Obtaining Referrals is a Process, not an Event

A recent article I read, "Don't Make These Mistakes With Centers of Influence" (e.g., attorneys), is worth your attention.   It covers key mistakes often made by advisors when attempting to obtain referrals from centers of influence (COI's). 

One of the experts said that advisors should help the COI first.  I've seen this successfully done by advisors with a free analysis of the COI's own investment program.  This shows them exactly what you can do for their clients. 

Click here to find out about a free trial for an analytical and reporting system which can enable you to provide a free analysis to your COIs, and for your prospects and clients. 
 

Read article

4 Reasons to Fire a Client

 Recently on our Financial Advisor Network (FAN) group's Discussion Board, we had a member reluctant take on a new client.  This prospect was in prison for the rest of his life, for doing some awful things to multiple victims (the advisor was approached by the convict's attorney.)  This got me thinking about four reasons, I learned from experience, to fire a client or say no to a prospect.

Reason # 1.  "You expect what of me?!" - Someone asked if I could manage money for his client.  But after I asked a few questions about his client's investment expectations (impossible) I said "no."  It isn't easy turning away a client, but I knew that he would fire us because we (no one) could live up to his expectations.

Reason #2. "You're a time killer" - The 80/20 rule (20% of clients creating 80% of income) seems to have an opposite rule on time spent servicing clients (20% of clients taking up 80% of your time.)  Rarely are the former 20% clients the same same as the latter 20%.   Questions and experience can uncover these time killers. 

Reason #3. "Don't make me hurt you" - Some clients are adversarial.  At a former firm, we had a VERY difficult client threatened to sue us (meritless) unless we lowered our fees.  We fired this client, with glee.  Such clients not only hurt the work we provide them, but also affect our work with our other clients.

Reason #4. "You're unprofitable at any speed" - Of course, the income we derive from each client must at least cover our costs, including the cost of our time and that of our staff.  Even "low maintenance" clients have fixed and variable costs (direct and allocated.)  "Loss leaders" are OK, if they lead to profitable clients.

 

 

 New content on FANResources.com

 

Our Financial Advisor Network (FAN) group's FANResources.com website is updated weekly.  Here is a review of this week's updates.

• 5 new 1-min. videos on better LinkedIn connections. 
• 5 new advisor articles, to help you grow your business.
• A new advisor resource, for established advisors looking for a new B/D or RIA firm. 

 Keep checking our website for fresh ideas.


 Closing Tip

Your LinkedIn profile shouldn't be your resume.

Many LinkedIn profiles of professionals look more like a resume for a new job, than information on why a prospective client should use you.  Replace words like "grew my AUM from x to y" with "I help my clients...

 

Advisor Investment Challenges & Modern Portfolio Theory

 Today's fluctuating markets, nervous investors and growing alternative investments require advisors to use analytical tools to understand investment relationships and the optimality of efficient portfolios.  This article, written by AdvisoryWorld, helps advisors through the understanding of the four key tenants of Modern Portfolio theory.

One of the many things I like about this article is how the creation of appropriate client investment solutions is as much art as it is a science. I also like the warning we must heed, that making investment decisions without a sound methodology and scientific basis can result in unexpected and unnecessary liability.  Read article

AdvisoryWorld helps financial advisors analyze and present compelling portfolio models to their clients. 



 FANResources.com is live!

 The Financial Advisor Network (FAN) group now has a valuable resource for advisors, our FANResources.com website. Check us out now!

• Recorded FAN webinars
• Quick idea videos
• FAN blog 
• Select articles
• Resources for advisors  

 Our website is updated weekly - check in for fresh ideas.


 My Week at NYSE

I spent a highly educational, interesting and fun week at the New York Stock Exchange recently, as a guest of the Greico Wall Street Academy.  I will share my experiences in this program, here and in future FAN newsletters.

The Wall Street Academy

 

This program's goal is to enable advisors to master their craft by having the knowledge necessary to deal with very high net worth multi-million dollar clients. We participated in numerous sessions to accomplish this, including acquiring an expertise of the global financial markets, economics, and the information that moves the markets and their effect on client portfolios.

On the floor of the NYSE
This program included a visited to the floor of the New York Stock Exchange.  We talked with traders and I probably was in the background of one or more broadcasts.  Oh yeah, the security was pretty intense - full background check.

email me for more on the Wall Street Academy

 

 

 

 Do you help your community?

Three reasons to volunteer 

We had a recent program for ten of our FAN members who are extensively involved with volunteer work in their communities. Here are 3 reasons they are involved in their communities.

1. Our communities need the help. And many FAN members feel such volunteer work is their duty.

2. It makes us feel good. The more we help, the better we feel about ourselves and the better we present ourselves.

3. Results in new business. Not the main reason we get involved, but it occurs naturally, through networking.

Quick FAN survey on your community involvement

Financial Advisor Network (FAN) Newsletter

 

FANResources.com has gone live!

To further help our FAN members, and other financial advisors, our FANResources website has just gone live.  Our website has a large amount of valuable information, to help financial advisors have more successful advisory businesses. Go to FANResources.com

Review of FANResources pages:
 Advisor Resources - We will list different resources that have been valuable for many of our members, with links for additional information on each of them.
 FAN webinars - These are tighter videos of FAN webinars that have been well received by our members in the past.

 FAN videos - These are groups of one-minute videos, following a central advisor business-building theme for each group.

 FAN blogs - Our FAN newsletters, with valuable information for our members, like this review of our FANResources website.

 Advisor articles - Both advisor- and non-advisor-related articles about different topics beneficial to our members and the growing of their advisory businesses.

 and more - We provide multiple opportunities for our members to ask questions and give us ideas on future content for them.  Go to FANResources.com

Doing good with community volunteering - Part 1 

Many FAN members helping others and themselves

We had a recent program for ten of our FAN members who are extensively involved with volunteer work in their communities. This summer we'll be doing a study of how involved our members are involved in their communities. In the meantime, Here are some observations about the benefits of such community service for advisors:

1. Help our communities be better places for its people. In short, our local, state and Federal governments cannot take care of all the needs of its people. In fact, many services are better handled by non governmental organizations. Many feel such volunteer work is their duty.

2. The psychic reward we obtain by helping others. Pretty self explanatory for anyone who is involved in their community. The more we help, the better we feel about ourselves. The better we feel about ourselves, the better others, including prospects, feel about us.

3. Becoming a seamless part of an advisor's business. The best advisory businesses are built through being an integral part of the community. Elite advisors obtain most of their business through this networking, and community volunteering is a great way to enhance one's networking efforts. After awhile, advisors find that their volunteer work becomes seamlessly integrated with their personal and business lives.

Coming up in Part 2 of this series - types of volunteer work, and expectations for effort required.

Join FAN's sub-groups

In addition to the Financial Advisor Network (FAN) group on LinkedIn, we have four sub-groups you also should consider joining.  These sub-groups enable the members to share ideas with other advisors who are similar to them.  Like with FAN, candidates for these sub-groups are reviewed to make sure they are right for the requested sub-group.
RIA advisor group - For FAN members who are with an independent registered investment advisory firm.  To join RIA sub-group
Independent B/D group - For FAN members who use an independent broker dealer. To join Indep. B/D sub-group.

Wirehouse group - For FAN members at the traditional wirehouse B/Ds. To join Wirehouse sub-group.
Christian Advisor group - For all FAN members who wish to belong to a sub-group for advisors who view themselves as offering a Christian-based advisory service. To join Christian Advisor sub-group. 

5-21-2013 FAN Newsletter

1. FAN members affected by OK tornadoes         3. Best Practices Corner

2. FAN 1-Minute Video Series                  4. Special FAN Member Benefit

 

1. FAN Members Affected by Oklahoma Tornadoes

FAN has at least a dozen members living or working in the area devastated by the yesterday's tornadoes in the Oklahoma City area.  Our thoughts and hopes go out to them and everyone else in that area.  

These tornadoes is a sad reminder of the need to have contingency plans for our advisory businesses and with our loved ones.  

  + Backed up information on the cloud or at a far away site 

  + Arrangements for the forwarding of phone lines, even if to another advisor's office again, at a far away site

  + Arrangements with family members to meet at a predetermined location, with a secondary location if a disaster strikes. 

  + Offer digital document copying and cloud-based storage for clients 

 

2. FAN's 1-Minute Video Series   

Here are the links for one of our weekly series of videos, all focusing on how advisors present themselves:

FAN - Advisor Dangers of Social Media
FAN - "Listener" as an advisor's brand
FAN - Advisor Business through Leadership
FAN - The Office Advisors Keep
FAN - Advisors are What They Wear

3. Best Practices Corner - Member Discussions

Our discussion board  always has great conversations related to advisor best practices ideas.  Each newsletter, will expand on one of these discussions.

Think Like a Digital CFP - Part 1 - One of our members posted a great article on how to grow their advisory business faster, by better using technology and social media to obtain and service their clients.  I like how this article gives you some great ideas, instead of just being conceptual. 
 To Think...Like a Digital CFP - Part 1.

 4. Special FAN Member Benefit

Free White Paper: The Enduring Case for High Yield Bonds

Researched and written by TIAA-CREF, to answer the question, "are high-yield bonds worth the additional risk at today's high prices and record-low yields?"  Link for free white paper

This white paper has interesting analysis and conclusions about how high-yield bonds can provide attractive risk-adjusted returns and help diversify risk in fixed income portfolios. Some of their conclusions about a long-term allocation to high yield through changing markets:

 • Higher income that drives long-term returns, potentially outweighing bond price fluctuations

 • Lower sensitivity to rising interest rates than Treasuries and high-grade bonds

 • Enhanced diversification to help manage portfolio risk, based on low correlations to Treasury and high-grade bonds

 (Many FAN members don't know that TIAA-CREF has mutual funds for clients of financial advisors.)

(Commentary about the above white paper is by FAN and not TIAA-CREF)

FAN Newsletter - April 18, 2013

Contents of our 4-18-2013 FAN Newsletter

1. FAN's Daily Video Series         3. Best Practices Corner

2. FAN Webinar Series                  4. Special FAN Member Benefits

1. FAN's Daily Video Series   

FAN's daily one-minute video series was created because of the feedback we received from our members.  We all need ideas on how to grow our investment advisory businesses, but we don't have too much time to read the ideas and implement them.  This is why our daily videos are about one-minute long, with each one taking less than 15 minutes to receive some benefit from (some require no follow-up work.)  Here are the links for this week's videos, all focusing on LinkedIn:

FAN - Updating LinkedIn Profiles - 4-15-2013
FAN - LinkedIn Profile not a Resume for Advisors - 4-16-2013
FAN - Dreaded Compliance with LinkedIn - 4-17-2013
FAN - Connect with Your Clients on LinkedIn - 4-18-2013
FAN - Contact details on linkedin profiles - 4-19-2013

2. FAN Webinar Series 

Recording of Last Week's "Capturing the Potential" FAN Webinar - This webinar was done in partnership with CEG Worldwide.  It was a great success, with many strong ideas and strategies to help build your practice.  Please note that we have access to this recording for a limited time.  Link for recording of webinar 

Some of our members requested a copy of the slides we used in this webinar, because of all the helpful information contained in them.  Link for webinar slides

For our members who have at least $200,000 in net income, CEG offers you a free "Best Year Ever" evaluation.  This is a private one-on-one call, where you'll find out the best ways to bridge your gaps and to reach your biggest goals. Then you'll receive a personalized Best Year Ever road map, to help you implement the strategies shared during your consultation.  Link for scheduling consultation

Free Emerging Markets Webinar: on broader opportunities and declining systematic risk. April 25, at 1:00pm EDT.  Limited seating   Link to register

Alexander Muromcew, EM Equity Portfolio Manager, and Katherine Renfrew, EM Debt Portfolio Manager - both with TIAA-CREF - discuss broader investment opportunities beyond the BRIC countries and the growing importance of emerging markets as strategic portfolio allocations.

3. Best Practices Corner - Member Discussions

Our discussion board  always has great conversations related to advisor best practices ideas.  Each newsletter, will expand on one of these discussions.

Five thoughts on asking for referrals - One of our members started a great discussion, which we are expanding upon here, about asking for referrals from clients. 

 i.  Ask, ask and ask some more - If done properly, asking for referrals doesn't cheapen your advisory business or bother your clients, quite the opposite.  Most people are flattered when they properly are asked for referrals.  If you find that rare client who doesn't like giving referrals, make a note in their file and never ask them again.  See the fifth thought if your clients ARE bothered by your referral requests.

ii.  Work hard to earn the referrals - Make sure your service and servicing is exceptional, and that you are positive and passionate.  As well, find ways to help your clients beyond your advisory work.  For example, help an unemployed client find a job, by checking with your network of people.

iii.  Create referral events and opportunities - You don't need expensive client appreciation events - though they work great - to get your clients to invite family and friends to attend.  You also don't need to give investment seminars.  Instead, provide non-investment help.  For example, you could have a weekly social media class for older clients, and their friends, who want to stay in touch with their grandchildren.  Smaller events/opportunities are better, because you aren't overwhelmed with people to follow up with.

iv. Know what to say, and practice it - The best time to ask for a referral is after a client thanks you, or when the client has a positive response to your question about whether you are helpful to them.  Then see if they have family members or friends who could benefit from working with you. See the sixth thought, for ideas on what to say.

v. Worse type of referral request, ever! - The referral request which makes clients anxious is, "who do you know...?"  You get the deer in the headlight look from them.  Their very long pause causes you to be timid the next time you ask for a referral - timid kills!  Best: specific people they know, from your various chats with the client, and LinkedIn searches. 2nd Best: types of people they know, like people at their country club - even better, people at their country club retiring in 5 years, like them.

vi. Buy a great book - Yeah, I said there were 5 thoughts, and this is thought #6 - look at it as a bonus.  Buy "Get more referrals now!" by Bill Cates,   It's cheap, a quick read and has many financial advisor examples.

 4. Special FAN Member Benefits

New Free White Paper: The Enduring Case for High Yield Bonds

Researched and written by TIAA-CREF, to answer the question, "are high-yield bonds worth the additional risk at today's high prices and record-low yields?"  Link for free white paper

This white paper has interesting analysis and conclusions about how high-yield bonds can provide attractive risk-adjusted returns and help diversify risk in fixed income portfolios. Some of their conclusions about a long-term allocation to high yield through changing markets:

 • Higher income that drives long-term returns, potentially outweighing bond price fluctuations

 • Lower sensitivity to rising interest rates than Treasuries and high-grade bonds

 • Enhanced diversification to help manage portfolio risk, based on low correlations to Treasury and high-grade bonds

 (Many FAN members don't know that TIAA-CREF has mutual funds for clients of financial advisors.)

(Commentary about the above white paper is by FAN and not TIAA-CREF)

Free Advisor Summit On Closed-End Funds, on May 22, New York, NY
FAN will be represented at this conference - for advisors using, or considering, closed-end funds.

Join other industry experts and keynote speaker Richard Bernstein who will present his “13 Investment Themes for 13.” Attendance is FREE, but there is a limit on attendees.
Register here