Top advisors learn about client communication and marketing. Now, you can too.
What's the story you're telling clients and
prospects about your firm and the value of the advisory services you
deliver? Are you sure they're hearing what you think you're saying?
Advisor Richie Lee thought so, until he did a mock prospect interview
on camera in May and was stunned at the playback. "Most of us want to
appear smart, but that's not really very meaningful to prospects. You
have to come across in a way that demonstrates your relevancy and value
to them," says Lee, an investment virtuoso who manages $1 billion for
200 clients at his Dallas-based firm, Lee Financial Advisors.
Lee is part of a forward-looking consortium of 12
advisors from across the country, aptly titled Group 2020. Nine of the
advisors, who manage between $450 million and $5 billion, locked
themselves away for two days in early May in a conference room in the
Atlanta Hilton. Their goal? To learn some hard but necessary truths
about their marketing deficits-not only what they say, but how they say
it, in writing, on Web sites and in person.
Submitting to the glare of TV and peer scrutiny
wasn't always easy, but it was a necessary next step for Group 2020 and
much of the advisory industry, which has been marketing-poor for
decades. In fact, more than 81% of fee-based advisors know they need
marketing training and realize it is not even remotely one of their
core competencies, Schwab Institutional reports.
Schwab referred the Group 2020 advisors to their
marketing trainers-Dan Sondhelm, vice president of strategic public
relations at Virginia-based Sunstar, and Terry Booton, president of
Advanced Marketing Instruction, Atlanta. But the advisors paid
thousands of dollars out-of-pocket for their self-imposed seminar. "We
know the success that fee-only advisors are having against wirehouse
brokers, but basically when it comes to marketing to new clients,
they're winging it," says Dave Welling, Schwab's vice president of
strategic marketing programs. "That gets harder to do as they grow
their firms, their assets and add staff."
Sounds reasonable so far, right? Everyone needs to
get on the same page. But there's one nagging question. The Group 2020
firms already have growth rates of between 15% and 40% annually. While
marketing may be a do-or-die proposition at newer advisory shops, the
advisors here admit they've done little if any marketing in years
because, frankly, they haven't needed to.
They get all of their new clients from referrals and
have almost all the growth they can handle. Our simple query, then: Why
spend money and valuable time in a two-day seminar learning to do
something you seemingly don't need to do-marketing? "The answer is, I
think fee-only planners are really weak at sales and marketing and it's
going to create havoc with their strategic plans for the future," says
Roy Ballentine, a Group 2020 member who manages $1.5 billion with
partner Alice Finn. Their firm, Ballentine, Finn & Co., is
headquartered jointly in New Hampshire and Massachusetts. "Many of us,
and we're no exception, have a hard time differentiating ourselves,
even though we do a great job as advisors."
The goals for the seminar were fairly
straightforward, if initially elusive, says Sondhelm. The desired
effect, at the end of marketing boot camp, was for advisors to be able
to:
Clearly differentiate their practices from those of other advisors;
Develop ten rules or tenets of their specific wealth-building process;
Convey these messages in a clear, concise, jargon-free manner;
Develop stories and statistics that illuminate their value;
Control their answers, regardless of the question, so that they always return to their firm's message;
Create a process for maximizing referrals; and
Be proactive when creating and updating your Web site.
Advisors who attended the two-day seminar admitted
that they came away with a number of valuable lessons they wanted to
implement at their firms.
But it wasn't always pretty. The best way to
illustrate how much these advisors were struggling with branding their
messages or distinguishing themselves was as simple as asking them to
go around the room and explain what they do.
"What we were really looking for was their
commercial," says Sondhelm. "We wanted to know: What is your unique
story? What's the value proposition of your business and how do you
communicate it in 20 seconds?
"What we saw is that these folks have built stellar
businesses, they're the elite of the elite, but bragging is difficult
for them. So one of our top goals was to help them figure out what
makes them different, what makes them stand out," Sondhelm says.
What could be easier for a group of veteran planners
than explaining what they do? "As the third person around the table, I
pointed to the two folks who went before me and said, 'We do what they
do,'" laughs Cheryl Holland, who manages $450 million at the firm she
helms: The Abacus Planning Group in Columbia, S.C.
"When you have the same words repeated again and
again, you realize: We don't have an elevator speech here. As Dan went
around the room, we all said, 'We do comprehensive financial planning,
with traditional and alternative investments, etc., etc. ...' We realized
right away we were all saying the same thing. That was a wake-up call,"
says Holland, who plans to double her assets in the next several years.
"I can't imagine going from $500 million to $1 billion without a
systematized process for marketing and referrals," the veteran advisor
says.
Members of Group 2020, and a growing number of
advisors, realize that without standardized marketing and communication
practices they run the risk of staff and client turnover, not to
mention failed strategic planning and missed opportunities. "I'm now
responsible for 50 employees," Ballentine says. "Back when we were ten
employees, it took ten clients to get the kind of growth we wanted. I
now need to create growth at a level and pace that is so much more
profound. And I have to be able to integrate and synchronize that
growth with every other facet of my firm. It's complicated.
"Beyond that, we now have eight senior client
advisors. We have to systematize the marketing process so our clients
and the folks we meet in the elevator all get the same stories. Right
now, I can't really say that's the case," Ballentine admits.
So along with the constant peer review and the
feedback from two marketing experts, the TV camera provided what many
advisors say was a profound experience. What were the glaring
weaknesses? The propensity to pontificate, to make speeches and to use
jargon that goes right over clients' heads without ever conveying the
great things your firm does.
"That's why we start the day in front of the TV
camera and go back to it so often," Sondhelm says. "I tell them: This
will be the most difficult interview you'll ever have to do. It only
gets easier from here."
The advisors who sat in front of the unblinking
camera's eye were asked: Tell us about your company and your
philosophy. And oh, by the way, the market went down today. Should I be
concerned? Simple questions, right? The point isn't really to create a
slick commercial, says Sondhelm, but rather to learn to control your
responses in a way that underscores the strengths of your firm.
If being interviewed in front of a camera is
difficult, watching yourself after the fact can be excruciating. "It's
like the lights go on, and bang, you're on another planet," Lee says.
"In round one of the interviews, advisors tell. They
sound smart and intelligent," Sondhelm says. "But I want to get them to
sell. They have to raise the bar. So we role-play continuously. We want
them to be able to control any interview, while making the prospect or
reporter feel comfortable. They learn to answer within the framework of
selling your firm and play to the customer's wants."
One way to make your answer more effective? Use a story and statistics, Sondhelm says.
According to Ballentine, "Before this coaching, if
you asked us what's unique about our investment management, I might
have said, 'We scour the planet looking for investments for clients.'
Now I'd say, 'Last year, we looked at 300 private equity deals and
selected only four we thought were good enough for our clients."
Instead of saying 'We do multigenerational
planning," Sondhelm suggests, find a story and relevant statistics. For
instance, tell clients that you work with 95% of your clients' children
to ensure that clients' wishes for heirs and their charitable goals are
carried out in a meaningful, respectful way. Be specific. Talk about,
for instance, how you set up a family foundation for some clients and
how their kids now run it, funneling significant donations to charities
that cater to 'X.' Be specific with story development for each of the
areas you specialize in, Sondhelm says. Then institutionalize the
stories so that all the members of your firm are trained to answer
questions and market the firm's benefits in the same way. The stories
should also be used to cross-pollinate written client communications,
newsletters and Web sites.
That brand of cohesive and comprehensive marketing
is critically important to Group 2020 member Janet Briaud, who plans to
grow her firm exponentially when her 27-year-old daughter Natalie Pine
joins the firm from the London-based hedge fund where she now does
investment analysis. Currently, Briaud manages $450 million for 230
clients at Briaud Financial Planning in Bryan, Texas, and despite a 15%
growth rate, has actually tried to slow growth. But that's changing
quickly. "Now we plan to expand the business and take it to multiple
locations, so it's critical to build the branding and the whole look
and feel of our business."
One area she knows needs revamping is her Web site
(www.briaud.com). During the marketing training, peers reviewed each
other's Web sites and Briaud's site elicited less-than-positive
feedback. "Our look is outdated, our story isn't told very well and we
haven't posted any of the updated press we've gotten. While we've been
voted top advisors in Worth and Medical Economics, the stories aren't
even up," Briaud says. "We know we have to be much more proactive and
professional about the story we tell going forward if we hope to grow."
One thing that surprised the group, and even
Sondhelm, was the advisors' use of jargon. "Take, for example, a phrase
as simple as 'high net worth,'" he says. "I asked everyone to write
down their definition. One advisor said it's $2 million to $10 million.
Another said it's $30 million."
Other jargon that plagued the advisors: financial planning, wealth
management and estate planning. "Does the customer really know what
these terms mean?" asks Sondhelm. "The problem with buzzwords is they
can be meaningless and the clients won't tell you. If you define your
value so that you and clients are on the same page, you'll connect with
them," he adds.
Case in point about the importance of message
development? Cheryl Holland credits what she learned at the seminar
with helping her firm make it onto the short list to manage a $30
million firefighters' pension.
"We developed our messages ahead of time. So when we
interviewed by phone, we figured out immediately that the group had
some hot buttons," Holland says.
The firefighters had been in a long-term traditional
brokerage relationship and were very angry about hidden fees, she says.
They also wanted education for the 7,900 firefighters in the plan, an
area they felt was sorely missing in their previous relationship. As
luck would have it, two of Holland's carefully developed messages
aligned perfectly. "We told them we specialize in low-cost,
tax-efficient investing and educating and empowering investors. We
continuously brought the message back to these points," says Holland,
who developed the messages with clients in mind.
The upshot? Holland felt in control. "Most of us
haven't had to market. But I have been totally amazed at what we can do
to get the kind of clients we want with just a little bit of effort. We
can supercharge our firm."