Why “The Lost Decade” is Good News for Financial Advisors
Do you normally see the glass as half empty or half full? I’ve always been a “half-full” kind of guy even when the glass is maybe 1/8 full. I just don’t see the 7/8 empty and just charge ahead undaunted!
It doesn’t take a Wall Street Analyst to see the past decade was a downer for most Americans. The joke about the 401k becoming a 201k is sad/funny just because it’s true for so many people. Of course, the joke should be modified a bit because with 2009 stock market bounce many people now have 301k’s!
Why is this an opportunity for independent financial advisors?
Because many folks tried a “do-it-yourself” approach to retirement planning and investments and came up short over the past 10 years. Their goal of retirement got pushed out so they know they need to do better and soon. Your task? Let them know independent, objective and well-informed advice can help them reach their financial goals.
So read this article from The Daily Reckoning knowing that plenty of folks in your city need your help to reach their financial goals. Your job is to attract their attention, let them know what makes you different and how that can help them, and then get to work helping them.
The Lost Decade
By Ian Mathias
01/04/10 Baltimore, Maryland – Before we dive into 2010, let’s close the books on the last 10 years — that decade of reckoning. We noted before Christmas that, as we forecast long ago, the major stock indexes were a bust for the decade. But check this out… Were the last 10 years a wash for the whole economy?
So what’s the term for 10 years of no growth in jobs, the slowest GDP growth in 70 years and a 4% fall in inflation-adjusted net worth? Dormancy? Depression? Whatever it is… ouch.
“Historically, downturns have been enormously creative times technologically,” notes Patrick Cox, our tech analyst. “Our current economic mess will be no exception. Economic pressures are forcing reassessments and hard, creative choices. The result will be an explosion of breakthrough technologies. Nobel laureate economist Gary Becker is just one of those studying business cycles who predicts that the recovery from our current mess will be unparalleled and spectacular…
“In the early 1400s, German goldsmith Johannes Gutenberg invented the movable-type printing press. This invention did far more than facilitate book production and increase the availability of knowledge. It started an information technology (IT) revolution that continues to accelerate even today.
“In Gutenberg’s era, his advances in lithography not only increased access to the world’s greatest thinkers. They also put practical business and technical knowledge in the hands of commoners. This seemingly insignificant invention smashed monopolies of thought and political power. The result was exponential growth in science, technology and democratic ideals. The Renaissance and the Enlightenment followed, on up to our present era.
“We’ve already seen a series of printed circuit lithography technologies revolutionize the electronics industry. Every electronic device you own — from your television to your mobile phone — contains a lithographically printed circuit board of one form or another. Like many of the transformational technologies of the last century, it was invented during the Great Depression. The timing was not a fluke.”
Advisor Marketing Success a Little Bit at a Time
In this short video, Richard Emmons speaks about the importance of doing little things that your clients request…even when it’s inconvenient. Even when it’s Christmas Eve!
httpv://www.youtube.com/watch?v=NYP8JBFZfy0
Advisor Marketing with Christmas Cards
In this short video, Richard Emmons explains how sending holiday cards to your clients and prospects can keep your existing clients happy and help you stand out from your competitors. You’ll also learn what to do if you’ve run out of time and it’s too late to send out Christmas cards.
httpv://www.youtube.com/watch?v=dHOsGXyz0V0
Marketing Success with “Free” Products
In this short video, I review Chris Anderson’s new book: “Free: The Future of a Radical Price.”
Author Chris Anderson makes the case that businesses can often raise profits by giving away quality content.
Financial advisors and other professionals can atract quality prospects by giving away valuable content to qualified prospects. This can be through free reports, community seminars, and articles.
Just remember that your TIME is limited and there are only so many hours in a day.
You can give away lots of free products, such as free reports, and use very little time each day. Free info on your website takes ZERO hours per day once it is set up. Dropping a free written reports takes only a few minutes to write out the address and apply a stamp.
However, when you give away your time, you should try to talk to lots of people at the same time. You can do this by hosting community seminars and speaking on radio shows.
Finding More Time for Marketing – Part 3
In “Finding More Time for Marketing – Part 2,” we looked at ways to cut your time spent on administrative activities. Now we’ll look at a few ways to free up time for marketing by cutting down time you spend on “Operations” which you know better as production activities.
Becoming more efficient on the production side does two things for you:
- You free up time to spend on marketing related activities
- You free up time to handle more clients.
#2 is key because you (and your staff) must handle more clients in the same 8-hour day. Otherwise getting more clients robs time from marketing activities. When you neglect marketing, the well runs dry and you run out of prospects. Not good. Not fun either.
Whether your practice is large or just getting started, technology correctly used can quickly improve your operational efficiency. One hour saved per day means over 250 additional hours over a given year. Time better spent getting and serving clients.
Some time ago, I had a client with decades of experience, excellent credentials, and happy clients in more than a dozen states. Yet he was a technology newbie to the extreme.
When I emailed him some questions, his assistant would print out the email for him. He would handwrite his comments and give it back to his assistant. She would fax it to my office. My assistant would call me to let me know I had a fax. When I was away from my office, I’d have her scan it in and email it to me. Incredible!
Thankfully, he got a new computer and some training, and soon replied to my emails with another email. And he freed up his assistant for more productive tasks.
Yet don’t fall into the trap of adding technology just for technology’s sake.
A client of mine is a member of the 300 Financial Group which takes a “Goldie Locks” view of technology. Not too much technology, not too little…just the right amount. In 300 Financial’s view, technology should:
- Make you more money
- Save you time
- Provide the information that helps clients make better and quicker decisions
You can learn more about 300 Financial’s technology approach by clicking here.
Go Paperless
Going paperless helps you in many ways: less office space needed, more productive staff, and less time preparing for client meetings.
One advisor I know went paperless from the beginning of his practice and has instant access to all client communications. And very few file cabinets in his office.
I know another advisor in the same town which has a huge room filled with file cabinets. And support staff which spends many hours every day keeping track of the paperwork and getting everything filed properly.
Obviously newly established practices have the advantage here: no file cabinets holding decades of client records. Yet practices with tens of millions of assets under management gain the most from office automation because your support staff can become far more productive.
Depending on your situation, this may be an incredibly daunting task. Yet the longest journey is begun with the first step so read these articles on ways to get started.
No More Fax Machine
7 Ways to “Say it” and not “Type it”
Autopilot Computer Backup
Track your time and see where all the time goes. Decide how much time you need to devote to marketing your practice each week. Then get started on reducing time spent on administration and advising. You’ll free up time for marketing your practice and reap the rewards later.
Finding More Time for Marketing – Part 2
When you are trying to free up time to spend on marketing activities, admin is a great place to look.
Admin includes all the backoffice activities which support the marketing and advising activities of the firm. You have one or more employee; you need payroll. You have vendors; you need to pay bills. You make a profit; you need tax returns. You have dust balls in the reception area; you need to vacuum. What’s that? You have a janitor for that? Great.
The general rule is to outsource everything you can: receptionist to answer calls, bookkeeper to pay bills and prepare payroll, CPA to prepare taxes, janitor to clean the office, and so on.
You may or may not enjoy these tasks. You may or may not have the education and experience to do them well. The point is to increase time spent on marketing means you save time elsewhere. Just because administrative activities need to get done does not mean you have to do them yourself.
I know one advisor who prepares his own personal and business income tax returns. As his practice continues to grow, this has got to go. Spending 4 hours every quarter for estimated taxes and 2 days in March for business returns and 2 days in April for personal returns means 8 days per year are spent on administrative tasks. This time can be better spent advising clients or marketing his practice.
Here’s a rule of thumb to consider: Outsource any task which can be done for less than your billable rate. If you charge out at $175 per hour, then pay a CPA $100 per hour to prepare your tax returns.
What if you’re an independent advisor without any staff? Do you need to do it all for the time being. Not necessarily. You just need to be more creative.
Consider locating your practice in a professional business center. Executive suites offer professional receptionist and administrative services on an as-needed basis. You have access to conference rooms when you need them. You pay a monthly fee which includes your office, telephone, fax, internet, janitorial and security. You save time because someone else deals with these various administrative services. Many executive suites allow conference room and day-use office access in affiliated business centers.
One advisor in New Jersey offers to meet clients in various cities to make it more convenient for his clients. So he not only saves time and money on administrative activities, he gets a marketing boost to boot.
Another possibility would be co-locating your office with a CPA or attorney. You’d benefit in many of the same ways as moving into an executive suite. Plus you’d be available for referrals from the accountant or attorney and get visibility from their walk-in traffic.
Either option means you don’t need to fill the role of Office Manager and deal with all the administrative details of running an office. You also add a receptionist between you and your clients and prospects which makes your firm bigger than just you.
And every minute you cut from admin means another minute spent on marketing.
Finding More Time for Marketing – Part 1
You want to grow your practice by increasing your focus on marketing activities. You know this will take time. Yet you feel overloaded these days already. Where can you find some more time?
I remember a few years ago when my daughter was getting ready for her big sister’s high school graduation ceremony. Time was running short. She was getting stressed. Was it related to her hair or her outfit? I don’t remember. I do remember her crying out, “Time, time. I need more time!” Don’t you feel that way sometimes?
While you can’t create more hours in the day but you can change how you spend your time each day. How? Budgeting, of course!
The process for budgeting your time is the same for budgeting your money. You want to see how you’re spending your time now, set “time spending” goals, and then create a plan to reach your goals.
Let’s look at how time is spent in virtually every business…whether a one-man operation or Walmart.
Every business has 3 main activities: Marketing, Operations, and Administration.
Obviously, Walmart has entire divisions of people spending 100% of their time on some aspect of one of these 3 areas. Yet the CEO must oversee all 3 areas and ensure none is neglected. At the store level, the store manager has a few people in marketing, many in operations, and some in admin to do payroll, keep the lights on, and pay the rent.
How does this activity breakdown look like for financial advisors?
- Marketing attracts and gains new clients
- Operations takes care of clients, and
- Admin includes back office work such as office management and compliance.
Based on conversations with many financial advisors, the general consensus is that “marketing is what I need to do, planning is what I like to do, and admin is what I hate to do but must do to keep out of trouble.”
So when time is tight which area gets neglected? Yes, marketing.
Now take a look at your calendar and see how you spend your time in marketing, operations and admin. Does your calendar only show time spent with prospects and clients?
In this case, you need to start tracking time spent on marketing and admin. You might be shocked at what you see. Or don’t see.
Just don’t be discouraged. Your business might be doing okay and you’re spending only a couple hours per week on marketing. Imagine if you started spending 30-40% of your time on marketing?
You’ll find it helpful to separate marketing into its two main functions: sales and marketing. What’s the difference?
Think of marketing as “leading the horse to water” and sales as “making him drink.”
Marketing is all about attracting new prospects as well as getting your existing clients to buy more and more often. You do this with your website, printed and e-mail newsletters, public seminars, advertising and all other ways of getting the word out. This also includes making it easy for your clients to refer their friends and relatives.
Sales is persuading that prospect in your office or conference room to place their trust (and money) with you.
Sales & marketing efforts work together to grow your practice. For example, any advisor without any marketing materials, advertising, or website has a much tougher job convincing the prospect in his office to become a client. Why? Because targeted marketing efforts attract more qualified prospects while screening out others. And marketing materials help tell your story well before your prospect walks in the door.
So your action item is to track your time in Sales/marketing, operations, and admin. In my next article, I’ll take a closer look at admin.