One of the hardest things for a young advisor to do is raise the profile of her brand and business. Since we’re relatively new to the industry, we don’t have as many relationships that have been built over years of working together. So we’re always looking for ways to market ourselves.
We came across the idea of compounding goodwill. Like compound interest, compounding goodwill means that the efforts you put forward compound and then return back to you in increasing amounts. Guy Spier, a Zurich-based investment manager, articulated this concept in his book, The Education of a Value Investor.
So, one of the ways we build our brand is by using his idea to give back, which in turn also allows us to network. For instance, everyone on our team is actively involved in charities that we’re passionate about. Some examples include: United Way, the Humane Society, Movember, Siloam Mission and the Westland Foundation.
While we never use our charitable activities as a front to market ourselves, the concept of compounding goodwill ensures that we still derive a great benefit in our business from the connections we make.
As younger advisors, this is one of the best ways to connect with people who might not be in your normal circle, either because of age or because they work in a different industry. Since we don’t actively prospect while helping charities, we can’t point to a specific instance where someone became a client directly from meeting there.
However, there have been instances where someone has approached us at events related to charitable work. Often, the person will ask us what we do, and if she identifies a need for herself or someone she knows, she’ll ask to set up a meeting. Even for people who never become our clients, the ability to build relationships with other people in the community is worth the effort.
We also are involved with other non-profits, such as local business or networking groups, and recreational sports teams. For instance, we’re involved in a professional organization that does charitable work on behalf of that profession as a whole. Through connections we’d made previously, we were able to speak to the directors of the organization.
We asked what he was looking to accomplish from a financial perspective. He had a number of personal and professional goals, including growing the foundation’s annual donations and developing a plan for his own retirement. Because we showed interest in the work he was doing, which had nothing to do with his regular job, we were able to sign him as a client.
The best networking you can do is when you don’t have expectations or an agenda when meeting people. Whatever you choose to do, we’d encourage young advisors to think of ways they can provide goodwill to their community and to the world. The long-term returns will be worth it.