The economy has tanked. Your revenues-tied to assets under management-are down significantly. Employees are feeling tentative, clients are scared, and you now keep a family-sized bottle of Alka-Seltzer in your top desk drawer. What could possibly counteract this misfortune?

It seems counterintuitive, but there's a school of thought that says the prepared advisor should benefit from these unfortunate times. Why? Because clients are on the move. Do-it-yourselfers decide they're not the experts they thought they were. Wirehouse clients are tired of never hearing from their broker or, worse yet, having their broker call with hot tips for portfolios diminished by half. Even your more direct competitors' clients are looking for a new home. This is a period of dissatisfaction with the status quo.

Many advisors say their phones don't ring anymore. But that experience isn't universal, as the three veteran advisors we spoke to have been enjoying new client flows in record numbers. How is this possible and what might they have in common that attracts these new clients?

Michael Joyce of JoycePayne Partners, with offices in Richmond, Va., and Bethlehem, Pa., is seeing a surge in new-client activity. "I have two inquiry meetings today, had one yesterday and signed on a new large client last Friday," says Joyce. "Bad times always tend to be good for business development."

Continues Joyce, "We had a big surge in the third quarter of 2008, signing on eight new clients in that quarter alone and another six in the fourth quarter. In the early part of 2009, we saw a temporary drop-off in new inquiries, but over the past couple of months there's been a surge that's accelerating now. So far in 2009, we've signed on 12 new clients."

In the 2001-2002 period, the surge effect was even more pronounced, he says. "In the fourth quarter of 2001, we pulled in 21 new clients. This was driven by both September 11th and marketing efforts we'd been working on. In general, we just get a lot more people calling or inquiring during bad times, especially when the markets are dropping. We definitely saw this in 2001-2002 and 2008-2009."

I asked where these clients are coming from. "The vast majority are the usual referrals from other clients, friends, relations, co-workers, NAPFA ... a handful are referred by CPAs." How about wirehouses? "We're seeing a lot of people really freaked out about their longtime broker relationships." The firm has had a mixed track record landing these clients, he says. "They're always talking to other firms besides us, and in some cases they don't make any changes at all."

Do ex-wirehouse prospects have trouble adapting to the service mix of a wealth management firm after being accustomed to a typical broker-client relationship? "Yes," Joyce says, "they're really focused on investment management, so they give little thought to the other services we provide. They tend to be more performance-oriented, and that's a problem because we construct every client's IPS individually rather than using model portfolios, so it's difficult to generalize about performance for the entire firm and relate that to a new client."

Ex-wirehouse clients are desirable only to the extent they fit the attributes Joyce is looking for in any new client. "We're looking for clients who want to delegate, not validate. We expect to be our clients' chief financial strategist, so if the prospect wants to give us $1 million out of total assets of, say, $5 million, this isn't optimal for us. He's just going to compare our investment performance with that of his other managers."

It stands to reason that if advisors can expect surges in new clients-from wirehouses or otherwise-they have to have internal systems adequate to take in and serve these clients without causing havoc to existing client relationships. Says Joyce, "We continuously evaluate our technology platform and improve it. If you don't do this, you'll be at a disadvantage."

Yet technology isn't his biggest challenge. "We've put more time and effort into managing and strategically planning for our human capital needs than our technology needs." Currently, Joyce is hiring new staff to augment the planning teams in his Pennsylvania office and the client service team in his Virginia office. "We don't want to be ahead in our human capital investment, but we don't want to be behind either. The proper balance is difficult to achieve. We've done a decent job, but I still lay awake at night wondering if we'll get it right in the future."

Lou Stanasolovich, owner of Legend Financial Advisors Inc. in Pittsburgh, has depended on his carefully crafted internal systems to help him take in a surge of new clients. "We have an adequate supply of staff and we tend to be highly systematized. We have numerous checklists we use to keep new clients moving along, so the process isn't chaotic but very organized. Everyone knows what their role is."

To teach new staff members how to use the various lists that guide the new-client intake process, Legend creates videos with Camtasia (http://www.techsmith.com/camtasia/screencasting/defaultb.asp?gclid=CLCmhe2Hg50CFSFRagodkFiFaw) that staffers can watch to learn the process. The company uses its ProTracker CRM for other parts of the process its lists don't cover. "Once we invest the portfolio," says Stanasolovich, "we use what we call our 'Determinator,' which is housed in ProTracker and entails selecting the dates for the client's billing and reporting, creating report cover sheets, billing and performance reporting. That document guides everything," he adds.

Typically, says Stanasolovich, the company picks up 12 to 20 new clients a year. (The big exception was in 2002, when it brought in 40 new clients.) But in the first eight months of 2009, the firm has already picked up 19. "Chaos causes good client inflow," says Stanasolovich. "If we brought in 80 or 90 new clients, we'd be strained, but this is within our means."

In addition to chaos, Stanasolovich attributes the new faces to Legend's marketing programs and client referrals. "We didn't lose much money [during 2008] and our clients told others about it. We also held Webcasts this year for prospects in our database. We attracted 40 people to the first one and 45 to the second. From the first, we got seven new clients and from the second, three.

"A lot of these were comeback prospects ... people we talked to five to seven years ago during the first downturn who became clients during this downturn. Some were referrals, one found us through a Wall Street Journal article, one from the Worth list and, earlier on, we were getting clients from Internet searches."

And from wirehouses? "We've had a few. They've had no service unless [their assets are] are north of $5 million, so they appreciate the higher level of service and the fact that we're extremely high contact. They'll receive as many as 25 to 30 phone calls from us within the four to five months." The toughest clients to deal with, says Stanasolovich, are those who don't give you the information needed for planning and these, he says, aren't any more likely to be wirehouse clients than clients from other sources.

Armond Dinverno, a principal in Balasa Dinverno Foltz LLC of Itasca, Ill., says the same thing about the handful of wirehouse clients his firm gets: "These clients say they haven't been reached out to as often as they would have liked. Response times have been poor. From our perspective, this makes them great clients because we smother them with touches," he says.

Of course, the firm has to "navigate them" away from the frequent conversations they're used to having with their brokers about buying and selling. "With a firm like ours, there's less need to pay attention to the portfolio so often, and that's a positive change for the client."

Reluctant to provide confidential client information, Dinverno spoke in percentages rather than absolute numbers in describing his firm's experience during the recession. "Our year-over-year [2009 over 2008] change is about 20% more new assets than last year."

To handle his upturn, Dinverno added two new people earlier this year and is looking at adding more staff in the fourth quarter of 2009. "On the technology side of things, we're good; we have the systems to handle the new traffic." But it's been an evolution learning how and when to staff up, he says. Dinverno echoes Joyce's sentiment: "We're probably never hiring as fast as we should. It takes longer to onboard new employees because our systems are complicated, so we're trying to get better at forecasting our need for new employees."

The greatest challenge of the markets we've seen in the new millennium, says Dinverno, is going from the daily "firefight"-client hand-holding, that is-to having the market rebound and dealing with new client opportunities. "In August, we called clients and let them know they should start opening their investment statement again," he says.

The lesson from these three advisory firms is: Get your systems in order, don't stop marketing, and look at future recessions as opportunities to offset falling revenues with revenues from new clients. They're there for the picking if you're prepared for them.

An independent financial advisor since 1981, David J. Drucker, MBA, CFP, has been an industry influential for many years. Learn about his upcoming Technology Tools for Today Conference-the industry's premier technology conference for financial advisors-at www.TechnologyToolsForToday.com.