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Exploring Your Business Model: Are You Amazon or Sears?

It’s early February, and the holidays are just behind us. If you’re like most people, you probably shopped online and had multiple packages delivered straight to your door—from Amazon, the United States Postal Service, UPS and a variety of other carriers. Maybe you even had your groceries delivered, or flowers or wine. It was convenient, wasn’t it? You got exactly what you wanted without ever having to leave your house or waste time looking for a parking spot at a crowded mall or store.

Your clients did the same thing, of course.

Which is why you need to think carefully about what’s really important to them. We live in a world where customers are increasingly dictating what they want, expect and will pay for, and the companies that prosper are the ones delivering on those needs.

You Know What Your Clients Want … Don’t You?

Ah, you’re thinking, but those are retail companies that deliver a product. It’s easy for them. What I deliver is an intangible service that can’t be measured the same way.

That would be true—if your clients agreed with you. Unfortunately, many of them probably expect the same things from you and your practice that they’ve come to expect from other businesses. How would you stack up in terms of convenience, choice, price and accessibility? Does your practice seem friendly, enjoyable, and easy to work with?

I’ve been thinking about this a lot lately as I consult with advisers on their business plans. One elite adviser is working far more hours than he’d like to, and his goal for 2020 is to take more time off to deal with some lingering health issues and to start accomplishing a few items on his bucket list. So, Bill (not his real name) went through the work of segmenting his client base and creating a carefully thought-out service matrix. All of this was good, until Bill discussed his planned deliverables with me.

Making Assumptions

As part of his offering for his top 50 clients, Bill planned to continue his customary quarterly meetings and reviews. Everyone else would be cut back to three meetings per year. And did I mention that these are all face-to-face meetings?

Bill thought he was delivering extraordinary value to his clients. To keep that schedule, he was holding 20–25 meetings a week. He and his staff were tired, overworked and frequently scrambling to get things done. It was a drain on everyone, with no end in sight.

It’s always easier to spot issues when you’re not directly involved. Clearly, this wasn’t working well for the practice, so I asked Bill a simple question: “What makes you think your clients want to meet with you that often?”

There was total silence for about a minute. And then Bill admitted he was gobsmacked—it had never occurred to him that clients wouldn’t value the experience he’s been at great pains to deliver. But think about it from your clients’ perspective. If they like and trust you, and they have a financial plan in place they’re working toward, why do they need to meet with you so often? Many of them might be stealing time in the middle of a busy workday or cutting short family time to sit down with you. Add in traffic and parking and coordinating with spouses, and it might be that your clients view keeping several appointments with you as a hassle. And all the while, you’ve thought they were thrilled by your platinum service level.

A New Discovery Process

When Bill actually asked his clients how often they would prefer to sit down and meet, most said annually, with a minority saying semiannually (only a few older clients wanted to keep their same schedule). As long as they could reach Bill when they had questions or when they had a life change, they were happy—eager—to meet less frequently. Between emails, market updates, events and social media posts, clients felt they were kept well informed with what was happening throughout the year.

As part of this discovery process, Bill also learned his clients were highly interested in using technology, such as videoconferencing, screensharing and texting, to stay in touch. He’d had that capability for years but never used it, assuming his clients didn’t want it. Now Bill is working on a new service model that begins with what his clients want and genuinely value from him, to the greater satisfaction of all.

Let’s go back to my earlier comments about retail shopping. Bill’s practice is now positioned as more responsive, convenient, technologically advanced and accessible simply because he is thinking about what clients really want and need—and then delivering it. As a result, Bill and his team will save hundreds of hours spent in meetings and meeting preparation—time they can now devote to being even more thoughtful and detailed when they do sit with a client. Bill is now planning to take his first two-week vacation in 20 years.

Amazon Vs. Sears

I’m not suggesting advisers unilaterally change their service models or cut back on client meetings. But if you don’t really know what clients want or expect from you, it’s high time you asked. Sears failed to recognize that its customers wanted something different from their shopping experience and kept offering the same things it always had. It’s currently in bankruptcy proceedings, while Amazon posted record revenues last year.

Which one are you?


Kristine McManus is chief business development officer, practice management, at Commonwealth Financial Network®, member FINRA/SIPC, the nation’s largest privately held Registered Investment Adviser—independent broker/dealer. Since joining the firm in April 2014, she has been working with affiliated advisers to grow their top line through the introduction of various programs, tools and coaching. Kristine holds the Chartered Retirement Planning CounselorSM designation, a master’s degree from Pennsylvania State University, and a BFA from Adelphi University.


Be Wary of Lead-Generation Adviser-Matching Services

Advisers looking to grow their business are always interested in finding new clients, but almost universally, advisers hate prospecting. Most of them don’t have the time, skill or interest to do the marketing on their own, which is why lead-generation services have become more popular. In fact, these services are banking on demand and specifically targeting advisers. You can find firms that will sell you prospect information in specific high-net-worth zip codes or Google and Facebook ads that will pop up on specific sites investors might be searching.

Some services take it further by promising advisers you’ll never have to prospect again. While adviser/client matching services have some differences in their business models, their core offering tends to be the same: they promise to match advisers with great quality prospects in their area who are pre-qualified and need their services. The adviser pays a fee to participate (usually a setup or onboarding fee, plus a fee for every referral the adviser receives) while the end client pays nothing.

Wow! That sounds great, doesn’t it?

You know what’s coming, don’t you?

There’s a big BUT. Like most things that seem too good to be true, there’s a catch. Let’s look at a few issues that should be considered before you sink money and time into an adviser-matching service.

Quality of Leads Generated

Where do the matching services find all these apparently great, high-quality leads? The leads come predominantly from advertising. The companies tout their multichannel approach for putting information in front of prospects, and they leverage Facebook, LinkedIn, Google organic searches and pay-per-click services, strategic partners and alliances, social media, email, custom landing pages and videos to make it all happen.

With these tools, they can target investors who are looking for information on a specific topic, such as how to leave money to children. Or they could compel a group of investors to reply to a general pitch for retirement planning or request an e-book on a topic after completing a form. While many prospects do complete such forms, they may or may not be told that a financial adviser will be contacting them afterward. Some prospects have expressed surprise when advisers reach out and say they don’t know how their name and number were obtained.

Some marketing agencies go even further by making the most of today’s sophisticated data analytics. They can cross-reference reams of data and extract candidates who might seem to fit a specific lead profile, such as being older than age 60, living in a particular town or zip code, owning a second home, driving a Mercedes-Benz and so on. These prospect pools might not have clicked directly on an ad or requested information, they have simply qualified as lead because they visited a financial planning site or clicked to run a retirement income calculator.

A One-Size-Fits-All Approach

All these services create pay-to-play scenarios, meaning that only advisers who sign up and pay will receive referrals. So, even though the services promise to match clients with advisers who are a great fit, the premise is flawed. A questionnaire for an investor looking for an adviser is likely to ask only the most basic questions to assess needs (e.g., are taxes important?), rely on investors to self-report their income and assets and make no distinctions for adviser experience and education. So, an adviser with a CFP®, AIF®, CFA®, CPA and 25 years of experience will be presented on an equal footing with a rookie adviser holding only a FINRA Series 7 securities registration. Since the job of lead-generation services is to spread the leads around to all advisers, everyone is treated the same—even though that may not be best for the paying adviser or the prospective client. Advisers receive a brief form with the name, phone number, email and total assets for each prospect, and then it’s up to them to follow up.

Compliance Approval

This is tricky territory indeed, and every firm is different. Depending on how the particular lead-generation service is structured, the SEC will likely consider the service to constitute a solicitor arrangement under Advisers Act Rule 206(4)-3. That’s because the SEC defines a “solicitor” broadly as “any person who, directly or indirectly, solicits any client for, or refers any client to, an investment adviser.” In general, the payment of compensation by advisers to for-profit lead-generation or adviser-matching services may be done only in strict compliance with the solicitation rule. And since it is the adviser making the payment who falls squarely under the jurisdiction of the SEC, it is the adviser who will be held accountable for failure to comply with the rule. Given that, before you spend money or time with any of the services out there, be sure to check with your compliance department and see if it’s allowed.

Are the Services Effective?

According to the marketing and websites of the lead-generation services, absolutely! And there likely is a degree of success, or these companies would quickly close doors.

Caveat emptor applies, though. First, carefully consider what you are trying to do with your business and see if these services make sense. Second, make sure you understand the following:

  • Cost: The services can be expensive. For most advisers, the up-front costs and costs per lead could be better spent on other marketing initiatives that would give them more control and better results.
  • Limitations: Geographic location seems to be the biggest factor in assigning advisers to clients, not experience or designations. The heavy zip code weighting seems at odds with the ability of more targeted technological capabilities, as well as the increased mobility of clients.
  • Missing information: Many advisers invest heavily in their learning and have earned a number of credentials and licenses. The services don’t take any of that into account when matching advisers to clients, although prospects can be influenced by reading designations on adviser profiles.
  • Lack of customization: Even though the services tout their ability at matchmaking, there’s no way for the service to get to know either the adviser or the client. Most prospects who fill out the (very basic) questionnaires might not even know their financial issues or the kinds of solutions they need, so how can they choose the adviser best qualified to help?
  • Risk of wasted time: While advisers can pay more for a lead based on the prospect’s assets, they cannot identify or choose their ideal clients. At Commonwealth, we coach advisers to try and find the right people who meet their minimums and ideal client profile. The opposite is happening with these services when the adviser agrees to follow up with all leads, whether they fit the practice or not.

Evaluate Carefully

Where do you want to spend your money, time and energy? What is best for the long-term success of your practice? In my opinion, most advisers’ time would be better spent deepening relationships with current clients, learning the best ways to ask for referrals and introductions and being highly visible in the community.

If you do want to engage in a digital strategy to find leads and prospects for your business, I suggest you check out LinkedIn first. There are plenty of resources to help you leverage the social media platform that are free, easy and put you in control of the people you contact. And that sounds like a lead-generation strategy worth trying.


Kristine McManus is chief business development officer, practice management, at Commonwealth Financial Network®, member FINRA/SIPC, the nation’s largest privately held Registered Investment Adviser—independent broker/dealer. Since joining the firm in April 2014, she has been working with affiliated advisers to grow their top line through the introduction of various programs, tools and coaching. Kristine holds the Chartered Retirement Planning CounselorSM designation, a master’s degree from Pennsylvania State University, and a BFA from Adelphi University.


Setting Your OOO Message: Best Practices

Your out-of-office (OOO) message is a simple communication tool that’s essential to use every time you won’t be answering calls or emails promptly. Whether your normal response time is a few hours or a business day, you need to alert those who contact you when that time has changed. If there’s an unexplained delay, clients may wonder what’s wrong, asking themselves, “Is he sick?” or “Did something bad happen?” After all, you’re usually so attentive. By immediately informing callers and emailers that you’re unavailable, you’ll prevent any confusion or disappointment when you don’t respond as quickly as expected.

Whether your OOO message is received by clients, prospects, business associates or others, it’s always a great opportunity to reinforce your image as a highly responsive and attentive adviser. But what exactly should you say? Your message should represent your authentic self, while keeping the following best practices in mind.

What Should You Say?

The best messages are clear, short and simple. Here’s a good example:

Hi, this is <NAME>. I’m out of the office until <MONTH DATE> and will be responding to messages on <MONTH DATE>. If you have an urgent need, please contact <NAME> at <XXX.XXX.XXXX> or <EMAIL ADDRESS>. Thank you for your message. I look forward to connecting soon.

A straightforward response like this works well for callers and emailers who have a business need. And, remember, if you’re recording a message for phone calls, speak articulately so those contacting you don’t have to replay your message. If necessary, spell out the email address of your contact person.

If you’d like to elaborate on your message, here are several options, along with some caveats, to consider:

  • Conveying your personality. Perhaps you’d like to mention where you’ll be (e.g., I’m hiking Mount Kilimanjaro!) or add a clever tie-in regarding an upcoming marketing event or newsletter distribution. If that’s in character, it can work. But if a “cute” message isn’t you, just keep things simple and authentic.
  • Adding industry info. If you’re away at an industry conference to keep up with the latest regulations, investment ideas or trends, a brief explanation may be useful. By doing so, you’ll let clients know that your unavailability is for their benefit.
  • Giving advance notice. If you’re going on “sabbatical” of four or more weeks, it’s best to tell clients well in advance. Let your clients know when you’ll be gone and whether you’ll be in communication or not. Ask them to think about any issue that may come up, so you can handle it proactively or alert your team to be ready. And, of course, you’ll want to reassure clients that someone will always be in the office to help them and be in touch as needed.
  • Working from a different location. This situation is increasingly common for advisers, given that technology typically permits seamless communication. If, however, your location does present technological challenges and/or a time difference is in play, it’s best to prepare clients. Use your OOO to convey the reality of when you’ll be responding to messages or not answering calls.

And while I’m on the subject, if you’re taking a vacation, take a vacation! If you answer phone calls and return messages while on vacation or don’t want clients to know you’re gone, think twice. That’s not a great long-term strategy for either you or your clients.

Remember Your OOO!

Your OOO message is a courtesy to clients—and even your staff members (who will need to respond to client queries). It’s also an opportunity to prevent any dings to your credibility. When you’re back in the office, make returning messages your top priority even if your staff assures you that all issues have been resolved. And, finally, remember to turn off your OOO and change the message on your phone as needed.

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Joni Youngwirth is managing principal of practice management at Commonwealth Financial Network in Waltham, Mass.