The Phone that Knows You Better than You Do by Sue Bergin

Every day, the mobile device in your pocket gets just a little bit smarter.

The latest example of how mobile devices can help organize your life comes in the form of the Android app, Friday. Friday is a personal assistant and is billed as a passive automated journal of your life. It tracks all of your mobile activities, collects and indexes them, and builds your own personal “Wikipedia.”

When did you last reach out to your top clients?

Friday knows, and can even tell you how long the call lasted.

How long does it take to get from Client A’s office to Client B’s office? Friday can tell you how long it took last time you did it, and the time before that too.

Are you spreading your business throughout town enough? Friday can tell you how many times you’ve eaten at each of your four favorite eateries this month.

Friday is a passive data collector that leads to “self discovery.” Continue using your mobile device the way you’ve grown to use it, and Friday will collect a treasure trove of information about you. You might even forget your phone is spying on you … I mean, collecting data on you. But, it is. Everything you do is chronicled just in case you might want to go back and examine it at a later date.

The creepiness of this app may outweigh its usefulness, but it is important to know that the data is out there and Silicon Valley (or India in the case of this app) is rapidly finding ways to curate it for us.

Potential for ECB Action Incites Strong Rally by Joe Preisser

Emphatic declarations of support for the Continent’s common currency, issued by The President of the European Central Bank, Mario Draghi on Thursday, and echoed by German Chancellor Angela Merkel and French President Francoise Hollande on Friday served to bolster investor sentiment and ignited a strong rally across global equities. The display of solidarity in defense of the euro project from the Union’s leadership seen this week came in response to the reemergence of fears of its possible dissolution as funding costs for the Spanish government soared to dangerous heights.

Trading for the week commenced as speculation that Spain would be the next member of the currency union to require emergency funding, swept through the marketplace, putting downward pressure on share prices around the world.  A decision by Madrid to offer financial support to the country’s struggling regional governments caused concern that the additional obligations would create an unsustainable situation for the heavily indebted nation. The yield on Spanish 10 year bonds rose above the record height of 7.5% on Tuesday, while Spain’s IBEX-35 stock index sank nearly 10% over the course of three trading sessions, reflecting the depth of trepidation with which the credit and equities markets view the difficulties currently facing the government.  According to Bloomberg News, “After taking on as much as 100 billion euros of bailout loans to aid banks, the risk…is that the additional burden of helping regions pushes bond yields to unaffordable levels.”

As the nations of the European Union continue to struggle to address the soaring borrowing costs faced by several of their member states, the trepidation this has created among investors around the globe revealed itself in several of the quarterly earnings releases issued this week.  The current situation on the Continent has deeply affected markets in the eurozone, reverberated across Asia, and is now being reflected in the profitability of corporations in the United States highlighting the global implications of the current crisis.  United Parcel Service, which delivers more packages than any company in the world, and Whirlpool Corp., the globe’s largest manufacturer of appliances both saw their shares fall after reporting earnings which failed to meet expectations (Bloomberg News). In its earnings release statement, Scott Davis, the Chief Executive Officer of UPS said, “Increasing uncertainty in the United States, continuing weakness in Asia exports and the debt crisis in Europe are impacting projections of economic expansion.”  

In an effort to hold down borrowing costs and to thwart contagion, the President of the European Central Bank, Mario Draghi, stated on Thursday that steps would be taken to halt the precipitous rise in the sovereign yields of several of the most heavily indebted members of the currency union.  Mr. Draghi was quoted by Bloomberg News as saying, “within our mandate, the ECB is ready to do whatever it takes to preserve the euro.  And believe me, it will be enough.”  The marketplace found solace in this statement, as the prevalent feeling among investors currently is that a direct sovereign bond buying by the ECB will be forthcoming, thus easing a measure of the acute effects of the crisis. With unlimited capacity on its balance sheet, the Central Bank is widely considered to be the only institution on the Continent capable of successfully intervening in the debt market to drive funding costs lower.  Bloomberg News quoted Bernd Berg, a foreign-exchange strategist at Credit Suisse, “Draghi’s comments that the ECB would do everything to preserve the euro currency gave some relief to markets and lifted asset prices after renewed euro-zone collapse fears.”

A joint statement issued by German Chancellor Angela Merkel and French President Francoise Hollande that their nations are, “bound by the deepest duty”(Bloomberg News), to maintain the currency union in its current iteration served to further ease investor concerns, as it reinforced the commitment of the Continent’s two largest economies to the euro project.  With a multitude of challenges facing the global economy it will be vitally important that the leaders of the European Union follow through in short order on the pledges made this week and work to drive sovereign yields back to sustainable levels, thus restoring a measure of stability to the marketplace.

Tough Negotiators See Red By Sue Bergin

Want to best position yourself next time you are negotiating fees, haggling with the broker dealer on issuance requirements, or trying to get your client the best rate on a mortgage?  Put a quick PowerPoint slide together with your key points and put it on a blue background.  
Or grey.  
Anything but red.
Researchers from Virginia Tech and the University of Virginia recently released a study describing how colors affect consumers’ willingness to pay in purchase settings like auctions and negotiations. They found that the color red influences how much participants were willing to pay in competitive situations.
The color red has long been known to invoke feelings of aggression.  Red is an emotionally intense color that enhances metabolism, increases respiration rate, and raises blood pressure.  It is also one of the easiest colors to see, which explains why stop signs, stoplights, and fire equipment are usually painted red.
Study participants who “saw red” entered higher bid jumps in auctions and made lower offers in negotiation settings.  In both cases, they took a competitive stance.  In bidding situations, they were willing to increase bids to ensure that they “won” the item and were not outbid.
In negotiation settings, participants who gained their information on a red background also wanted to “win.”  Their initial offers were low.  For example, when participants were shown vacation packages that were displayed on a blue background and were asked to make their best offer, the average was $712.  The same package set against a red background yielded an average offer of $684.  
The researchers concluded that the red background induced greater aggression, which caused participants to implicitly compete against the seller for the best deal.
Advisors typically avoid showing their clients anything that includes the color red.  This study gives us one more reason to love blue.

Newspaper Lampshades, Designer Cartoon Strip Handbags and the Savvy Advisor by Sue Bergin

Newspaper Lampshades, Designer Cartoon Strip Handbags and the Savvy Advisor
by Sue Bergin

Why is it that old letters from a strangers’ estate sale made into wallpaper is suddenly the “in thing” in interior design? Why would anyone in her right mind walk around in a dress that is made to look like yesterday’s newspaper? Are people really turning old, used books into cell phone docking stations? And, Dooney & Bourque’s comic strip handbags? What’s up with those?

These are all examples of what marketing and communication firm JWT calls “Objectifying Objects,” when it describes one of the top 10 trends for 2012.

According to JWT, as objects are replaced by digital and virtual counterparts, people will be drawn to the physical and tactile facsimiles.

Savvy marketers are catching on to the fact that digital messages are getting lost in the atmosphere and that “objects,” like good old fashion snail-mail, may have greater impact.

According to JWT, marketers spent nearly 25% less on direct mail campaigns in the years from 2007 to 2009. In 2010-2011, the pendulum swung. Digital mail began to see single digit gains. In further proof, JWT sites that the U.S. Postal Service projects marketing mail will rise 14% by the year 2016.

The bottom line is this. A single scrawled note on handsome stationery could make an even greater impression than a steady stream of tweets. This could explain why, despite the paperless wave and skyrocketing mobile and tablet sales, U.K. retailer John Lewis reported a 79% year-over-year increase in writing paper sales in mid-2011.

The allure of the handwritten note is best summed up by the best-selling author, Neil Pasricha, in his wildly popular bog, 1,000 Awesome Things:
“(T)he biggest reason why getting something handwritten is great is because it’s just so darned rare. I mean, for most people, you’re more likely to see Halley’s Comet crash into Big Foot while he’s riding the Loch Ness Monster than to actually get a full-blown note from a friend.
So I say treasure those handwritten notes, when you get ‘em, if you get ‘em. And if you don’t, there’s a pretty easy way to start receiving them. Man, just send a couple.”



Understanding Behavioral Style in Developing New Business – Part 2 by Bev Flaxington

In Part 1 of this two-part blog on behavioral selling, we discussed how behavior style impacts communication and why it is crucial for the successful advisor, business development representative or client services person to understand this science. Now, in Part 2, we give some sales examples.

If an advisor learns how to identify her or his own behavioral style, and learns all the nuances around it, he or she can learn the styles of buyers and influencers. Then, he or she can adapt their behavioral style to increase the probability of true connection with prospects and for developing long-term relationships – even with people very different from themselves. For business development people, this leads to an increased ability to close more business with new and existing prospects and clients. For client service folks, this means the ability to manage a long-term relationship even when there’s no real “click” of personalities.

In Part 1 we described the four styles – D for Dominance, I for Influencing, S for Steadiness and C for Compliance. Everyone has a “core” style, e.g. one dominant style out of these four; having determined that your prospect or client prominently displays the characteristics of one, your objective is to communicate with him or her accordingly. Here are some characteristics of each and how you’d approach them.

“D” – Interested in new & unique services or products; very “results” focused; makes quick decisions
“I” – Interested in showy and flashy products; focused on the “experience” (is it, or does it allow for, fun!); makes quick decisions
“S” – Interested in traditional products; very trusting and is looking for trust; is slow in decision making
“C” – Interested in proven, time-tested products; needs and seeks information; is very slow in decision making

As an example of communicating based on this knowledge, we’ll take the “I”. We’ll call this client Mr. Jones. He, like other core “I”s, is effusive and upbeat – an extrovert. They have a high need to verbalize ideas and their key emotion is optimism. Their expectations of others are high and their conflict response is to run away. Their stress reliever is interaction and socializing with people. Descriptors for them include inspiring, persuasive and trusting.

To further help you determine what core style you’re dealing with, there are four communication factors that are giveaways for each of the four styles. These factors are 1) Tone of Voice, 2) Pace of Speech and Action, 3) Words Used and 4) Body Language. In our example, how can you tell you’re interacting with a core “I”? Key on the communication factors for instant clues:
• Tone of Voice – it will be energized, enthusiastic, friendly and colorful
• Pace of Speech and Action – s/he will exhibit fast speech and fast action, and be fast toward people
• Words Used – fun, excitement, immediate, now, today, new and unique
• Body Language – you’ll feel the fast pace, the fast movement and orientation toward people.

Now that you’ve identified Mr. Jones as a high “I”, you must calibrate your own natural style for communicating with him. So if you are, say, a high “C” – as many advisors are – you need to make sure that you pick up your pace a bit, smile and nod your head to show that you’re fully engaged with the high “I,” keep the focus on them and ask questions, respond to their small talk and give them as much time as possible to verbalize. For a core “C” (or “S”) advisor, this can be exhausting – but you can relax after the meeting, which will be more successful if you adapt!

By taking the time to listen, observe and ask good questions, advisors can discern the behavior style of prospects and clients – and open whole new relational opportunities in the process. Next time, we’ll discuss some of the questions you can ask to help you determine style.

Understanding Behavioral Style in Developing New Business – Part 1 by Bev Flaxington

Have you ever been taken completely by surprise by a client or prospect? Or have you ever been unable to close a sale because you just couldn’t “get through” to them? Today, investors are being bombarded by so many advisors and business development people – all trying to connect and persuade them to become clients. However, one of the most fundamental ways to connect with prospects is often overlooked by those in a selling role: understanding behavioral styles and adapting one’s communication approach to the people s/he’s trying to persuade.

You may have at one time taken a training course on relationship-building, face-to-face selling skills, or something similar, but the key to understanding the buyer’s perspective necessarily begins with an understanding of behavioral style. This is because behavioral style is the crux of understanding communication style – and true communication is the key to developing great relationships in both your personal and professional life.
So, is it really true that your likelihood of signing new clients could come down to your behavioral style? Research conducted in 1984 and validated again every year since has proven three things: 1) people buy from people with similar behavioral styles to their own, 2) people in a selling type of role tend to gravitate towards people with behavioral styles similar to their own, and 3) if people in a selling or business development type role adapt their behavioral style to that of the prospect, sales increase.

Many advisors, business development and client service personnel have excellent communication skills, but have difficulty in relationships with prospects and clients – and don’t understand why. Something just doesn’t feel right, but they’re not sure how to diagnose the problem or modify their behavior for greater success. Often times, it’s not technique (i.e. the questions asked, presentation or negotiating skills, etc.) but rather a lack of understanding of one’s own behavioral style and motivators, and of knowing that behavioral differences can cause significant communication difficulties that hamstring closing a prospect or an ongoing relationship with clients.
One scientific way to understand behavioral style is through an assessment called DISC (Dominance, Influencing, Steadiness, Compliance). Based upon the work of Carl Jung, the DISC approach was invented by William Moulton Marston, inventor of the lie detector and holder of a Harvard MBA, over 80 years ago. The statistically based profiles show a person’s preferred styles on four scales of behavior – Problems, People, Pace and Procedures:

• Dominance (“D” factor) How one handles problems and challenges
• Influence (“I” factor) How one handles people and influences others
• Steadiness (“S” factor) How one handles work environment, change and pace
• Compliance (“C” factor) How one handles rules and procedures set by others

Depending on our differences in style and approach, we can either get along very easily together (because we’re so much alike!) or we can have significant clashes in our relationship.

A person’s behavioral preferences have everything to do with their communication approach and style. People who operate with very different styles have a difficult time “hearing” one another and communicating effectively. For instance, if I communicate only within my own behavioral comfort zone, I will only be effective with people who are just like me. However, in the corporate environment we are dealing every day with colleagues, prospects, clients and management – all of whom can be very different behaviorally. Not only is communication difficult where there are differences, but often individuals become hostile and conflict-oriented toward one another. Significant time, effort and corporate money is wasted because people are unable to “get along” and work together effectively toward common corporate goals. (Refer to the Brinker blog “Dealing with Difficult Clients” for a complementary discussion of this topic.)

In the next blog, we’ll take a “deeper dive” into behavior style – how you can identify it in your prospects and use this knowledge to improve your selling effectiveness.

Your Parents’ and Children’s Annoying Communication Habits Can Help Improve Client Relationships by Sue Bergin

Do you have someone in your life that has a cell phone, but refuses to turn it on? For me, it’s my parents. It doesn’t matter if my 76-year-old father is riding his Harley Davidson through the Blue Ridge Mountains and no one has heard from him in three days. We just have to sit tight until he gets sick of camping and checks into a hotel. Then, he’ll call us. We can tell him to keep his phone on until we are blue in the face. We can buy him an unlimited calling plan for his next birthday. It isn’t going to make a difference. The phone is for emergencies only. As long as he is ok, it stays off.

Have you ever threatened to take away your daughter’s cell phone because they won’t pick up your calls? You don’t understand why she doesn’t take your calls when she knows it’s you, and she knows you want to reach her. She doesn’t understand why you have to talk to her when you can just send a text. She probably doesn’t want her friends to know she must actually talk to her parents. She definitely doesn’t want her friends to hear how she talks to her parents. She would much rather you text her. That way she can whine in private. On the contrary, you’d prefer to hear her voice so that you can better gauge the situation.

With varying degrees of aggravation, we have learned to conform to communication preferences in our personal relationships.

When it comes to your relationships with clients, however, you want to avoid communication frustration. Recognize that clients have their pet tools, and demonstrate a willingness to communicate with them according to their preferences, not yours.

Ask clients how they want their appointments confirmed. Do they want a text, e-mail or a phone call? Would they rather your newsletters and routine correspondence come in the mail to their home or office, or would they rather have them e-mailed. Would they prefer Skype sessions to face-to-face meetings? What is the best number to reach them? Are they among the 33% of American’s that have chucked their landlines in favor of cell phone service?

Keep in mind, communication frustration is a two way street. A client you’ve worked with for years could now be tossing out your newsletters, when he or she used to pour over them. It isn’t because they no longer value your insights, but rather they read their “news” online. You won’t know this until you ask about their preferences. Maybe it is during the intake process, or the annual review, or even a midsummer survey. The key is to get ahead of the issue before it becomes an issue.

Using your clients’ favored communication methods is as much of an offensive play as a defensive play. You become more efficient and eliminate some frustration in your day. You also ensure that you never unwittingly earn the label, “that annoying caller/texter/e-mailer/snail-mailer/Skyper/or Facebook messenger.”

Not Who You Think by Michael Zebrowski, Chief Operating Officer, eMoney Advisor

When asked to identify their most formidable competition, most advisors point to the advisor with the fancy office, lots of back-office support, fully integrated technology, and the book-of-business torn from the society pages. While such advisors do pose a threat, they probably are not enticing your clients so much as the computers those clients have on their desks.
The digital era has transformed the investment landscape, including the way in which clients manage their financial lives. More and more comfortable with online services for education and information, clients are intrigued by how well technology can help them organize their financial worlds, and they are migrating to direct-investment platforms, such as Fidelity Brokerage Services, LLC, The Vanguard Group, Inc., Charles Schwab & Co, and TD Ameritrade, Inc.
This trend is probably more pronounced than one might imagine:
• According to Cerulli Associates, Inc., direct-investment platforms grew from $2.6 trillion in 2008 to slightly under $3.7 trillion in 2010. This increase represents a two-year growth rate of 19%.1
• In contrast, the growth rate for the traditional channel, over the same period, was only 14%. Cerulli ranks direct-investment platforms as the second biggest distribution channel after the wire houses.2
• This direct platform growth happened organically and did so in spite of a lackluster market. In 2000 eTrade and TD Ameritrade had combined assets in the $53 billion range. In 2011 they accounted for nearly $426 billion in assets.3
Growth Drivers
There are a number of factors driving the growth of personal financial management platforms, including investments made in some key areas:
• Advertising and Marketing. With nearly $1 billion a year spent on advertising and marketing combined, self-directed investment platforms have become media darlings.4 No matter what information your clients seek on the Internet, they are likely to come across an ad or sponsored material from a personal financial management provider. The same goes for watching television, reading magazines or books, or driving on the highway. Direct-investment platform ads are everywhere. With so many dollars fed by personal financial management providers into both new and old media channels, no wonder anti-advisor headlines such as “Financial Advisors Are Biased, Study Finds”5 are on the rise.
• Education. Successful personal financial management sites have incorporated “research amenities” and robust client educational materials. When a consumer enters a certain section of the website, educational content appears. Users do not have to search for more information. It is just a click away.
• Technology. Personal financial management sites are focused solely on the consumer. Made as simple as possible, they are straightforward, intuitive, and interesting. They make trading easy and inexpensive.
• Client Service. While the sophistication of the support is debatable, one point is irrefutable: “help” is waiting in the wings 24/7. Many of the top self-service investment platforms have made enormous investments in call-center infrastructure to ensure that financial professionals are available at all times to answer customer inquiries.
The increase in personal financial management systems is a trend to watch. Clients, however, will always need financial advice. Their desire to work with a knowledgeable professional, someone who can help remove obstacles and keep them on the path to fulfilling their goals, will endure. As life gets more complicated, the need to work with a trusted financial professional will only increase.
The content above is from Michael Zebrowski of eMoney Advisor has not been produced by Brinker Capital, nor does Brinker Capital make any claims or warranties to its accuracy. Views expressed are those of Michael Zebrowski of eMoney Advisor and do not necessarily reflect those of Brinker Capital.

1 Osterland, Andrew. “Advisers blind to threat of direct investing, study shows.” Investment News.
February 21, 2012.
2 Ibid.
3 Pew Research, 2010.
4 The Nielsen Company, 2009.
5 Berlin, Loren. Huffington Post. March 27, 2012.

Accessibility Outweighs Investment Advice as Barometer of Trust by Sue Bergin

According to a recent survey, clients are more forgiving of bad investment advice from their advisor than they are of poor communication skills.

The findings were drawn from the John Hancock Trust Survey™, which polled mass affluent investors (household income of at least $100,000, investable assets of at least $200,000) in mid-April 2012.

Twenty-five percent of the survey respondents indicated that inaccessibility and unresponsiveness as the top reason for lack of trust in a financial advisor. Coming in a distant second, at 13%, was poor investment advice. The third most prevalent reason for losing trust in a financial advisor was the lack of a personalized approach.

While it is helpful to know that the quickest way to lose trust is to dodge calls, delete e-mails without responding, and ignore client text messages, it is also useful to know what you can do to build trust.

According to the survey, trust is most inspired by the following factors:

• Clear explanations of investment recommendations (54%)
• Knowledge and timeliness about products and trends (54%)
• Fee disclosure (51%)
• Responsiveness (49%)

Somewhat surprisingly, the following factors ranked relatively low in terms of the number of respondents who felt they were important in building trust in an advisor:

• Recommendation by family or friend (21%)
• User-friendly tools and calculators (16%)
• Informative website (11%)
• Community involvement (5%)

The results point to the importance of blending both expertise and communication. Clients want to work with advisors who understand and can explain sophisticated financial concepts, and who are accessible when needed and as needed.

Advisors and Their Election Concerns

If you asked 100 advisors to identify their clients biggest retirement savings concerns, and you are likely to get at least half dozen or so answers.  If you asked the same group how our nation can pull out of our current economic malaise, and one answer would drown out all others.  There must be an administrative change

In May, 442 advisors shared their thoughts and concerns about the on the impending presidential election by participating in our Brinker Barometer online survey.

70% of those surveyed indicated that four more years of an Obama Administration is their biggest concern.  Advisors were asked to rank election concerns in the fourth quarter of 2011, and only 56% at that time ranked an Obama re-election as their top concern.

Following in a distant second to the fear of a continued Obama administration is the fear of “a divided congress” at 18%.  Romney winning the election only instilled fear to 5% of the respondents, and a growing Tea Party influence made 4% squeamish.

According to the advisors surveyed, 2012 will not only be a “will the best man win” election, but a “will the best man to fix the economy” election.

When asked for the indicators that might improve Obama’s re-election potential, 63% of the respondents thought lower unemployment rates might help the most.  40% however, thought that lower unemployment rates would be of no help whatsoever.

Ninety-six percent of respondents said the candidate with the most effective plan to fix the economy would claim victory.  Four percent believed that fixing the healthcare system is the best route to Pennsylvania Avenue.

To read more about advisors thoughts on the upcoming election, along with their predictions for the Republican candidate running mate, Click here.