Vlog – Trade wars are bad for business; Fortunately, we aren’t in one, yet

Brinker Capital’s Global Investment Strategist, Tim Holland, provides perspective on the Trump Administration’s tariff announcement.

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The views expressed are those of Brinker Capital and are not intended as investment advice or recommendation. For informational purposes only. Holdings are subject to change. Brinker Capital, Inc., a registered investment advisor.

Becoming an Obvious Expert Beverly D. Flaxington for Brinker Capital

One of the best ways for financial advisors to generate new business is to become “known”. Known as the expert, as the advisor with insights, and as the person who has something important to say. Many investors like to work with someone they perceive as knowledgeable and well-rounded.
How best to become an obvious expert? The first important piece is to be seen and heard. This can be done through using a PR (public relations) strategy and through social media. PR includes things like being interviewed on radio and television, being written about in newspapers and periodicals, and issuing press releases or other news stories. Social media includes things like LinkedIn, Twitter and Facebook, and means engaging in online discussion and information boards to talk about your expertise.
Some advisors shy away from the media because they don’t know what to say. As a first step, think about what interesting angles you can address relative to important topics in the news. Don’t limit your thinking to just the stock and bond market movements; think about trends for retirees and/or divorcees, multi-generational issues, or any other newsworthy trend that can connect back to your process or philosophy with regard to investing or planning.
Consider some of the following to establish your credibility as the obvious expert:
(1) Radio and television interviews are “free” advertising. Read and watch different journalists and reporters. Find out what they often report on. Write an email or a note to respond to some information they’ve given and your angle on their story. Make friends with your local media. Reporters and journalists are looking for new, fresh angles all the time.
(2) If you want to put more effort into it, consider doing your own blog talk radio show. You can pay a nominal fee to get set up on one of the major networks such as Live365 or blogtalkradio. With your own show you are responsible for coming up with content for each program, but you can always leverage other relationships such as COIs (Centers of Influence) like realtors, attorneys or accountants. Having your own show means you would be the interviewer instead of the interviewee. However, it allows you to get your thoughts and ideas across to an audience each week or month, depending on the show schedule.
(3) Create audio or video recordings of any interviews you have, or just record yourself telling case stories about how you work with clients. Circulate the audio or video to the press and also post it on your website.
(4) Issue a press release about something interesting happening at your firm. This could be the launch of a new website, a new angle on your service offerings, or a new hire to your firm. Anything happening at your firm can be newsworthy. Send press releases out over many of the free services available, such as this or this
(5) Engage in social media. As you pursue relationships with the younger generation (i.e. anyone under 40 years of age), they will immediately search you out on Google or some other engine to find whatever they can about you. It’s imperative to have a presence of some kind. Have an updated LinkedIn account, follow people on Twitter or create an account, if your compliance department allows it. Have a blog if you can, or at minimum post to other’s blogs when you have a response or idea to share.
Put a focus on becoming known, being seen and staying out in the public eye.

There are many opportunities to do so. Consider the ones that are right for your practice.

Central Bank’s Sway Stock, Market Commentary by Joe Preisser

Aided by a broad based reassessment of comments issued by European Central Bank President, Mario Draghi on Thursday, and the release of better than anticipated employment figures for the month of July in the United States, stocks rallied strongly on Friday to reverse the losses suffered earlier in the week and reclaim their upward trajectory.

Following a meeting of the American Central Bank’s policy making committee this week, the decision to forbear enacting any additionally accommodative monetary policy at present was announced in tandem with indications that measures designed to stimulate the world’s largest economy may be forthcoming.  The Federal Open Market Committee said in its official statement that they, “will provide additional accommodation as needed to promote a stronger economic recovery and sustained improvement in labor market conditions.”  As the recovery in the world’s largest economy has continued at a frustratingly slow pace, hope has pervaded the marketplace that increased liquidity will be provided by policy makers in order to encourage growth should they deem it necessary.  In its most recent communiqué, the Federal Reserve has reinforced this belief thus offering support for risk based assets.  Brian Jacobsen, the Chief Portfolio Strategist for Wells Fargo Funds Management was quoted in the Wall Street Journal as saying, “They probably are closer to providing, as they say, ‘additional accommodation as needed’, but I still think that they want more data before they actually pull the trigger.”

Investors across the globe registered their disappointment on Thursday with the decision rendered by the European Central Bank, to refrain from immediately employing any additional measures to support the Eurozone’s economy, by selling shares of companies listed around the world.  Hope for the announcement of the commencement of an aggressive sovereign bond buying program, designed to lower borrowing costs for the heavily indebted members of the currency union, which blossomed in the wake of comments made by Central Bank President Mario Draghi last week were temporarily dashed during Thursday’s press conference.  Although Mr. Draghi pledged to defend the euro, and stated that the common currency is, “irreversible” (New York Times), the absence of a substantive plan to aid the ailing nations of the monetary union was disparaged by the marketplace and precipitated a steep decline in international indices.

Friday morning brought with it a large scale reinterpretation of the message conveyed by European Central Bank President, Mario Draghi the day before, as investors parsed the meaning of his words and concluded that the E.C.B. is in fact moving closer to employing the debt purchasing program the market has been clamoring for.  The release of better than expected news from the labor market in the United States combined with the improvement in sentiment on the Continent to send shares markedly higher across the globe.  According to the New York Times, “on Friday, stocks on Wall Street and in Europe advanced as investors digested the announcement alongside data showing the U.S. added 163,000 jobs.”  Although the absence of immediate action served to initially unnerve traders, further reflection upon the President’s comments revealed the resolve of the Central Bank to support the currency union and fostered optimism for its maintenance. A statement released by French bank Credit Agricole on Friday captured the marked change in market sentiment, “Mr. Draghi’s strong words should not be understated, in our view.  The ECB President made it perfectly clear that the governing council was ready to address rising sovereign yields…Overall, notwithstanding the lack of detail at this stage, we believe the ECB will deliver a bold policy response in due time”(Wall Street Journal).

Tough Negotiators See Red By Sue Bergin

Want to best position yourself next time you are negotiating fees, haggling with the broker dealer on issuance requirements, or trying to get your client the best rate on a mortgage?  Put a quick PowerPoint slide together with your key points and put it on a blue background.  
 
Or grey.  
 
Anything but red.
 
Researchers from Virginia Tech and the University of Virginia recently released a study describing how colors affect consumers’ willingness to pay in purchase settings like auctions and negotiations. They found that the color red influences how much participants were willing to pay in competitive situations.
 
The color red has long been known to invoke feelings of aggression.  Red is an emotionally intense color that enhances metabolism, increases respiration rate, and raises blood pressure.  It is also one of the easiest colors to see, which explains why stop signs, stoplights, and fire equipment are usually painted red.
 
Study participants who “saw red” entered higher bid jumps in auctions and made lower offers in negotiation settings.  In both cases, they took a competitive stance.  In bidding situations, they were willing to increase bids to ensure that they “won” the item and were not outbid.
 
In negotiation settings, participants who gained their information on a red background also wanted to “win.”  Their initial offers were low.  For example, when participants were shown vacation packages that were displayed on a blue background and were asked to make their best offer, the average was $712.  The same package set against a red background yielded an average offer of $684.  
 
The researchers concluded that the red background induced greater aggression, which caused participants to implicitly compete against the seller for the best deal.
 
Advisors typically avoid showing their clients anything that includes the color red.  This study gives us one more reason to love blue.

Understanding Behavioral Style in Developing New Business – Part 1 by Bev Flaxington

Have you ever been taken completely by surprise by a client or prospect? Or have you ever been unable to close a sale because you just couldn’t “get through” to them? Today, investors are being bombarded by so many advisors and business development people – all trying to connect and persuade them to become clients. However, one of the most fundamental ways to connect with prospects is often overlooked by those in a selling role: understanding behavioral styles and adapting one’s communication approach to the people s/he’s trying to persuade.

You may have at one time taken a training course on relationship-building, face-to-face selling skills, or something similar, but the key to understanding the buyer’s perspective necessarily begins with an understanding of behavioral style. This is because behavioral style is the crux of understanding communication style – and true communication is the key to developing great relationships in both your personal and professional life.
So, is it really true that your likelihood of signing new clients could come down to your behavioral style? Research conducted in 1984 and validated again every year since has proven three things: 1) people buy from people with similar behavioral styles to their own, 2) people in a selling type of role tend to gravitate towards people with behavioral styles similar to their own, and 3) if people in a selling or business development type role adapt their behavioral style to that of the prospect, sales increase.

Many advisors, business development and client service personnel have excellent communication skills, but have difficulty in relationships with prospects and clients – and don’t understand why. Something just doesn’t feel right, but they’re not sure how to diagnose the problem or modify their behavior for greater success. Often times, it’s not technique (i.e. the questions asked, presentation or negotiating skills, etc.) but rather a lack of understanding of one’s own behavioral style and motivators, and of knowing that behavioral differences can cause significant communication difficulties that hamstring closing a prospect or an ongoing relationship with clients.
One scientific way to understand behavioral style is through an assessment called DISC (Dominance, Influencing, Steadiness, Compliance). Based upon the work of Carl Jung, the DISC approach was invented by William Moulton Marston, inventor of the lie detector and holder of a Harvard MBA, over 80 years ago. The statistically based profiles show a person’s preferred styles on four scales of behavior – Problems, People, Pace and Procedures:

• Dominance (“D” factor) How one handles problems and challenges
• Influence (“I” factor) How one handles people and influences others
• Steadiness (“S” factor) How one handles work environment, change and pace
• Compliance (“C” factor) How one handles rules and procedures set by others

Depending on our differences in style and approach, we can either get along very easily together (because we’re so much alike!) or we can have significant clashes in our relationship.

A person’s behavioral preferences have everything to do with their communication approach and style. People who operate with very different styles have a difficult time “hearing” one another and communicating effectively. For instance, if I communicate only within my own behavioral comfort zone, I will only be effective with people who are just like me. However, in the corporate environment we are dealing every day with colleagues, prospects, clients and management – all of whom can be very different behaviorally. Not only is communication difficult where there are differences, but often individuals become hostile and conflict-oriented toward one another. Significant time, effort and corporate money is wasted because people are unable to “get along” and work together effectively toward common corporate goals. (Refer to the Brinker blog “Dealing with Difficult Clients” for a complementary discussion of this topic.)

In the next blog, we’ll take a “deeper dive” into behavior style – how you can identify it in your prospects and use this knowledge to improve your selling effectiveness.

Your Parents’ and Children’s Annoying Communication Habits Can Help Improve Client Relationships by Sue Bergin

Do you have someone in your life that has a cell phone, but refuses to turn it on? For me, it’s my parents. It doesn’t matter if my 76-year-old father is riding his Harley Davidson through the Blue Ridge Mountains and no one has heard from him in three days. We just have to sit tight until he gets sick of camping and checks into a hotel. Then, he’ll call us. We can tell him to keep his phone on until we are blue in the face. We can buy him an unlimited calling plan for his next birthday. It isn’t going to make a difference. The phone is for emergencies only. As long as he is ok, it stays off.

Have you ever threatened to take away your daughter’s cell phone because they won’t pick up your calls? You don’t understand why she doesn’t take your calls when she knows it’s you, and she knows you want to reach her. She doesn’t understand why you have to talk to her when you can just send a text. She probably doesn’t want her friends to know she must actually talk to her parents. She definitely doesn’t want her friends to hear how she talks to her parents. She would much rather you text her. That way she can whine in private. On the contrary, you’d prefer to hear her voice so that you can better gauge the situation.

With varying degrees of aggravation, we have learned to conform to communication preferences in our personal relationships.

When it comes to your relationships with clients, however, you want to avoid communication frustration. Recognize that clients have their pet tools, and demonstrate a willingness to communicate with them according to their preferences, not yours.

Ask clients how they want their appointments confirmed. Do they want a text, e-mail or a phone call? Would they rather your newsletters and routine correspondence come in the mail to their home or office, or would they rather have them e-mailed. Would they prefer Skype sessions to face-to-face meetings? What is the best number to reach them? Are they among the 33% of American’s that have chucked their landlines in favor of cell phone service?

Keep in mind, communication frustration is a two way street. A client you’ve worked with for years could now be tossing out your newsletters, when he or she used to pour over them. It isn’t because they no longer value your insights, but rather they read their “news” online. You won’t know this until you ask about their preferences. Maybe it is during the intake process, or the annual review, or even a midsummer survey. The key is to get ahead of the issue before it becomes an issue.

Using your clients’ favored communication methods is as much of an offensive play as a defensive play. You become more efficient and eliminate some frustration in your day. You also ensure that you never unwittingly earn the label, “that annoying caller/texter/e-mailer/snail-mailer/Skyper/or Facebook messenger.”

http://www.smartplanet.com/blog/business-brains/one-third-of-us-households-chuck-landlines-now-use-mobile-only/20746

Not Who You Think by Michael Zebrowski, Chief Operating Officer, eMoney Advisor

When asked to identify their most formidable competition, most advisors point to the advisor with the fancy office, lots of back-office support, fully integrated technology, and the book-of-business torn from the society pages. While such advisors do pose a threat, they probably are not enticing your clients so much as the computers those clients have on their desks.
The digital era has transformed the investment landscape, including the way in which clients manage their financial lives. More and more comfortable with online services for education and information, clients are intrigued by how well technology can help them organize their financial worlds, and they are migrating to direct-investment platforms, such as Fidelity Brokerage Services, LLC, The Vanguard Group, Inc., Charles Schwab & Co, and TD Ameritrade, Inc.
This trend is probably more pronounced than one might imagine:
• According to Cerulli Associates, Inc., direct-investment platforms grew from $2.6 trillion in 2008 to slightly under $3.7 trillion in 2010. This increase represents a two-year growth rate of 19%.1
• In contrast, the growth rate for the traditional channel, over the same period, was only 14%. Cerulli ranks direct-investment platforms as the second biggest distribution channel after the wire houses.2
• This direct platform growth happened organically and did so in spite of a lackluster market. In 2000 eTrade and TD Ameritrade had combined assets in the $53 billion range. In 2011 they accounted for nearly $426 billion in assets.3
Growth Drivers
There are a number of factors driving the growth of personal financial management platforms, including investments made in some key areas:
• Advertising and Marketing. With nearly $1 billion a year spent on advertising and marketing combined, self-directed investment platforms have become media darlings.4 No matter what information your clients seek on the Internet, they are likely to come across an ad or sponsored material from a personal financial management provider. The same goes for watching television, reading magazines or books, or driving on the highway. Direct-investment platform ads are everywhere. With so many dollars fed by personal financial management providers into both new and old media channels, no wonder anti-advisor headlines such as “Financial Advisors Are Biased, Study Finds”5 are on the rise.
• Education. Successful personal financial management sites have incorporated “research amenities” and robust client educational materials. When a consumer enters a certain section of the website, educational content appears. Users do not have to search for more information. It is just a click away.
• Technology. Personal financial management sites are focused solely on the consumer. Made as simple as possible, they are straightforward, intuitive, and interesting. They make trading easy and inexpensive.
• Client Service. While the sophistication of the support is debatable, one point is irrefutable: “help” is waiting in the wings 24/7. Many of the top self-service investment platforms have made enormous investments in call-center infrastructure to ensure that financial professionals are available at all times to answer customer inquiries.
The increase in personal financial management systems is a trend to watch. Clients, however, will always need financial advice. Their desire to work with a knowledgeable professional, someone who can help remove obstacles and keep them on the path to fulfilling their goals, will endure. As life gets more complicated, the need to work with a trusted financial professional will only increase.
The content above is from Michael Zebrowski of eMoney Advisor has not been produced by Brinker Capital, nor does Brinker Capital make any claims or warranties to its accuracy. Views expressed are those of Michael Zebrowski of eMoney Advisor and do not necessarily reflect those of Brinker Capital.

SOURCES:
1 Osterland, Andrew. “Advisers blind to threat of direct investing, study shows.” Investment News.
February 21, 2012.
2 Ibid.
3 Pew Research, 2010.
4 The Nielsen Company, 2009.
5 Berlin, Loren. Huffington Post. March 27, 2012.

What’s Your Headline? by Beverly Flaxington @BevFlaxington

Gaining exposure through publicity, social media and PR can be very fruitful for financial advisors. In too many cases, an investor does not know how to go about finding an advisor to talk with about their investments – so they may read about someone, or see a financial expert speaking, and decide to contact them. A robust PR and publicity strategy can be a great complement to other business-building efforts.
What’s the best way for an advisor to start a campaign, or infuse an existing campaign with new energy? First, it is important to determine your budget, and decide what exactly you want to do. It is awareness building? Is it positioning yourself as the obvious expert? Is it placing yourself where potential new partners and other industry professionals will see you?
Like any marketing or business-building strategy, it is critical to know – before you do anything – what you are trying accomplish, what forums are best for what you need, and what budget you can allocate to your efforts.
The next most important thing is to understand your positioning. What do you have to say to the media? What’s your publicity platform? What’s the headline you can use that will grab the attention of the people you are targeting and reel them in to learn more about you?
There are many things an advisor can do to get broader exposure. Be sure, before you commit to anything, that you get approval from your compliance department.
Some areas to think about if you want to embark on a broader publicity campaign could be:
Identify opportunities in your local area for press. Could you write a column for a local paper (online or in print)? Could you be interviewed on the local cable station?
Find timely information in the national press and make a comment about it – this can be done on your own blog, or by writing in to a columnist or sending out a press release.
Find opportunistic places for advertising. Broad-based advertising seldom works, but running an ad in the symphony brochure, or at a local play, or for some other event can get your message to a targeted audience.
If you have the time and can do your own radio show, there are many options on Blogtalk Radio and others to have your own show. Or, if you’d prefer not to have to manage your own show, find radio stations you can contact and pitch your ideas about why you’d be a great guest.
Be sure you have an updated LinkedIn profile. Periodically post new information to keep it fresh and interesting.
Consider having a Facebook page for your business. Post interesting information about local activities, or market news.
Scan the Internet for people who are writing and blogging about topics you care about. Post comments and link back to your firm if possible.
There are many ways to get your message out there more broadly. Remember to establish what you are hoping to accomplish, how much time and money you can spend, and what you’d like to see as a result. Then pick the tactics that work best for you.
Remember, though, your headline matters. Stay consistent with your messaging and reinforce your platform points and positioning every chance you get! Repetition matters a great deal in marketing.

Second Opinions on Investment Performance By Sue Bergin

There was a day when you could sense when someone was looking over your shoulder. Technology, however, has made those days a thing of the past.

With the increasing number and sophistication of personal financial management software sites and mobile applications, it is getting easier for your clients to get second opinions on the investment advice you provide.

Technology-driven portfolio analysis boasts the ability to provide independent and objective investment evaluation, which is appealing to investors on a few levels. From a client’s perspective, they can get a second opinion on your recommendations at no charge, with no obligation, and relatively little effort. Once data is entered, they have a convenient place to go for aggregated and up-to-date information and continual guidance.

The functionality and sophistication of these personal financial management sites and mobile applications is evolving at warp speed. Take SigFig for an example. SigFig aggregates all investment holdings then makes recommendations based on current holdings. It compares the holdings in a user’s portfolio against other investments in the same category and share class. It then provides suggestions of other, less expensive investments that perform better than the user’s current holdings. It even goes a step further. After reviewing the user’s trading patterns, it evaluates the brokerage fees paid. Even individual advisors are evaluated based on the fees assessed and performance obtained. This functionality has led to all kinds of provocative “Find out if your financial advisor is overcharging you” headlines!

Another media darling is Jemstep, which scored a “Use Jemstep to See if Your Broker is Wasting Your Money” headline. Jemstep’s ranking engine analyzes 80 attributes of more than 20,000 mutual funds and ETFs.
Jemstep helps clients identify their financial goals, provides a ranked list of the “best investment options” for that client, and tracks aggregated investment performance.

These services and dozens of others are gaining in popularity. They are free or come at a modest fee, and they have seized the attention of both venture capitalists and the media. Your tech savvy clients are likely to be aware of them, and very well may be relying on them for a second opinion of your performance.

Mapping Your Social Network by Matt Oechsli @MattOeschsli

by: Matt Oechsli

If you’re serious about targeting today’s affluent investor, it’s time to get social. We’ve become addicted to our digital toys (iPads, BlackBerrys, etc.), and social media is elbowing onto center stage. Our research tells us today’s affluent want to know their advisor on a social level in addition to their professional role.

Because the human species is such a social animal, you wouldn’t think this would be an issue for advisors. Yet many advisors are behind the curve when it comes to socializing with affluent clients, referral alliance partners, and prospects. Our research shows that investors clearly are more likely to introduce someone they know to their advisor if the investors have both a business and personal relationship with the advisor, as opposed to a relationship that was exclusively business.

Our research also shows that elite advisors intuitively recognize the importance of social media technology, and they’re early adopters. It’s the essence of both relationship management and relationship marketing. Today’s reality is that advisors who have both a business and a personal relationship with their affluent clients have more centers-of-influence penetration.

This data reinforces what we’ve learned from our rainmaker research—social prospecting in affluent circles today is what cold calling was some 25 years ago; it’s what public seminars were about some 15 years ago. And yet, at a recent workshop we sponsored on best practices of elite advisors, it was obvious that socializing in affluent circles made some advisors uncomfortable. Among the questions: “When do you talk about business? What social activities should you engage in?Do you mean that we’re supposed to mix business with pleasure?”

Socializing is directly linked to word-of-mouth-influence (WOMI), and advisors need to understand the importance of WOMI in affluent decision-making. It’s the high-octane fuel that activates the process; relationship management (affluent clients) and relationship marketing (penetrating affluent COIs) are inextricably linked in stimulating positive WOMI. This is a gift. Why? Because advisors can now schmooze with their top clients, meet their friends in a non-threatening environment, develop rapport, build personal relationships, and transition their clients’ friends into new clients. Knowing “who knows whom” is what mapping your affluent client’s social networks is all about.

Social network analysis

A quick glimpse into the budding field of social network analysis highlights the innate power of WOMI. Social network analysis, the study of social relationships between individuals and groups, goes back to the ancient Greeks. Modern theories arrived in the early 1900s, and today scientists study its implications in everything from relationships within high schools to the spread of disease.

We find this fascinating. Think about your web of contacts for a moment and ask yourself four questions:

1) If you were to chart your relationships with your top 25 clients, how many have both a business and personal relationship?

2) If you were to chart your social contacts, how many total connections could you list? How many have the means to conduct business with you?

3) If you were to chart your referral alliance partner relationships, how many connections could you list?

4) What type of branding is being broadcast through your social network?

Connected, a book by Drs. Nicholas Christakis and James Fowler, shares an example of how social networks play a role in marketing. They tell a story of two piano teachers in Arizona who grew their respective business only through WOMI; they never advertised or promoted their services. At the end of the year, they analyzed their clientele and discovered that 38 percent of their new business came by WOMI from people that hadn’t personally used their services. Their reputation was communicated through friends of friends of their clients—three degrees of separation.

Whether you have 25 or 125 affluent clients, imagine the power of WOMI within your business. Essentially, social prospecting is simply socializing with your affluent clients and prospects in venues that you enjoy, but with strategic intent. The idea is not to discuss business. However, whenever a business conversation surfaces, the social prospecting drill is as follows: listen; if asked, answer questions briefly; gently table that topic for another time; exchange cell phone numbers; set a time and place to discuss business; and continue socializing.

Elite advisors have turned mapping their affluent clients’ social network into an art form. If you allow yourself to get social, you can, too.