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The Gurus Speak

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What’s the biggest challenge for independent financial advisors? Is it staying compliant, finding and motivating employees, smartly using technology, or transitioning a practice? While all of those areas befuddle many of you, the single biggest bafflement for most advisors is marketing. A new Schwab Market Knowledge Tools report puts it succinctly: Despite increasing competition, many financial advisors have trouble finding time to focus on business development. According to Cerulli Associates, advisors today spend less than a fifth of their time acquiring new clients. . .the best-managed independent financial advisory practices–those that are profitable and enjoy high productivity and strong client relationships–spend approximately 2% to 3% of annual revenue on client development.

That may be a nice financial benchmark, but on what should you spend that money? The answers will vary with each advisor’s business model, and there is no single path to wisdom, but in the pages ahead we proffer marketing wisdom from a plethora of pros, and warn you of marketing foolishness.–James J. Green

Mitch Anthony: Talk About Your Journey

“The value proposition for the next decade or two is wisdom,” says Mitch Anthony, president of the Financial Life Planning Institute in Rochester, Minnesota. “Find a way to describe your personal wisdom, your experience.”

Instead of seeing yourself as a supplier of products and services, find a way to convey the “wisdom that you’ve gathered in your lifetime and in your tenure in this business.” He suggests you “get more personal,” and ask yourself why you got into this business; what you like working on; and what your joy is in helping clients. Then share your unique point of view with prospective clients.

If you can say, “‘I’ve been there,’ or ‘I’ve seen that,’” you can differentiate yourself from other planners who speak more generically. Stress “return on life” rather than return on investment. “Financial planning is becoming commoditized. The best marketing is a conversation that resonates, a dialogue that’s outstanding, distinguishable from a competitor. If you’re just advertising what you do in terms of process, and what you sell in terms of products and services, you’re one in a trillion,” he warns.

Anthony says that the typical brief introduction to clients is a common marketing mistake. “One of the big problems I see out there is the 30- to 45-second elevator speech–they all sound the same.” Instead, reconsider who you are, he suggests, and dare to be different.–Kathleen M. McBride

Joan Bloom: Have a Clear Plan

In her career within and without Fidelity, where she is senior VP at the firm’s RIA unit in charge of strategic marketing and segment management, Joan Bloom has seen both the retail and institutional sides of marketing. The best tip she says she can give: Have a clear marketing plan.

The biggest mistake advisors make, she says, is to not have one. Advisors should start their plan by determining their goals, asking what already works for them, and how they get business now, then focus their marketing efforts in those areas.

If you get most of your referrals from existing clients, run seminars and entertainment events that focus on topics that are of interest to them. People who have similar interests to your clients, including their friends, are likely to be interested in the same topics. In addition, “expand your spheres of influence” with other professionals, including estate planning attorneys or CPAs, Bloom counsels, by working with them in offering seminars, using your own expertise, and leveraging it to attract groups of people–doctors, women–whom you already serve as clients.

“You don’t have to think big” when it comes to marketing, she says, by running expensive ads or using direct mail. Instead, your marketing efforts “should be highly focused, even narrow.” Regardless of the size of your practice, she counsels, “you must always be thinking about marketing.”–James J. Green

Richard Capalbo: Specify Goals

With a long career in the securities industry, Richard Capalbo knows loads about advisor marketing. “Develop an intelligent marketing plan,” he advises, then hone it, and carry it out.

Being specific about your goals is critical to building a successful marketing plan, says Capalbo, now a principal with the Quantum Group, a Los Angeles-based consulting firm. If you want to market to high-net-worth professionals, for example, it’s not good enough to call yourself a wealth advisor. Better that you define your mission thusly: “I help one-stock multimillionaires to diversify their assets,” or

“I help Fortune 500 executives with their pension funds.”

Before you put your plan into action, you also need to decide where your business should be in three to five years. That means not only deciding on your goals, but also bolstering your credentials. “What gives you the right to tell anyone anything?” asks Capalbo. Whether you’re a CFP, CFA, or carry other designations, “go back and constantly add to your credentials,” he says. “That gives you authority.”

To have an effective marketing program, you also must make some tough decisions about your clientele. Capalbo believes that “the biggest mistake financial advisors make is they open up too many accounts. This is what they have been taught–it’s their mantra.” But “60% of your accounts do only 4% of your business,” he maintains. “I can’t figure out how any financial advisor can service more than 200 accounts or family units,” Capalbo says.–William Glasgall

Larry Chambers: Wield a Mighty Pen

Perhaps it’s no surprise that Larry Chambers is a big fan of the written word, since he’s authored some 40 books (not all under his own name) and close to 2,000 magazine articles. He believes that an advisor who becomes “a local celebrity, even on a simple topic” by writing pieces for a local newspaper or a trade magazine will reap benefits in two ways: the process of researching, writing, and editing the articles will help you focus on what you know and what you can offer clients; and the articles will continue to serve as marketing vehicles for years to come.

When interviewed for this story, for example, Chambers said he had just attracted a new client for his Credibility Marketing program who had read a book Chambers had written six years ago. Appearing on radio and television might be good for an advisor, but Chambers points out that unlike most broadcast media, the written word lives on in many databases that are just a Google away from a prospective client who may be searching for an expert in a specific area.

As for marketing mistakes, the biggest one, he says, “is to do nothing” and think that the flow of passive referrals common in the go-go 1990s will return. “You have to have a proactive marketing process,” he counsels, and you have to be persistent if you want to be recognized as an expert.–James J. Green

Andrew Gluck: Devote a Day Each Quarter

Andrew Gluck, an Investment Advisor editor-at-large and CEO of Westbury, New York-based Advisor Products Inc., says that your No. 1 task is modest yet all-important: Spend one day each quarter on marketing strategy. “Marketing is a lot like dieting or staying in shape,” says Gluck. “You have to work at it.”

At that strategic retreat, create and execute your marketing plan. Gluck, whose firm works with advisors to create client newsletters, brochures, Web sites, and marketing copy, suggests you cover these topics:

Create a dedicated marketing budget. Then spend it.

Pick a niche and focus your effort there.

Rewrite your brochure copy at least once a year. Do the first draft yourself, but then hand it over to a professional.

Find a newsletter vendor.

Learn how to send e-mail newsletters.

Learn how to use your Web site provider’s back office, which lets you control your site.

Plan your Web site; creating an effective site takes planning.

Gluck says the biggest mistake advisors make is to fail to put together a marketing plan. Industry surveys suggest that only a third of advisors have such a plan, and at one meeting of broker/dealer reps Gluck recently addressed, only 10% of the attendees answered affirmatively when asked if they have a marketing program. Without a marketing plan, Gluck says, “they don’t have an identity–they have no brand.”–William Glasgall

Susan Hirshman: Reel Them In During the Summer

Do you deliberately stop marketing in the summer because you feel that prospective clients are so involved in holiday-making that they are just not interested in weighty financial matters? That’s a big mistake, says Susan Hirshman, wealth strategist at J. P. Morgan Funds in New York. “Don’t forget marketing in the summer,” when people are on vacation and making plans for the rest of the year. “They’re at their most relaxed–what better time is there to talk with them?”

One way to get prospective clients’ attention is to “unleash the power of your book” of business, she says. You could host an outing where clients bring qualified friends. This can be something “as typical as golf or fly fishing, or more esoteric,” such as an evening of “face and wealth preservation” to which one advisor invited a select group of clients, their friends, and a plastic surgeon.

Advisors need to think about “who can give you access to other people you want to get in front of,” according to Hirshman. A gathering of birds-of-a-feather could be an effective way for your clients to refer their colleagues. You would invite a group of clients, say, doctors, and ask them each to bring a colleague to the occasion. A variation of this is to host a networking event where clients in different professions could meet and potentially do business together. The key is that they all are asked to bring a qualified colleague or friend to the gathering.

Hirshman says the biggest marketing mistake she sees is when advisors don’t follow up after an event. “I can’t tell you the number of times I have asked, ‘How was your event?’ and the advisor says, ‘The event was fine, but nobody called me,’” she says. “You have to make the calls.”–Kathleen M. McBride

Derrick Kinney: Know Thyself

Based in Arlington, Texas, Derrick Kinney keeps busy both as an American Express financial advisor and running Palladium Media Consulting, where he helps advisors master the skills they need to use the media to their own advantage. He says the most important marketing tool available to advisors is self-knowledge.

“You have to find your strengths and concentrate on them,” he says. “The biggest mistake an advisor can make is to try and be all things to all people. It’s like going to a doctor that’s a general practitioner rather than a specialist.”

By specializing in a particular area and type of client, Kinney notes that advisors will increase their chances of success because they will be able to better refine the services they offer their clients. At the same time, they will be able to replicate that success by continually attracting similar clients.–Robert F. Keane

Steve Moeller: Forge Strategic Alliances

Don’t waste your time on mass mailings, advises Steve Moeller, president of American Business Visions in Tustin, California, and an Investment Advisor columnist. Instead, says Moeller, build strong ties to other professionals with clients or associates you can serve. Doing so, he says, will “fundamentally change” your advisory business.

Moeller reels off a list of professionals worth hooking up with: Attorneys, business brokers, corporate human resources directors, property and casualty insurance agents, and life coaches. He is especially fond of divorce lawyers, as well as investment bankers who help entrepreneurs sell their businesses. Both, he notes, may have no idea how to deal with the personal financial issues their clients are facing in selling a business or handling a divorce settlement. While Moeller thinks CPAs can also be a lucrative source of referrals, he warns that the mindset of many accountants can work against a relationship. “Accountants are pessimists by nature,” Moeller observes. “They’re cautious and compliance-oriented. They tend to look at what’s the worst thing that could happen.”

In partnering with other professionals, Moeller advises promoting the idea that “you can add value for the client and have a more robust offering on both fronts.” But he cautions against coming off as a product salesperson. “Be the type of advisor they would feel comfortable referring people to,” he says. “Take a thoughtful, consultative approach.”

As for direct mail, Moeller says advisors’ No. 1 mistake is to listen to so-called experts who say you have to send out a lot of it to make it work. He notes that “whatever response you get to your first mailing will drop by half the second time around, and by half again the third.”–William Glasgall

Steve Moore: Enlist Your Clients

Many planners tailor their marketing message to new clients, but Steve Moore, a former coach with the Seattle Seahawks and Buffalo Bills who now coaches financial advisors working with Russell Investment Group, says he has a more effective strategy. “Start with your existing clients,” he says. “Your No. 1 sales force is your existing clients, but they don’t know that.”

Before you can turn current clients into your best salespeople, however, you need to arm them with what Moore calls “the sound bite”–a catchy phrase a presumably satisfied client can use when talking about you to his or her friends. So you’re not just “my investment advisor” or “my financial planner.” You’re “the most recognized retirement specialist in New Orleans,” as Moore calls one advisor he has counseled. That becomes your tag line–something that clients will be proud to pass on.

To turn clients into fans, as well as improve your advisory relationships, Moore recommends that you meet with them to “do a fact-finder in a deeper and more holistic way than you’ve ever done before.” Then take your findings, plug them into your financial planning software, and use the results “to gain additional insights into your clients’ needs” and show “what we’re going to do for you over the next couple of years.”

Moore is also a big fan of holding intimate client appreciation events, rather than public forums, to spread the word. If you’re into golf or fly fishing, he suggests, invite a like-minded client and a friend or two to join you for an outing. Be sure to bring your digital camera along so you can do some “soft follow-up” afterward. E-mail some snapshots or a short movie clip of the group at play. A week later, follow up again.

Moore thinks advisors’ biggest mistake is not spending enough time to “create a service model they can talk about and that can differentiate them.” Without that distinguishing feature, he adds, you give your clients little reason to brag about you to their buddies.–William Glasgall

Lou Stanasolovich: Finding Success Outside the Box

Ask Lou Stanasolovich to list his planning firm’s top marketing strategies, and he’ll tick off the Internet, winning awards, being quoted in the media, publishing articles, and even private-labeling bottled water to be distributed at charity golf tournaments. Privately labeled water isn’t exactly a traditional marketing move, and that’s the idea: Thinking out of the box is a cornerstone of effective marketing, and Stanasolovich says it has worked well in spreading the word about Pittsburgh-based Legend Financial Advisors.

Stanasolovich says Legend gets its biggest clients from the firm’s Web site,, which sees 1,000 new visitors per month. Of those visitors, three to six “are willing to talk to us,” Stanasolovich says, and one or two of them “are good prospective clients.” In the last two years, “we’ve gotten more clients from outside the Pittsburgh area.”

Winning accolades from publications is also a great PR tool, Stanasolovich says. Legend has been named one of the top 100 fastest growing businesses in Pittsburgh, while Stanasolovich has made Worth magazine’s list of the top financial advisors in the country numerous times. He’s also been listed as one of the nation’s top advisors in trade magazines like Medical Economics, which bodes well for Legend since 40% of its clients are doctors.

Besides being quoted in various media outlets, another must-do marketing rule is writing articles, Stanasolovich says. During the second half of this year, Legend employees plan to devote more time to writing articles for various Web sites, “which will attract more traffic to our site,” Stanasolovich says. But one marketing venue that Legend avoids is seminars. “We’ve never been real good at seminars. Our clientele tends to have $1 million and over, so we’ve never had good turnout,” he adds says. Seminars are “more of a mid-market strategy, not a high-end” one.–Melanie Waddell

Dan Sullivan: Consider the R-Factor and DOS

The next time you chat with prospective clients, listen to yourself. Are you asking questions rather than making statements? Dan Sullivan, president of The Strategic Coach and founder of the Strategic Coach Program, says that asking the right questions is key to your success. The Toronto-based Sullivan suggests that you ask the “R-Factor Question”–the R stands for “relationship.” The question goes like this: “Let’s imagine we were meeting three years from today and looking back over the past three years. What has to have happened over that period of time, personally and professionally, for you to be happy with your progress?”

The client either answers the question or doesn’t. Someone who doesn’t answer–Sullivan says that 5% won’t–want information, but not a relationship. Those who do answer are open to the prospect of a relationship with you. Next, ask them about their dangers, opportunities, and strengths–”their DOS.” Specifically ask what dangers they want to eliminate, opportunities they want to capture, and strengths they want to maximize over the next three years. “Each of these categories is related to a particular emotion: Dangers are related to fear, opportunities are related to excitement, and strengths are related to confidence. Our theory is that people operate on a day-to-day basis on those three emotions. By asking these questions and very specifically narrowing it to the DOS categories, you get people to operate on an emotional basis rather than on an intellectual basis.” By starting out this way, you immediately differentiate yourself from everyone else.

Sullivan says the biggest mistake he sees is when advisors think that prospective clients are interested in products, financial companies, and advisors themselves. “Consumers are not interested in that. Stop talking about yourself and ask about them.”– Kathleen M. McBride

Michelle Swenson: Focus on Referrals and Passion

“If an advisor’s not doing anything at all to build business, what’s the very first thing they should concentrate on?” asks Schwab Institutional Senior VP Michelle Swenson. “Getting referrals.” The data backs up her contention, she says. “The best-managed firms get about 50% of their business from referrals from existing clients–it’s the most efficient, most effective method, too, since you’re already going to be meeting with these people, and existing clients are more likely to have a sense of what you offer as an advisor.” Then how do you go about getting those referrals? Ask your clients, she suggests, and you won’t be disappointed. Swenson cites a survey that Schwab conducted with a partner of 6,000 high-net-worth clients who already had an advisor. It found that 70% were “completely comfortable” referring friends and family to their advisor, and another 20% were “somewhat comfortable.” Swenson points out that “you do have to be sensitive to your audience. A lot of clients are flattered and perfectly happy being asked, but they expect the advisor to ask–they’re not going to bring it up themselves.” Swenson says Schwab has been holding seminars around the country with a consultant who teaches advisors how to ask for referrals, and says it will expand those seminars. As for marketing missteps, Swenson says that “the biggest opportunity for wasted resources is assuming that the corporate model–a lot of beautiful brochures and spending a lot of money on advertising–makes sense for an investment advisory firm.”

When asked which of the many firms Schwab Institutional works with are most successful at marketing themselves, Swenson says simply, “It’s when one of the principals makes this a passion,” and is willing to “spend time and money” on marketing and business development.–James J. Green

Marie Swift: Take It to the Web, and More

Marie Swift, who serves as a marketing communications coach to independent financial planners through her firm, Impact Communications, in Leawood, Kansas, says that advisors should be taking full advantage of their Web sites. She points out that in today’s market, a Web site is like the Yellow Pages ad of the past–that you have one is just a given. “If you don’t have a Yellow Pages ad and a good Web site, you may be discounted as a provider of advice,” she cautions.

“But building the Web site in and of itself is not enough,” she points out. “You need to make sure that you’re promoting the Web site much like you promote your business. Everything should be branded with your Web site address–stationery, business cards, pens, flyers, ads, and doing some targeted direct mail to your house list or a list that you would purchase, and then sending out some targeted post cards or targeted e-mail communications to those people to drive them back to your Web site.”

Swift stresses that a good Web site or any single item in your marketing arsenal is unlikely to produce the desired results alone. “It’s building a relationship over time that matters,” she notes. “You can support that relationship-building function with postcards and e-mails and letters and seminars, but you need to have multiple things at work at all times, and not expect any one portion of your marketing portfolio to produce stellar results. It all works together over time, just like investing over the long term works for the advisor’s clients.”

She cites as an example an advisor who spent almost her entire marketing budget on a direct-mail list and the rest on a single postcard mailing to the names it contained. “This woman was flabbergasted that the volume of postcards she sent out didn’t produce one phone call,” says Swift. “Any kind of e-mail or direct mail campaign is going to take multiple impressions over the course of the year.”–Robert F. Keane

Lewis Walker: Use Your Right Brain

To do well in developing client relationships, think with the right half of your brain, says Lewis Walker, president of Walker Capital Management in Norcross, Georgia. He says people are moving away from left-brain quantitative thinking to right-brain creative thinking. “When advisors move into this right-brain world and talk to the client in a way that’s meaningful to them, it sets you apart from other advisors. I know that it’s working when they say, ‘Gosh, nobody’s ever asked me that question before.’”

Walker asks clients about their past, present, and future. “Suddenly they say, ‘Gee, this is different because when I went somewhere else, right away they started looking at my statements trying to see how much money I have. This guy isn’t even looking at that yet. He’s talking about me and us and our family and our fears and our goals.’”

Walker is a graduate of Dan Sullivan’s “The Strategic Coach” program and recalls that Sullivan urged him to think about what his unique ability is, and to trademark it. Walker did just that, trademarking himself in 1994 as “The Investment Coach.” Under his trademark, Walker writes weekly columns for four community newspapers in affluent neighborhoods around Atlanta. The columns are all generic. “I never talk about investment products. Some columns have nothing to do–on the surface–with money. I write about all sorts of stuff, but none is technical.” He says that appearing in print is great public relations, and that PR “is probably the most underused marketing program out there.”

Emphasizing the old adage, “Let’s talk about the money,” is the biggest mistake he sees, and he’s no big seminar fan, either. He gets two or three invitations a week to lunch or dinner from local financial firms and their events sound and look the same–how to fund your 401(k) or roll it over. “I’ve heard from people that they have to send out more and more [invitations] to get fewer and fewer responses. It’s a very expensive way to do business,” Walker says.–Kathleen M. McBride