By Curtis C. Brown, Jr. Consultant Supernova Consulting

How are you communicating with your clients and prospects during the Covid-19 crisis and the recent market volatility? First, let’s frame the environment that people are experiencing. They are receiving many conflicting messages and don’t quite know who to believe.

This creates an atmosphere of fear and anxiety. The media is certainly reporting on the numbers and statistics of people who are being impacted by this pandemic. No one has all the answers as to how long and when this virus will end. Many people are being driven by fear and anxiety as well as hopelessness.

Walk in the Clients Shoes for a Moment

Let’s peel back the onion and walk in the client’s shoes for a moment.  Many are working or living in isolation right now at home. Gone are dropping the kids off at the neighbors for a mid-week date night with a spouse or significant other. The bridge club has been canceled. Grandma is not going to see the grandkids this weekend. The volunteer work at the non-profit has been put on hold. Dinner and a movie out has been canceled, in favor of staying in to watch Netflix and ordering take – out via DoorDash® or similar service.

Clients get frustrated at the long lines at Costco only to find many empty shelves once they enter. They might have to drive to several stores to find the necessary food items and staples. They see people wearing masks and gloves at the supermarkets. Your outside social life has been put on hold and you use Face time or Duo just to see another face on the other end of the smartphone.  The nearby gym has closed, upsetting the client’s regimented workout routine.

A few days in isolation is tolerable, however, days, turn into weeks leaving people very concerned and anxious. They are concerned about love ones who might be living in some of the hot spots around the country. I’m sure you can add to the list of what clients might be experiencing in what has now been termed as the “new normal”.

 Minimize the Pain

So, what are people doing to break the monotony? They are reading books that they have been meaning to get to for quite some time. They are going for walks keeping a distance of at least six feet, looking up on-line recipes and cooking more at home, streaming exercise programs on-demand, getting out and dusting off gym equipment stored in the basement or garage.

Like many of us, I contacted people I haven’t spoken to in a while to let them know I care about them and to see how they are doing. People appreciate contact caring and concern. This showing of empathy might seem like common sense. Don’t take this form of communication for granted when speaking with your clients and prospects.

Active Listening

During challenging times, when the markets are very volatile and your routines are upended,   communicating with your clients and staff is very critical. Part of this communication involves active listening and showing empathy. Understand where the anxiety is coming from.

Clients are thinking that retirements may have to be delayed, trips may have to be canceled, and major purchases may need to be put on hold. This is when your leadership and understanding rises to the occasion. Your role is to be an active listener, provide a sense of calm and stability, especially in an environment that clients may seemingly feel their dreams, hopes, and aspirations are being taken away. And perhaps you can help them with the daunting task of adapting to the new reality.

We have been through turmoil and crisis before and we have always come through it. It is inspiring to experience the resilience and tenacity of humanity, especially Americans. Most of us will  rise to the occasion and join together in times of turmoil.  We will come through this crisis as well. My faith confirms that there will be a blue sky after the storm!

 

 

Do you need a visual to discuss your new service model? This powerpoint is ready for you to add your own information for any presentation to clients, Center’s of Influence or prospective clients. Click on the link to download this powerpoint presentation:   Client or prospect presentation

As a Financial Advisor, you have to find ways to differentiate yourself from the competition. Your goal as a Supernova Advisor is to develop your practice following a concierge style of personalized service. That includes monthly contact, at a minimum, with your clients and potential clients which will demonstrate to them you value them and are grateful for their business.

If you are fortunate enough to have a company profile online you may see that. If your company name is different than your name it may not show up. If you have been published in a journal or donated to a fundraiser, played college or professional sports that could also show up in your search results. LinkedIn or Facebook links will almost always be there.  Click on each of the search results and see what they say.

Do you like what you see? Does it send the right message about you?  If not, there are ways to change it.

Business Web Page
Start by using your internal company resources and create a thoughtful, informative website for yourself and your team.  In the content, make sure you use words that will pop-up on a search, for example ‘wealth advisor’, ‘financial planning’, ‘high standard of service’, ‘limited number of clients’, specialties you work with like ‘401(K) plans’ or ‘retirement planning’.  Have a professional photo taken of your individual team members and a group shot if you have room for it.  Every word is important and communicates your brand.

LinkedIn
If your company will allow it, go to LinkedIn and join as an individual and as a business group.  Be sure to follow the steps to add your photo, invite people to connect and have a few endorsements.  Set up a schedule to add a new comment or link to an informative article at least once a month.

After signing up for LinkedIn the first step is building your profile. Your public profile describes your career history, education and other related content you want to publish. You can enhance your profile by adding sections for volunteering, experience, patents, publications and more. LinkedIn will prompt you to add this information and keep track of what you are missing. When writing your profile make sure you add your current role as a financial advisor and how you help clients reach their goals. Include your process and your (hopefully) low number of client that you serve with monthly contact, multi-generational planning and rapid response to client questions. Include personal information and accomplishments that will help build trust and make you approachable. Don’t forget to reach out to your Centers of Influence and clients and make sure you are connected with them on LinkedIn.  This is a valuable exercise that will give you a more approachable profile.

Publish Your Thoughts
Write articles to be published in financial journals, industry publications or trade magazines associated with your target markets.  As far-fetched as it may sound, even major publications, like the Wall Street Journal, are always on the lookout for new perspectives.  This will give you good exposure and further establish your name.

Facebook
Finally consider a Facebook page or Twitter account.  You can set up Facebook either as a family, individual or a business. If it is of a personal nature make sure you set your privacy settings accordingly so people doing a search for you can see your profile on Facebook but nothing else. This is where people see the human side of you. Post photos of your pets, sports activities you are involved with or charities you support. This is also a good way for your kids to be on Facebook with you controlling what they post.

Twitter
Twitter can be used by advisors to tweet the latest news, an update on market activity, or share personal accomplishments. Keep it short; tweets are limited to 140 characters.  Invite your clients to sign up for your tweets.  Just remember, Twitter is a time commitment – you will have to tweet once a day or at least once every couple of days to make it effective.

 

If you are short on time, “hoot suite” is a paid service you can use to schedule your LinkedIn, Facebook, Twitter and other social media messages. Set aside one hour a month to write them and then use this service to schedule them to go out when you want. You can try assigning members of your team a day or week to be responsible for content. Just make sure you approve it before it goes out. After you have published notice how many ‘likes’ or comments you get. Send those individuals a personalized note thanking them for taking the time to read them.

TO SUMMARIZE:

In coaching we always ask the question, ‘what are your niches?’.  An FA might say, business men or retirees.  But that isn’t specific enough! A niche is a highly specialized group of people working in the same industry, career, interest or commonality.

Narrow that down even more. If you said ‘Doctors’ define what specialty, if you said CPAs, identify a firm(s) or by age, seniority or years to retire.  If your niche is retired people, ask yourself ‘retired from what? ‘ One of my FAs specializes in widows of HNW individuals.

To take it a step further, there are two kinds of niches, natural niches and target niches. Natural niches are where you came from before you were an advisor. You may have started out as a CPA, insurance agent or played professional sports. That would be your natural niche. You will know your clients’ and prospects’ ‘language’ in that field and how to advise them with the uniqueness of their business. You know where to find them, how to approach them and important industry conventions they might attend. If for example, you came from Proctor and Gamble you might be targeting executives and board members or a specialty like scientists or researchers. This can really be all you need to do in your practice. You do well with that group because you came from the culture. You speak the language, you understand the people and you certainly understand the benefit. You know their benefit program as well as their HR director. You are an authority they can trust.

Target niches are those people that have something in common. They might be a yacht club, bicycling group or, as in the example above, widows. It could also be people interested in supporting a nonprofit like the opera or symphony. Always pick a target niche based on your interests. If you aren’t into sailing then the local sailing club would be a bad fit. You want to make sure that the niche you choose will generate the kind of clients that meet your minimum. If it does and you enjoy it, then that is your target group.

Usually FAs have found clients throughout their career that will fit into a niche category without even realizing it! Now is the time to understand who you have and how to duplicate those people. Be sure and take the time to understand the mechanics of any niche you choose. If you decide you want to target cardiologists interview one or two of them to understand their needs and concerns and how you can help them. You also need to know how to fit into their schedule a monthly update meeting, how they save for retirement, their investment style and all the other nuances of their business.

Once you have identified your niches you can start purposefully developing them by approaching a client that is already in the niche and ask for a few minutes of their time. You let them know you are interested in having more clients like them. Here are some sample reasons.

You then say, “Does it make sense to you to add more (business owners) to my practice?”  More than likely, he/she will say yes.

That is when you ask the key question: “If you were me, how would you go about adding more (business owners) to my practice?”

Then you keep quiet and listen.  Let the business owner, in this case, tell you how to get in front of other business owners.

If the business owner has no ideas you say, “Thanks for thinking about it.  Never forget, I am never too busy to help people like you.”  The worst outcome is that you have planted the seed that you would like to have more business owners in your practice.

It also helps to become known and trusted in your community. Your reputation will grow as you infiltrate your niche and become the specialist they all want to talk to.

TO SUMMARIZE:

EXERCISE

Take a minute now to write down 2 -3 niches you identify for yourself:

Write down your natural niches:

Write down your current or potential target niches:

Now look at your current clients and see how many fit into these categories. Do you have a mishmash of clients or are you focusing on specific commonalities? Which of these niches to you want to develop more?

 

 

 

 

Ponzi Schemes have been around since man first exchanged money for services. There are hundreds of Ponzi Schemes going on as we speak. There are over 50 that are exposed each year, with over 150 exposed in the wake of the Great Recession. Some are pure scams, while others are somewhat market dependent. Some start out in legitimate fashion, but because of bad bets, bad markets turn into Ponzi Schemes to hide bad decisions. By the way, it is never theft according to the perpetrator, it is just “borrowing the money”. They “always intended to put it back”. To them, this nuance make it OK. Others are just crooks. In my personal experience with Merrill Lynch, those Financial Advisors that were caught “borrowing” money from client accounts were always going to put it back. The FA’s were always fired immediately and the clients made whole. It was usually involved a relatively small amount of money. I had one FA borrow money from a client’s account to buy a computer. It ended up being other things and a total of $25,000. He was fired. Another made up false statements after hours after

having asked the client to make checks payable directly to his name. We got him when the FA went on vacation and the client called about his account. He was fired. A cashier once borrowed some money by making up false deposit slips in a lesser amount than the one given back to the office. When these small discrepancies appeared, she claimed she knew nothing about it. She was fired and went to jail. I had former banker who colluded with his buddy at the bank to borrow money from clients of the bank, trade in fictitious accounts at ML. When the trading was successful they put the original money back and split the profits. When it was unsuccessful, they simply left us with an unsecured debit balance and put the original money back in the bank. This was my first office as manager, so it was a shock to me that someone would be so brazen and risk their careers for so little money. They were convinced that they had a perfect scheme and wouldn’t get caught. We quickly put a stop to this, brought in the FBI and they went to jail for five years.

On a much larger scale there is fraud and deception going on all the time. In my home town of Indianapolis, there have been two famous cases involving Ponzi schemes. One where the Financial Advisor borrowed money from his clients, lived the high life, and when confronted faked his own suicide by jumping out of his airplane over North Carolina.

On an even larger scale, we had a individual buy a financial institution, turn it into his personal piggy bank, live the highest of high lives and eventually go to jail. They both made the highlight reel on “American Greed”.

So how do we protect ourselves, our loved ones and our institutions from these schemers? Understand that if these guys weren’t good, they wouldn’t get away with as much as they do. They tend to pray on our weaknesses. When we are in financial trouble they are there to take advantage of us. When we are greedy or envious, they are right there to help us out. They pray on the elderly in particular. These are the saddest cases where a trusting unsuspecting person turns over their life savings to a relative stranger. These people are masters of instilling trust, confidence in them.

So why don’t we see the problem sooner. Why do these scams last for years? We all have a very strong need to be right. The bigger our ego, the greater the need to be right. Even after they take away these schemers in handcuffs, clients are still defending them. We also hate to be embarrassed. This publicly admitting that we are wrong. This is why people would rather lose $100,000 rather than turning in a crook. Knowing this, how would you start a Ponzi scheme?

Twelve Steps to Starting a Ponzi Scheme

  1. Set up an Independent Investment Firm that required no supervision
  2. Invest substantial capital in the office, and your lifestyle
  3. Impact the local community by giving large pledges to their favorite causes
  4. Buy a large home, lease an expensive car, boat airplane. Join the right Club, church, and civic organizations
  5. When people ask you what you do, be vague. Talk about coffee futures, derivatives, options and other exotic products. Explain that you have figured out the system and are making money hand over fist. Explain that you are sharing the idea with a few close friends and family members.
  6. Take their money. Give them a promissory note and a regular stream of income above the market ie 12-25%. Give statements monthly showing compounding effect of money. Never return any money after initial returns. When absolutely necessary pay old investors with new money.
  7. Only take money reluctantly and only through referral from trusted sources.
  8. Spend client’s money lavishly on more new cars, boats, airplanes, hookers and drugs.
  9. Eventually run out of new money to pay old, skip town, fake suicide, get caught, and go to jail.
  10. Plan new scam while in jail
  11. Get out of jail
  12. Do it all over again

How to Avoid Ponzi Schemes

  1. Only do business with brand names that you can sue successfully
  2. Avoid complicated schemes that sound too good to be true. They always are.
  3. Avoid anything guaranteed except government bonds
  4. Be wary of smooth talking confidence men in $3000 suites, with fast cars, boats, airplanes and even faster women who befriend you and make you feel that you deserve everything that they have. All you have to do is turn over your money to them.
  5. Be wary of “credibility by association” who use religion, ethnic origin, club status, or other affiliations to establish credibility
  6. Be wary of the “credibility by referral” when accepting. “If he is good enough for Tom Smith, he is good enough for me”.
  7. Be wary of previously credible people whose lifestyle suddenly changes due to an amazing new investment strategy. Opportunity is different from schemes.
  8. Be wary of friends in the investment business that fall prey to the temptations of alcohol, drugs, women or gambling. I monitored very closely my FA’s that had a reputation for trips to Las Vegas. Pump and Dump stories are very common in Las Vegas.
  9. Never invest more than 5% of your assets in an illiquid investment where you could lose it all. We are all tempted by Private Equity deals. Even the most legitimate people fail more than succeed in these ventures. If you buy them through a name brand, at least you can get your money back if the GP runs off with your money.
  10. Report suspected Fraud immediately to your State Securities Commissioner.

 

Supernova Sample Screens for Segmenting Clients ©

1. Account by production

2. Value of assets

3. Are they likeable? Do they treat my staff well?

4. Are they trustworthy?

5. Do they fall into one of my niches?

6. Do they accept my recommendations?

7. Is there profitability in this account?

8. Is there an opportunity for future growth?

9. Can they be a Center of Influence?



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