an advisor’s guide - pershing llc · an advisor’s guide to becoming a stronger wealth manager....

An Advisor’s Guideto Becoming a stronger Wealth manager

guidebook developed with the assistance of:

contents

Introduction 3

Client Loyalty 4

Networking 14

Marketing 21

Conclusion 33

an advisor’s guide to Becoming a stronger Wealth manager. 3

IntroductionThe past several years have seen drastic changes in the financial services industry. Some companies no longer exist in their original forms, while others have been extensively restructured.

These changes, along with losses in asset value, have had life-altering impacts on individual investors. Many of them are now unsure of where to turn for investment guidance. Investors need their confidence rebuilt and are looking for an advisor they can trust. For the advisor willing to embrace a more holistic view of his or her clients’ financial lives, this presents an enormous opportunity. As importantly, consolidation of assets onto one platform can help you become the “go to” person for the comprehensive financial and investment needs of your clients.

Done correctly and systematically, consolidating clients assets can allow you to offer a single point of contact, greater efficiencies and more comprehensive reporting, and it makes life easier for you and your clients. In the long term, this holistic approach can lead to the profitable relationships that you desire.

Many advisors who wish to embrace this strategy are unsure of how to initiate the process of asset consolidation. We propose three steps:

Create ClientLoyalty

NetworkEffectively

MarketYour Services

> Create Client Loyalty. Develop the WOW experience. Providing unique and top-notch client service canwin a client’s loyalty, which ultimately translates into additional business.

> Network Effectively. Leverage your clients, your community, social media and centers of influencefor introductions.

> Market Your Services. Look for opportunities within your existing book of business. Implement organic marketing strategies that will help you uncover additional assets and cross selling opportunities.

This guidebook looks at each component in depth and offers actionable advice for implementing these strategies within your own practice.

4 pershing practice management

Client LoyaltyThere is a tremendous cost involved with the acquisition of new clients and most advisors spend the majority of their time and energy acquiring new clients and assets. It stands to reason that if we invest all that effort in acquiring new clients, we should spend just as much (if not more) time ensuring that these clients are satisfied.

Client satisfaction and retention is one of the most overlooked aspects of an advisor’s practice and yet it is probably one of the most important. Most advisors just do not spend the time (or do not know how) to create a loyal client base. It is unfortunate, because client retention is an advisor’s best bet for a profitable and growing business.

Loyal clients can ultimately lead to:

> Additional assets

> Referrals and introductions

> Increased cross sell opportunities

> Increased trust, resulting in willingness to pay higher fees because they see the value of your services

Before we address how to create client loyalty and the “WOW,” we must examine the value proposition. Value is perceived through the eyes of the client, and perception is reality. Therefore, it is in your best interest to make sure that you are communicating the right messages to your clients.

Your value proposition can be defined as:

> What sets you apart?

> What makes you unique?

> What do you have to offer?

> Why are you the right choice?

A good value proposition is made up of five building blocks:

Guarantee tools Diff erentiation Validation Reputation

> Guarantee. This is your personal pledge to your clients. It outlines your commitment to do everything in your power to ensure that you will not only meet but exceed their expectations.

> Tools. Tools are the specific products and services that you offer. They can also be the process and investment model(s) that you will follow to help your clients achieve their objectives.


> Differentiation. This is what makes you stand out when compared to everyone else. What makes you unique? What sets you apart?

> Validation. Validation is where you explain your value and why you are worth the cost. This is a commoditized industry, but you are a specialist delivering unique value and clients should expect to pay for your advice.

> Reputation. Nothing makes a prospective client more confident than knowing that you have a successfultrack record.

Once you have clearly defined your value proposition, you can focus on creating an environment where your clients have the “WOW” experience.

The “WOW” experience can be broken down into three components:

Data Collection(KNOW Your Client)

Defining an InvestmentStrategy (MANAGE

Your Client)

Communication(SERVE Your Client)

> Data Collection (Know Your Client). What do you do to ensure that you know everything there is to know about your clients and prospects?

> Defining an Investment Strategy (Manage Your Client). What products do you use? What is your specialty? How do you do what you do?

> Communication (Serve Your Client). What is your service model, contact strategy and clientsatisfaction process?

Stop aNd take aCtIoN!

take the time now to build (or rebuild) your value proposition.


develop a data collection process—Know Your client

Many advisors have a process to collect information about clients. Often this process only gathers basic information and goals. To really create loyal clients, you have to go deeper, and that takes more time and more active questioning.

Going deeper is not something that you can do in one sitting; it is an ongoing process. In our opinion, it takes at least two meetings for the data collection process.

Although this process is typically undertaken with new prospects, it adds to your client experience to follow this process with existing clients if you have not yet done so. It is an easy conversation to have, and revolves around ensuring that your clients are “adequately prepared” to meet their financial goals. Please refer to the Marketing Section of this guidebook for additional information.

meeting one meeting two

Know your client from life perspective Know your client from financial perspective

Meeting One is what we call a “feelings-based” meeting, aimed at discovering the client’s true wants, needs, goals and dreams. From a networking perspective, this is also the opportunity for you to find out who his or her other trusted advisors are (accountants, attorneys, etc.) and what organizations and clubs he or she belong to. You should be asking:

> How do you feel about your current lifestyle?

> What do you feel would add to your current well being?

> What are your most important financial concerns?

> What are your most important non-financial concerns and objectives?

> Tell me about your family. Is there anyone besides yourself whose future hinges on your financial decisions?

> Are there any current or anticipated factors or circumstances in your life that could affect your financial plans?

> Do you have an accountant or attorney? Who are they?

> Do you have a will in place? If so, when was it last updated?

> What are your goals for retirement?

There are countless other questions you can ask to gather information about the client’s current life and desired future life. Your goal is to avoid the trap that most advisors fall into, which is talking about finances and investing. Use the first meeting to find out about your client’s current and desired or anticipated situations with regard to family, lifestyle, health, business and special interests.


Meeting Two is where you get to know the clients from their financial perspective. You wish to discover the basics of their assets and investments. Questions to ask include:

> Where are your assets redundant?

> What brokerage firms and banks do you work with?

> What types of investments do you currently have?

A final thought about the two-meeting intake process. You must do this yourself!

> Do not delegate the gathering of data to a teammate

> Do not delegate the gathering of data to the client or prospect

> Do not attempt to gather all data in one sitting

Only you know whether you are asking the right questions, enough questions, too many questions, etc.

Only you can interpret your client’s body language and tone. Remember, the intake process is your opportunity not only to gather information but, more importantly, to start building a rapport with your clients that will lead to a stronger, deeper, more meaningful (and profitable) long-term relationship.

define an investment strategy process—manage Your client

The investment process encompasses your investment strategy and how you implement it. Done correctly, it is efficient and instills confidence in your clients. The process is core to your client’s wants and needs. This means that the pieces of the strategy that you put in place need to be directly linked to the goals and desires that you discovered during your intake process. The technical aspects of your investment process should include:

> Client’s risk tolerance and risk profile. What types of investments are suitable for, and help address, theirlong-term goals?

> Setting of expectations. What kinds of returns might they expect? What follow up and “active management” will you be doing on their portfolio?

> Investment strategy. What strategies will you employ, what products will you use and what allocations will you put in place?

> Monitoring and rebalancing. How often will you review the portfolio and recommend changes, if applicable?

> Communicating. Is your communications process built to increase client loyalty?


Words are one thing, but creating a Financial Life Binder for your client goes beyond, providing tangible evidence of your investment process. The Financial Life Binder is something you can create for your clients so that they can keep all their financial records and important information in one place. It should contain:

> Emergency numbers

> Financial advisory process

> Investment policy statement

> Financial plan

> Net worth statement

> Review meeting summaries

> Budgets and cash flow

> Insurance

> Investments

> Retirement plan

> Estate documents

> Charitable giving plan

> Bank documents

> Account documents

> Tax information

> Titles and deeds

> Warranties and contracts

> Certified Public Accountant (CPA), attorney and other influencer’s contact information

> Other important information

Most advisors have a process that they go through with clients. The process itself is a commodity. However, how you communicate that process to your clients and, more importantly, how you execute that process is not a commodity and that is what can separate you from other advisors. The unique and diligent way you execute is what will help create the client loyalty you are seeking.


create your own Financial life Binder. Buy some binders, make covers, create separate tabs and present to clients.


outline a communication process—serve Your client

As the title implies, but is often overlooked, communication is also a process! A process typically describes the act of taking something through an established—and usually routine—set of procedures to convert it from one form to another, as a manufacturing or administrative procedure, such as processing milk into cheese, or processing paperwork for a mortgage loan or converting computer data1 into a client report.

Many advisors do not think of communication as a process but rather a task. Communication in our industry is so important that it is often cited as one of the major reasons clients leave their advisor. So, how do you implement an effective communication process that builds the client loyalty that you are ultimately seeking?

1 The first step of the communication process involves segmenting your clients into tiers. Segmentation is done by ranking your clients based on their “value,” which consists of asset value, revenue value and the following additional subjective relationship characteristics:

a. Does the client trust (and follow) the advice that you provide?

b. Does the client refer quality prospects to your practice?

c. Is the client enjoyable to work with?

d. Does the client have significant future potential?

First, the client’s asset value is given a score based on various breakpoints. Sample asset breakpoints for each household:

> < $250k = 1 point

> $250 – $500k = 2 points

> $500k – $1m = 3 points

> $1m + = 4 points

Next, the client’s revenue value is scored. Revenue breakpoints are for yearly revenue for each household:

> < $1,000 = 1 point

> $1,000 – $2,500 = 2 points

> $2,500 – $7,500 = 3 points

> $7,500 + = 4 points

Finally, the relationship is assessed as follows:

> Trust = 1 point

> Referrals = 1 point

> Enjoyable = 1 point

> Future Potential = 1 point

1 http://en.wikipedia.org/wiki/Process


With this approach, you can easily establish breakpoints that make the most sense for the type of business you run. This example is based on a proprietary spreadsheet model.

client relationship Quality (1 point for “yes”, 0 points for “no”) Yes no

1. does the client trust (and follow) the advice that you provide? 1

2. does the client refer quality prospects to your practice? 1

3. is the client enjoyable to work with? 1

4. does the client have significant future potential? 1

Client’s Relationship Score 4

segmentation criteria profitability indicator

tier name total score

asset score

revenue score

relationship score assets revenue return on

assets

a smith 12 4 4 4 $12,229,127 $29,780 0.57%

a cohen 12 4 4 4 $3,142,579 $26,442 0.54%

B Jones 9 4 3 2 $1,178,221 $8,215 0.30%

B hill 9 3 3 3 $817,521 $7,915 0.97%

c scott 6 2 2 2 $417,348 $2,167 0.57%

c Wilson trust 6 2 2 2 $312,838 $1,025 0.33%

d harris 4 2 1 1 $102,109 $252 0.25%

d harris 3 1 1 1 $82,038 $57 0.07%

Scoring is such that a client could be scored as low as 2 points and as high as 12 points. You would then typically assign clients to tiers:

> Clients who score 10 to 12 points are put in the “A” tier

> Clients who score 8 to 9 points are put in the “B” tier

> Clients who score 5 to 7 points are put in the “C” tier

> Clients who score fewer than 4 points are put in the “D” tier

It is important that you customize this segmentation to your business and make it flexible enough to move clients to another tier if appropriate. For example, a 40-year-old attorney with only $250,000 in assets and $2,000 in revenue, with a good relationship score, might ordinarily be ranked as a “B” client. You know, however, that he is an attorney who has recently been made partner at a prestigious firm. Based on this information, you might decide to provide the client with “A” service because the attorney has a promising future and could potentially become a great center of influence.

To reiterate, step one is assigning a tier to each client. Note: Your client segmentation will also be used to indentify key marketing activities. See the Marketing Section of this guidebook for additional information.


Step two involves developing a contact strategy based upon the tiers you just constructed. Our suggested contact strategy is, as follows:

> “A” clients receive contact several times a month, four of which, throughout the year, are portfolio reviews. We strongly suggest that at least one, preferably two, of these reviews be done in person. “A” clients also get check-in calls during the eight months when there are no substantive reviews. In the Marketing Section we will discuss the content of these contacts.

> “B” clients receive monthly contact, two of which throughout the year, are portfolio reviews. We suggest at least one of these reviews be done in person. “B” clients also get check-in calls when there are no reviews.

> “C” clients receive quarterly contact, one of which is a portfolio review that can be done in person or overthe telephone.

> “D” clients receive semi-annual contact via telephone; these are often conducted by a licensed orappropriate assistant.

Step three encompasses the implementation of the contact strategy.

This process demonstrates a consistent and systematic approach to proactive client contact. As long as the client understands the communication plan and that he or she is going to get proactive contact, the number of inbound calls may go down. It is important to note that proactive client contact, including an ongoing social media presence and strategy, is only a subset of a client service and loyalty process that increases client retention.

The “A” service model’s client contact record creates a helpful visual roadmap that outlines the client experience by letting you see the complete picture of what you have to do and when. The “when” component enables you to be accountable and keep yourself organized and in front of your clients on a regular basis.

sample communications strategy

tier deliverables a B c d

contacts 12 6 4 2

telephone reviews 2 1 1 0

in-person meetings 2 1 0 0

policy statement ü ü ü ü

cpa package ü

Welcome letter ü ü ü ü

social media ü ü ü ü

holiday card ü ü ü ü

thank You notes ü ü ü ü

satisfaction Feedback ü ü ü ü

annual progress letter ü ü ü ü


The shaded areas represent the contact element of a broader service deliverables strategy. Note that the other deliverables represent a partial list of deliverables. In addition, note that only direct proactive contacts as outlined above “count” as part of your strategy. Other contacts such as research reports sent, reacting to inbound calls (in most cases) and ad hoc e-mails do not count as part of the strategy. Those other contacts are, or may be, of value but are not part of the strategy.

An advisor can actually prepare a written service agreement based on the above table or he or she can prepare a modified version to establish client expectations. You can determine in advance any potential issues and whether your desired contact strategy serves a particular client well. Knowing client expectations also allows you to exceed those expectations.

There are several other parts of the communications process.

2 The annual client progress summary consists of a formal letter sent to A and B clients, or a variation thereof, which recounts what you provided for them during the past year. It should, at a minimum, outline the key components of your deliverables plan so the client understands that you provide more than stock and bond trades. What is it you offer as an advisor? Do you supply:

a. Investment policy statement

b. Financial planning

c. Insurance review

d. Estate plan review

e. Access to an estate attorney

f. Income tax projection before year-end

g. Analysis of their cash reserves and debt management


segment your clients, and prepare a client contact strategy and service matrix.


3 In addition, you should include a client satisfaction survey. This would consist of:

a. Informal requests for feedback accomplished at regular review meetings, asking questions such as:

> What am I currently doing that you would like to see me continue?

> Is there something I am not doing?

> On a scale of 1 to 10 with 10 being exceptional, how would you rate my services? (If not an 8, 9 or 10, what can I do to make it an 8, a 9 or 10?)

> Is there anything else you can think of that I and/or my team can improve upon?

b. Formal surveys and structured client feedback forums conducted by an outside party or developed and administered by your firm.

Surveys help you know where you are excelling and where you can improve. Research in Horsesmouth2 shows that a typical firm loses 15% - 20% of its clients annually, many because of perceived indifference. It is important to identify client dissatisfaction in order to address these clients’ needs and retain their business, and also to prevent them from damaging your reputation. On the other side of the coin, positive feedback can be shared with clients and prospects, strengthening client loyalty. Yet only 8% of advisors take the time to conduct client surveys.

4 The following additional components will also enhance your communications process.

a. Be available 24/7, 365 days a year, if possible. If you are away from communications, let your best clients know in advance what to do if they need service of any kind. They should have all your contact information, including home, cell and office phone numbers and e-mail addresses. It is not likely they will take advantage of your constant availability, but they will feel confident knowing that you are always accessible.

b. Take 30 minutes every Friday afternoon to identify five people you want to thank for making it a good week. Send thank you cards. As Dr. Charles E. Dwyer3 says, “Get in the habit of writing brief notes of thank you, appreciation and gratitude to anybody who engages in a behavior and produces an outcome that you would like to see reproduced in the future. It should be dated and it should be signed. All you have to say is, ‘I really appreciated your x, y, z. Thanks very much.’” These personal communications offer another opportunity to strengthen your client relationships.

Pershing can help your client engagement process with customized tools and templates, including downloadable letters, targeted educational communications and seasonal reminders. Please contact your Relationship Manager for more information.

2 Client Surveys: What They Say May Surprise You, by Debra Taylor, CPA/PFS, Esq., July 17, 20093 Power and Influence, Dr. Charles E. Dwyer, University of Pennsylvania, November 2000


NetworkingWe have spent a lot of time talking about building client loyalty and creating that “WOW” client experience, which will lead to deeper and more profitable relationships. Now that you have invested in client loyalty, how do you reap the benefits of what you sowed? One way is to network for introductions.

Networking is probably one of the most efficient and enjoyable ways to grow your business. And believe it or not, if you build loyalty with your clients, they will want to help you with introductions.

To maximize your opportunities, understand how your attitude and actions will impact your success.

> Your attitude – Make sure you are not getting in your own way. Accept with a positive attitude that networking, through various mediums including social media, is an activity worthy of your time. You should get to the point where you find networking, if not easy, at least not difficult.

> Build relationships by listening – When networking, follow the 80/20 rule of communication: listen for 80% of the time and talk for only 20%. As in any relationship building, your task is to get the other person to like and trust you. Ed Klink4 points out that “95% of us spend 95% of our time thinking about ourselves. It is not that we are selfish; we just live in our own heads.” He offers these quotes from Dale Carnegie:5

– You can make more friends in two months by becoming interested in other people than you can in two years by trying to get other people interested in you.

– No one cares what you want. People are interested in what they want.

– The only way on earth to influence other people is to talk about what they want and show them howto get it.

> Know the value of your services. Do you have stories about clients’ perceptions of your value? How do you differentiate yourself? Do you have a great elevator statement? Keep it brief. Here are a couple of our favorites:

– “I show people how to retire with peace of mind.”

– “I teach people how to keep their financial lives on track.”

Networking falls into two categories:

> Organic networking—networking with clients

> External networking—networking with centers of influence

4 How to Win Friends and Influence People—Dale Carnegie from Ed Klink of Horsesmouth5 Dale Carnegie® Training http://www.dalecarnegie.com/


organic networking

Organic networking is the act of leveraging your clients for introductions. Although this might seem like a relatively simple task, many advisors miss the opportunity because they do not follow a formal process of:

> Deciding which clients to ask

> Educating the client(s) on what you are looking for

> Asking at the right time

> Asking in the right way

Whom do You ask for introductions?

Deciding who to ask for introductions is relatively simple. After all, you have segmented your book-of-business, and ranked your clients. Remember, one of the criteria for the segmentation that we discussed in the Client Loyalty Section had to do with future potential. Future potential is not just asset- or revenue-driven; it is also defined as, “Could the client be a good referral source or provide other avenues for growth?” Refer to your segmentation analysis and pick out the clients who have the best potential to make introductions for you.

education is Key

Oftentimes when advisors ask their clients for introductions, they get the following response: “I do not know anyone.”

When some advisors hear this they respond by saying: “OK, but if you can think of anyone, let me know.” Unfortunately for the advisor who travels down this path, the odds are very slim that the client will think of someone and then refer that person.

As a top-notch advisor what you need to keep in mind is that when a client says “I do not know anyone,” it really means, “I’m not exactly sure of the type of person you are looking for.”

Most clients do not know what you look for as advisors. In many cases, they have absolutely no idea what types of people you work with, or more specifically what types of people you help.

However, although the client might not know what you look for, they do know people who are in specific situations. The key to getting introductions is to help the client make the mental connection between the types of people you can help (work with) and the people they might know who fit the specific situation.


For example:

as advisors, you help people who are… clients know people who are…

– planning for retirement – retired or are looking to retire

– planning for education – Focused on children or grandchildren

– changing jobs – in a new job

– out of the job market – out of work

Know When to ask

Is there ever a right time to ask for introductions? You bet there is! The key is to remember…

Walk through the door When the client opens it

When is the door open? Anytime …

> You demonstrate your value.

> You conduct a great review.

> You contact a client just to say, “How is everything going?”

> A client says, “Thanks, I really appreciate what you are doing.”

A client opening the door is your opportunity; do not be afraid to take advantage of it!

Know how to ask

There is really only one right way to ask. VERBALLY. Either in person or over the phone. We recommend playing what we like to call the “do you know anyone who” game. You have spent time educating your clients on what you are looking for, so the “do you know anyone who” game is a perfect way to ask for introductions in the context of who you can help. For example:

“Mr. Client, I am so happy that you are comfortable with the direction we are going. One of the main reasons I became an advisor was to help people, no matter what their situation. To that end, let me ask you something. Do you happen to know anyone else who might need my services? For example, do you know anyone who:

> Just got downsized?

> Just sold a home?

> Recently had children or grandchildren?

> Is looking to retire (or is nervous they cannot stay retired)?

> Is unhappy with their current advisor?


use the Book of life

As you begin to ask your clients for introductions, we recommend creating a “book of life” for each client. This wheel of relationships helps you answer the question “Who do my clients know?” and ensures that you cover all of your clients’ connections.

TrustedAdvisors Friends

Family

Professional

Community Social

Client

external networking—centers of influence

Centers of influence come in many shapes and sizes, but for the purposes of this guidebook, we are going to focus on attorneys and accountants.

Networking with these professionals can grow your business. Yet many advisors do not know how to build solid strategic relationships that can lead to future business.

the Big secret—What these centers of influence are looking for From You

Attorneys and accountants are often approached for introductions. Therefore, it is necessary to understand what they look for in potential partners. It boils down to two main characteristics that you must demonstrate to effectively network in this arena.

> Personal Integrity. This includes your views and how you communicate them as well as your ethical and professional standards. You must operate on the same level as the center of influence. In addition, you must


be able to assure them that you do (and will do) whatever is most appropriate for their client(s), and that you will keep them involved and in the loop as necessary. (Remember, it is their reputation on the line when they introduce you to one of their clients.)

> Technical Expertise. How do you do what you do? What is your process? What success have you had? These centers of influence are credentialed experts and before they introduce their clients to you, they want to ensure that you can “talk the talk and walk the walk.”

the six-step approach to developing the centers of influence relationship

step 1—selective targeting

Choose your targets wisely. We advise having no more than three to four target relationships so make sure they are the right ones. Profile your top clients and use the book of life to identify key centers of influence. Ask your clients who they go to for help and see if they can give you a sense and background of that professional from their perspective. Questions include:

> What type of business do they have?

> Do they have a specific client type they work with, e.g., individuals, small businesses, corporations?

> In what areas are they particularly strong?

> In what areas may they be weak?

> How did they meet that professional?

> What do they see as the unique differentiators that made them pick that professional?

step 2—call for an appointment

After you have identified which centers of influence to target, the next step is contacting them to introduce yourself.

When you call, state upfront: “Our joint client, Ms. Jones, thinks very highly of you. I’d like to get together and discuss how you run your business.”

More often than not, the response is positive, or at least courteous.

step 3—meet, and make it about them

When you meet with the center of influence for the first time, your goal is to obtain a thorough understanding of their capabilities, services, goals, hurdles, etc. You want to ascertain if there is potential for a relationship. This is the perfect time to practice the 80/20 rule of communication. Think of it as an interview. To help you plan for the meeting, you can refer to these sample questions:

> What are your areas of expertise?

> What are the goals and objectives for your practice?


> How do you see your client base growing?

> What are your current challenges and how are you meeting them?

> What are your thoughts about managed money?

> When was the last time a client asked you about investments? How did you answer it?

> How did you build your practice?

> Who are your clients? What does your “typical” client look like?

> How did you meet your best client?

> What makes an ideal client for you, e.g., how would I recognize a great prospect for you?

> How many new clients do you usually get in a year? How many new clients do you want to add this year?

> How do you get new clients?

step 4—meet again and start the education process

Just as you educate your clients, it is necessary to educate the center of influence on your business. This education process will help to demonstrate the important characteristics that they are looking for in a partner. This is the perfect time to talk about:

> Your client acquisition process

> Your investment management process

> Your communications process

We recommend that you offer to do work for them gratis. Also, put them on your mailing list and invite them to seminars. The more you can show them how you operate, the better.

step 5—determine level of interest

It is key to convince your potential center of influence of your qualifications on the basics, personal integrity and technical expertise. By now you should have built rapport and know whether this center of influence would make a good strategic partner.

Now you have to ask directly if they want to enter into a joint introduction or joint marketing relationship. Ask if they are comfortable with your process and how you work with clients.

Unless you get an unqualified positive response you will have to dig further into why not. If you do not get a positive response and you cannot find out why, the best you may be able to do is have a cordial, positive but non-referring relationship.


step 6—it is a marathon, not a sprint

Building relationships with centers of influence takes time. Keep the following thoughts in mind:

> Keep your promises

> Keep confidences

> Communicate as fully as possible

> Have no favorites

> Challenge the behavior, not the person

> Follow through

> Listen attentively

> Forgive mistakes

Final thought on networking

Regardless of whether you are in front of clients, business owners, centers of influence or even online, make sure you always follow the four steps to networking success:

Identify whatyou are

looking forCommunicate

Show yourvalue (i.e., beclient centric)

Ask for theintroduction!


send a handwritten thank you note to the center of influence after each meeting.


MarketingAt this point, you have created an exceptional client experience and know how to leverage the great relationships to ask for introductions.

Now turn these efforts into tangible business, which entails marketing.

go Back to Your segmentation

Leverage your client segmentation again. Use it to look for areas of opportunity within your book of business. For example, you can look at clients with low returns on assets, or low-asset clients who might have assets held elsewhere. You can look for additional product opportunities by making a chart of your households, outlining what products each household already has and what additional opportunities may exist.

Examining your existing book will give you an initial direction to go in with regard to organic marketing with current clients.

marketing campaigns

In this section, we will cover eight different marketing campaigns that you can implement and use immediately. Four campaigns are for clients, and four campaigns are for networking.

Note: Please obtain all necessary compliance approvals before using the templates or scripts presented here.

client marketing campaigns

> Uncovering assets

> Insurance/annuity review

> Rollover campaign

> Financial planning


asset analysis

Description: This campaign uncovers, reviews and potentially consolidates outside assets for existing clients.

Goal: Gather additional assets from existing clients.

Who to target: Any client who may have assets held away from you.

How to implement: The initial step in this campaign is to send a letter to your target group. We recommend a systematic approach to both the mailing and follow-up process. For example (and depending on your bandwidth), mail 25 letters per week. Approximately five days after the letters have been sent, call your clients to ask them if they have outside accounts, investments or assets that they would be open to having you review. Continue this mailing and follow-up call process until your entire target group has been contacted. The actual reviews can take place over the phone or in person.

Sample letter:

Date:

[Address]

Dear [Client]:

In periods of high volatility and unpredictable surges, it is important to keep an eye on your investments.

As your advisor, I am constantly reviewing your portfolio to help ensure that you are on track to meet your goals and investment objectives. Since a portion of your investment portfolio is not held at [Firm Name], I would like the opportunity to offer you a complimentary 360-degree review of all your investment holdings.

This unbiased second opinion will provide you with:

> A clearer look at your total financial picture.

> The opportunity to enhance, refine or adjust your current investment strategies.

> Knowledge of other investment areas that may complement your efforts.

> A solid game plan for creating the future you want.

I will follow up with you in a few days to answer any questions and to schedule a convenient time for us to speak or meet. If you have any questions in the meantime, please feel free to call. I look forward to helping you.

Sincerely,

[Advisors Name]


Script for follow up calls:

Hi . It is [your name]. How are you? I wanted to touch base and follow up on the letter I sent you last week. In periods of high volatility and unpredictable surges, we have been having a lot of success helping clients and prospects with a complimentary portfolio review.

There is no obligation and, of course, everything is confidential. Once I complete the analysis, I will come back to you with my thoughts. If we see some areas for improvement such as increased performance, lower risk or increased cash flow/income, we would like the opportunity to present them to you.

How does that sound to you?

insurance or annuity review

Description: This campaign reviews existing insurance policies (i.e., Life, Group Universal Life, Second to Die) for clients.

Goal: If and where appropriate, the result could be additional insurance purchases and/or 1035 exchanges of older policies.

Who to target: Those clients who may have the need for insurance or have older policies.

Sample letter:

Date:

[Address]

Dear [Client],

During your lifetime, you will make many important decisions. Some will be easy, some will not. My goal is to help with the decisions you make revolving around your financial well-being. One area that many clients do not realize can be addressed, however, relates to your insurance needs.

Recently, several of my clients asked me to review their policies. In many cases our team was able either to save them money in premium or to offer substantially more coverage for the same premium. Over the last few years, insurance companies have been rewriting their mortality tables due to the fact that people are living longer.

Clients who experienced this service recommended that it be offered it across the board. I have decided to take their advice and offer you a comprehensive insurance review. I will be contacting you within the next few days to schedule a time for us to speak or meet. If you should have any questions in the meantime, please feel free to call me. I look forward to helping you.

Sincerely,

[Advisors Name]



Hi . It is [your name]. How are you? I wanted to touch base and follow up on the letter I sent you last week.

To reiterate, several of our clients have asked us to review their policies. In many cases we were able to either save them money in premiums or offer more coverage for the same premium.

There is no obligation and, of course, everything is confidential. Once I complete the review, I will come back to you with my thoughts. If you are in good shape, I will tell you so and advise you to keep things as they are. If I see some areas for improvement such as lower premiums or increased coverage, I would like the opportunity to present those findings to you.

rollover campaign

Description: This campaign helps uncover clients’ retirement plans at former employers as well as IRAs at multiple financial institutions.

Goal: Consolidate 401(k)s, 403(b)s, or pension plans from former employers—or even IRAs held at multiple financial institutions.

Target: First, identify all of your clients who have an existing IRA with you. Then, develop a list of 20 high potential clients based on the following defined criteria:

> Between 45 and 55 years old

> Recently changed jobs or were downsized

> Hold accounts at more than one institution (to benefit from account consolidation)

> Close to retirement with the need for an income distribution strategy


pershing’s retirementpowerplay.com provides complimentary marketing resources, training services, financial calculators and educational planning tools to help you integrate retirement solutions into your business.

Rollover IRAsMaximize the potential of your retirement savings

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Traditional and Roth IRAsInvest for retirement with tax-advantaged accounts

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Maximize the potential of your retirement savings

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Consolidate your retirement accounts today

© 2012 Pershing LLC. Pershing LLC, member FINRA, NYSE, SIPC, is a subsidiary of the Bank of New York Mellon Corporation. Trademark(s) belong to their respective owners.

If you have changed jobs, left the workforce or plan to retire, you probably have one or more 401(k)s, 403(b)s, or pension plans at former employers—or even IRAs at multiple financial institutions. Like most people, your retirement savings probably accounts for the majority of your assets, representing years of hard work.

Ensuring these savings maximize their potential to help you achieve your retirement goals requires planning, expertise and the benefit of professional guidance.

Now is the time to consolidate your retirement accounts to make sure you can accurately track your progress. One of the best ways to do so and maximize the potential of your retirement savings is by rolling over or transferring your assets into an individual retirement account (IRA). Rollover IRAs offer the benefits of simplified account management, a variety of investment choices and a complete picture of your retirement assets.

Your investment professional can help you identify your needs, then assist you with the rollover or transfer process. You should keep in mind that investing involves risk. The value of your investment will fluctuate over time, and you may gain or lose money.

Call today to make the most of your retirement savings.

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IRA SelectorIndividual Retirement Accounts (IRAs) should be an essential part of any investor’s retirement and wealth management strategy. IRAs offer many benefits including a broad selection of investment choices and tax advantages.

There are several types of IRAs, each with different features and benefits. The chart below serves as a guide for determining which type of IRA different investor situations. Your financial professional can help you choose an IRA to meet your needs. You should keep in mind that investing involves risk, including the loss of principal. The value of your investment in an IRA will fluctuate over time, and you may gain or lose money.

Type of IRA Key Information Investors Who May Benefit Most

Traditional IRA • Individuals must be under age 70½ and have earned income

• Contributions may be federally-tax deductible up to $5,000 limit for 2011 and 2012, depending on age, income and employer plan participation

• Earnings grow tax-deferred until withdrawn (required minimum distributions begin at age 70½)

• $1,000 catch-up contributions are available for individuals 50 and older

• 10% early withdrawal penalty for individuals under age 59½

• Typically offers more investment choices than employer plans

• Those who are looking for tax-deferred retirement savings beyond employer-sponsored plans

• Those who are not eligible to contribute to Roth IRAs or anticipate having lower income in retirement

• Those who invest primarily in mutual funds may want to consider a low-cost Mutual Fund Only IRA option

Roth IRA • No age requirement, but you must have earned income

• After-tax contributions up to $5,000 limit for 2011 and 2012, if modified adjusted gross income (MAGI) does not exceed limitations

• Federal tax-free withdrawals if requirements are met—generally, distributions are considered qualified if the individual is age 59½ or older and the account has been open and funded for at least 5 years; additional exceptions may meet the qualification requirements

• $1,000 catch-up contributions are available for those 50 and older


• Those who are looking for tax-free income in retirement

• Those who want to leave income-tax-free IRA assets to their beneficiaries


Rollover IRA • A Traditional or Roth IRA funded with a distribution from a former employer 401(k), 403(b), or other plan1

• See Traditional and Roth IRA Key Information sections for tax advantages


• Those who want to consolidate distributions from 401(k)s and other types of qualified plans from former employers

• Those who want broader investment options than those offered by former employer plans


1 If you are rolling over from a Roth 401(k) or Roth 403(b) to a Roth IRA, there is no federal tax liability. However, if you roll over directly from a traditional 401(k) or other employer plan to a Roth IRA, you will owe federal income tax on all pre-tax contributions and earnings in the year of the conversion. State income tax consequences may apply. Please consult your tax advisor regarding your individual cicumstances.

Pershing LLC does not provide tax or legal advice. You should consult with your tax or legal advisor about your individual circumstances before establishing or contributing to a retirement plan.

© 2012 Pershing LLC. Pershing LLC, member FINRA, NYSE, SIPC is a subsidiary of the Bank of New York Mellon Corporation. Trademark(s) belong to their respective owners.

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Client Profile for Retirement

Pers

onal

In

form

atio

n

Last name First name MI

Spouse/Partner last name Spouse/Partner first name MI

Address City, State Zip

Home phone Cell phone E-mailCu

rren

t Em

ploy

er

Info

rmat

ion

Current employer Benefits office contact info Total value

$

DC plan status

Active

Ineligible

Includes restricted stock

DB plan status

Active

Frozen

Terminated

Other retirement benefits

Non-qualified DC plan

ESOP

Other

Form

er E

mpl

oyer

In

form

atio

n

Former employer 1 Benefits office contact info Total value

$

DC plan status

Assets still in plan

Rolled to another firm

Cashed out

DB plan status

Active

Frozen

Terminated



ESOP

Other


$

DC plan status



Cashed out

DB plan status

Active

Frozen

Terminated



ESOP

Other


$

DC plan status



Cashed out

DB plan status

Active

Frozen

Terminated



ESOP

Other

Oth

er R

etire

men

t A

ccou

nts

Traditional IRAs Firm(s) Total value

$

Roth IRAs Firm(s) Total value

$

Other Firm(s) Total value

$

Total retirement assets

$


Sample letter:

Date:

[Address]

Dear [Client],

Most professionals switch companies at some point in their working career. If you changed companies you may still have a 401(k), 403(b), or pension plan with that company. As you need to ensure that the savings you have accumulated will continue to work for your retirement, I would like to review your retirement accounts with you.

Rules and regulations can make this process complicated. I would like to help you evaluate your investment alternatives so that you can decide what makes sense for you over the long term.

One of the most effective actions you can take may be to move your funds directly from your retirement plan to a Rollover IRA. Benefits include:

> Uninterrupted investment growth

> Retaining tax-deferred status of your investments and avoiding current taxes and penalties

> More choices for investing your retirement savings

> Increased flexibility in treatment of beneficiaries

As your advisor, I can help you develop a plan designed around your risk tolerance and overall retirement income objectives.

I will follow up with you in a few days to provide more information and to schedule a convenient time for us to speak or meet. If you have any questions in the meantime, please feel free to call. I look forward to helping you.

Sincerely,

[Advisors Name]


Hi . It is [your name]. How are you? I wanted to touch base and follow up on the letter I mailed you last week. In periods of high volatility and unpredictable surges, we have been having a lot of success helping clients and prospects with a complimentary retirement portfolio review.

Do you have any retirement plans held at former employers that you would like me to review to ensure your retirement plan is designed around your risk tolerance and overall retirement income objectives?

There is no obligation and, of course, everything is confidential. Once I complete the analysis, I will come back to you with my thoughts. If you are in good shape, I will tell you so and advise you to keep things as they are. If I see some areas for improvement such as rolling over retirement plans into an IRA, I would like the opportunity to present them to you.


Financial planning

Description: This campaign reinforces the importance of financial planning to clients.

Goal: Employing a holistic financial planning-based approach with clients to create loyalty, retention, opportunities for additional business and qualified introductions.

Who to target: Any existing client who needs to reassess where they are against their goals, those who have additional assets or those experiencing major life events (i.e., college, inheritance).

Sample letter:

Date:

[Address]

Dear [Client],

Every day the market is changing. To reach your investment goals it is critical to have a financial plan in place and to review and update it regularly. This plan should be flexible and adapted as needed.

I would like to take the opportunity to get together with you to review your portfolio to ensure we are meeting your objectives. This will help us:

> Get a clearer look at your complete financial picture

> Enhance, refine or adjust your current investment strategies

> Uncover other investment areas that can complement your efforts

Regardless of whether your goals are accumulation, preservation or distribution, I assure you that this will be time well spent. I will contact you in the next few days to set up a convenient time to speak or meet. In the interim, please feel free to contact me with any questions or concerns. I look forward to helping you.

Sincerely,

[Advisors Name]


Hi . It is [your name]. How are you? I wanted to touch base and follow up on the letter I mailed you last week. In periods of high volatility and unpredictable surges, it is critical to have a financial plan in place and to review and update it regularly.

There is no obligation and, of course, everything is confidential. Once I complete the review, I will come back to you with my thoughts. If everything looks fine, I will tell you so and advise you to keep things as they are. If I see some areas for improvement such as enhancing, refining or adjusting your current investment strategies or uncovering other investment areas that can complement your efforts, I would like the opportunity to present them to you.


networking marketing campaigns

> Individual Retirement Account (IRA) Beneficiary Review

> Client Profile Form

> Bring-a-Friend Event

> Client Advisory Board

> Social Media Activity (e.g. LinkedIn, Facebook, Twitter)

ira Beneficiary review

Description: This campaign starts with a service approach to make sure beneficiaries are up to date. The next step is to ask for introductions to the beneficiaries and uncover outside retirement accounts.

Goal: Get introductions to the beneficiaries as potential clients; consolidate outside retirement accounts.

Who to target: Any clients who have retirement accounts.

Sample letter:

Date:

[Address]

Dear [Client],

Are your beneficiary and contingent beneficiary designations for your retirement plans up to date? Are you uncertain who is named as beneficiary on your accounts? Has it been a while since you set up your account? I would like to invite you to meet with me for a Beneficiary Review.

Many people are unaware that the beneficiaries they name on Independent Retirement Accounts (IRAs), 401(k)s and other retirement accounts override a will. Outdated beneficiary designations could mean that your assets may not be passed on according to your wishes or that assets intended for a loved one could be subject to unfavorable tax treatment.

As an advisor, I want to provide the information you need to make beneficiary decisions appropriate for your situation. As part of the Beneficiary Review, I will have a copy of the beneficiary designations on file for your [insert firm name] accounts. In addition, any beneficiary, account and plan information for other IRAs, workplace plans, insurance and annuity products will help with the review.

Naming beneficiaries is an important part of fulfilling your financial goals. Let’s get together soon to review your forms and discuss options. I will call you to schedule a time for us to meet. Meanwhile, please feel free to call me with any questions.

Sincerely,

[Advisors Name]


Verbal script to ask for introductions to the beneficiaries of your clients IRAs:

Hi . It is [your name]. How are you today? I am calling because we are updating some of our records and I want to make sure that the beneficiaries for your IRA accounts are up to date. Are your beneficiaries still [“Sid Son”] and [“Diane Daughter”]? Good, I’m glad that we are up to date. I do have a question for you … I’ve never spoken to your children and would appreciate the opportunity to call and introduce myself to them. I think it is important they know who I am and I would be more than happy to help them with their own financial situations. Is it okay if I call them? Thanks so much and I will touch base with you after I speak to [Sid and Diane]. Have a great day.

client profile

Description: This campaign gathers information about your clients and the other important individuals who also advise them.

Goal: Obtain pertinent information on your client (e-mail address, anniversary, hobbies) and the names of his or her other trusted advisors. A secondary goal is to get introductions to these centers of influence.

Who to target: Any clients you may need additional data about.


Sample letter:

Date:

[Address]

Dear [Client]:

I wanted to take this opportunity to let you know how much I enjoy working with you and appreciate your business. My team is committed to going the extra mile to help you reach your financial goals.

We are in the process of updating our database and would greatly appreciate it if you would take a few minutes to fill out the attached questionnaire and return it to us in the enclosed envelope. Thank you and we look forward to continuing our relationship.

Regards,

Name:

E-mail address:

Work phone:

Cell phone:

Home phone:

Address:

Preferred way to be contacted:

Hobbies:

Favorite charities:

Spouse, children

Anniversary date, birthdays:

Certified Public Accountant name and phone:

Estate attorney name and phone:


Hi . It is [your name]. How are you? I wanted to touch base and follow up on the letter I mailed you last week. I appreciate the confidence you have placed in me through the years. First, I want to thank you for providing updates to my database and second, I would like to ask your permission to contact your trusted advisors to introduce myself. Is it okay if I call them? Thanks so much.


Bring-a-Friend event

Description: This campaign centers on hosting small intimate gatherings with key clients and their friendsor associates.

Goal: Leverage your existing relationships to get qualified introductions.

Who to target: Those clients who can bring qualified people to your event. These events can be anything from a formal dinner, to an informal cup of coffee, to an art gallery showing or a ball game.

How to implement: Go through your book of business and make a target list of clients who have the best potential to introduce you to qualified prospects (those that fit your ideal client profile). Decide the frequency of the event (one event per month, for example) and the type of event (golf outings, cooking classes, sporting events, etc.) that would be suited to each type of client. The next step is to contact each client personally to invite them, along with a friend or associate. After each event, send a handwritten note to each attendee to personally thank them for attending. One week after the event, contact your client to ascertain the best way to reach out to the prospect to gauge their interest.

Sample verbal script for asking clients to an event:

Hi [Sam]. How are you? I have an idea that I would like to run by you. Would you like to play golf in the coming weeks and round out the foursome by inviting two of your coworkers to join us? As we have discussed in the past, I would appreciate the opportunity to meet some of your coworkers and thought this might be a good venue. Let me know what dates work for you, and I will follow up next week.

client advisory Board

Description: This campaign creates your own personal Board of Directors from key clients, centers of influence and trusted advisors.

Goal: Engage key people to get advice and feedback on your business. The ultimate goals are greater loyalty, long-term client retention and other business opportunities as these key advisors engage in helping you grow your practice.

Who to target: Select group of clients, centers of influence and industry professionals (branch manager, key wholesalers, etc.) who can offer business advice and are also influential in their particular spheres.

How to implement: Identify 12 – 15 prospective members with the goal of having 6 – 8 join your board. Plan to meet on a regular basis, preferably quarterly. Use an agenda at every event. Meetings should take place in a private but professional setting, typically over dinner. Have the agenda, pads and pens, and a small token of your appreciation at each place setting. Sample agenda items can include: defining your ideal client profile, what you can do better, input on the client communication process, getting more qualified introductions that match your ideal client profile and explaining your products and services.


Sample verbal script for asking clients to join the client advisory board:

Hi [Sam]. How are you? I have an idea I would like to run by you. I would like to use the opportunity to get a group together to discuss our ideal client profile. Would you join me, and a few colleagues, for dinner? Let me know what dates work for you and I will follow-up next week.

Sample invitation:

Dear [Client]:

I appreciate the confidence you have placed in me through the years. We pride ourselves on offering the best service, advice and value in the area, and we are constantly striving to better our best. To help me better serve my clients, I have formed a Client Advisory Board to provide my team with periodic feedback on important issues related to our practice and how we service your account. As a premier client, we would like to invite you to join our advisory board. I hope you will be willing to share your opinions on how we can improve and grow our business. I will call you to discuss further details about the Board and our first event. Thank you.

Sincerely,

[Advisors Name]


ConclusionAs an advisor, your long-term goal should be to create deep relationships with your clients, and give them a “one-stop shop” for all their investment and financial needs.

Consolidation of assets onto one platform can help make this a reality.

Remember…

> You create loyalty through a “WOW” client experience.

> When your clients are happy, they are more apt to give you additional business.

> When your clients are happy, they are more apt to give you introductions to others.

Bear in mind that clients look to you for guidance, and in some situations may wish to discuss products or ideas that you are not well versed in. We encourage you to leverage the resources of your firm, social media sites and other partners to assist you in these situations.

Simplifying your clients’ lives is not a “one and done” project. It takes focus, planning and effort. Know that the time you spend is well worth it, however. The result is more meaningful and profitable client relationships that will help you grow your business.


Ideas Without Limitsthis guidebook is part of ideas Without limits, a program designed to help advisors identify trends, enhance operations and grow revenue. it represents pershing’s unique approach to practice management support—going beyond high-level guidance to offer actionable information, personalized consulting and ready-to-execute programs.

FouR keyS to youR SuCCeSS

our experience and research show that four key issues

represent the greatest challenges facing investment

professionals today. our practice management

solutions target the areas that may have the largest impact

on your business.

this paper helps you drive GRoWtH.

GRoWtHachieve your potential

through client acquisition and retention, referral programs

and mergers and acquisitions

HuMAN CAPItALattract, retain and develop

top talent while preparing for a smooth succession

oPeRAtIoNAL eFFICIeNCytake control of rising

overhead costs and build a more streamlined, scalable infrastructure for your firm

RISk MANAGeMeNtstay in step with fast-

changing regulation, and protect your business against

unexpected events© 2012 Pershing LLC. Pershing LLC, member FINRA, NYSE, SIPC, is a subsidiary of The Bank of New York Mellon Corporation (BNY Mellon). Trademark(s) belong to their respective owners. For professional use only.

gB-per-sWm-10-12

about us

pershing llc (member Finra/nYse/sipc) is a leading global provider of financial business solutions to more than 1,500 institutional and retail financial

organizations and independent registered investment advisors who collectively represent more than five million active investors. located in 23 offices worldwide,

pershing and its affiliates are committed to delivering dependable operational support, robust trading services, flexible technology, an expansive array of investment

solutions, practice management support and service excellence. pershing is a member of every major u.s. securities exchange and its international affiliates are

members of the deutsche Börse, irish stock exchange, the london stock exchange and the australian stock exchange. pershing llc is a BnY mellon company.

additional information is available at pershing.com.

an advisor’s guide - pershing llc · an advisor’s guide to becoming a stronger wealth manager....

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