More On Legal & Compliancefrom The Advisor's Professional Library
- Do’s and Don’ts of Advisory Contracts In preparation for a compliance exam, securities regulators typically will ask to see copies of an RIAs advisory agreements. An RIA must be able to produce requested contracts and the contracts must comply with applicable SEC or state rules.
- Client Commission Practices and Soft Dollars RIAs should always evaluate whether the products and services they receive from broker-dealers are appropriate. The SEC suggested that an RIAs failure to stay within the scope of the Section 28(e) safe harbor may violate the advisors fiduciary duty to clients, so RIAs must evaluate their soft dollar relationships on a regular basis to ensure they are disclosed properly and that they do not negatively impact the best execution of clients transactions.
As the years advance, some things change and some things never change.
The need for advisors to connect with prospective clients remains a business imperative from year to year. But the ability to do so has increased exponentially in today’s digital reality.
Rather than confine oneself to whoever shows up at a Kiwanis Club meeting, with all the difficulties inherent in generating quality discussions, an advisor today can develop his thoughts privately and reach a potentially unlimited audience through blogging.
“A blog lets you communicate some of your knowledge and passion; in the pre-blog days, this was impossible to create,” says Susan Weiner, an independent financial writing consultant and author of the new book Financial Blogging: How to Write Powerful Posts That Attract Clients.
“Now, [with the advent of blogs],” she tells ThinkAdvisor in a phone interview, “by the time an advisor connects with a prospect, they already know the advisor is a good fit for them.”
Incidentally, while an advisor might not necessarily know who’s reading (or passing on links to) their blog posts, there are nevertheless successful strategies for getting in touch.
“Offer some kind of incentive or special report to get readers onto your e-mail list,” says Weiner, who offers a mini e-book with investment writing tips to those who subscribe to her free e-newsletter.
While the advantages of blogging are available to advisors today, the challenges of blogging may well remain.
“Everybody wants to do it, but these people are not professional writers. That’s not what their training prepared them to do,” Weiner says. “Advisors can feel overwhelmed sitting at the computer typing a blog post.”
That’s where her book comes in, with its practical step-by-step guidance, including worksheets and checklists.
“Starting a blog can seem overwhelming," she says. "I try to take that feeling away from folks.”
Weiner, a CFA with a professional background in financial services, initially faced her own struggles with effective communication.
“I didn’t start as a good writer, so what I share in this book are some of the techniques that helped me along the way,” she says.
What’s more, before publishing her 107-page book, she tested its ideas with “real, live advisors” through a private online community “where I posted lessons and advisors posted their homework.”
Among her key findings are that, just as defining a niche is critical to building an advisory practice, so too is a niche mentality important in financial blogging.
“The most important thing is to identify who your target audience is and to write for them,” she says. “Don’t try and write for the whole world of prospects out there.”
Rather, if advisors “speak” to a narrow enough audience, your audience is “going to feel understood. You have to carry that understanding into the way that you write,” Weiner says.
Another blogging imperative missing from many blogs is a sense (on the part of the author) of “why should readers care?”
“What problem does the blog post solve for the reader? If you can identify some nagging problem and you can address it, you can [connect with] the reader,” Weiner says.
The financial writing consultant also offers ideas for those who are not strong writers:
“You can…get away with short posts by commenting on somebody else’s work," she says. "For example, if there’s an article in the newspaper that’s getting attention, you can link to it but give your spin on it. ‘Here’s what this person said in the Wall Street Journal, and here’s my take.’ It’s not as powerful as [a more developed] blog, but gives you a chance to express an opinion.”
There’s canned content — but that makes it harder for an advisor to stand out, she says. And standing out is the whole purpose of maintaining a blog — addressing the problem of differentiating the advisor from a vast army of professionals who are offering quite similar products and services.
Another approach for writing-challenged advisors:
“For folks who don’t like to write but are very articulate, they can embed a podcast on their blog or [produce] a slideshow using Slide Share, or video.” There’s also ghost-blogging.
Whatever the problem, there are solutions. One that comes up often is compliance, but Weiner says that’s not as big a deal as many imagine it to be.
“It just takes sitting down with your compliance officer and getting a sense of what’s acceptable and what’ not," she says. "If you’re going to stay away from discussing specific investments and guaranteeing returns, you have a fair amount of leeway.”
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