Guest post:”Using Story Telling to Educate Clients and Prospects”

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Plenty of financial advisors write books to enhance their credibility. However, I don’t know many who have written fiction in their pursuit of a broader audience. In his guest post, Chuck Rylant explains why he turned to telling stories to reach clients and prospects. You may want to consider something similar for a blog post or presentation.

Using Story Telling to Educate Clients and Prospects

By Chuck Rylant

Getting and keeping your readers’ attention is incredibly difficult when you’re competing with thousands of messages from multiple media sources. It is even more difficult when you’re writing about a topic often considered dry and boring.

We in the financial planning industry often find mutual funds, interest rates and tax laws intriguing, but our clients and those who need our services often do not. Before I wrote my personal finance book, I thought long and hard how I could share a message that would stick.

I decided to take a lesson from the bestselling book of all times—the Bible—with claims of 6 million sold. It’s hard to argue with those kinds of numbers.

Regardless if you follow a faith or not, most know the story of Adam and Eve. We have all heard about the forbidden fruit and the message of temptation. We remember the lesson because it’s told as a parable.

Do you think we would remember those lessons as well if they were written as a list of rules to follow? There is such a list, but I suspect more people know the forbidden fruit lesson than can cite the list of 10. It’s far easier to become engaged and remember the lesson if it is presented as a story.

One of my more popular blog posts is a true story about my first experience in Mexico where I illustrate a point through a kidnapping. Stories can be presented as truth or fiction and have the same impact.

I used to take pride in the fact that I never read fiction, until I realized I was missing a powerful way to improve my own writing. It is certainly a skill that takes time to learn and improves with practice, but try it and watch how much more engaged your readers become.

Chuck Rylant, MBA, CFP® is the author of How to be Rich: The Couple’s Guide to a Rich Life Without Worrying About Money available at Amazon.com

Opposing financial services’ social media paralysis at #NICSAGMM

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“Lawyers never get in trouble for saying ‘no’ to marketing.” I learned this from one of my favorite corporate bosses.

So I hastily scribbled a tweet when Rajib Chanda of Ropes & Gray made the following statement on the “Social Media in the Workplace” panel at NICSA’s General Membership Meeting on October 6.

Chanda made the point that there’s plenty of guidance for social media compliance. FINRA has been more forthcoming than the SEC. However, firms that fall under the SEC can look to its regulation of communications via other media.

Like Chanda, panel moderator Paul Butcher, director of global corporate social media for Citi, urged financial services companies to act.

He said, social media is NOT like walking across Niagara Falls on a tightrope carrying a piano. In his opinion, companies should use social media within carefully defined constraints.

Citi’s approach includes the following:

  • Global social media guidelines
  • A registration process for those who will potentially use social media on behalf of the company
  • Training on Citi’s best practices and guidelines
  • Appropriate use of technology and branding

If you’re still worried about risks from social media, panelist Anthony “Sandy” Codding, Jr. of Marsh/FINPRO described the kinds of insurance you can buy for protection in areas including defamation, intellectual property, errors and omissions, privacy liability, disclosure of financial information, and employment.

Citi on financial services’ biggest potential social media mistake

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“Where are financial services companies most likely to go wrong in their use of social media?” This is the question I asked of the panelists on “Social Media in the Workplace” at NICSA’s General Membership Meeting in Boston on October 6.

Surprising answer from Citi’s Butcher

I liked the answer given by Paul Butcher, director of global corporate social media for Citi.  He said companies could make a mistake by not listening enough to customers. Social media is not just an outbound channel, he added.

Earlier in the panel he’d mentioned that Citi listens to customer comments. It handles comments by first categorizing them, and then responding accordingly. For example, comments that are blatant violations of the firm’s terms of service are taken down. The work flow for other comments depends on their nature.

In one example, the firm’s call center in Jacksonville, Fla., monitors customer comments, engages with customers in the channel where they find the comment, and then move it into a regular, private channel, if appropriate.

In my opinion, too many financial companies treat their social media activities as one-way communications. I understand that compliance fears prompt much of their inactivity. Still, it’s frustrating for the folks who follow them. Financial companies that don’t respond to their followers risk alienating them.

Concerns of Marsh/FINPRO and Ropes & Gray

Prior to Butcher’s comment, Anthony “Sandy” Codding of Marsh/FINPRO commented on risks from an insurer’s viewpoint. Regulatory compliance and defamation are the two greatest risks, he said.

Rajib Chanda of Ropes & Gray added to Codding’s comment by pointing to the risks of financial services companies using mobile apps. As more people store information on mobile devices, you start to work about identity theft, he said.

I’m sure we’re going to hear more about all of these issues in financial services.

This post was updated on October 7, 2011.

For RIAs: Is this good marketing? Better practice for fiduciaries?

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Registered investment advisors, how much should you disclose when you use articles written by others? Is it okay to slap your name on articles largely written by others? What if those articles may also appear under the names of other advisors?

Below is a question posed by one of my readers.

Several DFA staff members write commentaries which are kept in a “library” for the approved advisors to use. Approved advisors can search for a commentary that they feel is timely (not usual to see commentaries which were written by DFA in 2008-2010 used in the present by an RIA).

A simple search of an DFA used commentary by an RIA will bring up multiple “DFA-approved RIAs.” However, in the individual RIA commentaries a few will use a disclaimer that states the subject matter was “Adapted From Joe Smith of Dimensional Fund Advisors” while many others will treat the commentary as their own work.

RIAs are quick to market their role as a fiduciary to their clients but I feel that acting with integrity is just as critical. I believe that citing sources correctly is fundamental to acting with integrity when communicating with clients and the public.

Do you think that clients would appreciate such disclosure and conversely disapprove of portraying another firms thoughts and research as originally from an RIA?

This isn’t–or shouldn’t be–an issue for registered representatives because FINRA advises them to disclose the role of other writers, as I discussed in “Registered reps, it’s time to ‘fess up.”

Mind mapping technology for financial advisors

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Technology can boost your effectiveness when you use mind mapping with your clients.

Using a digital pen in client meetings will spare you the inefficiencies of an old-fashioned pen or pencil as well as the awkwardness of struggling with complex mapping software in front of your client. After the meeting, using software to make your map more attractive and to manipulate the data will make you more effective with your clients. I recently learned how Jaime Bordelon, executive assistant for an investment advisor, uses a digital pen, in addition to MindJet and SmartDraw software, to capture and share information collected in client meetings.

Five-step process for your client meeting

Here’s the five-step process Jaime suggests for your client meeting.

1. Take your digital pen to your client meeting, along with an appropriate template. Jaime’s firm has templates for topics such as new client, prospect, center of influence (financial advisorspeak for referral source), re-discovery meeting, asset allocation, next phase, and retirement distribution.
2. Begin a general conversation and map it using your digital pen. Expand into more details.

3. After the meeting, you and the client sign the map to show that both of you agree on the information.
4. Dock your pen to save the data on your computer.
5. Give the client the original copy of the map. It’s satisfying for the client to get something to take away.

By the way, Bordelon uses an Okidata MC560 Plus Digital Two-Pen Solution purchased from Futureware in Omaha. It appears have been discontinued.  But there are other digital pens out there and you may find the Okidata model left in stock somewhere.

Mapping’s prospecting potential

“What’s really interesting is what happens after the client takes the map home,” says Bordelon. Mind maps are conversation starters in a way that plain text documents are not.

Sometimes clients leave their maps out in plain sight. Then, a friend sees and asks about it. Before you know it, you’ve got a referral. In many cases, these are referrals of persons whom your clients wouldn’t have suggested on their own initiative.

Another benefit: your clients often think of more information to add when they review the map later. This is especially true when they show it to the spouse, significant other, children, or friends.

Using MindJet or SmartDraw after the meeting

After your meeting, you or your assistant can clean up your map and make it more attractive by inputting the information into MindJet or SmartDraw. You can also color-code sections to make the information easier to understand at a glance.

The resulting map isn’t just pretty and digital. Using the software, “You can expand and collapse the ‘octopus’ it creates,” says Bordelon. “This way you can control the conversation and avoid overwhelming your clients with details” in subsequent client meetings. It’s also easy to update the map in future meetings.

What are you waiting for? Give it a try!

 

P.S. The beauty of LinkedIn

I owe LinkedIn as well as Jaime Bordelon for this blog post. I didn’t know her when she responded enthusiastically to a mind mapping question I posted on LinkedIn. LinkedIn can be an amazing resource for meeting new people.

Edited October 2, 2011

Article titles that reassure investors–Submit YOUR candidate

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Investors crave reassurance during volatile times. But it’s not easy to choose words that steady their nerves. With that in mind, I’m putting out a call for article titles that reassure investors.

Please comment with your candidate for the most reassuring title

If I get enough good candidates in the comments on this blog post, I’ll run a poll, so you can vote for a winner, as discussed in the following Facebook post:

Tom Brakke of the research puzzle blog, one of the early supporters of this contest,
clearly enjoys playing with titles. You can see this in his tweet suggesting “Pray the Course” as a reassuring title.

What makes a title reassuring?

The suggestions by John and Tom show a sense of humor, so I’m going to throw out some serious candidates for reassuring titles. I hope the following titles spark some conversation.

What makes a title reassuring? Based on the titles above, I seem to find comfort in titles suggesting I can benefit from–or ignore–market volatility. Right or wrong, this is what works for me.

How about you? What wording do YOU find reassuring?

Aug. 30, 2011 update: I am no longer accepting comments on this post as new candidates for this competition.

BNY Mellon says “no” to “staying the course”

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“Staying the course” is classic advice from investment and wealth managers, so I was surprised to see BNY Mellon Wealth Management challenge this adage as part of its “truth” advertising campaign.

“Staying the course is like navigating a new world with an old map,” says the headline of the BNY Wealth Management ad, which I spotted on the inside front cover of The New York Times Magazine dated July 24, 2011. I love the combination of plain English with a powerful analogy.

BNY Mellon Wealth Management ad

This ad is part of a series, which I’ve blogged about in “Financial ad in plain English: Another one from BNY Mellon” and “BNY Mellon: I liked your ‘truth ad’ until you used that word.” I hope BNY Mellon keeps up the good work.

Still, I was surprised to see the firm say, “Investors must maintain the discipline to stick with their plans,” on p. 18 of its 2020 Vision. Isn’t this what “stay the course” means? Because “stay the course” isn’t defined in the ad, I don’t know. Despite this quibble, I admire this eye-catching ad.

Guest post: “Why use a mind map with clients?”

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A mind map can be a great tool for communicating with your financial planning or wealth management clients. Some people absorb information better in visual than written form. Even word geeks like me find mind maps useful. So I’m happy to have Alex Murguia, managing principal of McLean Asset Management, explain how you can benefit from using a mind map to create a visual display of the most important information about each client.

Not sure what a client mind map looks like? Alex has provided a generic example. You can click on it to view it in greater detail.

Why use a mind map with clients?

By Alex Murguia

Creating and sharing a client mind map shows client that you have the extensive knowledge about them that’s necessary to steer them through their financial lifecycle. This helps you overcome a common barrier to referrals as well as deepening your relationships with clients. Only 15% of clients feel their advisors are very knowledgeable about their entire situation, according to Breaking Through: Building a World Class Wealth Management Business by John J. Bowen, Jr., Patricia J. Abram, and Jonathan Powell. Over the course of a year, advisors with a perceived high level of client knowledge generated about eight referrals from clients compared to three and two referrals respectively for advisors with medium and low levels of client knowledge.

However, you won’t reap the benefits if you fail to communicate to clients your encyclopedic knowledge of their personal lives. A mind map expresses this knowledge effectively and elegantly to your clients.

At McLean Asset Management, we begin the mind mapping process in our first prospect meeting. We inform our prospect that we will ask a series of questions to determine if we are a good fit to provide value to their current situation and goals. With a pad and pencil in hand, we begin our semi-structured interview that covers various aspects of a financial life. We specifically want to have a discussion concerning a client’s values, objectives, important relationships, assets, other advisors that they work with, processes that they like, and personal interests. Each discussion topic is a node on the map that expands into subsequent branches dependent on the topic and answers.

Click on this mind map sample to view it more clearly

A mind map has important advantages over traditional note taking during the discovery process and subsequent progress meetings because:

1. It helps us drill down to a client’s key issues faster and more accurately.

2. It captures information quickly, yet in a highly organized format.

3. It makes it easy to link and cross-reference very different, yet connected, pieces of our client’s financial picture.

4. It involves clients more deeply in the discovery process.

5. It provides a basis for moving forward, with clear goals and next steps.

6. It provides you with a document that is fast and easy to review.

Unexpectedly, in about one-quarter of our discovery meetings, a client makes a point to convey a positive comment about the map.  During our second prospect meeting, we hand the potential client mind map printout for review. This is also an implicit reminder that we listen to our clients.

Mind maps are also great to show a client’s other advisors (i.e., potential referral sources for us) during brainstorming sessions about possible client solutions. Update meetings always begin with a review of the mind map. This serves as a reminder that we are best positioned to make financial decisions that impact a client’s life because we are a trusted advisor that knows all about what is important to him or her.

Alex Murguia is Managing Principal of McLean Asset Management, a wealth management firm in Northern Virginia, and CEO of Instream Solutions. He tweets as @alexmurguia1.

Poll: How well do your clients know YOU?

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You picked the topic of my new poll about you and your clients. Well, maybe you personally didn’t pick it, but you may have.

Screen shot of Investment Writing Facebook question on poll ideas

One of my Facebook friends proposed my latest poll question in response to my asking on Facebook for poll ideas. I’m not sure which of them proposed it, but this person’s question attracted the most votes.

My friends have spoken, and I am following their lead.

New poll question

The poll question is: “How well do your clients know YOU? How can you tell?” Please answer the poll in the right-hand column of this blog. I’ve proposed a couple of answers to get you started. Please add your own answers to the poll. Here are the answers I’m starting with:

  • They know me very well. I can tell because they refer prospects who are perfect for me.
  • I figure they know something about me, but I don’t have any proof.
  • They don’t know me well because I’m always focused on them.
  • I have no clue.

I look forward to hearing from you!

August 30 update: Wondering why you should care about your clients knowing you? Below you’ll find coach Suzanne Muusers’ take on this question.


Usage tips for portfolio performance commentary writers

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It’s almost time for quarter-end investment performance reporting. I have some tips for you.

1. Use the past tense.

Why? Because portfolio performance commentary discusses historical performance.

2. Describe benchmarks’ key characteristics, when appropriate.

The general public doesn’t know the difference between the S&P 500 and the S&P 400. They may think one is a subset of the other, like the Fortune 50 and the Fortune 1000. So specify “the mid-cap S&P 400.”

3. Be consistent in how you spell and punctuate terms.

For example, choose between “indexes” and “indices.” Decide whether you’ll use “small cap” exclusively without a hyphen or hyphenate it as “small-cap” when you use it as an adjective.

4. Limit your references to the time period.

Once you establish that you’re writing about the second quarter, don’t repeat that information frequently. However, if you shift between discussing the second quarter and the month of June, name the periods often enough that your reader follows your transitions.

5. Don’t go crazy replacing “returned,” as in “the fund returned 3%.”

There are plenty of other ways to convey the information in the sentence. However, I believe too much variety is counterproductive in a paragraph that consists mainly of returns. Instead, the variety distracts from the reader’s ability to compare returns. If you’re citing many index returns, perhaps you should insert a table.

Do you have grammar, punctuation, or other usage tips for people writing about investment performance? Please leave them as comments below.