Getting Into the Mind of Today’s Affluent

Matt Oechsli

“Not coming from an affluent background, my mother was a teacher and my father worked construction. I’ve never been part of the country club scene,” explained Harry, then asked “How do the affluent think?  Shouldn’t you have money to advise people with money?”

Harry was hitting on an issue that has troubled advisors for years; the proverbial white elephant in the room.   Many advisors are uncomfortable in affluent spheres of influence, especially when it comes to marketing their services.  Why?  Because, like Harry, most advisors come from middle class backgrounds.  Thus many advisors suffer from some form of social self-consciousness, which left unchecked will interfere with their potential growth as an advisor.

As I explained to Harry, once you have a basic understanding of today’s affluent, it’s much easier to advise them on their family’s finances.  When done well, it becomes much easier to acquire more affluent clients.  The following are three affluent truths that will help you get into the mind of today’s affluent.

It appeared that Harry had a lot going for him.  He was a true professional; he was knowledgeable and looked the part.  His challenge was giving himself permission to ply his services in affluent circles.

Combat the Fear of Missing Out

Sue BerginSue Bergin

The fear of missing out has always been a strong motivator, but its power is increasing.  Social networking exposes us to what more people are thinking and doing.  This is causing many clients to question their choices, and at times make rash decisions.

According to marketing and communications agency JWT, fear of missing out (FOMO) is the uneasy and sometimes all-consuming feeling of missing out — that peers are doing, in the know about, or in possession of more or something better than you.

The role FOMO plays in motivating clients to action should not be underestimated.  It may be behind the Monday morning call from a client inquiring about absolute return investment strategies.  The call may leave you somewhat confounded, particularly if he rejected your previous overtures towards absolute return strategies.  The client’s change of heart can probably be attributed to a cocktail party discussion.  He may remember some of the buzz phrases and maybe even some fund names, but what sticks with him the most is that “they” are in and he is not.  He doesn’t want to be left behind, perceived as out-of-touch, or miss out on a great opportunity.  The opportunity is not immediately valued on its merits, but by whether the client wants to be part of the “in” group.

Social media adds fuel to the fear of missing out fire.  As you poke around on Facebook, LinkedIn or Twitter or media message boards it is easy to get influenced by the perceived masses.

In the example above, your client may have been perfectly comfortable with his decision to ignore your recommendations for incorporating absolute return strategies when presented in March.  Now that he has heard that his friends all have a certain percentage of their portfolios in absolute return strategies, he suddenly wants to follow suit

Investments aren’t the only ways that FOMO can affect your practice.  Clients are also going to hear talk or be exposed to social networking chatter about the level of service, accessibility and transparency offered by their advisor.  If everyone else in their social circle or aspirational social circle is working with advisors who provide online access to an aggregated and consolidated view of their portfolios, your relationship is vulnerable unless you can match or beat that service.

The best way to ensure that FOMO doesn’t lead clients astray from their financial plans or their relationships with you is to stay ahead of the curve.  Keep the lines of communication open, and offer your thoughts on a wide range of investment strategies.  This way, clients will remember where they heard about investment strategies first.   From you.  They’ll remember that you had an opinion, and they simply have to reach out to you for your opinion as to whether it is in their best interests.

Becoming an Obvious Expert Beverly D. Flaxington for Brinker Capital

One of the best ways for financial advisors to generate new business is to become “known”. Known as the expert, as the advisor with insights, and as the person who has something important to say. Many investors like to work with someone they perceive as knowledgeable and well-rounded.
How best to become an obvious expert? The first important piece is to be seen and heard. This can be done through using a PR (public relations) strategy and through social media. PR includes things like being interviewed on radio and television, being written about in newspapers and periodicals, and issuing press releases or other news stories. Social media includes things like LinkedIn, Twitter and Facebook, and means engaging in online discussion and information boards to talk about your expertise.
Some advisors shy away from the media because they don’t know what to say. As a first step, think about what interesting angles you can address relative to important topics in the news. Don’t limit your thinking to just the stock and bond market movements; think about trends for retirees and/or divorcees, multi-generational issues, or any other newsworthy trend that can connect back to your process or philosophy with regard to investing or planning.
Consider some of the following to establish your credibility as the obvious expert:
(1) Radio and television interviews are “free” advertising. Read and watch different journalists and reporters. Find out what they often report on. Write an email or a note to respond to some information they’ve given and your angle on their story. Make friends with your local media. Reporters and journalists are looking for new, fresh angles all the time.
(2) If you want to put more effort into it, consider doing your own blog talk radio show. You can pay a nominal fee to get set up on one of the major networks such as Live365 or blogtalkradio. With your own show you are responsible for coming up with content for each program, but you can always leverage other relationships such as COIs (Centers of Influence) like realtors, attorneys or accountants. Having your own show means you would be the interviewer instead of the interviewee. However, it allows you to get your thoughts and ideas across to an audience each week or month, depending on the show schedule.
(3) Create audio or video recordings of any interviews you have, or just record yourself telling case stories about how you work with clients. Circulate the audio or video to the press and also post it on your website.
(4) Issue a press release about something interesting happening at your firm. This could be the launch of a new website, a new angle on your service offerings, or a new hire to your firm. Anything happening at your firm can be newsworthy. Send press releases out over many of the free services available, such as this or this
(5) Engage in social media. As you pursue relationships with the younger generation (i.e. anyone under 40 years of age), they will immediately search you out on Google or some other engine to find whatever they can about you. It’s imperative to have a presence of some kind. Have an updated LinkedIn account, follow people on Twitter or create an account, if your compliance department allows it. Have a blog if you can, or at minimum post to other’s blogs when you have a response or idea to share.
Put a focus on becoming known, being seen and staying out in the public eye.

There are many opportunities to do so. Consider the ones that are right for your practice.

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.

SOURCES:
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.

What’s Your Headline? by Beverly Flaxington @BevFlaxington

Gaining exposure through publicity, social media and PR can be very fruitful for financial advisors. In too many cases, an investor does not know how to go about finding an advisor to talk with about their investments – so they may read about someone, or see a financial expert speaking, and decide to contact them. A robust PR and publicity strategy can be a great complement to other business-building efforts.
What’s the best way for an advisor to start a campaign, or infuse an existing campaign with new energy? First, it is important to determine your budget, and decide what exactly you want to do. It is awareness building? Is it positioning yourself as the obvious expert? Is it placing yourself where potential new partners and other industry professionals will see you?
Like any marketing or business-building strategy, it is critical to know – before you do anything – what you are trying accomplish, what forums are best for what you need, and what budget you can allocate to your efforts.
The next most important thing is to understand your positioning. What do you have to say to the media? What’s your publicity platform? What’s the headline you can use that will grab the attention of the people you are targeting and reel them in to learn more about you?
There are many things an advisor can do to get broader exposure. Be sure, before you commit to anything, that you get approval from your compliance department.
Some areas to think about if you want to embark on a broader publicity campaign could be:
Identify opportunities in your local area for press. Could you write a column for a local paper (online or in print)? Could you be interviewed on the local cable station?
Find timely information in the national press and make a comment about it – this can be done on your own blog, or by writing in to a columnist or sending out a press release.
Find opportunistic places for advertising. Broad-based advertising seldom works, but running an ad in the symphony brochure, or at a local play, or for some other event can get your message to a targeted audience.
If you have the time and can do your own radio show, there are many options on Blogtalk Radio and others to have your own show. Or, if you’d prefer not to have to manage your own show, find radio stations you can contact and pitch your ideas about why you’d be a great guest.
Be sure you have an updated LinkedIn profile. Periodically post new information to keep it fresh and interesting.
Consider having a Facebook page for your business. Post interesting information about local activities, or market news.
Scan the Internet for people who are writing and blogging about topics you care about. Post comments and link back to your firm if possible.
There are many ways to get your message out there more broadly. Remember to establish what you are hoping to accomplish, how much time and money you can spend, and what you’d like to see as a result. Then pick the tactics that work best for you.
Remember, though, your headline matters. Stay consistent with your messaging and reinforce your platform points and positioning every chance you get! Repetition matters a great deal in marketing.

Financial Services Dipped In Chocolate

The UPS delivery person rings the doorbell.  I mentally inventory recent online purchases and realize with delight that it’s something unexpected.

Before I even get to the return address label, large letters grab my attention:

PERISHABLE:  ONCE OPENED, CONTENTS MAY DISAPPEAR IMMEDIATELY.

Oh good, something yummy.

Then more lettering beckons me.

INSTRUCTIONS:  CLOSE AND LOCK DOOR.  HIDE BEHIND LARGE PIECE OF FURNITURE. QUIETLY OPEN BOX.  SAVOR AND ENJOY!

I am so glad that the kids aren’t home!  I eagerly tear open to find a package of succulent chocolate covered strawberries, which I ate before even reading the gift giver’s note.

How Chocolate-Soaked Fruit Relates to Financial Services

Because Shari’s Berries delivered a memorable customer experience, it is now my top gift choice—no matter what the occasion.

Shari’s Berries is an excellent example of how packaging can convert a gift-recipient into a lifelong customer.

Packaging is anything that your client sees, feels, reads or handles.  In the financial service realm, packaging can refer to your:

–                     Office environment

–                     Website

–                     Social media presence

–                     Staff interactions

–                     On-hold messaging

–                     Marketing materials

–                     Communications

–                     Presentations

–                     Educational materials

–                     Client appreciation gifts and events

Whether the impact is more subconscious than conscious, packaging makes a difference in defining your clients’ experience.  It is one of those things that is difficult to measure, but packs a punch.  One might even go as far as to say that your packaging differentiates you from the advisor down the street even more than your expertise.

When it comes to the delivery of your services, think about your packaging. Are your written materials crisp and clean?  Do you refrain from using investment jargon?  Is your website readable and engaging?  Do you respect clients’ time as much as your own?  Are you using their preferred communication modes, (e.g., texts, e-mails, or phone calls)? Are your social media messages relevant and helpful?

The key is to take action that will evoke favorable emotions.  If you want your clients to feel secure, make sure your reception area is calm and inviting.  Guests are expected, welcomed, and greeted with green tea perhaps.  You are well prepared for meetings, anticipate their questions, and provide take-away’s that reinforce your message and reflect well on you.

Packaging can be a point of differentiation in a crowded market.  If done well, it can