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Retirement Planning > Retirement Investing

The Cure for Advisor's Block

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You’ve just been asked to compose a speech, white paper, brochure, or article, and you have limited time. Most busy professionals just dive into the task with the primary goal of getting the job done. After all, you know the subject matter inside and out. But how are you going to distill all of your background and experience into a brief, meaningful message that doesn’t sound like either a textbook or an advertisement–especially when you don’t have time to think about it?

In combat, there’s an SOP (Standard Operating Procedure) in place for every action and every condition. It provides a familiar structure that can be followed automatically. I’ve created an SOP for writing. It breaks the process down into sequential actions that lead to the result you want. Let’s take a tough topic–the Employee Retirement Income Security Act (ERISA)–to demonstrate how this process works.

Step 1: Who are you writing to?

Think of a generic, but comprehensive, description that would fit anyone in your prospective audience. What are the concerns and needs of this reader? Put yourself in their shoes. Identify why your message would be of any interest to them and how it would benefit them.

How do you speak to this specific audience in such a way that they will be able to assimilate your message? Use simple, direct language to take something that is tactical and tell it in a way to make it practical. Overused media sound bites, high-concept nouns, and industry jargon have a way of causing the reader’s mind to glaze over, unable to discern anything new in what you’re saying. Keep in mind that this is not an advertisement of proven statements touting your qualifications and accomplishments. The paradox is that it takes real intelligence to deliver a complex concept in a simple way that is so engaging that readers feels they have discovered something new. It causes them to embrace and integrate their newfound knowledge and to recognize you as the source of this good feeling.

An audience most likely to benefit and respond to a speech or article about ERISA is one comprising fiduciaries of retirement plans–business owners, officers, directors, and employees of the company, as well as the named trustees of the plan and certain advisors to the fiduciaries. These entities may not even be aware they have fiduciary responsibility, and would greatly benefit from learning how to protect themselves from any personal liability. So we would begin writing by defining a fiduciary.

Step 2: What is the main point you want this story to address?

This step involves incorporating the problem or issue you are addressing and the solution you are offering into a core message. It sets up the direction and outline for the delivery of all the evidence and explanation you will give to support your premise.

“Learning the basic elements of ERISA will enable anyone in a fiduciary position to avoid personal liability.” This core message establishes the need to (1) define what roles fall into the category of a fiduciary, (2) provide a small background of how ERISA was enacted to protect the interests of participants in employee benefit plans from rampant abuses and discriminatory practices, and (3) what you need to know and/or do to protect yourself while fulfilling your responsibility.

Step 3: Identify concerns your audience has about the topic

You need to establish why your audience should be interested in what you have to say. It has to be timely and significant enough to hold their attention. In other words, they must feel as if you are talking about or to them personally.

What is their biggest concern, problem, obstacle, or impending issue that your message answers?

Here we would explain that the duties of a fiduciary are the following: to be loyal to employees’ interests, to diversify, to keep expenses reasonable, and to monitor and review. Being a fiduciary means that you can be held personally liable for wrongful acts committed either knowingly or unknowingly, directly or indirectly, that happen to the plan for which you are a fiduciary. Approx-imately 80% of small plans (those with under $3 million) are currently in violation of ERISA regulations. As the Enron debacle has illustrated, non-compliance could leave advisors (fiduciaries) open to liability.

Step 4: Provide steps/actions to correct the problem

This is where you get to shine. Now you showcase your specialty, process, or knowledge that resolves or averts the issues outlined in Step 3. Still, this must be done in a way that is not self-serving. How? By focusing on the solutions and the ways in which they solve the problem at hand. You should also include any relevant discoveries or recent developments that the reader hasn’t likely heard yet.

Using our example, we would now list the actions a fiduciary must take to prove compliance with the appropriate section of ERISA:

1. Create an investment policy statement in writing. (Explain that you can help them do this; it is one of your services.) Every qualified plan must establish a written investment policy and the policy must be followed (ERISA Sections 402(b)(1) and 404(A)(1)(D)).

2. A fiduciary must diversify the investments of a plan so as to minimize the risk of large losses. A qualified plan’s assets must be diversified according to ERISA Section 404(a)(1)(C).

3. An outside manager can be hired to manage plan assets. This fulfills two important concerns: first, to meet the obligation under the Prudent Expert Rule; and second, to relieve the trustee of liability as a co-fiduciary for any acts of omission by the investment manager. Qualified plan investments must be made according to Prudent Person requirements in ERISA Section 404(a)(1)(B).

4. The fiduciary (trustee) must maintain an oversight obligation; therefore, adequate monitoring, evaluating, and reporting procedures must be in place to fulfill this responsibility. The performance of qualified plan investments must be monitored and reviewed. ERISA Section 405(a) provides that a fiduciary may be held personally liable to the plan for all losses. Arguably, the review should be more frequent than once every three- to five-year market cycle.

Step 5: Use an anecdote to illustrate your point

Storytelling is the age-old way we connect with others. Everybody’s got one: a compelling story that people always pay attention to because of the emotions you bring to it. It’s the unique story you tell that gives proof to your process.

People respond best to “showing” rather than “telling.” That is, if you can show your audience how the solution works through an actual experience, they are more likely to remember and relate it to their own circumstances. Telling is more of a lecture on your topic and is quickly forgotten. If you can’t think of any personal experiences, there are plenty of recent news stories to draw upon.

For example, in the retirement plan arena, one photo of a CEO in handcuffs shows a frightening story. Here we would use the story of GIW Industries, who allowed their plan participants to allocate their accounts between one of three investment options. One option, selected by most participants nearing retirement, invested 70% of assets in long-term government bonds. The court determined that this violated the diversification requirements of ERISA since investment losses were not recovered by the time participant withdrawals began to take place. In this case, the court scrutinized the fiduciary’s failure to investigate the plans’ disbursement history and future funding obligations and the risk/return characteristics of long-term bond securities, subjecting the plan to significant imprudent cash flow risks (Case 10 E.B.C. 2290 (S.D. Ga. 1989) aff’d 895 F 2d 729 (11th Cir 1990)).

Step 6: Summarize and strengthen your point

Now you bring it all together. Stand back and ask yourself, “What does all I’ve said mean to the reader?” Does it follow some logical order, reflect your beliefs and ideas, and actually deliver what you promised? If appropriate, reemphasize the importance of your message and its applicability.

Most small business people have retirement plans for their employees, but are unaware of their personal liability in this area. ERISA is more about process than results, and while you can delegate your responsibility, you still must remain vigilant and monitor your plan.

Step 7: Conclude with a call to action

These are the breadcrumbs you drop to create pathways leading back to you as the expert resource. It could simply be your contact information or an offer for a free worksheet or other handout that applies to your topic or a directive to visit your Web site for more complete information.

You could include an offer for a compliance checklist, and a referral to get the complete guide to this topic, Understanding ERISA by Ken Ziesenheim (Marketplace Books, 2002).

You should be able to use the above structure as a template for any topic you choose to write about. You don’t have to sacrifice the business you have built or any special skills that make you the best at what you do. Writing need not become your new profession, but writing is something that you find yourself doing regardless, so why not make it as effective as possible? The visibility that your writing creates should build your positive image and expert status.

Larry Chambers spent 10 years as a broker before becoming an independent coach and writer. In addition to his 30-plus investment-related books, he has helped high-profile industry spokesmen gain expert-recognition status. He can be reached through