Often the biggest impact of broker-dealer conferences is usually made by financial advisors themselves. And such is the case at Raymond James Financial Services’ national conference, being held this week at Nashville’s Opryland Resort.
The home of country music was a fit place for an April 27 advisor session during which top Raymond James advisors shared their ideas about how to achieve business success.
The generous sharing of knowledge is so quintessentially American; in other cultures, secrecy is more highly valued, and guarding the secrets of success is how one maintains a competitive advantage. But American achievers, in their openness and sincere generosity, are truly the ones with the leg up, since teaching others is the surest way to secure your own knowledge.
A great example of this genre comes from Nancy Caton, who previously worked as a teacher.
She told the assembled advisors that she learned at that time that kids have different learning styles, and she used auditory, visual and tactile approaches to reaching her kindergarten class. She feels her grown-up clients retain these biases into adulthood, and so she uses lots of color in her charts, for example, and has a stash of candy in the office to attract those guided by their sense of taste.
Despite these child-friendly insights, most of Caton’s talk sounded more like it was coming from the principal than the kindergarten teacher. In a no-nonsense style, she stressed the need for sound systems of operation — for a mission statement, some basic kind of team and organizational chart — and advocated the advantages of segmenting the client base.
This means culling low-revenue clients with whom relationships are weak, and extending concierge services to A and B clients; the San Rafael, Calif.-based advisor with offices on San Francisco Bay has someone chauffer clients from the local ferry building to the office or make house calls to bring tax documents to an important client’s CPA.
Caton says that kind of service simply makes it impossible for the client to ever consider leaving.
While Caton’s clients have stuck with her, the financial crisis did adversely impact the firm’s bottom line, especially given the fee-based practice she runs.
In line with the market, income dropped 40 percent from 2007 to 2009.
This kind of financial decline is a critical test for people who run a business. Caton passed the test by determining she would maintain client service and would not risk losing staff through paycuts. She would instead cut her own pay and if necessary look into cutting bonuses and pension contributions.
Having a three-to-six month cash cushion was as helpful to her business as to clients whom she advises to do the same.
The plunging market was beyond Caton’s control, but she determined to work on areas that were within her control.
All her clients would receive 72 annual “touches” through client reviews, service calls, a weekly e-mail drip, a monthly newsletter and suchlike. One meta-touch was a “client study group” (or “group therapy” as she called it) wherein clients were invited to a session on weathering the financial storm.
Caton invited a mutual fund wholesaler to speak about the economy (and not to mention anything about products) and what actions clients might take to improve their situation.
The session was a big hit since it addressed clients’ desire to “fix” something. This led to a wave of new meetings to review and improve insurance plans, reallocate portfolios and, at year end, to harvest tax losses.
Coming out of the crisis, Caton has seen an upswing in business. She brought in a $12 million account fed up with his former advisor’s multiple broker-dealer changes and several other seven-figure accounts.
Prospecting has never been so easy, she says. So many do-it-yourselfers panicked and went to cash, and are now looking for a way back in, and someone to guide them.
What Raymond James advisors attending her talk learned is that you can’t control a crisis, but you can organize your business in preparation for such occurrences, and in so doing turn crisis into opportunity.