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FEATURE STORY
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The Perfect Storm - Part 1:
Positioning
By Matt Oechsli
Detroit, MI - "Every day seems to bring another crisis that I have to
deal with. These markets are just brutal," said Charles. "I'm hoping
things will turn around in a few months so I can finally start calling
my clients with some good news. I just don't see how anybody can bring
in new business right now; I'm spending all my time putting out fires."
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Like so many advisors, Charles didn't realize that he was in the
middle of a perfect storm for Rainmaking. These troubled times offer
advisors in the know unique opportunities for affluent-client
acquisition--far greater opportunities than bull markets can ever
offer.
The current volatility in the markets, the uncertainty of the
upcoming presidential election and, according to our research,
increasing affluent dissatisfaction with financial professionals, all
come together to create an unprecedented level of financial anxiety and
confusion among the affluent. This is a breeding ground for opportunity
for those financial professionals who are willing to capture it.
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Why? Because when the markets are good and the affluent are making
money with their investments, it's easy for them to overlook the other
aspects of their financial affairs. I believe the saying goes, "if it
aint broke, don't fix it." But, when the markets turn sour, and the
affluent are forced to tighten their belts, they will take a hard look
at the totality of their financial affairs and the quality, value and
convenience of the services offered by their financial advisors. I've
said it before: Any advisor who lives and dies on the strength of their
investments alone is at risk of losing his clients.
Our ongoing research on the affluent clearly tells us that they are
looking for a primary, or "go to" financial coordinator to handle the
multiple dimensions of their financial affairs. It's important to
understand that positioning onselef as the "go to" financial coordinator
is not simply about making a sales pitch. You have to actually put words
into action and become the "go to" financial coordinator. Show, don't
tell.
Our research on how the affluent make major purchase decisions
clearly reveals eight statistically significant criteria that the
affluent use to select--and whether to stick with--a "go to" financial
coordinator. I will examine two of these criteria that are especially
important in today's environment, and provide you with a few steps you
can take to properly position yourself to fulfill them.
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Criteria #1 - Proactive contact when tax or other changes impact
their portfolio.
This seems simple enough at first glance, but as Charles' story
demonstrates, it's an activity that is commonly overlooked, ignored or
avoided by many advisors. And, by the way, quarterly reviews of a
client's portfolio are not enough. The sub-prime debacle and the
volatility of the markets will clearly impact your affluent clients'
portfolios and provide you with an excellent opportunity to begin
re-positioning your practice.
Action step: Communication is key. Contact your clients and
explain how these markets will impact their portfolios. Maintain open
lines of communication, and contact your clients as often as they need
or want to be contacted.
Criteria # 2 - Understand personal and family goals when giving
advice
As stated above, these market conditions force the affluent to take a
hard look at their financial affairs. They will closely evaluate the
investment decisions you've recommended to ensure they are directly
linked to their personal and family goals. You must be able to
demonstrate why you made the recommendation and how it is directly
linked to achieving a personal or family goal.
In order to do this, you must truly know your clients. By
demonstrating to your clients that you understand their goals and have
made decisions about their portfolios that are linked to achieving those
goals, you will further position yourself as their "go to" financial
coordinator.
Action step: Contact your clients to make certain you truly
understand both their personal and family goals. Make this activity - in
today's challenging times - a fixed daily activity. From this vantage
point, you will be able to demonstrate to your clients that their
investment decisions are sound regarding their long-term goals.
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Again, like so may advisors, Charles needs to become immersed in
learning more about the affluent - their needs, wants, expectations,
goals and perceptions and begin studying how Rainmakers position
themselves so effectively in declining markets.
Our next newsletter, The Perfect Storm - Part 2: Prospecting, will
focus on how to prospect the affluent during this Perfect Storm.
For more information, join our FREE Rainmaker
Teleconference or download a FREE copy of our 8 Criteria Worksheet.
Once again, we want to thank all of you who have emailed comments and
questions to us. We will continue to do our best to answer each one. If
you have any topic suggestions or special requests, please contact Rich
Santos, publisher of Registered Rep. and Trust & Estates
magazines, at rich.santos@penton.com.
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