Trust, but Verify

John CoyneJohn Coyne, Vice Chairman

I recently had the opportunity to participate in the 2014 FSI OneVoice conference in Washington, D.C. on a panel centered on issues related to both liquid and traditional alternative investments.  Our nation’s capital proved to be a great venue for the discussion as it called to mind the signature quote that Ronald Reagan used in his discussions with the Soviet Union, “Trust, but verify.”

As the former chief compliance officer here at Brinker Capital, I was impressed by the thoroughness of the due diligence process outlined by the audience of compliance gatekeepers during their discussions about the products circulating through their companies in both the liquid and illiquid space.  It was clear that while they maintain excellent relationships with their product sponsor partners (no, they do not treat them like the evil empire), they have really elevated their game, particularly in understanding the advisor/investor motivations in determining the appropriateness of a particular investment.  It is clear that many eyes are on the investment decision as it winds its way through the Broker/Dealer pipeline.

Financial Services InstituteFSI is providing the type of farsighted stewardship that recognizes that the product manufacturers, custodians, Broker/Dealer’s and the advisors must have a common communion around the needs of the client.  Events like the OneVoice conference demonstrate that their fostering and encouragement of an effective dialogue among all these parties creates the best potential for success.

Taking care of the client…the Gipper would be proud.

Gain Access and Build Trust

Sue BerginSue Bergin

A training manual from a decade ago may have highlighted the importance of mapping your traits to one of three communication styles: aggressive, passive or assertive. Awareness of your own communication style helps you understand how others perceive your interactions, and allows you to adapt your approach with clients who have different styles.

While the advice is still relevant, there is another communication style to consider—mobile.

The mobile communicator believes in access. He or she should be accessible to clients 24/7, and vice versa.

Advisors with a more aggressive communication style should be able to alter their style when working with passive clients, but they must also demonstrate flexibility to move across the mobility spectrum.

Spectrem Group recently reported that 55% of high-net-worth clients use mobile devices to correspond with their advisors.[1]  Most mobile devices offer a variety of communication methods including telephone calls, text messages, e-mails, video chats, and social networking.  How do you know which is the best to use with which clients?

1.19.13_Bergin_GainAccess_BuildTrustThe answer is quite simple. Don’t make assumptions. Find out if the clients want their appointments confirmed via text, e-mail or a phone call. Do they want newsletters and routine correspondence delivered in their mailbox at home, or their inbox? Would they prefer Skype sessions in lieu of face-to-face meetings? Is the landline number you have on file in service, or are they exclusively mobile users?

Adjusting to your clients’ communication method of choice will win you favor in a highly valued category. According to a recent survey, clients are more forgiving of poor investment advice from their advisor than they are of poor communication skills.

25% of the survey respondents indicated inaccessibility and unresponsiveness as the top reasons for lack of trust in a financial advisor. Coming in a distant second, at 13%, was poor investment advice. The third most prevalent reason for losing trust in a financial advisor was the lack of a personalized approach.

As with behavioral nuance, you must learn to respect other styles and adjust accordingly. By using your clients’ preferred communication methods, you will gain efficiency and build trust.

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.