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Mythbusting Wealth Management

Think clients care about your investing chops, or that they love to meet you at your office? Here, two industry consultants take the hammer of truth to ten persistent financial fairy tales.

By April Rudin and Will Trout

Myths in the wealth management business never seem to dissipate, unlike assets from a trust fund. With the new year here, there’s no better time to debunk some of the hoariest beliefs, tropes and old wives’ tales out there. Here, April Rudin of The Rudin Group and Will Trout, head of wealth and asset management at the research and advisory firm, Celent, bring the hammer of truth down on these persistent financial fairy tales.

First goes Will:

  1. My clients want to hear the way I manage their portfolio. Do they really?  Too many advisors are stuck in the mindset that trading or tactical allocation decisions is what make them stand out. Tell your clients you bought Stock X on this day and sold Stock Y on the other is like giving a putt by putt description of a golf match.
  2. I outperformed the benchmark in a very tough year. Granted, you haven’t had to offer up this swan song in a while. But you might in 2019. The point is, clients engaged enough to look at their portfolio statements value the fact that you are making them money. Or at least, not losing it.
  3. My job is to educate my clients. Sure, some clients are interested in understanding concepts like volatility or alpha. Most aren’t. To point two above, many aren’t interested in investments at all. They are thinking in terms of their goals: how can this person help me save enough to retire in 10 years?
  4. Alternative investments are messy. Private equity and hedge funds are not for everyone, but there’s a reason the private capital markets are growing at three times the rate of public markets. Technology platforms like Artivest Network have made these white shoe offers accessible to RIAs and their accredited clients. Don’t let fears about a thicket of paperwork stop you from introducing these options to the appropriate clients, and showing them you know your stuff.
  5. Suggesting the use of fintech services not offered by my bank/advisory network puts me at risk of disintermediation. Not true! Today, application programming interfaces or APIs makes the integration of third party technology solutions to your platform straightforward. From payment tools like Venmo to aggregation technology, the world is your oyster….or your client’s, anyway. Introducing him or her to services that make life easier, especially when they don’t directly benefit you, is a good way to earn credibility points.

Now to April:

  1. My clients want to see me in person. Increasingly, the opposite is true, especially among those 50 or younger. They resent the fact you are a digital dinosaur and that you are making them to come in to see you. Plus, seeing your office with all the mahogany furniture reminds them what they are paying you.
  2. My marketing materials are scintillating. OK, few advisors believe this; at the same time, they underestimate just how boring their quarterly recaps can be. Canned content is Dullsville, especially when it’s around portfolio performance. Content marketing firms like Grapevine6 and others can provide you with customizable commentary that clients will actually read.
  3. Social media doesn’t matter. Not true on several fronts. Compliance-oriented software like Safeguard Social allows you to keep your nose clean and get out there on Twitter. Clients might not look for financial advice online, but they do listen to what others are saying. And the lack of a LinkedIn profile in this day and age says more about you than a basic or rudimentary one.
  4. The Rotary Club (or CPA Society) is the best place to make new contacts. Actually, one of the principals of organizational networks is that the further away you get from your usual circle of acquaintances, the more valuable your networking will be. That’s because these unfamiliar contacts will have access to groups and individuals you’d never ordinarily meet on your own.
  5. Trust is earned over time. It’s hard to discount this notion, but from a client relationship standpoint, the first 90 days are a goldmine. Opportunities tend to present themselves when the relationship is fresh and developing. Think about the days when you got to know your significant other. Conversely, a lousy initial experience in the form of a cumbersome onboarding experience can kill the possibility of cross sales and even threaten the relationship.


April Rudin is CEO of Rudin Group. Will Trout is head of wealth and asset management at research and advisory firm, Celent.

TAGS: Marketing
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