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Five and Five

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In today’s turbulent times we all want something we can really count on. Well, since we can always count on our fingers, let’s assign each one with a critically important idea about today’s market and a specific activity designed to yield success. With Five Things to Know and Five Things to Do readily at hand, you can focus your efforts, shepherd your time and proactively embrace the necessity of being successful on purpose.

The First Thing

The first thing to know about today’s market is that things aren’t the same as they’ve always been, and therefore your clients have never needed you more. Given all that they’ve been through in recent years — a highly volatile stock market, an extremely uncertain economic environment, rising health care costs and severely damaged retirement savings — it’s not surprising that your clients’ emotional and psychological condition is tenuous — and with good reason.

While it’s true (I believe) that the markets will eventually fully recover, that doesn’t mean it’s not “different this time.” Unlike in previous market setbacks, those most affected by the recent downturn — the baby boomers, now in their fifties and sixties — simply don’t have the time to wait for the markets to fully recover and their earning power to return to “normal.” Demographically speaking, given the time value of money and the hit to their retirement funds, for the baby boomers, recent market turbulence is a major disturbance, not simply a blip on the horizon. Therefore, it is different this time.

Many of your clients know that things are not the same and that they are in trouble, and to tell them otherwise — to pretend that everything is OK or is going to be OK one day soon — is to do them a disservice and unfairly punish them. Plus, if you’re spouting the “it’s all good” refrain, not only are you mentally and emotionally distancing yourself from your clients, but most of them will see through your posturing.

Instead, accept the fact that many clients have badly damaged financial lives, and that the best thing to do is to begin with the unvarnished truth. Once you’re fully straight with your clients, you can much more easily and effectively be there for them, and they’ll see how much they really need you now. If all or most of your clients fit into the ultra-affluent category, and perhaps have seen only modest changes in their lifestyles or economic outlooks, this advice might not apply. But if your clients are mainly among the upper middle class, those who aspire to the status of “middle-class millionaire,” then it’s time to get real with them and move forward with things as they really are.

Four More Things

The second thing to know is that client loyalty has never been more fragile than it is right now. Recent research by Russ Alan Prince shows that 81 percent of affluent investors with national firms are looking to move their accounts elsewhere. In the 32 years I’ve been in this business, one question I’ve been asked over and over again is “Who is our biggest competition?” My answer has consistently been, “Our only competition is the loss of investor confidence,” and right now that competition is gaining.

Third, with tumultuous markets and so many people upset over their losses and losing confidence, you have a great opportunity — right now — to win over ideal clients. Never forget that more Americans need quality financial advice than there are quality financial advisors available. This leads us directly to the fourth thing to know, which is that to capitalize on this opportunity, you must deliver what affluent clients need and are looking for today. To do this, you have to understand what they need and want, as well as what motivates them to look for an advisor or to change advisors. Once again, it’s not “business as usual,” which means that it’s also not sufficient to offer an outmoded value proposition, even one from 2007 or 2008.

The fifth and final thing to know right now is pretty obvious: you must act quickly. That brings us to Five Things To Do.

The To-Do List

There are five key strategies you should put your finger on to capitalize on the five things that you now know.

First, you must maintain a positive focus and stay on the offense. That means only doing things that are absolutely necessary to grow your business, such as remaining in close contact with your clients and meticulously following up on all referrals. The best way to stay focused on these priorities is to carve out the first two hours of each day to working on your business instead of in your business.

The second thing to do is focus on programs and action items that deliver immediate tangible results to your clients. To improve your core clients’ satisfaction you must stop trying to be all things to all people. Instead, segment your business and then target and reinvent yourself around the top 20 percent of your clients. Reinitiate your efforts to get to know these clients in an in-depth way with a rediscovery meeting, focusing on what motivates these clients now and what they need now.

You want both a renewed total overview as well as an in-depth understanding of these clients motivations, needs, wants and goals; review their wills, living trusts and insurance situation, that is, the critical items in their financial lives that lie outside their portfolios. In a changed world many of these extra-portfolio items are now outdated; by effectively addressing them, you provide your clients with immediate wins. While you’re at it, clean up odds and ends like old 401(k)s and uniform gift and minor accounts for kids now over 18. By simplifying your clients’ financial lives they can get focused on the long-term benefits of working with you to achieve their goals.

Third, consistently focus on the long term when meeting with clients. Letting your clients regularly engage you in a short-term reporting focus — “What has my portfolio done lately?” — is a lose-lose proposition. As you get to know your clients better, understanding what motivates them and helping them get their lives and financial houses in order, you can start changing the focus from “What happened today?” to “How can I retire the way I want in 10 years?” By simplifying your clients’ short-term situation, you can change the focus of your conversation to the long term.

The fourth thing: plan for success. Regular readers of this column know that wealth management — wherein you work with fewer but wealthier ideal clients from a targeted niche — is the winning business model for financial advisors. This means adopting a consultative process that covers the entire spectrum of these clients’ financial needs and that is oriented towards delivering them customized solutions in concert with the assistance of other experts such as estate planning attorneys and CPAs. You should build a strategic action plan targeted at the next six months, six to 18 months and greater than 18 months, with no more than three specific easy-to-state goals in each period.

Fifth and finally, spread the word. Success breeds success, so as you undertake the kinds of actions that bring immediate wins and tangible results for your clients, don’t hesitate to ask them for referrals and introductions. Once you’ve contacted a referral, offer these potential new clients a free second opinion on the state of their portfolio.

Patricia J. Abram is a senior managing principal with the coaching, research and consulting firm CEG Worldwide. Visit


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