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Controlling Expectations and Outcomes

The present economic climate offers heightened insecurity that recalls the traumatic memories from 2008. As far as investing is concerned, clients look to their advisers for precise navigation through these churning waters with the expectation/hope that “the outcomes from this next cycle will be different.”

Defining an Outcome
An outcome is different than a goal. The latter represents a forward view—what we want to happen; whereas an outcome is the result of the planning—what did happen.

Think of the distinction this way. A client goal might be, “I want my wealth secured for the long term,” and the related outcome is, “Your portfolio avoided losses.” While outcomes occur with or without planning, a well-executed plan sets the course for more positive outcomes.

Expectations and Outcomes
The adviser is the primary source for executing the plan, but only one of several sources for setting expectations (see a September 2014 Practice Management Blog post titled “Neutralizing a Client’s Negative External Influences”). A client that expects a 10 percent return because “that’s what my friend’s adviser delivered” only to be disappointed when 8 percent is realized brings to light a failure in managing expectations not execution.

Nonetheless, unmet expectations damage relationships. Therefore, communication strategies form the foundation for setting expectations and defining reasonable outcomes, and this process begins with the plan’s formulation through to each quarterly meeting; it never stops. (Note: fulfilling a client’s service and communication expectations are wholly under an adviser’s control. Take advantage of this control and nail it!)

Any Dollar Lost has the Same Outcome
The current bull market is the third longest in history. The natural cycle means there’s a much higher probability of a market decline than a continued increase. If expectations for the plan’s execution solely rest on performance numbers that go up, there’s a business risk associated with a dissatisfied client base.

Let me state the obvious: a performance decline means the dollar value of the portfolio is reduced; dollars are lost from wealth. This is a simple but vital message to reinforce. Why? Because any dollar lost from wealth—from spending, taxes, fees, depreciation or uninsured risks—has the same effect as a dollar lost to the market.

Here’s the dilemma: so much client anxiety is focused on market downturns that are largely out of an adviser’s control. And, the adviser, knowing this anxiety exists, gets stressed over the possibility that his or her top clients may start looking for another practitioner should investment performances stumble.

Seizing Control of Outcomes
Pounding the fact that any dollar lost has the same wealth outcome as a market decline shifts the plan’s tactical target to programs that minimize the loss of dollars. Given this blog’s space limitation, we’ll focus on two tactics: one for an adviser’s top clients and one for all clients.

  1. Top Clients: Tax Management
    The current tax environment is unfavorable to high-income investors. In some states, the combined tax burden can exceed 50 percent, but even the federal 40 percent marginal tax rate takes substantial dollars from wealth every year. In other words, investors worried about a big market decline every five or six years (U.S Trust says 65 percent of wealthy investors’ priority is to minimize taxes), miss the point that an effective tax management program can minimize the loss of dollars every year. This is called tax alpha and it can be a primary (and controlled) source of outcomes produced by an adviser. Consider variable universal life, variable annuities and trusts in an effective tax management solution.
  2. All Clients: Products with a Disciplined Selling System
    Many studies chronicle the difficulty in actively managed investment products exceeding benchmarks. Whereas most managers tout their stock research and “buying” systems, certain portfolio managers have highly disciplined “selling” systems that do two things to capture value: 1) selling on the upside when a target value is hit; and 2) selling on the downside when value floors are reached.

Losing less than the market also produces excess return. Investment products excelling in the risk statistics “downside capture” and “downside deviation” accurately identify portfolio managers with disciplined selling systems. Here’s the impact: studies show that avoiding losses leads to a better long-term performance profile simply because each dollar NOT lost allows the portfolio to compound from a higher floor.

Comparing Outcomes
In the annual—if not quarterly—review meeting, produce a side-by-side comparison of the plan’s loss minimization program and one without. This will illustrate how the outcome of extra dollars measurably defines a client’s ROI in the advisory relationship.

Kirk LouryKirk Loury
Wealth Planning Consulting Inc.
Princeton J

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3 Steps for Writing Stellar Web Copy

ContentIf you’re like the majority of financial advisers looking to gain the competitive edge, chances are you’re looking at revamping your online presence. But before you go crazy about new site designs and layouts, step back and look at the one foundational piece of your digital footprint: messaging and content.

Advisers typically think about what they want to say instead of what their clients and prospects want to hear when it relates to filling their site with content. They push their message out to the world with their metaphorical megaphones without considering how to draw people in like a magnet to share details.

So what can advisers do? The answer starts with writing stellar web copy. More than 90 percent of the visitors you drive to your website right now disappear and stay anonymous forever. Think about that. Think about all those potential leads; all that interest swimming under the radar. And, all that happening because your content isn’t moving your visitors to take action.

Take the next week, schedule some time on your calendar, and meet with your team to brainstorm ideas and organize your strategy before committing to a particular direction for your copy. Here’s where to begin:

1.) Describe Your Ideal Client
A compelling writer always begins by getting to know the audience inside and out. This can seem like a lot of work, and it is, but the great thing about getting to know your readers is you can use the information again and again.
Write down detailed information:

  • Target audience’s demographics (age, gender, location, income, etc.).
  • Your audience’s primary concern (with regard to the services you offer) right now; what keeps them up at 3 a.m.?
  • Why this information should matter to them.
  • Your audience’s communication preferences.
  • Do they respond better to long pages or short ones? Video, audio or text?
  • How do they spend their time?

If you can’t answer some of these questions, ask. Whether you survey your newsletter readers, ask on social media or call a few of your best clients and get their perspective, you don’t want to guess or predict the answers. The information you collect will help shape your copy. If you’d like an exercise to help jumpstart your brain when thinking about your ideal clients, click here and enter the code “marketing” to download our Digital Marketing Messaging Exercise.

2.) Find Your Focus
Every page must have one main focus, or objective. That’s not to say you can’t expect your copy to do multiple things—for instance, it’s common to hope the home page will welcome new visitors, encourage call-to-actions and lure people into reading your blog. But, it must be written with a singular goal.
A scattered voice leaves your readers feeling unsure what to do next, while a confident voice directs them from point A to point B elegantly. Your goal should determine every choice you make about messaging. In this way, you can help visitors follow a straightforward path to the action you want them to take.

3.) Organize Your Thoughts
Once you know who your ideal audience is in great detail, and you know why you’re writing a particular page, you’re almost ready to put pen to paper. But there’s still one more thing advisers and their team must do that I find so many skipping: forethought. Think about what you’re going to say, how you’re going to say it and what the overall message will be. Jot down some notes, pontificate a few headlines and opening paragraph and reflect on how you (if you were in your clients’ shoes) would respond to the direction of the copy.

  • Does the messaging answer the specific needs and/or objections of your ideal clients?
  • Does the copy engage the reader, or does it try to force information down their throats?
  • Are you writing ABOUT yourself and your services, or are you writing FOR your target audience?
  • Have you included keywords for SEO? Which ones, where and why?

This may seem elementary at first, but I assure you, after getting everything organized and laid out, your copy will pretty much write itself. The entire writing process will flow more easily without the typical frustration you may have experienced in the past. And, perhaps most importantly, because you have put some thought into your approach, the copy is also much more likely to get better results than if you simply put fingers to keyboard and begin rattling off with no direction.

When you know your audience well, your writing will connect with them in an entirely different way. They’ll be able to trust you—and thus follow your recommendations—because you’ve demonstrated you understand them. And in the current noisy world we live in, giving your audience the feeling of being understood might be the differentiator you need to connect, engage and keep those who mean the most to your business.

Ron_CarsonRon Carson
Founder and CEO
Carson Wealth Management Group
Omaha, NE

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Email Prospecting: 4 Tips to Make the Most of 2.7 Seconds

email-on-ipadOne of the biggest challenges for advisers when prospecting is to secure that initial meeting. Often the preliminary outreach to a prospect may take place via email and in that case getting a positive response—or a response at all—can be an arduous mission to accomplish.

According to The Radicati Group, a technology research firm, 1.9 billion non-spam emails are sent every day. To stand a chance to be acknowledged, email messages must be smartly crafted to grab recipients’ attention and motivate them to respond. Other consumer studies also revealed that it takes only 2.7 seconds for an average person to decide if they want to read, delete or reply to an email. This is in part courtesy of our increased use of handheld devices, which currently represent a preponderant portion of all email interactions.

A couple of industry statistics will help you gauge the impressive growth and usage of email on mobile devices:

  • 53 percent of total email opens occurred on a mobile phone or tablet in Q3 2014, from 48 percent in Q2 2014.
    (Experian, “Quarterly email benchmark report,” Q3 2014)
  • Mobile email opens up 180 percent in three years, from 15 percent, Q1 2011 to 42 percent in Q1 2014.
    (Campaign Monitor, “Email interaction across mobile and desktop, Q1 2014)

What are some of the key factors that prompt prospects to delete emails? Key culprits traditionally include convoluted language, use of industry jargon and failure to make a strong case for value—are you worth your prospect’s time? Will you be for her or him a valuable source?

Ultimately, it is not the service or product that you are pitching that will prompt your prospects to take action. Rather, your capacity to convince them that you understand their challenges and that you can help them achieve their goals will be the deciding factor. This is what will persuade them that getting additional information or requesting to meet with you will be a good investment of their time.

Here are some of the crucial factors you must bear in mind when crafting an email:

  1. Grabbing Subject Line: Use concise language. Do not exceed 50 characters. Be clear, consistent, use action words to inspire and, when possible, consider adding the recipient’s first name
    Length: The statistics above make a compelling case for prospects reading emails on mobile devices. Consequently, keep your emails short—preferably under 100 words
  2. Personalize: According to HubSpot Science of Email research, personalizing an email increase click through rates by 14 percent. So, conduct some specific research that can help address the recipient’s challenges and openly quote it in the text.
  3. Credibility: Do not shy away from name-dropping. If the prospect was referred to you by a third party, mentioning that individual’s name may significantly increase the odds of a response
    Value: The first couple of sentences should unequivocally state what you are offering and why it is valuable. To accomplish this goal, clearly state your value proposition. Also, go the extra mile by sharing any educational material you may have on the topic and clearly enunciate to the reader the benefits she will derive from reading such material.
  4. Closing: In closing your email, remember that your goal is to establish an ongoing conversation. Include a call-to-action and word it in a personal and engaging manner, be it a meeting request or a telephone call.

Claudio PannunzioClaudio O. Pannunzio
President and Founder
i-Impact Group
Greenwich, Conn.