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Networking

6 Steps to better Networking

Networking is a really important business activity, but it’s one that fills a lot of people with dread… They think of standing around in crowded rooms with no one to talk to, or being pinned in the corner with somebody talking endlessly about some mind-numbingly boring topic. And so while most people recognise the importance of networking, very few people do enough of it. In fact, I find it’s the one activity that causes the most discomfort when it ends up on the marketing plan for a Financial Broker!

So what can you do to make it easier and more effective? After all, if it actually works and helps you generate new clients, you are much more likely to continue to do it.

Recognise that it isn’t easy

It isn’t easy… but it isn’t easy for anyone. So while you might think that it’s so easy for certain people, that tends to be because they’ve worked really hard at becoming good at networking.  However, while some people might appear to find it easier than others, everyone at least has a common purpose  – they are there to build connections. So approach it from the point of view that at least everyone has the same goal and are open to talking to you.

You must have a strategy

At the end of the day, you’ve got to be standing in the traffic if you want to get knocked down! But it’s not enough to wander blindly into a networking event without a clue of how you’re about to approach it. This starts before the event where you try and get a handle on who is likely to be there. Are there lists of attendees available in advance? Can you check out who members of the business group / conference attendees are? Once you’ve an idea of who will be there, you can start thinking about who your preferred “targets” are. And then you can start doing some quick research on them through their website and LinkedIn profile. And this research will hopefully come in very handy later…

Be a first mover

Don’t just head for your pals and spend your night in deep conversation with them! By all means, if they are in a group of people that you want to meet, take the opportunity to get introduced into the group. But be active and make the first move to start conversations. Others will thank you for this and it also gives you the opportunity to guide the conversation.

Be interested

And this is where your research comes in really useful! If you can show a level of interest in the people you meet – some knowledge of their business, some connections you have in common, it might even be that you know about some quirky interest of theirs, this will ease them into the conversation as you are opening the door for them to talk about themselves. And then be interested because your interest in them will come back in spades. They will naturally want to reciprocate and turn the conversation towards you, which of course is then your opening…

Hone your own pitch

When you get over the initial chit-chat and move on to talking about your reason for being at the event and what you have to offer, this simply must be interesting and must grab their attention. At the end of the day, they will be talking to many people that day so you must be in some way memorable. If you are pitching your wares, paint pictures of solutions, not saying why you’re such a great financial planner. Let people see how you will solve problems for them and enrich their lives in some way.

Follow up brilliantly!

Then when all the hard work is done, make sure you take the final step. Contact people after the event saying how it was great to meet them and thanking them for their time. Connect with them on LinkedIn and if you send out a company newsletter, suggest that they be added to the circulation list. Send them information if this makes sense. If there’s a favour you can do for them, maybe there’s someone else you can introduce them to – well then this is even better.

So yes, networking is not easy. But hopefully these few thoughts might make the task a little less daunting for you!

Will Financial Brokers be replaced by Robots?

Does it sound like a mad idea to you? Well it shouldn’t, there’s even a name for them now – Robo-advisers. The question is not if they’ll eventually have a role in the Irish market, it’s when will they have a role and to what extent will they disrupt the traditional advice models.

So for starters, what is robo-advice? It is using technology to carry out the advice process within an overall investment management proposition. It’s related to the advice part, not the management online of an investment portfolio, as that capability has of course been around for years. It’s suggested that there is a swathe of the population that may be disenchanted with the traditional advice model and want to be more in control of the process themselves, via the use of technology. It’s already making strides in other markets – for example a robo-adviser firm in the US called Wealthfront now has more than $1bn in assets after only two and a half years in operation. They’ve doubled their assets in the last 9 months.

The robo-adviser model works by the investor completing a series of questions on a website, similar to those that you ask at a meeting with a client – their investment objectives, age, time frames, assets, risk profile. The website then instantly runs a programme that produces an appropriately diversified portfolio for the investor, made up of passive funds and ETF’s. Once the portfolio is implemented, the other activities carried out by an adviser (rebalancing, annual reports etc.) are also carried out by the robo-adviser.

So are robo-advisers a real threat for financial planners and financial brokers or can they be ignored? Well the jury’s definitely out, so here are a few thoughts to help you make up your own mind.

Why you can’t ignore them

  • Cost: Websites can typically work for a lower price than humans. So robo-advice will be attractive to investors whose main aim is to reduce costs.
  • Convenience: Investors can get advice without leaving their desks, at a time completely of their own choosing.
  • Dissatisfaction with existing broker: Some investors are dissatisfied with advice they’ve got in the past. They see this as a preferred way forward.
  • Technology: The technology is (or at least appears to be) there now to enable people to get the advice they are looking for.
  • Attractive to younger investors: These models are potentially more attractive to younger investors who are happy carrying out many others aspects of their lives online. Will they view investment advice any differently?
  • Attractive to smaller investors: As financial brokers struggle to deliver their proposition profitably to investors with smaller funds, this may not pose the same problem for robo-advisers.
  • The missing link: The advice piece was the one area missing in terms of portfolio management. Robo advisers will enable investors to fully manage their portfolios online.
  • Scale: One of the biggest challenges for financial brokers is to deliver a top-class advice proposition to large numbers of clients. This is not a challenge for robo-advisers.

So is it game over for traditional financial brokers. To my mind, absolutely not! While there might be fewer arguments “for the defence” below, these are very powerful reasons.

Why financial brokers will always win

  • It’s all about the discussion: We only have to look at the risk profiling process. I think many financial brokers agree that none of the systems available are perfect, that the discussion between adviser and client is equally important to bottom-out the client’s real risk profile.
  • Tasks can be templated, but people cannot: We’re just not that straightforward as a species! Research tells us time and time again that the full personalisation of advice is a key requirement of investors.
  • When markets tumble: Who do you call for reassurance and advice when markets tumble? I call my financial broker, unless he’s got to me first! No such luxury with robo-advisers.
  • A major change in your life: Who will help you make sense of the impacts on your portfolio of major changes in your life – a death, a sudden and serious illness, loss of job etc. All of these need a friendly face to keep you on track. Robo-advisers don’t offer that.
  • It’s not all about portfolio growth: Financial brokers give so much valuable advice around the edges of a portfolio – they will consider the impact of taxes, inheritance planning and protection needs. All very valuable and not on offer from robo-advisers.
  • You can’t ignore emotions: Investing can make you feel exhilarated, angry, reassured, doubting! Financial brokers play a very important counselling role, one that robo-advisers will never play.

I for one can’t imagine being willing to pass on the value that I get from my financial broker. Yes the fees may be slightly higher than those available online, however I think they’re worth every cent in terms of the reassurance that I get, the opportunity to “run things by” him and the sense of having someone in my corner. I won’t be moving!

Do you view robo-advisers as a real threat or are they on your radar at all?

Do you want your Marketing to Work? Get the Brief right!

Many Financial Brokers are now starting to turn their attention towards 2015 and as part of this, some are reviewing their marketing material.

There are probably two ways to approach this. The first is to appoint a marketing professional (cough, cough – such as myself!) to remove the headache and to deliver the particular project for you. The alternative approach is to roll up the sleeves, write the content and arrange the design and production yourself. Irrespective of which path you decide to follow, I suggest that one of the main determinants of success is the quality of the brief that you give to anyone who you engage in this process, such as a consultant, a graphic designer, advertising or PR agency etc.

This might not appear to be the most exciting topic in the world, but if you don’t want to waste your marketing budget, it’s a really important process to get right. So what should a strong marketing brief contain?

Clear Objectives

First of all, you need to set out in crystal clear fashion what are the objectives of the particular marketing project. Are you looking to raise brand awareness, to sell a product or to educate etc.? Don’t assume that any 3rd party involved in the process will instinctively know what you trying to achieve. Instead, remove any doubt and set out clearly your objectives.

Target Audience

Who are you trying to reach with your marketing communication? Think about this across a range of demographics;

  • Males or Females
  • Age groups
  • Geographical areas
  • Socio-economic groups
  • Occupational groups or sectors of the economy

The clearer you are about who your communication is aimed at, the better the chances of it actually getting picked up and noticed by that group. Because people will engage with it if they believe that it is specifically aimed at them.

Tone of voice

Think through the tone of voice that the audience are likely to best connect with. Should the communication be written in corporate style language or should it be written in informal “folksy” language? This needs to be considered carefully as the wrong tone of voice will immediately alienate the audience.

Their current perceptions of the product or service

It is always a good idea to capture the current perceptions of the product or service that is being marketed among the target audience. If you can clearly demonstrate that you know what the audience think of your product today and build your message from this position, this will help to build your audience’s engagement.

The desired perception of the product or service

This is where are you trying to get to. Is it a position of the audience seeing improvement, in building greater levels of trust, in seeing you as the best in the marketplace? Be realistic about your desired perceived positioning and then capture it clearly so that everyone understands where you’re trying to move the audience to.

Clarify the benefits of the product or service

These are obviously required, but spend time capturing these in detail. There may be an “angle” in one of the more obscure benefits that a creative person might spot as a great hook for your target audience. So list these out and explain in detail why the target audience values the benefits.

Design

First of all and similar to the tone of voice, some design styles will land better with your target audience that others, so clearly identify whether you are looking for a sophisticated, corporate design or something less formal and potentially even humorous for example.

The other area to consider in relation to design is the linkage back to your own brand. Provide all of the necessary assets – your logo and contact details are obvious ones. But also provide any colour schemes that you generally use and of course if you actually have brand guidelines, provide these.

Audience Reaction

The next question to consider is what you want your audience to think and feel as a result of your communication. Should they be enlightened? Should they be scared by some stark facts you’ve put out there? Should they be questioning their existing approach to the problem at hand, maybe questioning the approach that they are currently taking to their investment portfolio?

Calls to Action

And finally, what do you want the audience to do? Are you aiming that they will ring you, or visit your website or download some information? Maybe you’re looking for them to sign up to a newsletter or other communication? It’s really important to be crystal clear in your call to action, to give yourself the very best chance of success.

These are the areas that will make up a very strong brief for a 3rd party working on your behalf. Put the time into getting the brief right, it will pay back many times over in the long run.

Adding lots of value to your clients? Tell them about it!

A lot of advisers today are really starting to effectively demonstrate their value to new clients in their initial meeting. Using powerful presentations or other marketing material, they are setting out their advice processes and how these processes are really valuable to the clients.

However many advisers still struggle with reminding their clients of the ongoing value that they are adding, year after year. They’re providing great ongoing advice, adding value to the clients throughout the year but the clients just don’t seem to see it – they don’t realise the value added… So how can you keep reminding your clients of the tremendous value that you continue to add?

Here are two ways that I think are really important.

Have brilliant review meetings

This is a very obvious one, but there are some financial brokers who consider it a “win” if the client says they don’t need a review meeting! The review meeting going ahead is certainly not a win. Yes it might give you an extra few free hours, but the opportunity cost of reinforcing your value is significant.

Of course there is the “hard yards” in review meetings of reviewing a client’s portfolio, getting up to date values and potentially even writing a short review report. But this is balanced with the business opportunity of potential top-ups, a review of protection benefits and policies and new financial products needed. However the real opportunity to demonstrate your value on an ongoing basis to clients rests outside of the traditional review meeting agenda. Why not take a little extra time and set out for your clients some financial benefits that you’ve delivered to them such as;

  • The growth in actual euros of their investment portfolio
  • The tax saved as a result of their pension plan and any other tax efficient policies
  • The actual money saved in euros and cents as a result of a protection review you carried out previously.

 Now your ongoing fee / trail commission starts to look very small! However there’s still a lot more you can do at these review meetings to demonstrate further value to you clients.

  • Help your clients with their household budgeting. Trust me (as a consumer), this can add huge value to your clients!
  • Talk to them about their broader financial needs where you don’t provide the solutions. You can add value by tapping them into your network of solicitors (for their will or enduring power of attorney), tax advisers (tax advice) or accountants. Now you’re the person pulling all of the strings!
  • Obviously if you carry out future cashflow planning with your clients, this is an exceptionally valuable exercise every year.

Client Calendars

There are lots of activities that you carry out on behalf of your clients during the year. The challenge is getting them to notice the work that you’re doing on their behalf and then reminding them about it in an engaging and memorable way. One of the ways that you can do this is by providing your client with their own calendar of your services every year. Obviously you would create a nicely presented version of this, but the main content for your key clients might look something like this, if presented at the end of each year;

  • January: Client newsletter,
  • February: Investment rebalancing
  • March: Annual Review Meeting, client newsletter
  • April: Investment seminar, update on major market movements
  • May: Investment rebalancing, client newsletter
  • June: Golf outing
  • July: Client newsletter
  • August: Investment rebalancing, meeting with your accountant
  • September: Half Year check-in, client newsletter
  • October: Budget update, tax deadline review
  • November: Investment rebalancing, client newsletter
  • December: Christmas lunch

Now the client sees you working for them throughout the year, not just at a single point in time at the review meeting

If you’re delivering both of these supports in a structured and engaging way, how likely is your client to start arguing over your trail commission?

How are you going to exit your business?

This is a question that continuously exercises all business owners. How are they going to leverage their business to support their desired lifestyle when they want to stop working? This article explores some of the main areas you might consider to increase your chances of achieving your end goal in relation to your business.

What are your goals?

First of all, think about what is important to you in terms of exiting your business. Do you have a particular timeframe in mind? Are you looking to “get out early” and maybe have a long, but relatively modest retirement? Or are you looking to work hard well into your 60’s (or later) and then sell your business to fund a more prosperous retirement? If so, it’s important to be working towards a definite end date. Or are you looking to build a business that will continue after you’re gone, possibly headed up by one of your children, a business that may also support you in retirement?

These are really important decisions to think about now, as they will influence what’s important in achieving your goals. Will it be all about maximising the value of the business on a certain date in the future or are you trying to build extremely deep relationships between your clients and your business that will endure after you’ve exited?

Know what your business is

Now you’ve got to be really honest with yourself. What do you have to sell? Is it actually a business or simply a consultancy service? For some Financial Brokers, they’ve built up a thriving business in which they are the conductor of the orchestra, where the value is not based purely on their own presence in the business. These businesses are obviously very attractive to potential buyers. Then there are other businesses in which the value all revolves around the business owner. Take the owner out of the equation and what is there? While these businesses may offer a nice lifestyle to the owner, they are a far more challenging proposition when it comes to trying to sell.

If you own a business that is based on you as the key asset and you have ambitions to sell it one day, you need to start thinking about how you will develop some saleable value within your business.

Where is the value in your business?

So let’s assume that there is potential value in your business, outside of your own input and that your aim is to actually sell your business. Now it’s time to try and maximise the value of all of your assets. These might include;

  • Financial Assets: An obvious one to start. The main asset that a prospective purchaser will pay for is the future income stream of your business.
  • Persistency: The next thing a buyer will look for is the persistency of your business as this will be a key influencer of the potential future income stream. This will give them a sense of the quality of the “book” of clients that they are buying.
  • Brand: if your brand is well known and seen as a trustworthy brand, there is definite value in this for a buyer.
  • Staff: If you have a team of highly qualified, revenue generating people that will remain in the business, they are a very valuable asset to the business.
  • Market Positioning: If you have a recognised presence in some attractive market segments and niche areas, these may open up new opportunities to a potential buyer.
  • Operational Excellence: If your service proposition, compliance and data management (among other) areas are very strong, these offer great opportunities for a buyer to leverage off the capabilities of your business.

Who will facilitate your exit?

This is another factor that you need to start thinking about well in advance. Who is likely to enable your exit from the business? Once you’ve identified the profile of your potential buyer, you can then work on making your business proposition as attractive as possible to them.

If your aim is that your business will continue with a new leader / owner of the business, you need to start identifying who your potential successors will be. Do you have fellow directors who will buy you out? Or do you have younger, ambitious individuals within the business who might want to take over after you’ve gone? If so, you need to identify these people and start putting in place structures and interim incentives to retain them, and to make it attractive for both you and them for a buyout to happen in the future.

If an external buyer is your preferred route, you need to start identifying particular candidates. Would your business be attractive to current competitors, either in your market segments or geographical area? How would your clients react to this? Are there firms trying to build presence in a niche where you already enjoy a strong presence?

And then, how do you alert potential buyers? Is it a quiet word or a public tender (which will alert your existing clients)? Or can you use the broker networks to gather interest?

How will they pay

Of course one of your main areas of interest will be how much you will get for your business and how the consideration will be paid! Will it be a straight cash deal or will there be some tie-ins into the future in the form of earn outs etc. And how will your firm be valued – are buyers likely to look at recurring income, profits or future cash flows? And which of these works best for you?

Lots of questions to consider! Now is the time to start thinking about them. The more thinking and preparation you do well ahead of your exit date, the more fit for purpose your sale proposition will be. And all of that is likely to result in a higher price for you.

What are the critical areas that you believe need to be considered when selling a financial advisory firm?

Are you still a Salesman?

I was with an adviser recently who ticked me off on a couple of occasions when I mentioned the word selling. He contended that he is an adviser and not a salesman. I say that you need to be both…but not like the guy in the picture!

There’s nothing wrong with selling!

For some people, selling is a dirty word. Particularly so when you are dealing with financial services. That’s understandable I believe when it comes to mis-selling, however this is an experience being suffered thankfully by fewer and fewer clients today. Financial advisers have continued to raise their game, industry standards have increased, and compliance oversight has increased too – all of these factors resulting in fewer incidents of mis-selling. Yes, there have been a few high profile cases (the latest one involving a well known stockbroking firm) unfortunately in recent years that again undermine trust, but these are not representative of the market in the main.

In fact these cases increase the need for selling! Not of financial products though, instead there’s a need to get out and sell the value of doing business with you!

Selling is exchanging

The Wikipedia definition of selling is; “Selling is offering to exchange an item of value for a different item”. A key part of your job is to convince your clients to exchange your item (advice, guidance, expertise) for their item (commission, fee). So selling is not passé. The financial advisory business model still needs selling.

The old days of “the insurance man” out selling products are thankfully long gone. This was where the seller was very transactional focused, having access to a very narrow range of (poor) products and their role was to convince people to buy these products, whether they really needed / wanted them or not.

The difference today of course is that the process starts and ends with the client. The transaction (if needed at all) is only a means to an end, a mechanism which helps clients to meet their own specific financial objectives. The value that the client gains is the advice, leading to the optimal product choice, rather than the product itself. Of course nothing stays the same as well, so advisers also need to sell the benefits of ongoing monitoring to ensure product adjustments are made as required to help the client to achieve their objectives.

Selling is necessary

Independent financial advisers provide a really valuable service to their clients. However prospective clients who haven’t experienced your service and seen the value being gained, may still be living in a world of mistrust of all financial advisers. So you’ve got to convince them otherwise and sell them the value that they will derive from having an expert on their side of the table, guiding them through the complexities of the world of personal financial planning.

To do this, you need to have developed a very robust proposition for your clients and then be able to communicate this in a very engaging way. If you can’t do this, they won’t see the value that they are getting and of course there is no way that they are going to part with their hard earned cash to buy your services.

Don’t be ashamed of selling, it’s a very noble pursuit when carried out with the right intentions! You can be very proud of the product (advice) that you provide and of the value that clients get from exchanging value with you. So get out and shout it from the rooftops!