A newly released study by Mellon Transition Management (a branch of BNY Mellon Asset Management) shows that manager turnover in the institutional marketplace is slowing back to historical, pre-financial crisis levels. (Click here to read the Fundfire article about the study.) On the surface, great news, right? Maybe – maybe not.

On the bright side, this trend could be an indicator that now that the dust has settled, and the market has been on an uptrend , committees are taking more time in evaluating their managers before deciding to make any switches. It could also be reflective, as the article points out, of the fact that changing managers can be costly and time-consuming. There could also be compliance reasons for this slowing of manager changes.

In addition, even if managers are underperforming their peers, there is less of a “rush to judgement” in up markets.

On the flip side, the negative here for the investment management industry is that whatever the reason – time, cost, compliance, performance or some combination – its going to be harder to grow your AUM and  get new clients. In a zero sum game like manager changes, one manager typically wins at another managers expense, a slowing trend is good for protecting what you have but not so good for growing your business.

The upshot is that if indeed manager transitions are slowing and taking longer when they do happen, then the importance of your marketing message and value-added proposition becomes more important than ever. In addition, client service takes on an increasingly important role in client retention.

To me at least, this slowdown in manager turnover is a net negative for most managers. What do you think?

In a recent survey of advisors conducted by IMCA and Cerulli Associates (the two organizations team-up each quarter to present industry research), the top reasons were given for both how advisors acquired new clients as well as why they lost others last year. (I give these reports a lot of validity since both of these organizations are top notch and the advisors they survey – IMCA members – tend to be high quality advisors.)

The top two ways clients were acquired? REFERRALS – coming in at number one were referrals from friends/family/existing clients and at number two were referrals from other professionals. These results are not surprising, and reinforce the notion that if you don’t have a formal referral program in your practice, and if you are not actively seeking referrals, then you are missing out on perhaps the best and surest source of new business.

The top reason why clients were lost? They passed away. (Clients unhappy with performance came in at number two and client has relationships with other advisors came in at number three.) While it is inevitable that clients die, this does not mean that you have to lose their family as clients. This result reinforces another notion that a lot of people in this business talk about, but not a lot of them do well – cultivating multi-generational relationships.

Just as referrals should be easy – a happy client should be more than willing to refer others to you – so should getting to know your client’s family so that they too become clients. Do you know your client’s children? Their birthday’s? If you don’t, there is no time like the present to start.

In a way, these results should be heartening because both the best way to get new clients AND not lose current ones, are relatively easy things to do – if you do them!

1. Maintain lifestyle in retirement – 31.4%
2. College education funding – 19.6%
3. Protect current level of wealth – 14.6%
4. Aggressively grow wealth – 14%
5. Leave an estate for heirs – 9.8%
6. Charitable giving – 4.2%
7. Minimize income and capital gains taxes – 2.4%
8. Improve household cash flow – 1.9%
9. Better manage market risk – 1.9%

Now – how does your marketing strategy and product and service offerings match up with these results? We all know that surveys will come-up with different results, but the general lessons are all pretty consistent these days:

Especially in light of the economic difficulties that so many people have experienced over the past few years, more and more people are worried about their retirement, about funding their major obligations – such as college – and about preserving the wealth that they have attained. Preservation has for most surpassed growth. The new mantra for many has become Retirement, Retirement, Retirement.

Consistent with the above, high net worth individuals are more concerned with long-term concerns than shorter-term ones – such as minimizing taxes this year and managing market risk. That is not to say that these concepts are not important and that they should not be addressed – they should. But they should be somewhat down the line in the presentations that you give clients and prospects.

Make your clients concerns your concerns and your focus and you will be more successful in growing your business.

Do you REALLY know what high new worth clients wants from their advisors? Are your services and strategy – whether you’re an advisor, RIA, sponsor firm or investment manager – aligned with what people REALLY want? Investment News recently printed the results of a Cerulli Associates/Phoenix Marketing International study which ranked the top nine reasons why high net worth clients use advisors.

(Full disclosure – the article did not detail how many people were surveyed, what their average investible assets were or what the definition of high net worth individuals was; but given that these guys are well known and respected in the industry, I’m going to assume that this was a fair sampling.)

In any case, the results should make you sit back and ask yourself the questions – Given my services, am I targeting the right audience? If not, what should I change and how should I change it? Do I change my target audience? Do I adjust/fine tune the services that I offer? A little of both?

Here are the top nine answers – I’m going to present them today in no particular order and provide the answers next week – take some time to think about the answers and rank them – also, think about the relative importance of each. Here’s an interesting point- the top answer was selected by 31.4% of respondents, while the second most popular answer was selected by 19.6% of respondents – quite a difference.

Here you go – the top nine answers – have fun sorting them out! Remember – today they are in no particular order.

• Protect current level of wealth
• Leave an estate for heirs
• Better manage market risk
• Minimize income and capital gains taxes
• Maintain lifestyle in retirement
• Charitable giving
• College education funding
• Aggressively grow wealth
• Improve household cash flow

Have a great weekend!

As the financial services industry increasingly embraces social media, a natural question becomes the role of you or your company’s website vis-a-vis its overall social media strategy. The days of discussing whether or not your website is a dinosaur only in the context of how old it is and whether it serves more of a purpose than just being an electronic brochure, are long gone.

(By the way, if when you read the words “social media strategy” above and thought to yourself “what’s that?” your marketing problems probably run deeper than just the effectiveness of your website!)

If you haven’t updated your website in awhile it could very well be a dinosaur – especially if it is just an electronic brochure – and you probably need to update it, make it more interactive and make it more relevant.

If your website is up-to-date you have passed the first test. However, it still might be a dinosaur if it does not have a well-defined place in your overall marketing and social media strategy. In fact, given the interactive nature of social media, and the ability it gives you to form a community with clients, some are now even questioning whether you still need a website.

My answer is an emphatic YES. In fact, the issue is addressed quite well in the recent article Is It Time To Shut Down Your Website? There are definite advantage and disadvantages to social media – e.g, LinkedIn, Facebook and Twitter – and to websites. Each tool has different strengths and weaknesses, which means that those who can integrate the best of each together into a cohesive marketing and asset gathering strategy will be the most successful.

For example, and most importantly to me as the article points out, while you will be able to reach portions of your clients with each of the social media tools mentioned above, you will be able to reach all of them with your website. Might there be some duplication? Sure. But overlap is better than missing anyone. Websites are also your property and you own it – unlike social media sites where you don’t have ownership.

I am a big fan of social media. But I am also a fan of well designed and integrated websites. At the end of the day, the first thing most people usually do to find out more about you is “Google” you or go to the website listed on your business cared – use this as a springboard to link to your social media sites. It is still a red flag in terms of credibility if your answer to a prospect is that you don’t have a website. A website ads instant credibility (of course as long as it is a good one!)

So it is actually now more important than ever to make sure that your website is not a dinosaur!