With how much you already do as a financial advisor, being told that you should add one more thing to your plate might make you roll your eyes and think “Right like I even have time for that.” Newsletters can feel like one of those things. Maybe there are a few perks to writing one but actually doing it sounds like it would just take too much of your time away from the more important tasks on your schedule.
This article is here to tell you that a) sending out a regular newsletter can bring in more than just a “few perks” and b) it doesn’t have to take up all (or any) of your time if you do it right. Keep reading to learn why and how to write effective newsletters without taking up more of that free time you already don’t have.
There are three main advantages that putting out a regular newsletter can give you as a financial advisor.
This newsletter is your chance to offer educational information and insights to your audience on a regular basis. For existing clients, it’s a soft reminder of how much value your expertise creates for them and the education they get from each email can help them better understand the services you’re providing.
For prospects, it creates an image of you as a thought leader and knowledgeable source in the world of finance. While all advisors advertise their financial expertise as a reason to hire them, you will have been actively demonstrating it. When it comes time to choose an advisor, they’re more likely to have confidence in your expertise because they’ve already seen a sample of it.
With financial newsletters, you have an opportunity to start the trust-building process even before a person becomes your client. With a good marketing strategy and a great newsletter, you can build up an audience of people who are interested in learning about finance—even if they’re not quite ready at this moment to work with an advisor.
When those members of your audience are ready to hire a financial advisor, those regular newsletters ensure that you are someone they already know and have already established some baseline trust in your expertise.
For existing clients, a great newsletter reinforces their impression of you as someone who cares and truly has their best interests in mind. For prospects, it lays the groundwork of trust and confidence in your expertise and commitment to people’s financial wellbeing.
Regular newsletters are also a regular reminder to clients that you’re there to help them. Maybe a recent market downturn has them feeling a little anxious about their portfolio but they keep putting off a phone call to you.
Filling your next newsletter with insights about that market downturn and ending it with an invitation to call or email with any specific questions or concerns could be just the nudge they needed to reach out. And that reassurance that you’re open and willing to be there during uncertain times will go a long way toward reinforcing the trust in that client relationship.
To maximize each of those benefits, you need to make sure you’re putting out a quality, effective newsletter. Here are some tips.
The goal of this newsletter is to establish yourself as the go-to resource for timely and useful insights into the world of finance. Think about recent market news or the kinds of questions your clients or prospects are likely to care about. Let that guide your decision on what topics to cover.
Keep the newsletter fun and relatable by adding a dash of your personality to it. Maybe you’re famous among friends and family for always having a cheesy joke to share. You could include a “joke of the week” in your newsletter.
If you’re a Star Wars fan, include a piece of Jedi wisdom or a movie quote—bonus points if you can relate it to the financial topics you’re discussing.
Use headers, bullet points, and other formatting to make the newsletter as easy to skim as possible. That way, readers can quickly find the information they’re most interested in and still feel like they got value out of your email, even when they don’t have time to thoroughly read the whole thing.
In addition to explaining financial concepts or offering insights on recent market events, be sure to include actionable advice. During a market downturn, you could offer tips for making a more bear-proof portfolio. When talking about retirement planning, you could offer tips on how to accurately estimate how much someone needs for their dream retirement.
By giving readers advice they can use, you’re establishing yourself not just as a financial expert but as a resource people turn to when they’re trying to manage their financial lives.
Figure out the right frequency for your newsletter. Some opt to send one out weekly to keep their name as fresh in prospects’ minds as possible. For others, weekly newsletters might be too much and could risk alienating clients who don’t want their inboxes flooded with emails. Instead, monthly or quarterly newsletters could be more effective.
Think about your client demographics and the audience you’re trying to reach when deciding how frequent your newsletters should be.
There are lots of ways you can reap the rewards of a regular financial planning newsletter without adding more work to your already full plate. Here’s how:
You can either send over a list of topics you want to be included and let them do the actual writing or give them full freedom to write it themselves and just review the draft when it’s done. The best option depends on how much of a finance background the staff member in question has.
Even if you want to write the newsletter yourself, a lot of the other work of sending out newsletters can still be delegated to staff to save you time, like:
The more you delegate to staff, the more you can focus on the work that only you can do — without sacrificing the little things that tend to be neglected if you’re trying to do everything yourself.
Write out a template that includes the basic pieces you’ll include in every newsletter like the ending call to action that invites clients or prospects to reach out with questions and the opening greeting. You can use Pulse360 to create and store this newsletter template.
To make it even easier, you can keep track of topics you come up with as you go by writing them down in your notes and using Pulse360’s tags to tag them as “newsletter.” That way, when it comes time to write, you can easily pull in a list of the topics you came up with throughout the week or month and simply write out a few sentences on each one (or have your staff do it!).
Financial advisors might not think that UX design laws have much to do with running an advisory practice but many of these principles of human behavior can help you improve client satisfaction and run a more efficient office. By applying Fitt’s Law, for example, you can find ways to improve organization and reduce the time spent searching through your computer for the information you need.
In addition to reducing the time wasted looking for the right document or that one note you jotted down somewhere months ago, applying Fitt’s Law to your practice can drastically improve client satisfaction. A financial advisor that isn’t wasting time searching through their computer can spend less time on file prep before and between meetings. Keep reading for a definition of Fitt’s Law and some tips for applying it to your practice.
Fitt’s Law is a principle that guides how UX designers build web pages that are easy and efficient to navigate for users. This principle is based on the research of Paul Fitts, a psychologist who studied the human motor system. What this psychologist found is that the smaller the target and the faster the movement, the higher the chances of error.
In other words, if you’re frantically scrambling to find a single tax return on a computer with thousands of files on its hard drive while a client is impatiently waiting to get on with the meeting, the chances of not being able to find it or taking far longer than necessary to do so are high.
In UX design, this means that buttons or other clickable objects should be large and spaced far enough apart that a user can easily find what they want to click on and avoid accidentally clicking on the wrong thing.
In an advisory practice, it has more to do with how to organize your files and notes in a way that reduces time spent looking for the right document. Here’s what I mean:
In a client meeting, the more time it takes you to pull up the right document or find the right piece of information in the notes and files from your last meeting, the less time you have for actually going over those documents or discussing that topic with your client. Fumbling around to find the right file or notes can also make you look disorganized to your clients. Naturally, many times, you just will push this off for after the meeting (to avoid this bad look) - this just ends up creating more work for you later!
Using Fitt’s Law to develop an organization system that allows you to have instant access to the documents you need during a meeting will reduce the time spent searching for what you need and reassure your client that you’re organized and on top of things.
So, how can you apply this UX principle to your organization? Here are some tips to get started:
If you promised a client that you’d go over their previous tax returns at the next meeting, you need to make note of that. Do you have a system for keeping those details organized and ensuring that you don’t forget that information before the next meeting rolls around?
How much time do you currently spend reviewing old notes to figure out what needs to be covered in the next meeting? If the answer to that is more than a few seconds, you need to examine how you organize your meeting notes.
With the right process and the right tools in place, finding the information you need in your notes should only take about two seconds. Using Pulse360, for example, all your notes for a particular client are compiled in one place. Then, you can add tags — like “next meeting” — to specific pieces of information in those notes so that when you’re reviewing notes later, you can automatically generate a meeting agenda populated with all those discussion points tagged with “next meeting.” Finally, if you need to find a piece of information during a meeting, you can use filters to quickly locate the important information.
Even without Pulse360, you can make your meeting notes easier to search by implementing a better note taking system in your office. Strategies like using the same note-taking template across all meetings will make it easier to know where certain information will be located, for example.
Keeping all your meeting notes and meeting-related information in one file also cuts down on the time fumbling from folder to folder on your computer in search of the document or information you need during that meeting.
A super organized file folder system is an important part of cutting down on time spent hunting down the documents you need during a meeting. An organization system that is consistent and easy to search ensures that you know exactly where to go and what to look for.
Again, an automation tool like Pulse360 can help here. Instead of searching through your files on your computer while your client watches and waits, Pulse360 makes it easy to instantly pull up the document you need.
At the XY Planning Network (XYPN) conference last year, Michael Kitces, a financial planning expert and the mind behind Kitces financial planning education website, discussed the importance of meeting prep, agendas, and documentation but also acknowledged that the time it took made it difficult to do on a regular basis.
“The number one thing that most of us spend the most time on that we really shouldn’t be spending so much time on is the meeting notes and follow up and the prep that goes along with it,” Kitces said at XYPN 2021.
“For most advisors, we spend more than one hour in prep and follow up for every one hour we spend in meetings.” So sending an agenda ahead of the meeting usually gets cut because there simply isn’t time for it.
That’s why Kitces is so excited about the potential of Pulse360. By “automating and templating all of these pieces around meeting agendas,” Kitces argues, the software cuts down the time spent on meeting prep and notes so much that you actually have time to send agendas.
“Relative to the cost of Pulse360, you need to save like three minutes a week or something to actually make this a good ROI on your time and it’s going to save you a lot more than three minutes a week.”
Whichever strategies or tools you choose to implement, the key is clear, easy-to-search organization systems that cut down the time it takes to find what you’re looking for. Automation and note taking tools can speed up the process even further so that you can instantly access exactly what you need without having to search at all.
The serial position effect states that “users have a propensity to best remember the first and last items in a series.” For UX designers, the idea is that the most important points—or the details that you want to call a user’s attention to should be at the top or bottom of a page.
But even outside of web design, the human brain has a natural tendency to recall the first and last items in a sequence most clearly. In studies where participants were given a list of words and then asked to recall them later, they were most likely to recall the first few words and last few words on the list.
As a financial advisor, that means that regardless of whether you’re speaking to your client or writing them an email, the client is most likely to remember what you said at the start and at the end of a meeting or email—and least likely to remember what was said in the middle.
There are two related phenomena that could account for this tendency: the primacy effect and the recency effect.
The primacy effect refers to the fact that it’s easier for the brain to store smaller chunks of information in long-term memory. So those first few items on a list get quickly processed and stored. But by the middle of the list, the brain starts to struggle with information overload.
The recency effect refers to the fact that, before information gets stored in the brain’s long-term memory, it’s held briefly in the short-term memory. This short-term memory can handle around seven items at a time. So those items at the end of the list are recalled well simply because they’re still sitting there in the person’s short-term memory (but they haven’t yet been processed into long-term memories yet).
Understanding when and how the brain processes and stores information has major implications for how you communicate with your clients. If clients are struggling to remember the advice you’re giving them or forgetting to take the important next steps to act on that advice, this can hurt the value they’re getting (and perceiving) from your service.
Knowing that the first and last points are the most likely to stick, however, you can make sure you’re structuring your meeting agendas and emails in a way that optimizes how much your client remembers.
The key lessons to take away from this UX design law include:
Here are five ways to use that knowledge of how human memory works to get the most out of your meetings and communications with clients.
To get the most out of your meetings while accounting for the way human brains process and store information, make sure to organize your meeting with the most urgent and important topics upfront and the second most important topics at the end.
You can use the middle of the meeting for:
The division won’t always be so clear-cut since there’s rarely going to be a topic that you think, “well, it’s fine if they forget this entirely.” Instead, try to think about how soon they need to remember it or take action on it.
Jumpstart their memory by sending that agenda you created to them via email ahead of the meeting. Even if all they do is give it a quick glance, it’ll ensure that those items already start the process of becoming long-term memories even before the meeting starts.
Sending out meeting agendas is also a great way to make sure clients remember to bring any necessary documents with them or recall any questions or topics they wanted to bring up.
You can’t always pack all the important and urgent details into the beginning and end of a meeting. Sometimes, there’s just too much ground to cover. Sending a follow-up email with a quick summary of what you discussed and what next steps need to be taken can help counteract the serial position effect and increase the amount of information your clients take away from your meetings.
For maximum optimization, put any actions they need to take—like sending over documents or contacting their tax preparer—at the end of the email. Even better: separate them from the rest of the text and use bold font to draw their attention to them.
Don’t write an essay. Write a bullet-point summary. It’s easier for the brain to process smaller pieces of information than longer ones so an easy-to-read list of key points will get absorbed by the client’s memory more effectively than a long-winded, meticulously detailed email.
To help reinforce the client’s memory even further, you can swap the order of the items. Put the first points from the meeting at the bottom and the last points from the meeting at the top. This way, those last points which might still just be stored as short-term memories are more likely to get moved into long-term storage—increasing the total amount of information that your client remembers in the long term.
The more opportunities you create to refresh and remind your clients about their finances and the services your providing, the stronger and more detailed their memory will be. With everything else going on in their lives, it’s easy for memories of what you did early in the year to fade and to lose sight of just how much progress they’ve made toward their goals.
An annual summary, written in a short and simple list not unlike your meeting recaps, is a great way to refresh their memory on how much value you created for them throughout the past year and highlight what’s on the agenda for the coming year—reminding them of how much you’ve already helped them accomplish and how much more you have to offer going forward.
UX design advice and communication advice for financial advisors have one thing in common: both tend to emphasize simplicity. Simplified web pages and simplified explanations of complex financial topics are both extremely helpful to users and clients, to be sure. But there is such a thing as too much simplification.
That’s where Tesler’s law comes in. This UX design principle is all about making sure that you don’t oversimplify to the point of abstraction—and it’s just as relevant for financial advisors as it is for web designers.
Tesler’s law, or the law of conservation of complexity, says that for any system, there’s some amount of complexity that just cannot be reduced. In other words, there is such a thing as too much simplification. In web design, if you simplify the layout too much, it can actually become more difficult to navigate because there’s not enough detail to show where things are.
While you don’t want a busy or messy webpage, you also don’t want one that’s so barebones and empty that no user can figure out what’s what.
As a financial advisor, you also need to steer clear of oversimplification for similar reasons. When explaining financial concepts, you want to use clear, easy-to-follow language but you don’t want to dumb it down.
In financial planning, oversimplification can end up hurting returns since the simplest approach isn’t always the best. For example, investing the same amount of money into a portfolio each month without ever rebalancing it sounds easy to a client but without that rebalancing, they could be losing money in the long run.
That’s part of why clients come to you, so you can do the complicated parts of wealth management while they, ideally, just have to sit back and watch their money grow.
But to get to that point, they need to trust you and, to some degree, understand what you’re doing and what you’re recommending. That means you need to be able to communicate the complex financial plans and tools you’re recommending in a way that’s both simple enough to understand but not so simple as to be generic or missing details.
For example, explaining the difference between a Roth IRA and a Traditional IRA simply as one is taxed now and the other is taxed later is true but it’s missing some important details. For one, there are other restrictions and requirements to consider.
For two, there are different advantages that come with when those tax breaks kick in. A higher-income client or one whose income is just on the cusp of a tax bracket, for example, might benefit more in the long run from the immediate tax break of a traditional IRA where a more modest earner might benefit more from tax breaks in the future when they start making withdrawals.
Again, you know this. But that’s exactly why the oversimplification of the explanation can end up backfiring. A client might end up choosing a Traditional IRA even though they’d benefit more from the Roth, simply because “tax breaks now” sound better.
Here are some tips for finding that balance where you simplify your financial advice without oversimplifying it.
Complex details don’t have to be completely mystifying. After all, your clients are adults with at least a basic knowledge of math and how money works. Sometimes, what makes a certain financial concept so confusing is simply the fact that’s being described using technical jargon.
Take the advice you’re planning to give a client and try to phrase it using only language that you would have known in high school before you’d taken any advanced courses in finance. If you keep the language simple enough, you may not have to worry too much about simplifying the concept itself.
Visual aids can go a long way toward keeping a client on the same page, even when you start to get into the weeds of the details that are too important to simplify away. A chart showing different investment accounts side by side with the key points listed beneath each one gives your client a frame of reference to go back to while you’re busy explaining the significance of a particular point on that list.
Visuals also help clients keep that information organized by having a reference they can use to connect your current point back to an earlier point you made. It’s also a helpful reminder that they can refer to as needed later on—especially if you send over a copy in a follow-up email after the meeting.
You’re making this recommendation for a reason. Which of the client’s goals does this advice serve? Which of the client’s concerns does it address? Start from that goal or concern, explaining how this advice moves them closer to their goal.
Then, once they know how it’s relevant to them and what need it’s serving, work backward to explain how the product or strategy works—in plain, jargon-free language.
For certain scenarios—like choosing a retirement account or college savings plan—you can skip the explanations of the different options and instead lead the conversation by asking questions about what the client wants.
For example, instead of explaining the differences between a 529, a custodial account, and an educational savings account, you can ask the client questions about how much flexibility they want in terms of how the money is used, whether they might want to contribute more than the limits set by some plans, and whether they expect their income to exceed the income limits of some plans at any point while making contributions.
These questions not only help you zoom in on the right plan but have the added benefit of showing the client what kind of differences and considerations exist across each option.
For this next piece in my series on applying UX laws to your financial advisory practice, I’ll be looking at Hick’s law and talking about why it’s so important to keep both your client services and your office workflow as simplified and straightforward.
As financial advisors, you’re often dealing with some incredibly complex calculations and strategizing to maximize returns, minimize tax impact, and ensure clients achieve their financial goals. Because you’re so familiar with it, though, you might forget to simplify it for clients or team members who aren’t as knowledgeable. In this article, we’ll look at why that complexity can end up causing problems and how you can apply Hick’s law to help both your team and your clients make more confident and accurate decisions.
Hick’s Law states that, “the time it takes to make a decision increases with the number and complexity of choices.” In other words, the more options you have, the longer you’ll take to pick one.
If you’ve ever been in a grocery store, faced with choosing a pack of paper towels when there are dozens of brands making competing claims about whose paper towels are the best, you probably understand what Hick’s law is getting at.
Beyond choosing between options, it can also make completing a task difficult. The more complicated a task is, the longer it will take someone to figure out what step to take first and how to get it done.
To avoid this problem, Hick’s Law suggests that minimizing choices as much as possible and breaking complex tasks down into simpler steps will help people make decisions faster. Think about the grocery store example again: if there were only two brands of paper towels to choose from, you’d be in and out in minutes.
In the office, Hick’s Law will mostly apply to the workflow. The more complex a process is, the more difficult it will be to complete, even if your team is highly skilled. If every decision a team member makes needs your approval or clarification, for example, this can quickly create a bottleneck.
However, if you empower your team to use their own experience and knowledge to make certain decisions, the work can keep going and you just need to monitor and make corrections as needed.
When a client’s money is on the line, this might seem like a risky proposition but there are plenty of areas of your practice where giving your team more authority to make decisions won’t directly impact a client’s account.
If your assistant has your calendar and knows what your availability is, for example, they can schedule meetings for you without checking in with you first. Likewise, if you implement clear guidelines, other administrative and routine tasks can be handled by your team on their own.
If guidelines state that follow up emails should be sent out before the end of the day that the meeting was on, your team will know which follow up emails to prioritize and when to send them out. If guidelines state that annual summaries are sent out to clients at the same time each year, your team will know when to start putting those summaries together without you needing to instruct them.
Simplifying the workflow and empowering your team to make decisions on their own frees up more of your time to focus on strengthening client relationships and doing the work that you can’t delegate to team.
Hick’s Law has tremendous implications when it comes to both prospective and current clients. Let’s start with the prospects. If you put a menu of your services in front of them that details dozens of different service options they can choose from, it will be harder for them to figure out what it is they need.
Instead, try organizing those into three levels of services: transactional services, planning, and annual planning. Under each section, include a very simple description of what each level involves. Then, as they start asking questions, you can clarify the points that are most relevant to them and provide details where they need them. Of course, if you take this approach, you need to provide more disclosures but those can be made available either while they’re asking questions or when they sign.
While you can provide a comprehensive picture of every possible service you can provide today or in the future, you need to provide a personalized picture of how your services can help that prospect achieve their particular goals.
For current clients, Hick’s Law will mostly apply to review meetings and to providing your recommendations. Let’s take a look at two examples of a follow-up email to a client regarding a recommendation:
After reviewing several options, I recommend you consider investing $250 a month in ABC 529 Plan for your son, Tom.
After reviewing several 529 plans, I recommend you consider investing in ABC 529 Plan for your son, Tom. Based on our research, the age-based portfolios in this plan have the potential to be a better fit with your son’s time horizon. Consider investing $250 a month towards his education. You wanted him to join an Ivy League school and with your current savings plus this additional ongoing investment, you will be able to achieve this goal.
Email A is simple and straightforward. In a single sentence, it tells the client what 529 plan you recommend and how much you recommend investing. Email B contains that same key information but buried in a lot of extra details. Just seeing how much text there is can make a client feel like it’s more complex than it is and delay or avoid making a decision.
While those extra details are important, they aren’t necessarily important to include in your emails and communication with your client. They can instead be added to the plan itself so that your client can access the details as needed rather than being inundated with them in the email.
If you do need to include more details in your email, use bullet points and other formatting to make sure it still looks readable. Here’s an example:
Each bullet point includes one piece of information. The most important parts are bolded to help the client quickly find the key information. With this format, you can include the details you need but present it in a simplified format that’s easier to digest.
Cutting complexity like this makes it easier to process the information and come to a decision. Prospects will have a more confident grasp of what they can expect from you and clients will have a more confident grasp of what you’re recommending and why.
The number of certified financial planners has been growing over the past few years. Meanwhile, new tech solutions like roboadvisors and automated investing are becoming more popular. Those two trends mean that it’s not enough anymore to be qualified, experienced, and great at your job. You need to be those things, too, of course. But you also need to differentiate yourself from the ever-growing pack and communicate the unique value you bring.
That pressure to differentiate yourself can end up backfiring if you’re not careful, though. To understand why you need to understand a core principle of web design known as Jakob’s law.
In web design, Jakob’s law states that users prefer a site that works similarly to the sites they already know. While it might seem like originality is key to setting your website apart from the rest, it can end up causing frustration and dissatisfaction if it doesn’t feel familiar and intuitive to navigate.
This is because of the mere-exposure effect—a phenomenon in which people start to prefer one thing over another simply because they’ve seen it more. So, when they come to a new website for the first time, they’re coming with expectations they’ve set based on other websites that feel related.
It’s because of this design principle that so many search engines exhibit the same basic design as Google. The search bar in the middle and little else cluttering up the page. If you were trying out a new search engine and the search bar was in the bottom left underneath a menu of different features, you’d likely feel a little confused at best and frustrated at worst.
The same holds true for other websites. Most news sites follow a similar format. Most online banking services offer the same basic layout and tools.
This doesn’t mean the product or service they’re each offering is exactly the same. News sites still manage to differentiate themselves from each other effectively without straying from that familiar news site layout that users expect. Banks still manage to set their online banking services apart from each other, even while offering similar core services.
As a financial advisor, the key takeaway is that, as counterintuitive as it sounds, there is such thing as too much differentiation — at least, too much of the wrong kind of differentiation. Here are three ways a poorly-executed differentiation strategy can backfire.
According to a Financial Customer Experience Report published by Qualtrics, client trust and investment track record are the two key criteria potential clients look at in financial advisors. If your differentiation strategy is based on, say, offering the lowest fees, then you’re not really addressing either of your audiences’ top priorities.
Being different for difference’s sake will do more to confuse prospects than attract them. These potential clients are coming in with their own preset expectations in mind about what a financial advisor should do.
So you first need to reassure those prospects that you do, indeed, fulfill those basic expectations — much like a bank adopting a familiar webpage layout helps first-time users confidently navigate that bank’s online services.
Without that familiar context, your audience might be left wondering what exactly you’re offering and how that compares to your competitors.
So, part of your unique value proposition is that your firm includes a large enough team that no single advisor is handling hundreds of clients at a time. Awesome. But why should a client care how many other clients you’re juggling? More importantly, how does that value proposition relate to their expectations or help you better meet their needs?
If you’re not framing your unique value in familiar terms based on what your prospects are looking for, you’re not clearly communicating why that difference matters.
While differentiation can backfire, you also don’t want to over-correct and present yourself as a generic, nothing-special advisor. But how do you strike that balance? Here are a few tips.
The best way to stand out from the crowd is to focus less on that crowd and more on the ones whose attention you’re trying to grab. Find out what pain points prospects are experiencing. What frustrations have they run into when consulting other advisors? What do they expect an advisor to do for them?
If you focus your efforts on finding the best way to solve their problem and make the advisor relationship as “user friendly” as possible, you’ll do far more to differentiate yourself than you would by constantly focusing on, say, keeping your fees lower than everyone else’s.
Keeping tabs on what your competitors are offering is useful, but only to a degree. You want to make sure your services meet a benchmark level as those of other advisors vying for the same client demographic. You also want to make sure your fee structure isn’t wildly out of line with the going rates.
Beyond that, though, don’t worry about what others doing. Worry about your clients’ expectations and whether or not you’re meeting (or, better, exceeding) them.
Avoid overly technical jargon in your marketing and your communication with clients, not only because the average person won’t know what that jargon means, but also because it can obscure what you’re saying.
While avoiding jargon, make sure you don’t skip key terms and concerns your audience is likely looking for. You might layout your range of services, using standard terminology like “financial planning” or “portfolio management” so that prospects can immediately identify that you offer what they need. Then, within those categories, highlight the differentiators that make your financial planning or portfolio management services exceptional—including why that difference is relevant to a prospect’s goals or concerns.
One way to balance differentiation with the need for familiarity is by offering options and customization that allow clients to essentially build the advisor experience they want. One simple example is offering multiple ways for a client to schedule a meeting with you.
For those who prefer the old-fashioned way, invite them to call you to set up a meeting. For those who want the convenience of modern solutions, use software like Calendly that lets clients schedule meetings automatically, without needing to get you on the phone.
Likewise, you might offer clients the choice of remote or in-person meetings.
When you provide this kind of customization, you’re essentially letting the client differentiate your service for you by allowing them to tailor your service to their exact needs and preferences.
Whether you’re trying to grow a new practice or just maintain the competitive edge of an established one, you can always benefit from adding new insights and knowledge to your toolbox. One of the key methods for doing that is reading the latest research and business advice to stay up to date on new techniques, strategies, and technology for your financial advisor business. Here are five best books for financial advisors about running an advisory practice that every advisor should add to their practice:
By Michael Hyatt
I am a big believer in the value of delegation as a way to make your practice more productive and efficient. While I spend a lot of time thinking about ways that financial advisors can delegate more to tech, it’s equally important to delegate more to staff.
This book by Michael Hyatt is all about why and what to delegate to a virtual assistant. The first three chapters cover the importance of having a virtual assistant and defining exactly what it is they can do. The last three chapters provide some insights, tips, and strategies for getting your assistant up-to-speed and developing a smooth workflow. You’ll learn how to set clear expectations, how to work effectively with a virtual assistant, and how to invest that time you’ve freed up by delegating those routine tasks.
By John E. Grable and Joseph Goetz
The Certified Financial Planner (CFP) Board commissioned this book in 2017 in response to the lack of counseling and communication training in the CFP Board’s curriculum. While the technical skill you do gain in that curriculum is essential, what many advisors realize soon after they start working is that financial advising is just as much about building relationships and communicating effectively with clients and prospects as it is about understanding finance.
John E. Grable and Joseph Goetz compiled this book based on the latest research in applied communications to cover the core communication skills that every advisor needs. Each of the 10 chapters focuses on a different dimension of communication, including:
Moreover, unlike other books on communication in business, this has been written by financial advisors and tailored to financial advisors. All of the research and advice is discussed in a way that specifically relates it to your practice.
By Greg Friedman and Shaun Kapusinski
When Greg Friedman and Shaun Kapusinski noticed the increasing rate of mergers and acquisitions in the financial advisory space, they set out to write a book that could provide some guidance to firms that are going through a merger or acquisition.
These transactions are notorious for being messy, difficult, and full of unexpected issues. Friedman and Kapusinski decided it shouldn’t have to be that way. They wrote this guidebook as a way to help firms complete this transaction as seamlessly as possible.
It does this by breaking the process down into stages:
In each chapter, the authors rely on the decades of real-life experience they’ve accumulated in the financial advisory and operations space to define best practices during each stage of the process. They also discuss resources, tools, and methods for things like technology integration, encouraging a smooth merging of staff, and communicating with clients through the process.
By Moira Somers
As a financial advisor, creating value for your clients largely depends on whether or not they actually follow your advice. If you’ve worked with enough clients for long enough, you quickly realize that that’s not always as straightforward as you’d like. Breaking through a client’s behavioral biases regarding their finances can be tough—but if you don’t find a way to do it, your advice won’t be able to translate into real value.
That’s exactly why Moira Somers, a neuropsychologist and leading practitioner in the field of financial psychology, wrote this book. Each chapter tackles the problem of client nonadherence from a different angle to unpack why it happens and what you can do about it.
The book is equal parts theory and practical advice as Somers walks you through how to identify the root of a particular client’s nonadherence and tailor your strategy to their unique personality. So if you are looking for a book on financial advising, start here.
By Mark C. Tibergien and Kimberly G. Dellarocca
In this insightful book, Tibergien and Dellarocca combine rigorous research with real-world case studies to uncover exactly what makes a financial advisory firm last. In the broadest terms, what they found is that the firms which adapt to new industry trends early and keep up to date with technology are the ones that tend to survive through the generations.
To start, the authors debunk some myths that are common in the industry about what is threatening financial advisory firms so that advisors can focus instead on what really matters: planning for the future of financial advising.
Over the course of 12 chapters, readers explore key business trends, significant generational differences in investing styles and client expectations, and how to effectively leverage new technologies. With this book, you’ll be able to better adapt your practice to the needs and expectations of a broader range of clients spanning multiple demographics and generations.
Each of these books explores a different dimension of financial advisory firms and how to run a more productive practice that provides more value to more clients. Whether you’ve been in this business for decades or you’re just starting to build out your practice, there are sure to be new insights in each of these books that could help improve your business. In addition, if you want more choices, Michael Kitces has a more in-depth list here. AdvisorEngine also has a list of books at this link.
When financial advisors try to “justify” their fees, the first thing many turn to is portfolio returns. On the surface, it makes sense. “If you pay me this fee, I’ll help you get this much back in the form of improved returns.” However, portfolio returns are just one narrow dimension of the value you provide. Focusing only on that one narrow dimension obscures all that other value.
More importantly, it doesn’t provide a full picture of what your client might actually need. In reality, your clients also need your help with managing risk, making their portfolio more tax efficient, more cost efficient—and all that’s not even touching on the financial planning services you can offer outside of a client’s investment portfolio.
So how do you talk about the value you provide in exchange for your fees without limiting yourself to your ability to maximize returns? One way to do it is to reframe the conversation as one about financial goals instead.
For every argument in favor of a financial advisor’s ability to improve a portfolio’s returns, you’re going to see a dozen naysayers out there who will tell you that investors can maximize returns on their own without paying an advisor to do it for them.
Whether or not an investor could do it on their own, the likelihood that they would do it in the most cost-efficient, tax-efficient, and low risk way possible is small.
Moreover, the need to choose the right financial products to fit their investment goals or to shift the balance of their portfolio over time as their priorities change all make the DIY approach complicated. If the investor also has a full-time job and a family, there simply isn’t enough time to do it all on their own, without missing some details.
This is why financial advisors need to change the conversation. The reality is that you’re providing a multidimensional service that goes way beyond returns. But, when you only talk about returns, any DIY investor with a reasonable understanding of the market will feel like they can do what you do on their own.
If you shouldn’t fixate on portfolio returns, what should you talk about with your clients? The short answer: talk about their financial goals. Then, frame your value conversation in terms of those specific goals.
In some cases, returns might be a feature of that conversation. In most cases, the conversation will revolve around a variety of other services and skills. Here are some things that you might talk about instead:
Investors might have a general sense of what kind of goals they’re interested in. Some might be working on a college fund for their kids. Others will want to retire comfortably. Still others will want to minimize tax exposure or figure out how best to manage an inheritance.
However, without financial expertise, these goals end up being vague and uncertain. Moreover, it’s rarely clear what the specific steps from point A to point B are. How much does this person need to retire “comfortably” by their standards? When do they want to retire? How much will they need to invest throughout their working life in order to get to that amount? What is the best allocation of assets to achieve that number on time at the lowest possible risk?
Without appropriate and manageable goals, investors are just throwing money into investments without knowing how much they need or whether they’re doing enough to get there.
A financial advisor can help transform those vague goals into attainable targets, complete with a concrete action plan.
The best investment policy is the one that you adhere to, without fail, all the time. One of the biggest mistakes DIY investors make is coming up with a strategy but then going rogue when it comes to actually implementing it. They’ll sell off shares in a panic or hold onto a stock far longer than they should have, in hopes that’ll recover or become even more profitable.
When investors go off script like this, they can seriously impact their returns and end up blaming the strategy as being faulty. In reality, it’s the investment turnover and bag holding that are eating away at their returns.
Advisors can help investors draft a clear investment policy statement that meets their specific goals and then help them adhere to that policy fully and consistently for the long term.
As markets shift from bullish to bearish or investors shift their priorities with time, portfolios will need tweaking and rebalancing. A more aggressive growth portfolio might need to be gradually transformed into a conservative, risk-managed portfolio as the investor seeks to secure the gains accumulated through the high growth years.
As markets turn bearish, some hedging and insurance strategies might be helpful, especially for retired clients or those who will need to start withdrawing from their portfolio soon.
This kind of tactical adjustment requires a level of expertise about which assets and financial products are most appropriate for which stages of life as well as what the best strategies for responding to the current market are.
On the other side of the returns coin, you have taxation and costs associated with an investor’s portfolio. Most investors tend to focus on maximizing returns and give only passing consideration to the costs of each investment, especially where ETFs are concerned.
Financial advisors, on the other hand, have an in-depth understanding of how to keep the costs of investments down by choosing the lowest-cost ETFs and keeping transactions to a strategic minimum, but also how to protect those returns from taxation effectively.
Without considering the tax efficiency or cost of a portfolio, those taxes and fees can eat into the returns they’re getting.
The key takeaway here is that too much focus on “maximizing returns” really doesn’t do justice to the full scope of the value you provide as a financial advisor. Without talking about the full range of value, clients can lose sight of just how much they’re getting in exchange for that financial advisor fee.
For more tips and insights into how to reframe your conversation with clients, check out my in-depth post on the value of financial advisors!
Phishing and identity theft are on the rise, not just through email but phone calls, texts, and even in person. In 2020, the FBI received nearly 800,000 reports of phishing, totaling $4.1 billion in losses for the victims of those schemes. The number of reports increases each year. As a financial advisor, preparing your clients to avoid common scams and protect their accounts from these financial losses is an important service you can provide. Here are a couple of the most common phishing attempts and ransomware attacks and some tips that you can share with your clients to keep them safe from these scams.
Here are some of the most common ways scammers gain access to your information, install harmful ransomware, or steal money from their victims. Send your clients periodic reminders of these common methods along with tips on how to avoid becoming a victim to them.
More often than not, scammers will simply guess someone’s login credentials through trial and error. Once they have those credentials, they can get into your accounts as they please—often without you ever being alerted to suspicious activity.
Here are the best ways you and your clients can protect your accounts from this method:
Email phishing is another popular way scammers will gain access to your data or your accounts. By using deceptive email subject lines or impersonating trusted brands or agencies, scammers try to get unsuspecting victims to click links or download files that either secretly install spyware on their computer or redirect them to a scammers website where they give their personal information under the belief that they are on an official, trusted website.
Here are some of the best ways to avoid falling prey to email phishing:
Scammers can use similar tactics that they use in email over the phone or text message as well. They can even go so far as to disguise their caller ID to display a name and phone number that you know and trust (like the IRS or your bank). Once you answer, they’ll use similar manipulation tactics to try to coerce you into handing over money or personal information.
Here are some of the best ways to avoid becoming a victim of mobile scams:
As a financial advisor, one of the best ways you can help your client is sending out reminders with these tips periodically to keep clients alert to possible fraud and make sure they know how to protect themselves from phishing and identity theft. While the threat exists all year round, research shows that attacks spike in the weeks leading up to the holidays and during tax season. So, sending out quick reminder emails with these tips in early fall and another around late January or early February is a great way to keep your clients safe and demonstrate the value you provide as an advisor.
And if you prefer, you can receive updates from us when we hear about the latest attempts via our weekly blog newsletter. Provide us your email address at the bottom of this blog or the sidebar.
An often overlooked but surprisingly effective way to improve productivity and strengthen company loyalty is providing ongoing employee training opportunities. Financial advisory teams can benefit enormously from implementing a culture of ongoing learning that allows each member of their staff to discover and pursue their career goals. Here’s how it can benefit your business and how to implement it in your office.
From increased productivity to fostering stronger skills in your team, there are a lot of ways your financial advisory practice can benefit from investing in your employees’ growth. Some of the key benefits include:
Tapping into all those benefits doesn’t require a complete overhaul of how you run your firm. A few simple changes can help encourage your staff to take advantage of this opportunity to grow.
The first step to incorporating ongoing learning is providing your staff with the resources to do that learning. While some larger companies do this by providing reimbursements or tuition coverage for continued education programs, it doesn’t have to take the form of costly incentives like these.
With online course catalogs like Udemy, Coursera, or LinkedIn Learning, you’ve got plenty of budget-friendly options for providing the resources your employees need to upskill and explore their interests.
While it might seem like focusing exclusively on developing skills that directly relate to your practice makes sense, it’s actually better to let employees decide for themselves what kind of skills or knowledge they want to develop—even if it doesn’t have anything to do with your financial advising.
Some loose parameters are fine. For example, in my office, I provide unlimited access to LinkedIn Learning (formerly Lynda)—an online learning platform with thousands of business, software, and creative courses—with the simple request that they choose at least one work-related course. The rest of their learning is up to them.
Providing the resources and giving employees freedom to pursue their own interests is a great start but if ongoing learning isn’t already built into your office culture, it might not get utilized as much as you hoped.
Implementing something new for your team is just like starting any new habit. To make it stick, you need to set concrete, achievable goals. Ask your employees to set specific learning goals for themselves (work-related or otherwise). Then have them identify which courses they need to take and what timeline they want to finish them in. With a concrete plan in place, they’ll be more likely to take advantage of this learning opportunity.
You may already be tracking certain performance goals for your staff that you then review during periodic performance reviews. Doing the same with an employee’s learning goals can help them stay on track.
Discuss learning milestones during those work performance reviews. Of course, the discussion about learning performance should be more casual and shouldn’t have an impact on their performance rating. This should just be an opportunity to establish the importance of ongoing learning.
Whether it’s small talk before a meeting starts or planned “learning lunches” where employees share what they’ve learned lately, find ways to incorporate learning into casual conversation. Doing this does a lot of things.
First, it’s an opportunity for you to take an active interest in your staff’s ongoing learning. Showing interest in what they’re learning encourages them to keep going.
Secondly, it builds a sense of community. Studying or completing assignments, even for a skill or subject you’re interested in, can be tough and, especially with online or remote learning, it can also get lonely. But knowing you’ve got a community of fellow learners at work that are cheering you on and want to know what you’re learning about can be just the motivation you need to plow ahead.
Finally, it makes ongoing learning part of the office culture. If “What have you learned recently?” is heard just as often as “How was your weekend?” in the office, it reinforces the idea that ongoing learning is a fundamental part of life.
When an employee successfully completes a certification or finishes an online course, be sure to give that employee recognition for their accomplishment. This could be as simple as designating an “achievement wall” in the office where you hang certifications or diplomas. It could take the form of an award—like buying lunch for the employee or bringing in donuts for the staff to celebrate the employee’s success.
These small acts of recognition and reward will go a long way toward reinforcing a culture of learning in the office. When the rest of your staff sees an employee being rewarded for their learning, they’ll be more encouraged to continue pursuing their own learning goals.