The power of storytelling

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A number of people commented to me after I recently shared an article from the New York Times. To my mind, this is one of the best case studies I’ve ever read about the power of working with an excellent financial planner. This is not a story about the planner enabling mega-growth in somebody’s wealth. Instead it is the real-life story of how a financial planner helped steer the journalist and his siblings through the death of their father.

The power of this planner’s approach with this family was not in clever financial solutions, it was all about the practical advice given, the quiet hand on the tiller guiding them through one of the most difficult periods of their life and the heartfelt empathy demonstrated as the planner travelled on the difficult road with her clients.

The reason the article has such an impact is because it is not some theoretical explanation of the benefits of financial planning, instead it is demonstrating it in a real-life situation. It is bringing real emotion into an educational and insightful piece.

 

Make it personal

It reminded me of a conversation I had in the last year with a great Irish financial planner. We were discussing content marketing and LinkedIn & Twitter in particular. He mentioned that his most Liked / Shared / Commented article was a post he put up about celebrating his son’s birthday. However the post was not just about a birthday party, it was about making time for the really important parts of our lives, and doing this in a financially responsible way. Life is not just about working and accumulating wealth, instead it is about being able to live our lives as we choose to do. Excellent financial planning demonstrates to your clients how you can make this happen. Telling this through a personal story makes it much more engaging than an “Expert Insight” piece about financial planning.

 

Give real-life examples

While I can’t claim to have written such powerful pieces myself, I regularly see the strength of more personal content myself. Over the last year, I’ve written a number of pieces about the impacts of working with backdrop of Covid-19. The most read articles were the ones where I gave some insights into how I’ve approached working in this environment, what has worked well and the mistakes I’ve made for others now to avoid! People want to read real-life stories and examples.

People like insights into your life and how you actually work. Each year I write about apps and technology that I can’t live without and these are some of my most-read articles each year. I was left scratching my head for a few years about this, as I could not understand why these would be read more than the other great and insightful (in my mind) content that I’m writing all of the time!! It’s because people get an insight into the person and how they work.

There’s a lot to be gained from maybe stepping a little out of your comfort zone, opening up a little more than you may have done so previously, and even leaving yourself a little vulnerable.

 

People will relate and engage better with your personal stories.

Does running a niche business make sense?

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This is a question that occupies a lot of thinking time of many advisers today, as they contemplate their future client acquisition strategies. While we are seeing some advisers setting minimum hurdle sizes with new clients (either in assets under management or agreed fee levels), let’s be honest, many advisers are generalists, welcoming any prospective clients into their business. So it’s a valid question – is a niche strategy a viable business model for advisers?

I believe that if carried out in a very structured way, it can be a very viable strategy.

Let’s start with a definition of niche. One I came across described it as, ‘denoting or relating to products, services, or interests that appeal to a small, specialised section of the population.’ The scary part in reading this is the piece about the “small, specialised section”, as this leads people to think that their base will be too narrow to make it sustainable.

 

Niche strategies can make life easier!

I tell this from personal experience. When I decided to strike out on my own almost 10 years ago now, this challenge was the one that gave me the most headaches. Would I concentrate my proposition and ultimately my sales & marketing efforts only on financial advisers? Or would I offer my services to any client that I could get?

I went for the niche strategy, focusing my efforts solely on financial advice firms. My target audience was immediately narrowed to only hundreds of firms, rather than tens of thousands of potential customers. That was scary.

But what was far easier was connecting with this group. Rather than trying to appeal to everyone, and probably not connecting with anyone, I could focus all of my efforts on a specific group of people. This made it easier in developing my sales propositions, writing website content, producing newsletter and blog articles. I can communicate with a clear target in mind, and my messages as a result are a little more personal to my audience. I also have much richer and relevant experiences to call upon when working with different advice firms. On the other hand, when you are trying not to exclude anyone from your sales and marketing efforts, it’s very difficult to connect with people.

Yes, a narrow niche strategy is hard at times, and when business goes a little quiet the temptation is always there to broaden my marketing into other markets. But doing that will dilute my presence in the narrower (financial adviser) market. And just because you target a niche only, it doesn’t stop you working in other markets. I’ve worked with a number of businesses in other sectors, who saw what I was doing with financial advisers, approached me and asked me to bring those skills to their industry. But staying focused on my niche in my sales and marketing efforts will generate the lion’s share of my work, and is the right strategy for me.

 

What are viable niche strategies for financial advisers?

Financial advisers who have gone down the niche route successfully have tended to do so by focusing on one (or sometimes more) of the following,

  • Demographics: Focusing on specific age categories, gender, social grades (e.g. ABC1’s)
  • Employment sectors: Focusing on the public service specifically, sectors within the private sector, specific occupations.
  • Geography: Focusing on clients within a certain geographic area only
  • Product lines: Focusing on developing expertise and leadership positions within specific product areas or dealing only with clients who require full financial planning relationships.

 

What are the main steps in building a niche strategy?

If you decide to go down the niche route, first of all you need to do some research about your target niche. You need to understand the numbers of target clients (is the niche large enough to sustain you?), think through how you will access them and consider what opportunities are available to you to market to them effectively. You need to also think deeply about the problems that you will be able to help them to overcome, and how you will communicate and demonstrate your capabilities to that segment of the population in an engaging way. Because at the end of the day, you will live or die by whether your target customers recognise that they are dealing with a specialist in the particular niche or not.

 

Niche strategies are certainly not right for every financial advice business. However for some, they just might be the best way to fully leverage a unique strength or opportunity of your business.

6 “no no’s” on LinkedIn

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I’m a big fan of LinkedIn and have been for the last decade. While some people (too quickly) dismiss it as just another route for recruiters to target your staff, I believe it offers significant benefits to financial planners in building and engaging a valuable network. However it’s not perfect, and as a follow-on piece to the above linked article, I think it’s useful to set out a few practices that people should avoid when using LinkedIn.

 

LinkedIn is not for selling

If you’re thinking about using LinkedIn for selling, think again. LinkedIn is a platform for setting out a professional profile on the web, building a valuable network and then engaging with this network over time. There is nothing worse than accepting a connection request, only for it to be followed by a sales pitch from my new connection. It is by far my number one gripe and will result in me not engaging with you…ever. Think about it – it’s like walking into a room, introducing yourself and then shoving your product or service in the other person’s face. You never do it in real life, don’t do it online either.

 

Never send out the stock LinkedIn connection request

This one is the second biggest sin in my book! I urge you to always personalise a connection request. If you know or have previously met your target connection, remind them of this. Otherwise find something in their profile or on their website which demonstrates that you want to connect specifically with them. It’s too easy and lazy to send out a bunch of standard connection requests hoping that some of them will land… but is that not just spam?

 

There’s no point being secretive and hidden

Remember that LinkedIn is a networking tool. This is important, and the best physical networks are ones where people are open with other, introduce new people, collaborate together and help each other. So why do some people keep their connections hidden online? I’ve been using LinkedIn for about 15 years now and still haven’t heard of a single example of a client being “stolen” or even approached, as a result of being identified as a connection of another adviser.

In this vein too, I always advise that you remain visible yourself and identifiable when looking at other people’s connections. What’s the harm in someone seeing that you are considering connecting with them or otherwise researching them? Is that not an integral part of networking?

 

Don’t leave your profile unfinished

This is one that we’re all guilty of. Review your profile regularly as this is your personal showcase on the web. Make sure the information is up to date and that you’re putting your best foot forward in each of the profile sections. LinkedIn make this very easy for you, by asking you all of the relevant questions in each of the sections.

One area in particular that carries a lot of weight and adds hugely to your profile is the Recommendations section. Why don’t you approach that recent, delighted client to whom you have just delivered clarity, valuable advice and a roadmap to achieving their financial goals. They will probably be delighted to recommend you, but they won’t think of it – you need to ask!

 

Less haste, more speed

It’s very easy to share updates on LinkedIn. But it takes a little bit longer if you want to maximise the impact of your posts and the value that you add. It is worth that extra minute or two to go and find a good image to use, as opposed to not using an image. Posts without images have far lower click rates. In the same vein, if you are sharing 3rd party content, add your own take on it or a question that you think it poses. It might take a minute to think of it and type it in, but it’s worth it rather than just sharing a link.

 

Don’t give up

It take time to build an effective network and to then engage your network. I’m a long-time user of LinkedIn and really believe that with a little bit of effort, it can pay big dividends. For me it has been a consistent and valuable source of new clients, and that is without ever “selling” on LinkedIn. Instead through trying to add value with what I hope is useful content, LinkedIn has got me on to radars that I otherwise probably would never have appeared.

It does take a little bit of time and some effort, but it’s worth it. If it’s not happening quickly for you, stick with it. It is worth persevering.

 

Will 2021 be better for advisers?

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2020 has been a year like no other. It has created unexpected and unique challenges for financial advisers in terms of the daily running of your business, interacting with clients and growing your business. There was no clue coming into 2020 that it was going to be a year less ordinary…

In looking at the prospects for 2021, I had a number of conversations with advisers about their outlook and prospects for the year ahead. These were hearteningly positive conversations, most advisers that I spoke to are very optimistic about 2021. This optimism is based on a number of factors.

 

There’s bound to be less upheaval…

Of course there is no guarantee of this, but if we have an event as significant for the whole world as covid-19, we can probably all throw our hats at it! We are in the midst of a once in a generation event… and advisers are still standing. In fact many report that their income has not been particularly badly impacted in 2020, a good place to be as we survey the decimation of the economy as a whole.

It’s important to remember though that this is not just down to good fortune, it is also an outcome of your planned and well-executed shift in income model away from upfront commission towards a recurring income basis.

And let’s not forget that finally it looks like there are effective vaccines on the way.

 

Your investment advice is well placed

Most of you consistently guide your clients away from trying to time markets and avoiding making short-term investment decisions. If ever this advice was put to the test, this was the year. A 34% drop in markets as a result of covid and huge uncertainty around the US elections certainly tested the mettle of investors. Telling your clients to stick to the plan and avoid short-term noise paid off in spades. Markets were up 60% from their low point in March to mid-November and staying invested through the US elections resulted in a 9% gain over the following two weeks. Those investors who baled into cash at the low points will rue those expensive decisions.

As we enter 2021 and we see the uncertainty arising over Brexit, what will your advice be now? I know what I plan on doing with my investments… I won’t touch them or even look at them again for a few months.

 

Clients will need your help more than ever

There are a lot of people very badly impacted by covid. They have had a very difficult year and their businesses have been severely impacted, for many their doors have been shut. Some will never reopen or fully recover. For these people, their financial plans are very compromised, and a lot of careful thought and expert guidance is needed in relation to investment and retirement plans. Your calming wisdom and experience is needed now more than ever.

Your clients need help in revising their plans, looking at different scenarios and resetting some of their expectations for the future. They need your honest appraisal of their situation and your best advice – no matter how hard this may be for them to hear. And then you can help them plot the best route forward and build back their confidence in their financial future.

 

Your processes have likely improved

One of the big advantages of the sudden shift to remote working earlier this year was the need to very quickly develop new and smoother business practices. One year ago, how many of you were able to effectively carry out meetings online, use digital signatures and share files and workflows with colleagues via the cloud? Also so many of you are now so much further along in terms of using social media, communicating more regularly with existing clients and actually delivering an enhanced client proposition. Your business is operationally stronger going into 2021 than you were entering this current year.

 

You’ve an alternative way of working

This time last year, very few were thinking about ever working remotely. Now we’re all experts in it! Some of you love the flexibility it offers, and the commuting time saved. For many it has resulted in a much better work/life balance. Many of you will retain it on a part-time basis in the future, even when a full return to the office is possible.

While it definitely suits some people better than others, at least now everyone knows it is possible and knows what is needed to work effectively at home.  At the very least, it’s an additional work option for you going forwards.

 

2020 is almost done, it was a year like no other, but ultimately was not too damaging for many financial advisers. All of the signs point to a calmer 2021 that offers great potential for you.

What advisers value in the advice they give

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I took the opportunity this week to grab a coffee and have a good read of an excellent piece of research that was issued by PortfolioMetrix at the start of the summer. The research is called “The insider’s guide to the value of advice” and can be accessed here. It’s well worth a read, as it considers the views of almost 200 financial advisers in Ireland, UK and South Africa in relation to this important subject. It also overlays the research with further good insights from both advisers and from PortfolioMetrix, along with links to other relevant research and articles.

So what are the nuggets that the research tells us?

First of all, it was useful to see on one page the financial value of advice as identified by other research carried out by a number of large, international organisations such as Vanguard, Russell Investment and others. This external research reveals,

  • Advisers add between 3%p.a. to 4.4% p.a. in net returns for their clients.
  • Clients who enjoy an ongoing relationship with a financial adviser had pension wealth that is 50% greater than those who only got once-off advice.
  • The savings of an advised client will be 2.73 times greater over a 15 year period versus a non-advised client.

The PortfolioMetrix research asked the advisers to pick, and then rank, their top five attributes from a suggested list of twenty. As it turned out, only seven of the 25 attributes were selected by more than 25% of the respondents. Interestingly, there was one standout attribute that was selected by 76% of the respondents; Empathy. This is the ability to put yourself in the client’s shoes and really understand what is important to them. It is about gaining their confidence and building trust. As one respondent added in their commentary,

“Without empathy no amount of professional qualifications is going to help you engage with clients”

The next six attributes that were also chosen by more than 25% of the advisers were;

  • Life Goals (49%)
  • Peace of mind (47%)
  • Simplify (47%)
  • Personalised financial plan (41%)
  • Consistency & continuity (39%)
  • Behavioural coaching (36%)

Each of the 20 attributes were also identified as belonging to one of four categories which revealed that,

  • Soft skills are most important (35% of advisers)
  • Building the financial plan (30%) is next
  • Putting the plan into action (20%)
  • Ongoing service (15%)

The conclusions of the report cautioned though that It is also worth noting that what advisers think is valuable to their clients is not always matched by what their clients think. A study by Morningstar revealed a sizable disconnect between the views of advisers and their clients. Clients undervalued behavioural coaching whilst advisers overvalued understanding the client’s unique needs and undervalued maximising returns. The takeaway from this is that once you have articulated your own value proposition, it is worth running it past your clients to ensure it resonates with them.

This is a current and valuable piece of research that is worth reading by all advisers.

 

 

How do you build trust?

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I recently shared the most relevant findings for financial advisers in the Edelman Trust Barometer 2020, in which we saw continuing challenges for the financial services industry in relation to trust. However we also saw that trust in the financial services industry is growing faster than any other sector, so the graph is definitely moving in the right direction!

I got a lot of feedback in relation to this article, thanks for all your likes and comments – much appreciated as ever. A few advisers have since asked me what they need to do in order to build trust. So here goes – my thoughts on a few ways that really help to build trust.

 

Be visible when the going gets tough

This is so relevant today, with the Covid-19 pandemic and investment markets crashing to the floor. Now is not the time to go to ground and hope that clients won’t ring about their falling investments. Instead now is the time to be calm, show your leadership qualities to clients and remind them that their financial plan will deliver the desired outcomes over time. Yes, acknowledge the discomfort caused by markets today, but remind clients that this will pass. Your visibility and reassurance will provide comfort to clients, and will help build their trust in you.


Communicate how you work with clients

One of the most important ways to build trust, particularly with potential clients, is by communicating really clearly how you will actually work with them. Many people only sort of know what a financial adviser does – something to do with pensions and life assurance? Let potential clients know the problems you solve and the outcomes you achieve for them. And then explain how you will work with them. You can give huge levels of comfort by walking the client through your advice process in detail, showing them what to expect and the value that you will add. This will help to remove any doubts in their mind.


Provide client testimonials

Continually seek out client testimonials, they are really important. In my book, you need to seek permission to use the client’s actual name (and logo if a company). Testimonials from “John H, Dublin” don’t really count – in fact someone might suspect they are made up! Genuine client testimonials are really powerful – who can advocate for you better than people who you’ve helped in the past, whose lives you have potentially changed?


Seek recommendations on LinkedIn

LinkedIn is a really important platform for financial advisers; it’s where many prospective clients will check you out before picking up the phone to you. After all, when they Google your name, the chances are that your LinkedIn profile will appear high up the search results. Recommendations from clients on your LinkedIn profile are a very powerful endorsement of your services, so look for these at every opportunity. They are great trust builders.

Presence in mainstream press

Some advisers have built up great profiles by regularly appearing in “Opinion” columns in national newspapers and some even building positions as regular commentators on TV and radio. These are great for building trust, as they demonstrate your industry knowledge and authenticity as a voice worth listening too.


Your qualifications

Sounds simple? If I was a CFP, I’d tell everyone at every opportunity! Why not advertise the fact that you are part of a highly qualified cohort? Prospective clients will value the fact that you are investing in yourself and are willing to keep learning in order to stay at the frontier of providing the very best financial advice. It will also help you to achieve high levels of trust among clients.

 

There are of course many more ways of building trust; advertising any awards that you win, communicating your opinions with your clients via newsletters and being active on social media. Hopefully the ideas above will give you a few pointers as to how you can continue to build trust with your clients and prospective clients.