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Sailing Into The Wind

San Antonio -- "The volatility is the killer," bemoaned a frustrated Russell. "I know I should be calling my clients, but everybody is in a panic and they're calling me. I feel like I'm spending most of my time trying to talk my clients down from the ledge. I don't think anybody can bring in new business under these circumstances. Heck, I'm just trying to keep my head above water."

Russell was speaking to one of my associates about a possible coaching relationship, and let me tell you, he needs all the help he can get! Sure, the markets are all over the place right now, but there is a silver lining for those advisors that truly understand what the affluent are looking for in a financial advisor. Let's start by setting the stage. Here's a brief look at how the markets have performed over the last two months:

  • On the year, the Dow Jones has already been down as much as 10 percent ... and it's only February.
  • From a relative high of 13,930 on October 31 of last year, the Dow dropped almost 1,000 points over the next two weeks to 12,988 on November 12. It then rose another 800 plus points to 13,727 by December 10, slipped over 700 points to 11,971 on January 22, and then gained around 700 points back to close at 12,743 on February 1.
  • These days, 2- to 4-percent daily fluctuations are the norm, not the exception.

It makes me dizzy to even write those numbers, and I imagine it's making a lot of you dizzy to read them. Now put yourself in the shoes of your affluent clients and imagine the emotions and panic they're feeling. It's not a pretty picture.

But here's the opportunity for those that get it: Russell is your competition. Stop and think about that for a second. Are you beginning to see it? To feel it? Are you beginning to understand the enormous opportunity out there waiting to be captured?

The affluent need you in these turbulent times! And, more than ever, they recognize the need for a true "go to" financial advisor. Any advisor who lives and dies on the strength of their investments alone is vulnerable--and they surely are not acting as the "go to" coordinator for their clients.

Our research on the wants, needs and goals of the affluent is clear: The affluent are looking for a primary financial coordinator to handle the many dimensions of their financial affairs. The affluent are out there looking for this professional, but don't know where to find him. All the major firms are promising this type of service, but only a handful of advisors (7 percent based on our research) are actually providing it. That means 93 percent of your competition is not acting as the "go to" coordinator for clients. Are you seeing the opportunity yet?

Dissatisfaction is the breeding ground for opportunity. Sure, when the winds are at your back your clients are happy; you're happy, and it's easier for advisors to pretend that they are "go to" coordinators. But when the wind turns into your face and that happiness turns to a panic, a select group of goal-focused, fearless, well-prepared and opportunistic advisors (we call them "rainmakers") are able to turn this panic and dissatisfaction into opportunity. Well, get ready to sail into the wind because there is sure to be plenty of dissatisfaction (opportunity) out there for those who understand the affluent playing field.

Let's get back to Russell, a veteran advisor who is panicking because of the market volatility. My associate was able to uncover some interesting facts about his practice:

  • First of all, Russell is not acting as the coordinator for the totality of his clients' financial affairs. He handles their investments, and in certain cases, their insurance.
  • Second, he has gone through quite a few coaching programs, the most recent of which advocated taking every Friday off. Now his clients are calling Russell more then ever before, and he's simply "unavailable" on Friday. To make matters worse, every Monday morning he comes into the office with a host of messages from panicked clients, and that in turn makes him panic! How many calls do you think Russell fails to return? Do you think his clients are happy to hear from him three days later?
  • Finally, Russell does regularly contact his clients, but only when instructed by an automated contact-management system.

If Russell decides to engage my associate in a coaching relationship (and he should) he will learn that if an advisor does the right things, the right way, aimed at the right target market, he can take business away from anybody! That is true in any market, but never more so than in a down market. Now more than ever, the affluent need a trusted "go to" financial coordinator -- not a stock broker who lives and dies with the peaks and valleys of the market.

Let me walk through what Russell should be doing -- and any advisor should be doing -- with his clients, and how he can bring in new business as well as strengthen the loyalty of his existing clients.

  • First, Russell needs to become the real deal for his affluent clients. He must reposition his services so that he can act as a true coordinator, handling the totality of clients' financial affairs.
  • Second, he needs to start proactively contacting his clients any time there is an important change in their portfolios. Our research shows that the affluent want personal and proactive contact -- not reactive and automated contacts.
  • Third, Russell needs to understand that he is the product in the eyes of the affluent. If he can become the real deal for his current clients, he can take business away from anybody.

Russell has decided to engage my associate in a coaching relationship. The last I heard, he was already changing his contact system to be more proactive, and was starting to develop a virtual team of experts to better serve his clients.

Russell has already started to turn affluent dissatisfaction into opportunity, and is primed and ready to join the elite 7 percent of advisors who can truly sail into the wind. Are you ready to capitalize on this opportunity?

If you would like a FREE copy of our Critical Path Organizer, a system for tracking top relationships, please visit our FREE download page.

Also, if you brought in 10 or more $1 million-plus clients over the past year, and want to participate in one of our current research projects, visit 2007-8 Rainmaker Best Practices.

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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