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Opportunity Amidst Crisis

A crisis that seems to never end can be nerve-wracking even for the best of us, but much more so for those who fail to take deliberate "crisis control" action. Financial advisors should view the recent events (Greece, 1,000-point swings, Goldman Sachs/SEC, etc.) as both a wake-up call and an opportunity.

San Diego: "I'm getting the feeling that this crisis is never going to end," groaned Steve. "It seems that nothing I'm doing with my clients is relevant in the midst of a 1,000-point drop in the Dow in a matter of minutes."

Steve was exhibiting the characteristics of apathy -- which is the first cousin of defeat -- throwing his hands up in frustration and saying, "There's nothing I can do!" Everyone, even the savviest financial professionals, was floored by the wild gyrations of the Dow Jones on that eventful May 6. To put Steve's comments into context, all of this occurred only a few hours before my presentation and he was still in the processing mode, but going down the wrong path.

A crisis that seems to never end can be nerve-wracking even for the best of us, but much more so for those who fail to take deliberate "crisis control" action. Financial advisors should view the recent events (Greece, 1,000-point swings, Goldman Sachs/SEC, etc.) as both a wake-up call and an opportunity.

The Wake-up Call: Financial advisors need to be working feverishly to become the "go-to" financial coordinator for their affluent clients. This requires extreme diligence, both with managing their practice and managing client relationships. There can be no complacency, no resistance to making the requisite changes that ensure you, as a financial advisor, are overseeing the multi-dimensional aspects of your affluent clientele's financial affairs.

The Opportunity: Every crisis is a two-sided coin: problem versus opportunity. The aforementioned wake-up call describes the ongoing challenge, but the opportunity is uncanny. Why? Because it's disguised within the wake-up call. The more the media beats the drums of financial doom, the more this financial crisis spreads its tentacles, which provides the media the fuel to beat the drums of panic, and the more nervous the affluent investor becomes. All of which heightens their awareness of the need for first-rate professional advice and guidance.

Since that momentous 1,000-point trading error day, numerous advisor blogs and forums have been singing the praises of financial advisors who weren't inundated with calls from panicking clients. This sounds like nirvana to any advisor flooded with calls from panicked clients, but there is a danger lurking in this smugness.

From the perspective of the New World Advisor, today's elite as defined by our research on meeting today's affluent investors expectations, I'd highly recommend that you view these turbulent times as, yes, a pain in the a--, but also a real window of opportunity. As I outlined to Steve, advisors can capitalize on this ongoing crisis by conducting a thorough re-evaluation of their current state of affairs on three fronts.

Let's take a quick look at each to get you started…

1) Your Practice/Team
What services are you providing? For instance, comprehensive financial planning and its execution are extremely important to today's affluent investor and should be at the core of your practice. The same is true for financial organization; keeping your client's financial documents organized and current. Alas, though nearly 80 percent of advisors claim that planning is an integral part of their practice, only 25 percent of today's affluent feel as though they have a comprehensive financial plan.

How competent is your personnel? Your practice/team is only as strong as its weakest link. Are roles and responsibilities clear and understood? Are you conducting performance reviews? Is everyone pulling his or her weight

This ongoing crisis creates the perfect window of opportunity to add services you heretofore have not provided. It is also the time to address performance issues of all personnel, and re-align roles and responsibilities if necessary.

2) Managing Relationships
Each new chapter within this crisis affords an opportunity to strengthen your client relationships. How? By meeting face-to-face and explaining what is occurring and how you are protecting them, by calling them and explaining the same, by meeting with them socially, and so on.
It is also the perfect time to strengthen your referral alliance partners. You should, if possible, meet with each on a personal basis and help them understand what's happening, how you've responded, how clients are protected, and help them in explaining this to their clients.

3) Rainmaking
Eight of 10 affluent investors have enough dissatisfaction with their financial advisor(s) that they would consider making a change if they knew of a better alternative. Whether it's Goldman Sachs and the SEC, Greece, market volatility, or the media fanning the flames of panic, nervous affluent investors are in a perfect frame of mind to meet with you for a second opinion. You want to be penetrating your affluent client's centers of influence.

Hold a series of small events focused on "Economy: Market Update" as this ongoing crisis has made these events the second-most favored (intimate social events are number one) by today's affluent investor, and the second-most likely where they would bring a guest. Make certain you have each client bring a guest you've selected, and also invite your strategic referral alliance partners.

Deliver one second opinion daily.

It's ludicrous to suggest that advisors should be enjoying this financial crisis. Today's world of financial services is extremely unsettling to everyone. However, there is a sliver lining amidst all of this pain. As I explained to Steve, this is the opportunity to very carefully fine-tune your practice in a manner that will enable you to capitalize on these challenging times.

For a FREE copy of our 2010 New World Advisor Research Report Excerpt, visit our download center. From this research we have identified 16 criteria critically important to today's affluent investor. Enjoy!

Also, if you haven't already - join The Oechsli Institute's Group on LinkedIn!

Once again, we want to thank all of you who have emailed comments and questions to us. We will continue to do our best to answer each one.

If you have any topic suggestions or special requests, please contact Rich Santos, publisher of Registered Rep. and Trust & Estates magazines, at [email protected].

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