Becoming the next superstar advisor

By Keith Pangretitsch | May 25, 2011 | Last updated on May 25, 2011
5 min read

Anyone with kids knows pop star Justin Bieber was discovered via YouTube. Before long, his songs were getting millions of hits from a growing fan base and he was courted by Justin Timberlake and Usher at age 12. When I was 12, I wasn’t even courted by girls with pigtails.

So what would an advisory business look like if your clients could replay your brilliance over and over again to their friends, colleagues, and family members? We’ve all had situations where everything worked for a client and the right answers came to you at the right time. How do we turn happy clients into your marketing team? No one has invented YouTube for financial advisors yet, but I have some ideas to get us started.

Giving clients the tools

How do you make your business go viral? Create something people want. No one watches YouTube if it’s boring.

Clients want returns, but they can be quite volatile, even with relatively conservative portfolios. So what do clients want that we can control? Ultimately, all clients want to live the way they’ve become accustomed to. For some clients, the priorities to achieving a financially healthy retirement may be skewed towards tax minimization, disciplined saving, or protection in the form of some type of insurance.

The scarcity mentality is alive and well in the advisory business. The unwillingness of most advisors to want to spend part of their time targeting a particular market is surprising. Targeting a specific market will certainly make the question of what clients want simpler, as there is going to be more common ground.

Ask your clients deeper questions to better understand their needs. We ask about financial and personal situations, but how do we demonstrate we are the best listener they’ve ever worked with and we fully understand their goals?

Put together a one-pager that summarizes the client’s situation and outlines what is important to them — the soft issues. I hate saying that phrase as it has negative connotations, but you need to know they have grandchildren in New York and Arizona whom they visit four times a year. You need to know they would consider selling their home to finance their goals of travelling. Once you complete the one-pager, ask the client, “Did I hear you right?”

They may provide you with additional information or simply say yes. Either way, you’ll have a document with the information to make the right plan. More importantly, your client will have a document that they can describe with clarity to others if the opportunity arises to share the detail you put into your practice. I will guarantee that few advisors share their notes with clients outside of a verbal reference or to position a product, but it’s a subtle but important way to help your business to go viral.

Highlighting your great work

Once we understand a client’s situation and goals, we can start to build a plan. It can be as simple as a stated return that a client wants to achieve or as sophisticated as a thorough wealth management strategy. Many firms now employ the services of financial planning, estate and insurance professionals to help advisors with higher-end client solutions.

We schedule a multi-hour meeting with clients where we discuss multiple solutions, hoping they will absorb all the things they need to get done. The reality is the many pieces involved in getting your client organized are all important, but most are not urgent, meaning we do not need to overload clients.

The second challenge is that most clients forget the majority of what we tell them within hours of leaving their meeting with us. To combat this, Russell Investments suggests a one-pager called the Client Engagement Roadmap, which maps out the client’s goals based on priority and schedules associated action items to be completed every quarter. By delivering the roadmap to clients every three months, you remind them of everything you’re doing for them.

A survey by Advisor Impact defined engaged clients as those who are happy with the services you provided. Dissatisfied or merely content clients almost never gave referrals. Engaged clients referred prospects 44% of the time when a friend or colleague asked them if they knew a good advisor. I cannot tell you the number of times advisors have lost opportunities relating to insurance or financial planning because the client was unaware they offered that service. In many cases, the advisor had even discussed a similar product with them at one point in the relationship and the client forgot. If this has happened to you, try the Client Engagement Roadmap.

Goals-based reporting

We often get caught comparing client portfolios to benchmarks or an absolute return, when in fact what clients really want to know is whether or not they are going to be all right. I suggest we figure out a way to communicate that.

A solution that Russell and others provide is goals-based reporting, a one-page solution that displays what your clients are looking for. You start with the client’s current assets and project out based on all the goals they have and how much money they will need at retirement. Then you set upper and lower thresholds that outline what clients would like to add to their retirement if markets and their investments surprise on the upside, and what happens if things don’t go as planned.

After you have set your desired and most likely outcome along with your upper and lower control limit, you simply track your progress monthly, quarterly or annually to ensure you are within the bands set for your client. Benchmarks fail to take into account people’s preferences and individual situations. This approach solves this issue directly. It also gives you credit for all your past successes or failures and ultimately gives clients the peace of mind of knowing they are going to be all right. A benchmark will never be able to tell them that.

Becoming the next superstar advisor

Understanding client goals, addressing goals directly, and communicating in an easy-to-understand format means your clients will rave about you. You may not reach a million hits, but if you have 30 HNW clients and they each know five similar couples, that’s a potential prospect list of 150 clients. If you end up with 50 of those clients and they know five more couples, that’s 250 prospects, and so on. Over the remaining 20 years left in your career, the numbers could become quite high. You may not become the next Bieber, but at least you’ll become a superstar in the eyes of your clients and their referrals.

  • Keith Pangretitsch is Director, National Sales at Russell Investments Canada Ltd.

    Keith Pangretitsch