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Financial Planning > Behavioral Finance

Editor's Letter: Tectonic Shift

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I am sure that I am not alone in thinking that we are now living in a time of historic transformation. I adduce this from the recent shift from billions to trillions as the new economic benchmark, and the heightened geopolitical risk in an age of renewed nuclear competition, among other factors. Opinionated as I am, I have decided to forgo the temptation to offer my thoughts on the shape of things to come and instead focus on the most practical day-to-day concerns of financial advisors.

The world of the financial advisor is clearly in a period of very rapid change. I have met with a great many advisors at conferences across the country and I have never observed greater concern about the business or uncertainty as to how to proceed. It already seems clear that Wall Street lacks the respect it once commanded (and deservedly so), that the best and the brightest will be attracted to other professions and that the public trust in financial professionals has been badly damaged.

Such circumstances demand active steps on the part of financial advisors to build and defend their business. Amid all the current gloom, I recall a broker-dealer conference I attended amid the prosperity of the early part of this decade. When an executive announced the firm’s top producers, it turned out that one of those recognized was seated right next to me. He seemed like such a humble guy — frankly, no superficial characteristics tagged him as the sort of person who managed hundreds of millions of dollars of client assets. In fact, the place he came from was one of the least centrally located cities in the country; it was not a place of wealth, nor very populated.

I asked this man how he built such a lucrative business in such seemingly inauspicious circumstances. Almost embarrassed by his good fortune, he stated his answer in a single word: “marketing.” He said he wasn’t smarter than other brokers and he didn’t have different or superior products, but — with another twitch of embarrassment — he said he “owned” his market because very few advisors were engaged in serious marketing. You can be sure that is even more the case today when people’s instinctive reaction to a tough economy is to scale back spending.

This month’s cover story (“What Do Prospects Find When They Google You?”) is therefore devoted to the subject of marketing, particularly in today’s key battleground online. Now more than ever, it is a survival imperative to actively make your mark in that marketplace.

In his new book, “The Professional’s Guide to Financial Services Marketing” (reviewed in this issue), online marketing expert Jay Nagdeman of Suasion Resources cites a corporate memo from Western Union. Written in 1876, it states: “This ‘telephone’ has no inherent value — it cannot be seriously considered as a means of communication.”

Like Western Union, your actions or inactivity today telegraph your place in tomorrow’s less roomy marketplace for financial advisors.

Gil Weinreich


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