For years, the U.S. economy was like the 2007 New England Patriots: undefeated, untarnished. How the mighty have fallen.
It’s time now for financial advisors to review their own game plans, both to buttress relationships with clients and to address franchise weaknesses.
The good news is that you are likely the most blessed group of people on Wall Street. For top-quintile advisors seeking new firms, packages can exceed 200 percent. Even as Wall Street slashes staff, solid producers are always in demand. The bad news is that you are on the frontlines of a market crisis pummeling retail and institutional investors alike.
You need to prove your worth to clients. Grab a helmet! There’s a lot you can do to restore investors’ faith in your role as a trusted advisor and to ensure that you have the flexibility to take your business in new directions.
Solid client relationships are the key to your franchise. To be sure they recognize your value:
1. Reach out to investors now.
They need your advice more than ever. Pick up the phone and send personal notes to clients explaining clearly what you are doing to protect their investments. Arrange meetings that enable you to articulate your short- and long-term plans.
2. Prospect. Investors are upset.
You are probably spending many extra hours soothing your own clients. Nonetheless, times of turmoil make for ideal opportunities for winning new clients. If you can, make time to prospect.
3. Expand your franchise: Many of your colleagues will want out just ahead of the boomer retirement bump.
Demographics point to two favorable trends. First, advisors are aging (about half are more than 50 years old), and Wall Street is not recruiting enough younger people into the game.
In tough times, many advisors are more likely to choose early retirement. Many with weak franchises will leave the industry and their book of clients to the fleet of foot. Fewer people will be chasing more assets.
Once you have opened the lines of communication with clients, you need to assess your business environment: Are you at the right firm? Do you have the right mix of clients, products, and platforms? What do you need to do to shore up your franchise and improve on it?
Your firm’s stock is down as well. But steady producers can count on more job security than anyone else on Wall Street.
Opportunities are expanding; the elite can still command top dollar.