The secret to the martial art of judo is to make the strength of your opponent work for you, not against you. In judo, it is a mistake to fight or to try and see who is stronger. Instead, judo masters use their opponent's strength to defeat them. When their opponents lunge at them, judo masters do not dodge and look to counter punch. Instead, they grab that arm while their opponents' momentum is going forward, add just a little energy and flip them onto their back. It is this technique that allows a well-trained 140-pound man to defeat someone of much greater size.

The principle of judo can be applied to the financial advisory business as well. It is no secret to any advisor that bearish markets make for bearish clients. Everyone in the profession recently has fielded an angry or despairing phone call from at least one of his or her clients. Bear markets make advisors feel like victims when clients leave angry messages or leave them altogether. Advisors feel frustrated and out of control: "How can I alone fight the market? It's just too big and powerful."

Taking our inspiration from judo, we can see that the solution is not to fight against the market forces as they place pressure on your client book. Instead, work with those market forces. Find some way to use market strength-whether down or up-in your favor.

"Sure," you say, "easier said than done."

Actually, it is as easy to do as to say. The techniques discussed here actually are quite simple and easily executable. You also should know that these techniques have been used effectively by many top advisors and have been confirmed with extensive research among affluent investors.

Bear markets create anxiety among investors, often leaving them disgruntled. Unless you know how to handle clients during bear markets, it can be a frustrating time. But there is a way to work with clients that is positive for both them and you. Applying "client judo" gives you a golden opportunity to differentiate yourself, and the service you provide, to your clients-especially your best clients. The secret to client judo is to avoid fighting with them on the performance front as you win them over on the service front.

You can win them over on the service front because so few advisors try to make contact with their clients during down markets. Research shows that during significant market drops, the overwhelming majority of advisors simply do not communicate with their clients. This tendency of advisors to hide creates millions of panicked, wealthy clients who know their accounts are going down, who don't know just how much and who haven't heard word one from their advisors. Sounds like an incredible opportunity, doesn't it? This is your chance to differentiate yourself at the exact moment when clients are most likely to switch advisors.

Judo Client Management

There is a step-by-step process you can use to make this style of client management work for you. First, identify your best clients. Your best clients are those who make up the top 20% of your book based on assets under management, referral potential and personal rapport. If your business is like that of most advisors, this core group is the driver of your profitability. This core group includes the clients you especially want to protect from poaching by other advisors, and it is your beachhead for winning new production so you can build your business.

Second, identify each client's profile from the nine different high-net-worth personality types (see Exhibit 1). Typically, you will find that your core clientele is composed of two or three of the profiles. This is because you naturally have a rapport with these people. Clients with these profiles are the ones with whom you naturally work most successfully. Each of these nine profiles has a unique financial motivator that drives all of their investing decisions, and you can use your knowledge of this motivator to maintain and even raise a high client-satisfaction level.

Here are several examples. For clients in the Family Stewards group, their prime motivator is the welfare of their families. For them, college funding and the generational transfer of wealth are central issues in their investing behavior. Investment Phobics dislike investing a great deal. They know they need to do it, but they don't want to be educated on the subject. It makes them uncomfortable even to discuss it. To succeed at investing, people in this group defer decision-making and responsibility for their portfolios to their advisors. Because they don't like or understand investing, they tend to choose their advisors emotionally. They rely on how they "feel" about the advisor and how much they trust the advisor. The decision-making of Investment Phobics is based on two factors: Do they have a personal rapport with an advisor, and does the advisor understand their desire for help without forced education?

Another group, the Independents, is motivated financially by a drive for personal freedom and independence. They want to retire early and pursue a hobby or interest that they hold dear.

The third step in Judo Client Management is to establish an individualized client-contact plan. When the market drops and has a very bad day or the client's portfolio continues to slowly deteriorate, you should be prepared to contact him or her with your perspective on the markets. Your reason for contacting the client is not to recommend buying or selling anything, but rather to reassure him or her. In these contacts, you simply want let clients know that during these difficult periods, you are watching over their portfolios for them. You are available for their questions, you are their sounding board, and you value communication with them.

This simple step of maintaining client contacts is extraordinarily powerful. It helps you protect your core clientele, and it also helps you build it. It protects your clientele by demonstrating (because actions are more powerful than words) that you can be relied on upon good times, as well as in the bad times. By communicating with them, you will immunize them from that relentless little voice in their heads, saying, "The market was down another 300 points today, and I haven't heard from my advisor in weeks. I wonder if that's because there's a problem. I wonder if I should call somebody else or move my account."

Additionally (and here is where the judo part comes in) this habit of communicating helps you build the AUM from these clients. The average affluent person (account size of $1 million to $5 million) has, on average, THREE advisors managing assets for them. If they are extremely pleased with your service, they will be inclined to move money from those other advisors to you. This is a very powerful method of increasing AUM per client.

Judo Client Management raises your clients' satisfaction with your service and increases their desire to refer clients to you. To harvest these referrals, simply begin by talking to them about their own situation (see sample openers for each profile below). Then ask them if they have any friends who have expressed anxiety about the market and whether their portfolios are being managed appropriately and to their satisfaction. This is the critical step because your core clientele becomes your sales force. Virtually all of your clients will have talked to a friend or acquaintance who is dissatisfied in some way. All you need to do is ask. This is the step with which many advisors have trouble. However, there are ways to do it to make it easier on yourself. You can state that you take great pride in taking care of your clients, especially in the bad times, and ask if they have any friends who need this same level of service. Or you simply can reiterate a story of a client who referred a prospect because the prospect hadn't heard from her advisor during a difficult period, and your client passed your name along as someone who had been extremely available during this time. Either way, this step allows you to gather any potential referrals of clients who are seeking a higher level of service and communication.

You should adjust your Judo Client Management strategy to individual high-net-worth profiles. Some profiles are more anxious, some need more emotional support and some need control (see Exhibit 2). Adjusting your communication strategy allows you to be more effective.

You can take this a step further and focus on what you might say to an affluent investor to start the Judo Client Management strategy moving (Exhibit 3).


It has been said that chance favors the prepared mind. Volatile markets are inevitable. Good advisors are prepared with client-management communication plans to rely upon in good times and bad. Regardless of what the market does, events favor the prepared advisor. Skill with Judo Client Management will reward those advisors who are prepared to take action on the service side when the markets drop.

Brett Van Bortel is a consultant to the financial services industry and has developed age, gender and pesonality-based segmentation programs. Russ Alan Prince is president of the consulting firm Prince & Associates in Shelton, Conn.