Start with a good lead, or lose your reader

“…the lead is the doorway into every text. Its job, never a minor one, is to draw the reader over the threshold,” says Francis Flaherty in The Elements of Story, p. 201.

The lead, also spelled lede, is the first sentence or paragraph of your blog post or article.  Write a weak lead and you may lose your audience at the very beginning of your piece.

When you write your lead, Flaherty suggests you ask “What lead will prompt in the reader the most irresistible questions, questions powerful enough to propel him through that doorway and into the story?” p. 202.

When you write an investment or wealth management blog post, the most powerful leads often pose a problem faced by your readers and dangle the possibility of a solution. Have you written a powerful lead of this type? Please post a link to your blog post, so we can see how you’ve mastered the lead.

Dan Ariely says disclosure may hurt investors: Report from his #CFA2010 talk — #CFA2010

Most investment professionals, including CFA charterholders, figure that more disclosure about financial advisors’ conflicts of interest will help investors.

Not so, said Dan Ariely, author of Predictably Irrational, to the CFA Institute’s annual conference on May 16. In fact, disclosure may not improve investors’ decisions.

Two countervailing forces apply when a financial advisor reveals conflicts of interest, said Ariely.

Let’s assume the financial advisor tells a client that he’ll receive a higher payment if the client chooses Fund A over Fund B.

On the one hand, the client will tend to discount the advisor’s opinion because of the potential bias, said Ariely. On the other hand, the advisor will feel freer to push Fund A because he has revealed his conflict. Ariely believes that this second force will overwhelm the client’s discounting of the advisor’s opinion. As a result, investors end up no better off despite disclosures. 

You can watch Ariely present
Some of Ariely’s past presentations have been captured on video. You can view Ariely on YouTube. 

Follow the CFA Institute’s annual conference
You can learn about presentations at the CFA Institute’s annual conference as they occur. Read the CFA Institute’s conference blog or follow the conference using the #CFA 2010 hashtag on Twitter.
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Copyright 2010 by Susan B. Weiner All rights reserved

How to improve your financial planning client relationships

You can improve your relationships with financial planning clients by encouraging them to communicate honestly with you from the very beginning. 

This is the main lesson I took away from Shari Harley‘s presentation on “How to Say Anything to Anyone: Paving the Way to Powerful Working Relationships” to the annual conference of the Financial Planning Association of Massachusetts.

Ask for honesty
Harley suggested that audience members achieve this by saying, “I want a great relationship with you. If I do anything that violates your expectations, frustrates you or causes you challenges, please tell me. I promise I will say thank you.”

Assuming that your client says “yes” to your request, then you can add, “I hope I can do the same with you.” This sets the stage for two-way communication. If it works, you’ll never be surprised again by a client defection. 

I asked Harley what she’d recommend saying after “thank you” when a client gives negative feedback. Don’t say anything other than “thank you” right away, she suggested, because you’ll feel defensive. Go away and think things over. You can follow up later.

Follow up with questions
Don’t stop with your initial agreement to be honest with each other. Follow up with questions that help you to understand your client better, said Harley.

Here are some of her suggested questions:
1. Who was the best service provider you ever worked with?
2. What made him/her the best service provider?
3. What are your pet peeves?
4. Do you prefer email or voicemail?
5. What do you wish I would start, stop and continue doing? 

I can see how these questions would benefit me as a service provider and a client. It’s time to rev up my courage and start asking more questions.

I believe Harley’s approach could benefit you in your professional and personal life.

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Copyright 2010 by Susan B. Weiner All rights reserved

Financial advisor poll: How do you sign your business emails?

Email communications with clients, prospects, and referral sources are an essential part of  your private wealth management or investment business. Handle them well, and you deepen your relationships. In How to Instantly Connect with Anyone, author Leil Lowndes suggests an email closing technique that may boost your effectiveness.

Even something as small as your email signature sends a message to your clients, prospects, and referral sources. You set a different tone when you end with “Sincerely, Jane Advisor, CFP, CFA, Senior Vice President” instead of “See you soon, Jane.” 

Lowndes suggests that you forego traditional closings in favor of ending your email with your recipient’s name. For example, “Thanks so much for your help, Samantha” when Samantha is the person you’re emailing.

According to Lowndes’ approach, you can get away with just your first name or initials–or even nothing at all–after such a line. “Hearing their own name unexpectedly as the last word of your message makes them feel an instant connection with you,” she says.

I like Lowndes’ idea. But only in moderation. If you close every email like this, the technique will lose its impact.

The rest of the time, you’ve got an array of more traditional closings to choose from. You need to strike the right balance between formality and warmth. This may mean using different signatures for different clients, depending on  your relationship with them. Signatures may also vary by occasion.

Please answer the poll in the right-hand column of this blog about which of the following closings you use most often. 

  • Best wishes
  • Bye 
  • Cheers
  • Have a great day/weekend
  • Kind regards
  • Sincerely
  • Sincerely yours
  • Thank you
  • Warmly
  • Yours truly
  • –None of the above

I’ll report on the results in my June e-newsletter.

By the way, in these days of blogging transparency, I’m disclosing that I got Lowndes’ book for free. I won it in a Twitter contest when I was the first to reply to a tweet by the publisher.

Related posts

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Copyright 2010 by Susan B. Weiner All rights reserved

Your customers, your inspiration

“Customer comments can contain pure gold. Many of my most in-demand services came about from a suggestion made by someone who wanted to do business with me.”

What suggestions have your clients made to you? Have they suggested new services? Different ways to deliver your services?  Listen to what they say. You may discover a new way to build your business.

Marcia’s tip has worked for me. An out-of-state client asked if I delivered writing workshops virtually, rather than in person. Her question eventually spawned my first teleclass.
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Copyright 2010 by Susan B. Weiner All rights reserved

Whoa, insurance = spam?

Insurance can get your email tagged as spam. I never would have guessed.

I saw the following message after I ran one of my e-newsletters through a spam checker.

It looks like there are some words in this email that might send your email to a Spam folder. To make sure your email is delivered successfully, we recommend going back to change or remove the following words: insurance.

Perhaps this happened because there are too many spammer pushing shady insurance schemes.

Fortunately one iffy word isn’t enough to keep your email out of most in-boxes. Look at your overall spam rating before you panic. If it’s low, like the typical rating on my e-newsletters, you should be okay. 

The “open” and “bounce” rates for my e-newsletter mentioning “insurance” were no worse than usual. However, “insurance” was the newsletter’s only element tagged as potential spam.

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Copyright 2010 by Susan B. Weiner All rights reserved

No more fancy-pants prose, please

“The writer who indulges in fancy-pants prose sometimes has too large an ego, and sometimes one that’s too small,” says Francis Flaherty, author of The Elements of Story.

Fancy-pants prose—in other words, highfalutin, multisyllabic words—rarely serve writers well. Instead, as Flaherty suggests, they’re evidence that the author is trying to impress his or her audience.

In the investment and wealth management world, this shows up in the use of words such as “mitigate” when “reduce” or “cut” would serve the purpose. 

Can you think of fancy-pants words you’d like to eliminate from our industry’s publications? Please leave a comment.

Guest post: Five Tips for Delivering Bad News to Clients

Everyone struggles with delivering bad news to clients–and financial advisors have had to deliver plenty of bad news over the past couple years. 

That’s why I felt excited when I discovered that Kathleen Burns Kingsbury, the author of this guest post, can help advisors manage difficult communications with clients.

Five Tips for Delivering Bad News to Clients
By Kathleen Burns Kingsbury, LMHC, CPCC

Delivering bad news to your clients is not easy. It often stirs up uncomfortable emotions–for clients and for you. Learning how to deliver troubling news effectively in conversation and in writing newsletters is the key to maintaining good relationships with your clients in good times and bad. 

Here are five tips for delivering bad news more successfully: 

1. Sandwich the bad news. Use the following analogy to guide you. Think of bad news as the meat in a sandwich that’s surrounded by two pieces of bread and some dressing to make it taste better. Start the conversation with thoughts or facts about what is working in the markets, your company or  the client’s portfolio. Then share the bad news or the meat of the issue. Last, end the dialogue on a positive note. Clients are human. We all find difficult news more palatable when surrounded by some good delicious information.

2. Be direct. Advisors and wealth managers have a tendency to talk too much when sharing bad news with clients. This is often because being the messenger makes you feel uncomfortable emotions, such as anxiety, fear or worry. Talking more may help you feel better, but it confuses the client. So fight the urge to over-verbalize. Just be direct with the client about what is not going well.

3. Make the client feel his/her reaction is normal. A client will experience feelings after hearing bad news about their financial investments. Don’t fight this by trying to convince the client or yourself that there is no reason to feel bad. Instead, take a deep breath and validate that this news is hard to hear and hard to give, so the situation is emotionally difficult. It is surprising how validating a client’s feelings calms them down and strengthens the advisor-client relationship in the long run.

4. Don’t personalize the client’s reaction. Many well-meaning advisors feel overly responsible for the pain caused by the current economy.  It is okay, and even advisable, to have your own feelings, about the ups and downs in the market place. Just make sure you are not trying to control what is out of your control and taking on too much responsibility. Practice accepting your feelings and your client’s reactions without judgment. Only take responsibility for what is truly in your control.

5. Get support. The best way to survive the current economy is to get support from your friends, family and colleagues. Your job is challenging. You need a place to talk, vent and share your frustrations with others. Model this for your clients because this is a great lesson for all of us to learn. Sharing difficult news is never easy, but it is a little more tolerable when you are not alone.

Kathleen is founder and CEO of KBK Wealth Connection, a company passionate about helping financial services professionals and their clients master their money mindset through wealth psychology. She recently released a new audio program called Creating Wealth from the Inside Out.
Sign up for “How to Write Blog Posts People Will Read: A Five-Week Teleclass for Financial Advisors starting on April 22 or for my free monthly newsletter.
Copyright 2010 by Susan B. Weiner All rights reserved

Question re: client portals–is there a way to capture your emails to clients?

It’s tough to separate investment communications from technology, especially given the strict retention guidelines of the SEC and FINRA. That’s why my ears pricked when an investment manager said that client portals can’t retain emails sent through them. I took that as a challenge.

I discovered that at least one client portal, FamilyOfficeNetwork (FON), satisfies this retention need. 

“FamilyOfficeNetwork does retain messages sent within our portal and they meet the SEC’s retention requirements. We can also have any notification email sent from our system BCC to any email address a firm desires,” wrote FON’s Aaron Pickett in response to my inquiry.

Bill Winterberg, I must thank you again for helping me find an answer to a technology question.

The next session of “How to Write Blog Posts People Will Read: A Five-Week Teleclass for Financial Advisors” will start in April. For more information, sign up to receive “Information on upcoming classes, workshops, and other events” as well as my free monthly newsletter.
Copyright 2010 by Susan B. Weiner All rights reserved

JP Morgan’s Eigen: Put your clients in non-traditional, long-short fixed income

Too many of your clients are over-invested in traditional fixed income, in the opinion of William Eigen, JPMorgan Asset Management’s director of absolute return strategies and portfolio manager of the JPM Strategic Income Opportunities Fund. He made a case for using fixed income funds that can go short and use synthetic financial instruments during his presentation to the Boston Security Analysts Society on March 15. 

Why bond funds haven’t changed
Fixed income funds really haven’t changed in 30 years, said Eigen. Their managers still basically rely on changes on interest rates to make money. In contrast, he said, managers of equities have driven the development of hedge funds.

Fixed income hasn’t evolved because interest rates have been falling for 30 years, said Eigen. In other words, with falling rates driving capital appreciation, there was no need for new techniques.

Can you imagine, Eigen asked, what would have happened to stock funds if the Standard & Poor’s 500 had gone straight up for thirty years? Clearly he believes this would have stifled innovation in the management of stocks. Instead, the stock market’s ups and downs spurred creativity. 

The need to protect your clients’ capital 
Traditional fixed income performed more or less okay for thirty years, with some rocky years here and there. But the interest-rate decline that drove bonds’ long-term positive performance will end. “I’m nervous with short rates at zero,” said Eigen, “yet investors are still piling in.”

Indeed, Eigen managed traditional bond funds during his 12-year career at Fidelity Investments. He left because he felt he couldn’t protect his investors’ capital adequately under the limitations of traditional bond investing. “I won’t be held prisoner to duration,” said Eigen. He wanted to be able to short-sell and put on relative value trades using synthetic instruments.

It’s important to earn positive returns in fixed income by taking advantages of factors other than falling interest rates. If not, asked Eigen, what happens when a long-term trend of rising interest rates takes hold? If you’re familiar with concept of duration, you know that bond prices fall when interest rates rise. Another negative: With interest rates at historic lows, there’s no “coupon cushion” of attractive interest rates to ease the pain of bond investors.

It’s easy to see the appeal of short-selling bonds in a rising interest-rate scenario. Investors would profit by essentially betting on bond prices’ decline.

Now Eigen can take advantage of short-selling as manager of the JPM Strategic Income Opportunities Fund, a long-short relative value fund that does not use leverage. The fund can use synthetic instruments. It can also hold cash because Eigen’s top priority is not to lose money. That’s a challenge for which cash is sometimes the only solution.

The fund is managed as an absolute-return fund with a target of t-bills plus 2%-8%. “You don’t need duration to generate solid fixed income returns,” Eigen said. Another potential benefit of his approach: it has “zero correlation to traditional fixed income,” Eigen said. 

Outlook: Rising rates, risky sovereign debt, relative value
Eigen thinks interest rates could rise faster than most pundits expect. Investors might get scared once rates start rising. Then they might quickly bail out of bonds to cut their losses.

Eigen is also scared about sovereign risk. Look at what’s happened in Europe and Dubai, he said. His fund is taking advantage of that on the short side.

Synthetic instruments such as credit default swaps are a good way to take advantage of the relative value opportunities that arise in times of low volatility in bond markets. For example, investors seem to perceive a solid company such as Berkshire Hathaway as on a par with lesser insurance companies. Synthetic instruments are sometimes the only economical way to invest in this disparity.

What do you think? Is the end near for traditionally managed fixed income funds–or have they still got some life left in them?

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Fund using alternative strategies gain steam
* I LOVE this fixed income presentation
* Strong words from editor of Financial Analysts Journal