For investment managers, winning a finals presentation is a balance between adapting to the past and being forward-looking, and between presenting general firm information and specifics as relates to this prospect. The top 10 are key points that should be addressed in the presentation – if the client has to ask about these issues, it’s probably too late!

(This list was prepared for a presentation made to the IMI Consultant’s Congress in Stamford, CT)

• Number 10: Explain any unusual fluctuations in AUM. Differentiate between markets losses  and client terminations, withdrawals and redemptions.
• Number 9: Describe any process adjustments that you made in reaction to the 2008 financial crisis and this year’s Euro-crises. Where these changes permanent or temporary?

There have been a lot of headlines lately about the announcements by the wirehouses that they plan to reduce their number of advisors over the next few years. Surprising? No. Necessary? Yes. Behind the headlines, however, there is perhaps another story.

A recent survey by Cerulli Associates Inc. shows that the warehouses’ share of retail assets under management fell from 49.7% in 2007 to 42.8% at the end of 2010. (The warehouses are today defined as Morgan Stanley Smith Barney LLC, Bank of America Merrill Lynch, Wells Fargo Advisors and UBS AG; the above numbers do not include Merrill Edge advisors or Wells Fargo’s Finet channel for independent advisors.) As an aside, the regional brokerages and independents are picking up this market share.

The number of advisors at these firms, during the same time period, declined from almost 57,000 to just under 51,000. Cerulli estimates that 20% of these advisors left by choice and the rest were terminated.

So what do we deduce from these numbers? For one, the warehouses are obviously focusing more on productivity than share numbers; in fact, during this same period of time, the average AUM per advisor increased to $94 million. It no longer makes sense to be the biggest – what makes sense is to the best and most productive. With costs rising – both platform as well as total compensation (health care anyone?) – fewer, more productive advisors, makes business sense.

The implication for advisors is that the human cost aside, this trend actually increases competition. It makes sense to extrapolate that the remaining advisors will be the cream of the crop – the weak links are getting stronger.

The industry is getting smaller – and that is probably a good thing. For the individual advisor, however, this change will make it more competitive, not less – as counter intuitive as that sounds. The public perception of advisors is still negative and the market environment is still tough – these numbers don’t do anything to change that.

Advisors must continue to strive to differentiate themselves and clearly articulate their value-added proposition. After all, there are still more than 50,000 at the wirehouses alone!

Regular readers of this blog will know that I am a very big fan of social media. The caveat, however, is that it must be social media done right. Last night, I witnessed social media gone bad, and it has lessons for everyone.

I was sitting with a friend who happens to be a fan of the Amtrak page on Facebook. The folks at Amtrak decided to try and be funny in an attempt to connect with their followers. They posted something like “How many Amtrak employees does it take to change a light bulb on a train?” I didn’t really understand the post actually – I think it was a combination at an attempt at humor and again trying to “bond” with their followers.

Well, it failed miserably. For everything good about Amtrak – and it can be a very convenient way to travel on the East Coast – lets just say that they have on-going customer service and service reliability issues. Not something to be made light of if you are one of the many who has been stuck on a train or at Penn Station!

My friend and I sat there amazed at the speed with which the scathing comments came pouring in from followers and “fans” of Amtrak. Perhaps the most memorable was one that answered the above question with something to the affect of “one to hold the bulb and a whole lot to turn the train,” an obviously reference to Amtrak’s lack of efficiency.

It was kind of scary to see the swift and negative reaction to this botched attempt at humor. Someone may – or should – have very well lost his or her job after that one.

The lesson here is that you must always know your audience in social media – because your reputation can be enhanced or ruined so quickly. Before posting anything to a blog, or LinkedIn, or Facebook or Twitter – ask yourself if the message is in keeping with your brand and if there are potential readers/fans/followers that you are going to offend (or even potentially offend). If you have any doubts – don’t press the button!

It takes a long time to develop an on-line reputation and reap the benefits of social media – and the effort is well worth it. But it only takes a nano-second to alienate those that had previously supported you. Think before you post!

Our Q4 newsletter is out and features the new White Paper “Thriving Amid Chaos.” While continuing to demonstrate leadership to your clients is important, you can simultaneously improve your business practices and weather the current economic and financial storm.

Thriving in today’s world relies on a two-pronged approach:

1) Inward-Looking: Control what you can – like how you manage your business – by looking at your 3Ps:

• People
• Planning
• Processes

2) Client-Facing: Communicate more effectively by honing your communications strategy and making sure that your messages are:

• Clear
• Consistent
• Convenient
• Compelling

Click here to read the entire White Paper. Click here to see the newsletter.

Have a great rest of the quarter – and start thriving despite the chaos.

Do you know?  And are you your client’s primary advisor? A recent survey of advisors and clients by Cerulli and Associates has some sobering results for many advisors. On the second question – of the 1500 advisors surveyed who concentrate on clients with more than $5 million in investible assets, 73% said that they were their client’s primary advisor while only 34% of the corresponding clients agreed with that assessment. Quite a disconnect.

Back to the question in the title – How many other advisors do your clients have? According to Cerulli’s report, which covered over 7800 households, about 25% of advice-seeking households use multiple advisors, with the percentage increasing to 33% among those with investible assets of $2 million to $5 million. That percentage grows to 58% for those with more than $5 million in investible assets.

Clients with multiple advisors also tend to keep less of their net worth with their primary advisor. By the end of last year, only 22.6% of investors surveyed kept more then 90% of their assets with their primary advisor; this percentage fell to 13% for those with more than $5 million.

All of the statistics quoted above showed gains from a similar survey conducted in 2008 – a continuing reaction to the financial crisis.

So, do you really know how many other advisors your clients have? The opportunity here is for those advisors who are able to focus on the entire relationship, even if they don’t have all of the assets. The advisor who plays this role is often referred to as the Alpha advisor (or quarterback). While it may be too late to stop your clients from diversifying among multiple advisors, providing the key service of reporting on all of their assets – whether for a fee or not – should position you above their other advisors. It’s also a great marketing and prospecting tool to help you grow your business and increase client retention.

It doesn’t’ seem that the trend toward multiple advisors is set to reverse itself, especially after the last few months, where images of 2008 are entering our dreams once again. So don’t fight the trend – react to it and succeed from it. Become an Alpha advisor.

It’s Bad – but it’s not 2008 bad.

Yes, it feels eerily like 2008. And yes, in a few short weeks, many of the stock market gains of the past three years have evaporated. But it is my opinion that as bad as it seems, we are in better overall shape than we were in 2008 – the credit markets are functioning and companies are in better financial shape than they were.

More about this later – but my point here is that this is my opinion. DO YOU HAVE AN OPINION? And if so, and you are client-facing, have you communicated this opinion to your clients? At times like this, clients want to hear from you.

Over the past few weeks, one of my clients has sent out three special notes to clients. One of these notes simply including a synopsis of the market commentary of a very well know market guru. Each time I received a communication from him, I felt a connection – that he was on top of his game. He is also calling clients to give the personal touch, but even if you do that today, that client still will want to know next week that you are still thinking about them.

Communicate with your clients – or they will not be your clients for long!

Back to the opinion portion of this post. Am I scared? Absolutely. My biggest fear is that politicians here and abroad (most notably Europe) are unprepared to deal with any crisis of this size. This is more a crisis of confidence than a meltdown of the system itself. And that is a good thing. We need our leaders to emerge with real ideas about cutting our deficits and kick-starting the economy. Because if we don’t, even though this is not 2008 again, things are not likely to improve for a long time.

Global stock markets are in turmoil, confidence is eroding and layoffs are accelerating. That described the situation three years ago in the midst of the financial crisis. Add European debt problems, an increasingly dysfunctional government and continued high unemployment and you have today’s reality.

We don’t do special editions of our newsletter very often, but decided to issue one today.

Cost cutting has begun in many companies – and probably rightfully so. But there are right ways to cut costs and wrong ways. Our newsletter provides some perspective on this topic with the hope that rational cost cutting takes place – reductions that will truly position companies for future success.

Click here to read the full newsletter.