Tag Archive for: communication

Everything old is new again in advisor communications

This guest post comes from Andy McMorrow, a longtime financial marketer who has inspired some of my own blog posts. I’m glad to have his contribution about crisis communications for advisors.

Everything old is new again in advisor communications

By Andy McMorrow

Back in the day—probably been 15 or 20 years ago—private wealth consultant Russ Alan Prince did research on the topic of advisor communication during times of crisis. He discovered that not only did communication with clients help advisors retain client assets (as compared to those who did not communicate with clients), it could be used as the basis to grow AUM as markets returned to relative normalcy. More on this in a moment.

Discussing bad news can differentiate

Prince hypothesized that communication during times of crisis was a differentiator from most clients’ perspectives. My hypothesis in this blog post is that it remains so.

Let’s face it: delivering bad news hasn’t gotten any better in the past decade. There’s still no app for that.

Fact is, the path of least resistance for advisors has always been to avoid the discomfort of a discussion with a client when their portfolio performance is less than ideal.

Prince suggested that doing exactly that can really set one apart and help build trust. I think it’s a great plan of action for those willing to set aside the short-term angst of making lots of client calls in order to strengthen the client relationships.

4 suggestions for conversations

How does one go about this? Several ideas:

  • Focus on the plan—Remember the plans that you worked diligently to develop in close collaboration with your clients when the market was gliding ever upward? The plans that formalized the rational approach you suggested based on their time horizon, comfort with risk, etc.? That’s a great tool to support your outreach, especially if it can help you show that they are still on track to meet their objectives over the long term. Help them focus on the thinking they understood and signed off on before things went haywire and panic rose to the fore.
  • Help them be heard—Much of the value of financial advice comes from just “being there,” listening and acting as a sounding board, and keeping clients from taking rash action. (I want to sell at the bottom of the market and put everything in cash!)
  • Remind them that they’re part of the herd—Research has shown that investor attitudes to gain or loss can vary greatly depending on how that gain or loss compares to the market in general or that of another individual. Admittedly, a 25% loss of assets is tough no matter how it is communicated, but understanding that every investor felt that to some degree, will take the edge off of it. All investors—not just your clients—are feeling the pain.
  • They haven’t lost until they sell—Those losses are only conceptual unless the client locks them in by selling at the bottom of the market. Sure, nobody knows where the bottom is, just like no one knew where the top was; time to break out the “10 best days in the market” and other sales idea to help them understand the risks associated with staying the course or selling after the market’s worst series of days.

The point is communication is better than not communicating. As speaker and financial advisor coach Richard Weylman says, “In the absence of communication, people always assume the worst.”

Don’t let them assume the worst about you and your relationship with them and their money.

Grow your AUM

As a final thought, consider Prince’s final suggestion for communication: use it as the foundation of a strategy to actually grow your assets under management.

How do you go about this?

Prince suggested that in your outreach you ask about client assets that are managed by an advisor or advisors other than you. (If I recall, Prince had compelling research that said most clients do have assets spread among two or more advisors.)

Have they heard from their other advisor?

Yes? What did she or he say?

No? How do they feel about that? Depending on their response, you may have the perfect opening to use that lack of communication to segue into a conversation about consolidating those assets with someone they trust and is there for them in good times or bad.

If not, simply take note and be sure to ask again when you reach out in your next touch during the Downturn of 2020.

Andy McMorrow is a financial services marketer with more than 20 years helping asset managers, institutional firms, and advisors engage clients and prospects to prepare for their financial futures.


Prepare clients for market volatility

Prepare your clients for the fact that their portfolios will experience periods of disappointing performance. I often share this advice in my presentations on “How to Write Investment Commentary People Will Read,” but I’m always seeking more specifics on how to do this. At the NAPFA Spring 2019 Conference, I picked up practical ideas for how financial advisors can achieve this.

Financial plan as source of certainty

In “Improving Investor Behavior Through Behavior Coaching,” Jay Mooreland of the Behavioral Finance Network touched briefly on how financial advisors can prepare investors for volatility. He suggested focusing on the financial plan as a source of certainty.

Talk less about performance, and more about the plan, he urged the audience. “Remind them that your plan accounts for this volatility,” he said. After all, as he said, we can’t control market volatility, the economy, or politics. We can, however, control our investment strategy and our behavior and our reactions. In fact, you can coach clients to view volatility as their friend. That’s because it gives people an opportunity to “buy low.”

Pre-commitment plan

Mooreland suggested creating a “pre-commitment plan.” Tell your clients you understand that it’s difficult to buy during volatility. That’s why you have clients commit in advance that if the market falls X%, they’ll move Y% into stocks. You can make plans for multiple levels of market declines. “From a behavioral standpoint, it can be powerful,” said Mooreland.

Mooreland also showed two market performance graphs that reinforced why investors shouldn’t let short-term volatility upset them. If you fell asleep on September 1, 2018, and woke up on Easter Sunday, 2019, the market would be at roughly the same level. That investor wouldn’t have experienced volatility.

The perception of volatility is a function of how often you look at the market, said Mooreland. The more often you look, the more often you’ll see what is ultimately a good investment look bad.

Use your communications to reduce the volatility and stress that your clients feel. Both you and your clients will benefit.

Avoid guarantees

Of course, don’t promise that the financial plan will protect clients from harm in any scenario. You know how the SEC feels about guarantees. Still, there’s plenty that you can do within the constraints imposed by the regulators.

Dear husband, please stop

You can learn a writing lesson from my dear husband.

It drives me crazy when he says to a restaurant’s hostess, “You don’t have a table for two, do you?”

I nag him afterwards, saying “Ask a positive question, not a negative one! It’s easier for the listener to understand what you want.”

The “go positive, not negative” rule applies to statements as well as questions.

Here’s an example of a negative statement that sticks in my mind due to my having earned a Ph.D. in Japanese history.

“The war situation has developed not necessarily to Japan’s advantage…”

This is how the Japanese emperor announced in 1945 that Japan had lost the war. Did you understand that?

The Japanese prefer roundabout sentences. Americans do not.

How to help your clients help their aging parents

Your clients’ communications with their aging parents can have a big impact on their peace of mind as well as their financial plan. A family meeting is one way to improve communications, as described by Bob Mauterstock of Gift of Communication in “Breaking Down the Barriers: Helping Your Clients Help Their Parents” at the annual conference of the Financial Planning Association of Massachusetts on May 16, 2013. As a financial advisor, you can help clients by suggesting they organize a meeting. You can even facilitate the meeting, said Mauterstock.

The family meeting can break down the generation gap and the communication gap, said Mauterstock. Your clients and their parents may not find it easy to talk. Parents belong to a generation where emotions or money weren’t discussed. They may also shun the online communications favored by younger generations. Face-to-face communication may work best for them.

Family meeting participants

The family meeting should take place face-to-face and involve both aging parents and all of their children, said Mauterstock. Don’t leave out anyone. You’ll probably find that one child is the alpha child, most trusted by the parent. In an interesting twist, Mauterstock, who is an only child, looked to his wife as their “alpha child,” needing her endorsement of his suggestions.

Also involve a facilitator as a neutral party. When financial advisors act as facilitators, they can be heroes to their clients, said Mauterstock.

Family meeting agenda

Start with values, not valuables, in your family meeting, advised Mauterstock.

Be aware that aging parents want to maintain control over their lives. Tread carefully. Anything that threatens control will cause parents to shut down.

Start with the parents’ emotional issues. They are wondering:

  • How will I maintain control over my life?
  • How will I be remembered by my children and grandchildren?
  • What do I want to get done whether I’m alive or not?

Other topics for discussion include legal, healthcare, and financial issues as well as the details and location of other key information.

Other resources

Mauterstock is the author of Can We Talk? A Financial Guide for Baby Boomers Assisting Their Elderly Parents. He blogs at www.parentcareplanning.wordpress.com. Among the books in his extensive resource list was David Solie’s How to Say It to Seniors.

Instructions for a bad wife

I’m a bad wife. I confess that I don’t always give my husband 100% of my attention. Maybe not even 75%. I’m trying to turn over a new leaf. But in the meantime, you may learn something about communication from my failure to accurately follow my husband’s parking instructions.

Lesson 1: Don’t over-explain

As a financial advisor, you’ve probably given instructions to people—clients, employees, vendors, and fellow professionals—who are distracted as they listen to you. If you give them too many details, they may zero in on the wrong points and make mistakes.

In my case, my husband gave me very detailed instructions about where he wanted me to park my car and why I should park there. It involved our shed, his tires, the garage, and the patio. Since I wasn’t listening closely, I imagined a mistaken scenario in which his tires were in the shed, so he needed me to park far back in the driveway.

If only my husband had said, “Please park in the driveway like you usually do when I need to park on the patio. You can’t park in the garage because…”

Lesson 2: Listen and ask questions

My husband forgave me for messing up, but you may not be as lucky if you don’t listen to the folks giving you instructions.

If you can’t concentrate on the conversation, maybe you should wait until another time to get instructions. Or ask questions to confirm that you’ve understood the instructions properly.

I plan to try one of these two methods the next time my husband asks me to do something for him.


Image courtesy of stockimages at FreeDigitalPhotos.net

Outlook Social Connector: A cool email helper

Outlook Social Connector

You can see multiple categories of information using Outlook Social Connector

Better email communication results from a better understanding of the person with whom you’re exchanging messages. It’s hard to keep all of the relevant information in your head, or even to collect it in one place. This is why I like Outlook Social Connector, which I learned about in consultant Bill Winterberg’s presentation on “Transformative Technology You Can Implement Today” at FPA Experience 2012. While Winterberg highlighted the tool as an aggregator of social media activity, I especially like its email function.

Email history display

When I write anything more than a simple email, it helps to see an overview of my recent emails with the recipient. Sure, I can get that by doing a search, but Outlook Social Connector automatically presents that information to me.

Eyeballing this history may remind me of something that will strengthen my email. Another tab shows me attachments we’ve traded recently, which is handy if I want to confirm that I’ve sent the latest draft or invoice.

Social media information

I’ve connected Social Media Connector to my LinkedIn account. When I click on an email, I see my contact’s LinkedIn

  • Photo
  • Recent activity (New connections)
  • Status updates

This helps me to personalize emails to the recipient. For example, I may comment on a blog post link posted by the recipient.

Facebook is also an option

Outlook Social Connector connects to more than just LinkedIn. The most noteworthy other option is Facebook. I wish they’d add Twitter. However, LinkedIn, in my opinion, is the most helpful option for business.

If you’re using Outlook Social Connector, I’d love to hear how it has helped your emails, client relationships, or marketing.

Your investment performance reports are failing you

Sending inadequate performance reports to your firm’s clients can hurt your client retention, says Philip Lawton in Middle Office: Managing Financial Institutions in Turbulent Times

Too many numbers is a common flaw. Clients also need narrative explanations, says Lawton. In my experience, some people can quickly grasp the significance of a chart or table. Most people will benefit from explanation, especially an explanation that highlights the most important data.

Charts that are “busy and unattractive” are also a problem, Lawton says. He suggests that you hire a graphic designer to work with your performance analysis to fix this.

“…over time, ill-designed reports and poorly delivered explanations may damage relationships and erode trust,” concludes Lawton.

Jan. 22 comment by Philip Lawton:

It’s hard to get performance reporting right, but seeing it—and helping compliance officers see it—in the context of client relations can make a difference. Retail clients may be relatively unsophisticated, but institutional clients are typically very busy, and both need clear, meaningful communications. Performance reports must, of course, be complete enough not to be misleading, but too many numbers tend to elicit too many words of explanation; the result may be frustration and, ironically, incomprehension. That’s not the desired outcome!

Happy Thanksgiving! I’m thankful for…

Dear readers, Happy Thanksgiving! I hope that you have a wonderful holiday.

I’m thankful for you, my readers. You’ve inspired my writing with your ideas, your responses to my “Reader Challenges” and polls, and your questions. You’ve supported me from the very beginning, signing up to receive my e-newsletter that eventually grew into my blog and social media presence. Some of you have taken my blogging class, attended my presentations, hired me as a writer or editor, recommended me to colleagues or on LinkedIn, or shared my work online.

I’m also grateful for social media. LinkedIn, Twitter, and Facebook have made it easier for me to reach and chat with you. An introvert like me couldn’t have touched as many people in the days before social media.

I appreciate your support. Thank you!

Should my firm insert its name at the start of every email subject line?

You asked plenty of great questions during my presentations on “Writing Effective Emails and Letters.” One participant asked whether a company should insert its corporate name at the start of every email subject line.

I say “No,” as long as the sender’s email address clearly indicates the corporate affiliation. The space limitations of your email subject line, which I discussed in “Don’t make this mistake in your email subject lines!” mean you shouldn’t include information that doesn’t serve a purpose. Repeating your company name in the subject line wastes space.

Does YOUR company use its name in subject lines?

If your company uses its name in every subject line, what’s the reasoning behind its approach? Does your firm’s email address not clearly reflect your company name?

Why hire a writer? Three powerful reasons

You can write. You know your company, products, and services better than anyone else. You may even be a great writer. So why should you hire a freelance writer instead of writing your own article, white paper, or other piece?

1. Your project will be completed on time

You’ve got lots of work to do. Writing keeps getting pushed to the back of the line. A writer who understands the importance of deadlines will give you a realistic schedule and complete your project on time.

2. Your topic will be explained clearly

Experts like you often suffer from the curse of knowledge, a term I first encountered in Made to Stick by Chip and Dan Heath. It’s hard for you to explain things to outsiders because you know too much. You may get bogged down in details before you tell readers why they should care about your topic.

A writer can tackle your topic from the perspective of an outsider. Journalistic skills help the writer draw out the right information when they interview you.

3. Your piece will be easy to read

Writing isn’t your focus. Despite your talent, you lack the time to edit and proofread carefully. When you reserve your energy for editing and proofreading your professional writer, you’re bound to get better results.


Image: FreeDigitalPhotos.net