Hardly a day goes by that I don’t read one study or another, or see a poll that indicates that the public level of confidence in the financial services industry remains very low. And usually the answer why is the same – a lack of trust. Trust is our equivalent to real estate’s Location, Location, Location. Its’ All About Trust, Trust, Trust – that’s it in a nutshell – that’s what matters to investors.

So if we all know that you have to gain an investors trust, why are so many in our industry having trouble either understanding this, or in gaining it? I read an interesting article recently that not only talked about trust between advisors and clients, but between advisors and the investment companies (e.g., mutual funds) that they work with. What was most interesting to me was that advisors are looking for the exact  same thing in the companies that they work with that clients look for in advisors.

So why the disconnect? Why are advisors in general able to articulate what they want from investment partners but unable to demonstrate the same traits to the people that they want to do business with them? Why can’t we as an industry gain the public’s trust?

First, lets look at the traits that are most important on the advisor side. They want firms they work with to be ethical, trustworthy and easy to business with. These traits are more important to them than cost. In addition, many advisors seem to be reducing the number of firms that they are working with in order to be able to do a better job of due diligence – they want to work with a smaller number of partners who they know well and can trust.

Hmmm – sounds familiar? That’s exactly what clients want – they don’t want to have a lot of advisors – they want someone that is ethical, that they can trust and that is easy to work with.

So where is the disconnect – why can’t many advisors demonstrate to their clients that they are ethical, trustworthy and easy to do business with?

Much has to do with the fact that clients don’t understand what the advisor is really offering – what the “brand” is. If an advisor doesn’t effectively articulate what his value-added proposition is and what makes him different – and better – than the competition, then naturally the client will focus on either price or product – and inevitably not be happy.

The clients of successful advisors can tell you why they do business with their advisor. So, maybe, if your’e an advisor, you should ask the question – the answer might help you reposition or redefine your message. Ask yourself the question, ask your clients the question. In fact, just by asking clients the question, and showing clients that you trust and value their opinion, you are probably starting to increase trust!

Its All About Trust, Trust, Trust.

A Mission Statement – a short statement of a company’s purpose – is an important part of your brand (or corporate identity). It helps distinguish you from the competition by articulating your value-added proposition in an intriguing and engaging way. A good Mission Statement makes the reader want to read more about you and your services.

It should be short – especially if people see it for the first time on your website – because if it isn’t, people won’t read it. As in your elevator speech – if you can’t articulate your value succinctly – it’s time to go back to the drawing board!

Having said that, there are three additional important components of a good Mission Statement:

1) It should clearly define the product and/or service that you provide;

2) It should clearly define who the target audience for your product and/or service is; and

3) It should contain a measurement metric so that you can evaluate its effectiveness.

It might sound daunting to accomplish these goals in a short statement, but it’s definitely possible. To view some samples of Mission Statements please click here. Slides 5-6 of this presentation provide general examples as well as a few specific ones from the financial services industry. (Contact me if you want to know the companies whose Mission Statements are listed on slide 5.)

Send me a draft of your Mission Statement and I’ll give you my two cents.

We have published our first quarter newsletter, which features our new White Paper “The 10 Keys to 2011 Marketing Success.”

Click here to see the entire newsletter. Our introductory letter, entitled “A New Year, a New Congress …” talks about the dichotomy between the outlook for the markets and the outlook for the economy as we move into 2011.

While the outlook for the economy is improving somewhat, concerns remain over the speed and magnitude of the recovery. On the other hand, most market participants are more optimistic about the outlook for the stock markets as we enter a very important earnings season. Even though there is a lot of optimism, however, earnings were so good last quarter there is some caution and concern if earnings this quarter will be as good.

Against this backdrop, we all need to run and grow our businesses. Enter our White Paper, which discusses marketing in today’s environment.

Have a great quarter – we would love to hear your feedback on our newsletter and White Paper.

We just completed our newest White Paper – The 10 Keys to 2011 Marketing Success.

The White Paper begins:

The economic events of the past two years have brought with them the reality that while referrals are great, and will always be part of growing a business successfully, many practices that have relied on referrals exclusively have more recently needed to supplement these referrals with a more active marketing approach.

For those who have not had to actively market for a number of years, or those who have not been happy with their marketing success – or lack thereof – one of the stark realities is that marketing has changed. Competition has increased, clients have become more discerning and social media has had a dramatic impact on the types of activities that are most effective.

Click on the link above to read the rest of the Paper. It can also, along with the other White Papers referenced in it, be found on the Resources tab of our website.

I’ve read a number of articles over the past few days analyzing why communications between advisors and wholesalers break down. Many mutual fund companies and investment managers continue to struggle with the best way to earn the trust of advisors, and in turn become one their core investment offerings.

Well – I have a news flash – it really is not all that complicated! The one caveat is that good performance must be there – because if an investment firm is consistently under-performing, it will be very difficult for any wholesaler to establish a long-term relationship with any advisor. Let’s not be naive – this is all about business. The wholesaler wants to help the advisor, but if no business comes his way, this support will inevitably diminish.

I don’t view this as a conflict of interest as much as a reality of life. Top-notch advisors do business with multiple providers of investments, and it’s fine that the level of support and communication is a factor in the decision-making process. After all, they need to provide their clients with information on an on-going basis.

So, what are the keys to success in this advisor/wholesaler relationship?

The first key to success is one that does not have a lot to do with the wholesaler per se. It’s important that the firm that the wholesaler works for communications openly with the home office of the advisor so that the rules of the road are clear and that the priorities of the sponsor become those of the investment provider (and in turn the wholesaler). Advisors do not want to do business with firms that will potentially bring him into conflict with the powers that be at his firm. A strong firm-to-firm relationship makes the job of the wholesaler easier from the start.

Then it is up to the wholesaler. Begin by asking what the advisor wants  – not by telling them what you offer and can do for them. The best salesmen – and wholesalers are after all salesmen – listen more than they talk. While there will be a lot of common answers – like value-added presentations or financial support for seminars (if allowed by the firm) – each advisor will want to get information and communicate with you in his own way.

Make the advisor feel like the services you area providing, and the way that you are providing them, is unique and custom to his needs. Treat him like the client that he is. Ask how often he wants to hear from you and in what form. Ask for permission to contact him in case of “emergencies” that need to be communicated quickly.

In other words, treat the advisor as a partner. Advisors spend a lot of time making sure that their clients are happy – wholesalers should do the same. The most successful wholesalers understand that advisors want this same level of attention given to them in their relationship. See – its not that complicated! But it does go beyond having the best value-added training modules.

Its the relationship, the relationship, the relationship. And communication, communication, communication.

First, I want to wish everyone a Happy and Healthy New Year and a great 2011. I thought that I would end the year with some predictions about what I see happening next year. No guarantees here – just having some fun before I head out on vacation.

I’ll start with the macroeconomic picture, and then talk about the financial services industry.

10 – Stocks will once again have a better year than the economy as a whole. I am “mildly optimistic” heading into 2011. The one thing that I have learned is that you can’t fight the market’s momentum.

9 – Housing will continue to struggle in 2011 and unemployment will remain stubbornly high. The jobless recovery will continue, but there will not be another recession.

8- The much-talked-about municipal bond crisis may develop, but will not be as bad as the doomsayers predict. Increased municipal failings will not be surprising – but this will not be another crisis of the magnitude of the housing crisis.

7 – The bipartisan spirit of the lame duck Congress will end quickly – particularly over spending – and the gridlock predicted after the election will begin. This is not necessarily a bad thing for the markets – just the reality.

6 – The Federal Reserve will not raise interest rates (that will happen in 2012).

5 – The crisis in the Euro zone will continue and the PIIGS will continue to give us heartburn – but the Germans will lead the EU to the rescue and the crisis will not negatively impact the US (maybe on particular days, but not overall).

As for the financial services industry:

4 – It will be another year of net advisor losses for the wirehouses. The allure of going independent coupled with continued negative press will be the straws that break the camels back and influence advisors to make the change.

3 – UMAs will continue to grow at the expense of SMAs and ETFs will continue to grow at the expense of mutual funds, although ETFs will continue to fight negative press surrounding the plethora of derivative-type ETFs that are being developed.

2 – Fidelity will have at least one reorganization (not hard to predict based on past trends!) and Schwab will continue to grow its managed accounts AUM and surpass at least one, if not two wirehouses.

1 – Consolidation among money management firms and RIAs will continue as firms continue to cut costs and search for synergies to help them distinguish themselves from the pack.

Let me know your thoughts – what you agree with and what you disagree with.

Happy New Year!

A recent Wells Fargo survey of its clients about retirement yielded some very interesting results – Wells’ clients on average said that they would need $300,000 to retire and that they had only saved $20,000. My first reaction was that these clients are probably bank clients – as opposed to brokerage clients – so the $300,000 number seems low. But what is more noteworthy is how little the average person seems to have saved for retirement – in this case less than 6% of what they think that they will need. While the goal will be significantly higher for wealthier clients, I would venture to guess that most of them are also behind in their retirement savings efforts due to the economic events of the past two years.

I start with this story because it got me thinking about both issues – surveys and retirement. Most people are becoming increasingly worried about retirement. Hardly a day goes by that you don’t see an article about either retirees going back to work, or people extending their working years. There is little question that issues revolving around retirement will be prominent in clients’ minds moving forward.

Now surveys. When is the last time that you surveyed your clients? In many cases, I would guess the answer is never. But surveys are a great way to accomplish a number of goals:

1) Get a feel for how your clients are really feeling

2) Give clients a chance to tell you what they want

3) Make clients feel like you really consider them partners and respect their opinions

Oh yeah, you might get some real good client service and business-building ideas in the process!

Think about developing a client survey on retirement to kick-start your 2011 – at the very least it’s another “touch.” But it also might bring you some added credibility and business in the process. Oh, and make sure to include your prospects in the survey as well!