to remain loyal to you, no matter where you work, if they have faith in your judgment and your loyalty to them. You can deepen that sense by candidly explaining to them why you've chosen one product as opposed to another and by pointedly steering them away from firm offerings that you feel aren't right.
Some financial advisors, often neophytes, market their firms - not their own value as advisors. When they play up their firms too much, clients tend to see advisors as interchangeable employees -- not as indispensable resident entrepreneurs - and are less likely to be loyal when the firm has "issues". They're also less likely to follow "employee" advisors to new firms.
If you have taken this path it's time to upgrade your approach. You need to start calling clients and offering objective, tailored advice that showcases your talents as well as your personal interest in their welfare.
Listen to your clients
If too many are nervous about your firm, then it may be time to make a change.
Sometimes the negative headlines may be more than you can overcome. If you can't alleviate clients fears about the safety of their money or if key clients are urging you to find another firm, then it is time to consider your options.
Your clients have been witness to a nearly unprecedented string of firms going belly up (or nearly belly up), including but not limited to Bear Stearns, Lehman Brothers, Washington Mutual, AIG, and Wachovia. As the saying goes, you can't fight the tape. Sometimes even the most competent, in-charge maestro can't relieve anxieties when so many big names have gone silent.
Mark Elzweig is president of New York-based Mark Elzweig Company, an executive search consultancy that relies on cutting-edge technology to aid clients. He has worked with financial advisors and investment managers for more than two decades.