Back to School

Regardless of where and when you went to college, chances are things are a lot different today, especially the cost of a four-year college degree. For most people, college is a four year commitment; however, what’s accomplished in those four years impacts an entire lifetime. Deciding where to go to school and what major to declare is almost as important as figuring out how to pay for it.

What’s clear is that a college degree is much more valuable than a high school diploma. According to the U.S. Census, the total annual family income when the head of the household has earned a bachelor’s degree earned almost twice as much ($110,587) as a head of household with a high school diploma ($59,904). Multiply this over the course of a career and we are starting to talk real money!

U. S. News and World Report just released their rankings report of the best colleges for 2011. This is the 27th year the magazine has been educating parents and children about the best colleges and universities in the U.S. In addition to ranking the overall top universities and colleges, the magazine ranks schools in other categories, as well. There are regional rankings, college rankings by high school counselors, up-and-coming colleges, business programs, engineering programs, and more.

Not surprising, the top 5 universities are:

Harvard, Princeton, Yale, Columbia, and Stanford

The top 5 liberal arts colleges are:

Williams, Amherst, Swarthmore, Middlebury, and Wellesley

Here's a link to a complete listing of U.S. News & World Report University and College Rankings.

It’s widely known that one of the main reasons people save and invest their money is to pay for their children and/or grandchildren’s college education. As a financial advisor, you are probably already helping many of your clients do just that.

However, as a wealth advisor today, you can help your clients do so much more. Become an expert and trusted resource regarding all things college-related.

• Learn everything there is to know about 529 college savings plans (remember tax implications vary by state).
• Compile a listing of college prep course instructors in your area. There are chain programs, such as Huntington Learning Center, with centers across the U.S. and Canada. There are also smaller, independently run centers that provide more than just tutoring services for the SATs and ACTs. Ivy Educational Services, for example, provides tutoring, along with counseling on how to write an essay that will get the attention of college admissions officers.
  
• Depending on the age of their children or grandchildren, open a dialogue with your clients about the latest college rankings. Some sample questions may include...
  

Questions for those with high school aged children:

1. Have you seen the latest U.S. News & World Report college rankings?
2. Has your son/daughter started talking about where he/she wants to go to college?
3. What subjects are he/she interested in?
4. Has he/she taken the SATs? Have you considered a prep course to boost scores?
5. Do you know the approximate four year cost of that school’s tuition?
6. Do you currently have a college account for your children/grandchildren?
7. Will you have enough to pay for school when the time comes?
   

Questions for those with younger children:

1. Have you seen the latest U.S. News & World Report college rankings?
2. Before you know it, your children/grandchildren will be talking about college. Do you know the approximate cost of a four year college education?
3. Do you currently have a college account for your children/grandchildren?
4. Will you have enough to pay for school when the time comes?
   

If some of your clients are thinking about sending their kids to a smaller, less popular school thinking it will be less costly…forget it. These days, college is expensive no matter where you go. I would never have considered going to Harvey Mudd College in Claremont, CA. It was ranked #18 on this year’s U.S. News and World Report list. I have nothing against the school…I’ve just never heard of it. I was shocked; however, to discover that one-year tuition at Harvey Mudd for the 2010-2011 school year is $40,390.

Believe it or not, #1-ranked Harvard University is cheaper at $38,416…just try to get in!


by Theresa Ficazzola

Building Your Wealth Management Network with Business Brokers

One truism of the financial advisory business today is that investors are expecting increasing levels of proficiency and sophistication from their advisor(s). The advisor can respond to this internally, i.e. by adding specialized competencies and functions within the team…or externally, i.e. forming alliances with other trusted professionals. Typically (and predictably), these external alliances are with CPAs and attorneys. Less typically, more creative financial advisors are building networks with other professionals, e.g. property and casualty agents, commercial loan officers, art gallery owners, business appraisers, etc.

Whatever professional network the advisor chooses to build, it should completely be a function of the clients the advisor chooses to serve, and how they serve them. In this way, the advisor creates a virtual (and virtuous) team which works to the benefit of the clients.

Financial advisors who we are coaching who work with entrepreneurs and business owners are finding that business brokers are natural members of their wealth management network. For those advisors who are interested in connecting with business brokers in this regard, we offer the following insights:

• Comeback is spotty. Many business brokers are only now emerging from a very tough period where listings were down 40%+. When the banking crisis triggered the recession, the brokerage business was devastated by a lack of credit. Even now, the comeback has been spotty around the country. Business brokers in New York are reporting that listings are up from last year…however many brokers in California report that 2nd quarter listings are way down from 2009.
• An increase of self-funders. One of the trends of the past year or so is that self-funders have come into the market. In some cases, these are down-sized executives who are buying businesses…bypassing loans and putting their own savings into the purchase price.
• Credentials count. In choosing a business broker, find one who is credentialed by the International Business Brokers Association. To become an IBBA-sanctioned Certified Business Intermediary (CBI) requires some years on the job, as well as additional continuing education.
• Finding a specialist. The best brokers specialize in a select group of industries. Every industry has its own unique culture, history, and knowledge awareness. Importantly, business broker generalists are akin to the financial advisors generalists, i.e. they are fast becoming dinosaurs.
• Communication is key. The best business brokers work with their clients in communicating how they manage the process. This process might include: researching the company and industry, “staging” the business for sale, valuing the business, uncovering potential buyers, providing frequent updates on interested prospects and transaction status, etc.
• Negotiating the fee. Most usually, the broker collects a fee when the business is sold. 10% has been the industry standard, although with the weakened economy, knowledgeable sellers have negotiated better deals.
• Time-frame for sale. On average, it takes about nine months to sell a business. Brokers will ask their clients for an exclusivity contract, and six months is the likely minimum time-frame, although like the fee, anything is negotiable.
  

Concluding Thoughts: Right now, buyers like private equity funds are scrounging the market looking for bargains. On the sell-side, there is a pent-up desire to sell, motivated by the fear of a possible increase in the capital gains rate. Either way, it would seem to be an opportune moment for financial advisors to connect with business brokers. Savvy financial advisors could partner with business brokers in joint marketing opportunities, and position themselves as an integral player in this process. Building your professional advisory network could take some time; however, the benefits of a mutually beneficial relationship (e.g., new client introductions for you and the broker) are worth the time and effort.

by Chris Holman

The Science of Attention

My apologies for our brief hiatus...I've been away on jury duty.

There's a pretty interesting piece in yesterday's New York Times entitled, "Outdoors and Out of Reach, Studying the Brain."

The premise of the article is intriguing. Organized by Dave Strayer, a professor of psychology at the University of Utah, five neuroscientists take a raft trip down the San Juan River in a remote section of southern Utah.

The trip's intention is to explore what happens when we step away from our devices and rest our brains...in particular, this journey is an exploration into how attention, memory, and learning is affected; as well as how our capacity to focus is altered when we escape from the phone, email, texting, etc.

What makes this excursion doubly interesting is that it is populated by both "believers" and "skeptics". The believers postulate that heavy technology use can inhibit deep thought and cause anxiety...and accept that getting into nature can help. The skeptics use their digital gadgets without reservation, and are not convinced that anything lasting will come of this trip, either personally or professionally.

As time went on during the trip, both the believers and the skeptics became more relaxed, reflective, quieter and more focused on their surroundings. While a few days away from civilization didn’t transform the group, it did get them to change the way they think about their research and themselves. For example, one person used to take out his computer during meetings, but is now saying that perhaps he can learn to listen better and work at becoming more engaged.

More and more, in this era of Information Overload, neuroscientists and psychologists are directing their focus to the Science of Attention. Some interesting new books on this topic include:

• Distracted: The Erosion of Attention and the Coming Dark Age,
• The Dumbest Generation: How the Digital Age Stupefies Young Americans and Jeopardizes Our Future,
• The Overflowing Brain: Information Overload and the Limits of Working Memory.
  

I find the entire topic quite absorbing. Behavioral studies have shown that performance suffers when people multitask. These same researchers also wonder whether attention and focus can take a hit when people merely anticipate the arrival of more digital stimulation. If true, this would mean that our attention and focus is always at a deficit! Bummer!

By the way, if you are reading this post while you are on vacation yourself...do yourself a favor:

Step away from the electronic device...now!

All the best!

by Chris Holman

PS...If you have a colleague or friend who might appreciate the information on this blog, please consider forwarding this to them. Thanks very much!

What Motivates You?

Lately, for many of our coaching clients we have been thinking about the subject of motivation. For financial advisors and entrepreneurs especially, this is an interesting and always timely topic.

Coincidentally, there was a short piece this past week in Forbes that addressed this topic from the standpoint of entrepreneurs, "Why Serial Entrepreneurs Can't Stop." In this article the author contends that the motivation for entrepreneurs, especially the "serial entrepreneurs", i.e. those go-getters who can't stop creating and building new companies is...a sense of purpose. For them, changing the world is part of their quest. As such, their work is never done.

For the top-performing financial advisors who we work with, we also see them driven by other desires, such as:

• Achieving a goal...personal, professional, material,
• Reaching a lifestyle that is equal to, or better than, that enjoyed by their parents,
• Building a profitable and sustainable business that will survive them,
• Validating themselves in their own eyes, as well as the eyes of their peers.

Push/Pull Factors for Entrepreneurs
For entrepreneurs, there have been some interesting studies that investigate the key motivating factors for starting a business. Generally, the factors are split into two underlying reasons...Pull and Push factors.

Pull Factors for Entrepreneurs

1. Independence, or the feeling of being in charge of one's own destiny
2. Money
   
3. Challenge and Achievement
4. See an Opportunity
5. Lifestyle

Push Factors for Entrepreneurs

1. Job Dissatisfaction
2. Changes within the workplace
3. Children, i.e. financial concerns, a desire for flexible schedules, etc.

Interestingly, Pull Factors for entrepreneurs seem to be much more persistent and sustaining than the Push Factors.

As coaches, one of the frequent questions that we encounter is how to boost ambition. Without being completely directive and telling our clients what to do exactly, we have seen success for clients who do two things:

1. One of the keys to ambition is the understanding of one's own motivations. If you can understand what drives you on a day-to-day basis, your path to increasing your ambition becomes clearer.
2. The other method to jump-starting ambition is to get you out of your comfort zone and take some risks. Ambitious people don't settle for the status quo. They seem to be continually testing the boundaries of what they can comfortably do, on both a professional and personal basis.

For closing thoughts, let's turn to one of our heroes...Mark Twain...whose memory has recently benefited from the publication of a 500,000 word autobiography:

"Keep away from the people who try to belittle your ambitions. Small people always do that, but the really great make you feel that you, too, can become great."...Mark Twain

by Chris Holman

You've Got the Power!

In 1968, James David Power III struck out on his own to form J.D. Power & Associates. It was an unusual career move for the time. At 36 years old, with a mortgage and three kids, Dave Power had a secure job as director of corporate planning at McCullough Corp., makers of chainsaws and Weed-Eater.

Nonetheless, Power had an ongoing passion for market research, and decided to form his own market research firm. (In the early years, Power and his wife Julie tabulated the results of their customer surveys around their kitchen table.)

J.D. Power & Associates began as a publisher of independent customer surveys that focused on the automobile industry. Power’s big break happened in 1971, when his customer research uncovered a flaw in Mazda’s rotary engine. Writing his first-ever press release on a yellow pad of paper, Power detailed unreported problems by Mazda car-buyers. 24 hours later, the press release hit the front page of the Wall Street Journal…and (as they say) the rest is history.

By 2005, J.D. Power & Associates had grown to 700+ employees with annual sales of $150 million. Dave Power had earned the reputation as the auto industry’s “Mr. Quality.” During that year, Power decided that the time was right to step aside, and sold his company to McGraw Hill. Terms were undisclosed.

For the past 8 years, J.D. Power & Associates have branched out to the financial services industry and have provided ratings for full-service investment firms. In the latest survey, “2010 U.S. Full Service Investor Satisfaction Study” released on July 19, 2010, three firms distinguished themselves with superior ratings: Edward Jones, RBC Wealth Management, and LPL Financial. Edward Jones had the highest investor satisfaction, averaging 769 on a 1,000 point scale.

The study also finds that advisors who perform certain practices see a positive impact upon client satisfaction and the overall investment experience. These activities include:

• Fostering engaged client/advisor relationships that involve the development of an investment strategy,
• Periodic review of investment objectives,
• Regular communication around, and reasons that explain, investment performance,
• A clear explanation of fees and commissions.
  

The study also finds that investor satisfaction has a substantial impact upon several other important criteria: share of wallet, more new client introductions, and higher levels of loyalty and retention.

Also notable is that investors’ positive sentiment regarding their own investment firms have decreased. Overall, an increasing number of investors believe that their firm is more focused on profits…as opposed to them.

The 2010 study is based upon responses from 4,460 investors who make some or all of their investment decisions with an investment advisor. The study was fielded in May 2010.

There are no real surprises in the Investor Satisfaction Survey. Financial advisors know they need to engage their clients and keep them happy. What is relevant is yet another reminder that many clients remain dissatisfied with their current firm. What about yours? Here are some coaching questions that come to mind:

• What are you doing to effectively engage your clients on multiple levels, so they remain satisfied with your level of service?
• Why not communicate the survey’s findings to begin an open dialogue with them about you and your practice?
  
• What is your plan for acquiring new clients in today’s marketplace?
  
• How else might you use the survey’s findings?

You have the “power” to ensure all your clients are satisfied; don’t relinquish that power to someone else.

by Chris Holman

Think for Yourself

Groupthink is a style of thinking that people can engage in when they are deeply involved in a cohesive group. When groupthink occurs, the desire for group unanimity overrides the motivation to realistically discuss and appraise different alternatives.

For financial advisors, groupthink occurs all around. Wall Street is an exceedingly subjective and psychological environment where there is a marked tendency towards groupthink.

For those financial advisors who work with investment committees of foundations or employers, group decisions can lead to significant behavior and psychological biases.

There are several noteworthy pieces that explore this interesting topic.

• For those of you who have read Michael Lewis’ The Big Short, you know the story of how a quirky band of unknowns made hundreds of millions of dollars by thinking differently than the “Wall Street Machine”.
• There is also a wonderful research piece from Vanguard on groupthink called “Group Decision-Making: Implications for Investment Committees.” This is a must-read article for any financial advisor who works with investment committees on an ongoing basis.
• There is also a thoughtful piece on Art Petty’s Management Excellence blog entitled, “Six Steps for Avoiding Groupthink on Your Team.”
  

Many financial advisors are getting sucked into the groupthink philosophy because they are hesitant to break out from the pack. There could be several reasons for this, including compliance rules and regulations, fear of a lawsuit from a client, or worries about hitting their numbers and potentially losing their job if they say or do the “wrong” thing.

It’s interesting to note; however, that some of the most successful investors in the past decades, e.g. Benjamin Graham and Warren Buffett, have achieved their success by avoiding the trap of consensus, groupthink investing. Coaching questions: What about you? Do you participate in groupthink, or do you stand up for what you believe and speak out on your own?

Perhaps Doris Lessing, the 2007 Nobel Prize winner for Literature, summed it up best when she said, “Think wrongly, if you please, but in all cases, think for yourself.”

by Chris Holman

Post-Crisis: Has Investor Psyche Changed?

Capgemini is a global consulting firm headquartered in France that has released the World Wealth Report (in conjunction with Merrill Lynch) for the past 14 years.

In the most recent report, World Wealth Report 2010, they offer some interesting observations with regard to the post-crisis environment. In their view, investor psyche has changed significantly in the past three years. Since their insights run parallel to what we, at ClientWise, are seeing in the industry, I thought that I might share them verbatim:

1. Post-crisis, most high net worth clients have yet to regain their trust in the regulatory bodies and institutions that are meant to oversee markets and protect investor interests. Coupled with ongoing concerns around financial markets, this lack of confidence has long-term implications for investing behavior.

2. Shifts in asset allocation mirror investor caution. High net worth investors are favoring predictable forms of cash flow like those in fixed-income products, and are seeking protection against downside risk, and their search for returns takes place within the broader context of portfolio risks and goals.

3. High net worth investors have seized a more hands-on role in their finances. Above all, they want specialized and independent advice, transparency and simplicity, and effective portfolio and risk management, and are looking for wealth management provider relationships that can clearly demonstrate a more integrated approach to meeting their needs.

4. Emotional factors are a prominent feature of the high net worth psyche today, and wealth management firms and advisors must incorporate those emotional factors into stronger portfolio management and risk capabilities so as to properly support client goals and needs.

5. With billions of assets still in motion post-crisis, wealth management firms are embracing change, leveraging key tenets of behavioral finance to rebuild investor trust and confidence and drive further innovation into their offerings and service models.

Admittedly, many of these changes in investor psyche were happening before the financial crisis. However, post-meltdown they seem to have been exacerbated.

However, the learning for financial advisors is profound. Assuming that you agree with Capgemini's observations, the coaching question is: what are you doing differently now to meet your clients’ needs, communicate more effectively and restore their trust?

Join our Complimentary Webinar
At ClientWise, we’re always looking for ways to help financial professionals improve their productivity and meet their goals. Our latest public webinar, to be held on Thursday, July 15 at 4:30 pm, EST, will discuss the benefits of our new service, the Benchmark Assessment Report (BAR™), which benchmarks your practice against other top advisors.

For more details about how the BAR™ can leverage your strengths to accelerate growth or to register for the webinar, please visit our website at www.clientwise.com and click on the “Knowledge is Power” photo.

by Chris Holman

Generation Gap

There’s a thought-provoking piece in the Harvard Business Review that discusses generational diversity in the workforce and how to manage it.

In many organizations today, there is a diverse group of workers with disparate differences in attitude with regard to: motivating, managing, maintaining, dealing with change, and increasing productivity. Many of today’s organizational leaders are members of the Silent Generation or Baby Boomers. Fast on their heels are Generation X and the Millenials. Although stereotypes are tricky, it seems to be true that each generation demonstrates similar characteristics.

For those financial advisors who work on multigenerational teams, it might be helpful to raise awareness of the differences between generations, as well as to recognize the benefits of cross-generational dialogue. The photo at the beginning of this article is a prime example of the difference between two generations—the older businessman is reading a book, while the younger person seems to be reading a text message from his phone.

The oldest generational group, born between 1925 and 1945, is the Silent Generation. This group values hard work, conformity, dedication, sacrifice and patience. Members of this generation are comfortable with delayed recognition and reward.

The largest group in the work force today is the Baby Boomers. Born between 1946 and 1964, Boomers are characteristically optimistic and team-oriented. They place a high value on work ethic, while also seeking personal gratification and growth.

The smallest sized group is Generation X, also known as the Sandwich Generation because of their position between the two largest groups. Generation X, born between 1965 and 1980, were the first “latchkey kids”. They are self-reliant, global thinkers who value balance, fun, and informality.

Millenials were born between 1981 and 2000, and ultimately will become the largest group. Members of this generation exhibit confidence, optimism, civic duty, sociability, street smarts, inclusivity, collaboration, and open-mindedness. They tend to be goal-oriented.

Multigenerational Dialogue
For many teams, cross-generational understanding begins with dialogue. Indeed, some teams have formalized the conversation by organizing discussion groups that explore the generational differences between them.

Here are some coaching questions that may facilitate a useful exchange of ideas:

• What were some of your generation’s key national and international events?
• What trends, people, and popular culture do you recall from your first 12-15 years?
• Which defining historical event(s) shaped your generation?
• What do you value most about your generation?
• What challenges do you face as a result of being in your generation?
• What perceptions do others have of your generation?
• What are the pluses and minuses of working with each of the other generations?
• How can the members of multigenerational teams work better together?
• What should the mode of communication between them be?
  

Within any team, it is important to openly discuss differences in expectations. Recognizing that the same generation can look very different through the “generational lens” is helpful in understanding that it is normal for different people to react to the same situation in different ways.

Join our Complimentary Webinar
Webinars are a relatively new method of communicating and are commonly used by people from most generations. The benefits are obvious: they can reach a large audience; participants can be located across the country; they’re convenient, they save time and money and increase productivity.

At ClientWise, we’re always looking for ways to help financial professionals improve their productivity and meet their goals. Our latest public webinar, to be held on Thursday, July 15 at 4:30 pm, EST, will discuss the benefits of our new service, the Benchmark Assessment Report (BAR™), which benchmarks your practice against other top advisors.

For more details about how the BAR™ can leverage your strengths to accelerate growth or to register for the webinar, please visit our website at www.clientwise.com and click on the “Knowledge is Power” photo. Members of all generations are welcome.

by Chris Holman

Kids?...or a Bentley Flying Spur?

For moms and dads, or those of you considering becoming a mom or dad, have you ever wondered just how much it costs to raise a child today?

A study released recently by the USDA, showed that raising a child is 22% more costly than it was in 1960. Adjusted for 2009 dollars, middle-income parents in 1960 spent a total of $182,857 to raise one child through the age of 17. Today, parents spend $222,360. The bulk of those costs are, not surprisingly, for health care and education.

(The suggested MSRP for a 2010 Bentley Continental Flying Spur Speed Sedan is $202,500.)

As a financial advisor, these figures shouldn’t sound too off the mark. Everyone knows the costs of raising a child are increasing each year, particularly for education. However, most parents spend so much money on the day to day expenses of raising their children, they fall short of being able to afford to pay for college, let alone fund their retirement sufficiently.

What are you doing to help your clients prepare for the financial reality of paying for their children’s expenses until they’re on their own? Effectively managing finances over the course of a child’s early lifetime can significantly impact how much money your clients will end up with in their retirement fund.

How can you help?

• Consider creating a marketing campaign surrounding the USDA’s new study to make your clients aware of the expenses of raising a child. Create a mini campaign for clients who are expecting their first child (or those becoming grandparents) and distribute it a few months before the child arrives to prepare them for what lies ahead. Once they have the baby, they will be too preoccupied with everything that comes with being a new parent to focus on their finances.

• Create a list of popular websites that you can share with your clients that offer good information and advice about health care costs (www.insurekidsnow.gov) and education expenses (www.collegeboard.com ).

• Devise a strategy to help your clients decide where they should put their money and when – is it better to pay off the mortgage, save for college, or fund a retirement account. If there are limited finances, which should be done first? Develop different scenarios with real life examples to share with clients.

• Host a seminar in your office to help clients understand their options. Consider holding it in conjunction with a local university financial aid officer or an estate attorney from your professional advocate network for maximum impact.

The better prepared your clients are for paying for their child rearing expenses, the better prepared they will be to enjoy the lifestyle they dream of having in their retirement. As their trusted financial advisor, you can help them prepare more effectively.

by Theresa Ficazzola

Life's Lessons (at $53,118.00 a year)*

Bob Joss is the insightful, well-spoken, and highly regarded professor of finance and Dean Emeritus of the Stanford Graduate School of Business. In his last lecture as a teacher, he recently summed up his life’s learnings in “Top 10 Life Lessons,” which are 10 lessons that have been important to him throughout his distinguished academic and business career.

#10. Life is like cricket. Don’t know much about cricket, but I think he means that life is a long game, with ebbs and flows. Consequently, it is important to be prepared and stay alert for opportunities and challenges. As a financial advisor, what are you doing to prepare your clients for their life-long game? Are you staying alert for all the opportunities that may come your way from your clients and the prospects in your pipeline?

#9. Life is too short to deal with “bad” people. “Bad” people are bad news. They create negative energy and can ultimately waste your valuable time. For financial advisors, “truer words were never spoken.” Most financial advisors can build a pretty good business by finding 100 good people who they can connect with and serve. Therefore, concentrate on finding those folks who meet your minimum threshold of “good” people.

#8. Run it like you own it. Leadership is about responsibility and our actions matter and are watched. If we run a business like an owner, we set the tone for all others who observe us. Ensure you’re running your practice like you own it, even if you don’t. Treat your team with respect and reward them appropriately.

#7. Don’t forget to manage sideways. We are always a part of some team. Think beyond the immediate. As a busy financial advisor, you have a lot to do each day. As you are managing your big picture, don’t forget to also focus on the details, which in some cases, matter just as much as the larger ones.

#6. Don’t take yourself too seriously. Arrogance deprives a leader of loyalty. Leadership is about earning followers. As Jim Collins has written, Level 5 Leadership is a combination of humility and will. Try to keep your sense of humor, even when you’re having a bad day or dealing with a difficult client.

#5. Without fear, there is no courage. Take intelligent risks. Trust your instincts. Ask for help…asking for help is a sign of independence, not weakness. If you don’t have a mentor or a close friend who understands your business; someone who you can bounce ideas off of; someone whose advice you can trust—find one, or two. Building a close alliance can give you a little extra push when you need it most.

#4. Life is full of “character-building” experiences. When we have a “character-building” experience, it can transform who we are as a person. Don’t stay in your comfort zone; try new things. We learn the most when we learn a skill that is about something important to us. What’s important to you? What’s important to your clients? Ask your clients what keeps them up at night; then devise a plan to help them sleep better.

#3. Find the words. Life is an endless series of conversations. How well do you converse with your clients, your colleagues, your team? Can you speak succinctly, clearly and with conviction? Perhaps you could benefit from taking a public speaking class at a local college. Leaders earn followers by honest communication, i.e. communication that respects, and connects, with their audience.

#2. Use critical thinking throughout your life. Critical thinking leads to great questions, which can uncover the 1 or 2 important kernels of information that may lead to helping you resolve an issue or solve a problem. Don’t forget to ask your clients questions on a regular basis—keep them engaged; you never know what relevant piece of information you can garner from them that could further solidify your relationship with them.

#1. Don’t forget to renew yourself. Remain curious and vital. Self-preoccupation is a prison. Our identity is what we commit to. Periodic self-assessment allows us to learn and grow. When was the last time you took some time out for yourself to do something you really enjoy? Whether you take a solo bike ride or run, immerse yourself in a good book, get a massage, or take a walk on a beach, you’ll be sure to be renewed—at least for a little while.

Ralph Waldo Emerson, the great American literary philosopher summed things up best when he wrote, “Life is journey, not a destination.”

*Tuition at the Stanford Graduate School of Business for 2010/2011 is $51,118.00, not including room & board, books, and other expenses.

by Chris Holman

Know Your Neighbors

The popular assumption is that the internet…mobile phones… texting…and other new technologies…have enabled Americans to become increasingly isolated. Indeed, past sociological research has supported this assumption.

However, some interesting new research by the Pew Internet & American Life Project disputes this belief.

In a recently released report by the Pew Foundation, "Neighbors Online", it was revealed that internet users are more likely to meet their neighbors face-to-face and engage in meaningful discussions of community issues. Also, people’s use of mobile phones and the internet is associated with larger and more diverse discussion networks. When their full personal network is examined…i.e. both strong and weak ties…internet use, in general, and use of social networking services, such as Facebook, in particular, are associated with more diverse social networks.

The Pew findings include:

• Knowing one’s neighbors’ names is a key predictor of how much people chatted in person about community topics. If you know your neighbors’ names, you are 70% likely to be talking to them about various community topics, and if you don’t know their names, you are only 12% likely to do so.
• Internet users are more likely to meet their neighbors face-to-face and engage in community issues, i.e. 50% vs. 35%.
• Speaking face-to-face is still the most common way that people interact regarding issues that affect the community. 46% of Americans talked face-to-face with neighbors about community issues, 21% discussed community issues over the telephone, and 11% read a blog dealing with community issues.
• Having face-to-face interactions with neighbors about community developments is closely linked to factors such as: age, socio-economic status, education, and race.
• Women are slightly more likely than men to know all, or most, of their neighbors, i.e. 44% vs. 40%.
  

For financial advisors, this report reveals interesting implications regarding the importance of connecting with others in their respective communities. The most obvious finding is that simply knowing the names of your neighbors greatly increases the likelihood of engaging them in some form of conversation or dialogue, even if it’s something as basic as the weather.

(Coaching Question: Do you know all your neighbors? Can you name them? How well do you know them? What types of conversations do you have with them? If you don’t know all of them, why not introduce yourself the next time you see them and explain who you are and what you do? Who knows, they may just be in the market for a good (and friendly) financial advisor.)

by Chris Holman

Are you happy?

Some people say that happiness is a state of mind, just like feeling young. Let’s face it, everyone has their good days and bad days, but some people are just happier than others. A new study reported by LiveScience.com says that age is a big factor in determining who’s happy. The study, reported by Rachael Rettner for LiveScience.com, revealed that older people in their mid- to late-50s are generally happier, and experience less stress and worry than younger adults.

The results were based on Gallup phone surveys conducted in 2008 of more than 340,000 Americans. It included measures of both overall happiness (called global well-being) and day-to-day experiences of specific feelings such as stress and happiness (called hedonic well being). It’s more impactful to include both types of happiness in a study such as this because the first provides a more reflective look at life while the second gives a more immediate view of life.

I guess this makes sense. If we were only talking about hedonic well being, I would argue that children and younger people are the happiest people on earth. Have you ever seen a three-year old bite into a cupcake or jump into a pool? Do six-year olds ponder paying the bills? Do 10-year olds worry about paying the mortgage or finding a job? Generally speaking, most kids are happy all the time; they have no worries or fears—their parents do all the worrying for them.

People’s overall satisfaction with their lives showed a U-shaped pattern in the study, dipping down until about the age of 50 before trending upward again. Stress and anger steadily decreased from young adulthood through old age. Worry was fairly constant until age 50, when it declined. Sadness levels rose slightly in the early 40s and declined in the mid 50s, but overall sadness didn’t change much with age.

Study researcher Arthur Stone, a psychologist at Stony Brook University in New York explains several theories that may explain the trend:

• Older people are better at controlling their emotions than younger people,
• Older people remember fewer negative memories; they focus on telling and retelling stories about the “good old days”,
• Older people might focus less on what they have or have not achieved and more on how to get the most out of the rest of their lives.
  

Of course, this is just one study. More research is needed. But is it? Can you really measure true happiness? Should we try? Maybe we should spend less time trying to figure out why people are happy and just spend more time being with people we like, doing the things we enjoy. Certainly that should make us happy.

Are you happy today? Why not send a friend an email and attach a Smiley face to it. It might make you happy (at least for a minute), and you might make your friend happy, too.

According to Wikipedia, Smiley has been a registered trademark in some countries since 1971 when French journalist Franklin Loufrani created "Smiley World" to sell, advertise and license the smiley face image in the United Kingdom and Europe. The Smiley name and logo is registered and used in over 100 countries. Loufrani had created the icon in 1971 to highlight good news in newspaper articles.

Need an even happier pick-me-up, listen to Bobby McFerrin sing his 1988 hit “Don’t Worry, Be Happy” on Youtube. The song was the first a cappella song to reach number one on the Billboard Hot 100 chart, a position it held for two weeks. The song's title is taken from a famous quote by Meher Baba.

The Indian mystic and sage Meher Baba (1894–1969) often used the expression "Don't worry, be happy" when cabling his followers. In 1988, McFerrin saw a poster of Baba with the quote and was inspired by the expression's charm and simplicity; as a result, the song was composed.

Peace of mind, including financial stability, can certainly help to reduce one’s anxiety about living the lifestyle he or she wants in retirement and contribute to one’s overall well being and state of happiness. As a wealth advisor, are you doing everything you can to make your clients as happy as they can be, regardless of their age?

by Theresa Ficazzola

The Google Rule

Michael Schrage is an author and research fellow with the MIT Sloan School of Management's Center for Digital Business.

He writes a very good blog piece in the Harvard Business Review, entitled, “The Google Rule."

The Google Rule is a practice that Mr. Schrage has followed for the past eight years. When he meets someone for the first time, he always Googles them. In his words, "I can say without hesitation or reservation that this has proven an exceptionally valuable professional discipline. I almost always find some relevant factoid or useful info-nugget."

By itself, this is not a surprising thing. I, too, am an inveterate practitioner of The Google Rule.

Schrage goes on to make an interesting observation. During his executive education classes that he leads at MIT, he makes a point of asking his students...if they have Googled him, prior to attending the class. The answer has always been the same. One or two students raise their hands, but the vast majority of his students have not taken the time to do this.

For what it's worth, I would corroborate Mr. Schrage's observation. I am often surprised at the number of professionals who do not use Google much to gather information about prospects or clients.

Let's think about meeting a prospective new client for the first time. Typically, what is the objective for this first meeting?

When you meet someone for the first time (in a prospecting capacity), the bar can be set pretty low. The main objective for the first meeting...is to get a second meeting. Nothing more than that. Studies have shown that, typically and on average, it will require about 7-9 "touches" before a prospect becomes a client. (A "touch" is defined as any form of contact, e.g. an email, a phone call, a letter, a face-to-face meeting, etc.) Given that there will be a number of different occasions where one connects with a prospective client; the objective of the first meeting is simply to determine if this is a person who you would like to connect with, going forward. To accomplish this, you will need to engage in dialogue, ask some interesting questions, and build a personal rapport. In building rapport with a relative stranger, Google is a great place to start.

As Mr. Schrage points out, taking the time to learn about someone prior to a first meeting is a common courtesy. In fact, to not do so is incurious, slothful, and somewhat disrespectful.

But the real power of The Google Rule is this: it may lead to the unexpected. By learning an interesting factoid about a stranger that can be appropriately inserted into a casual conversation, you set yourself up as someone who goes above and beyond the normal course of business.

To a prospect, the "expected" is tedious and boring. Nothing wrong with it, but it certainly won't set you apart from the crowd. Going above and beyond shows potential new clients that you’re serious, thorough, and genuinely interested in them. Not a bad way to start off any new relationship.

by Chris Holman

Pollyannas

Pollyanna was a best-selling 1913 novel that was adapted to a 1960 Disney movie starring Hayley Mills (who won a special Oscar for her role). Pollyanna's philosophy centers on an optimistic attitude of life that she learned from her father called the "The Glad Game."

In popular lingo, a "Pollyanna” is pejoratively used to describe someone who always seems to find something to be "glad" about...even if this belief is unreasonable or illogically optimistic.

In an illuminating article in McKinsey Quarterly, it was demonstrated that equity analysts have been overly optimistic for a generation. For the past 25 years, equity analysts' earnings-growth estimates were found to have been 100% too high. The sanguinary projections have generally ranged from 10-12% annually, compared with actual growth rates of 6%. The only time they've been right in recent memory has been during the strong-growth years of 2003-2006.

The discouraging bit for investors is that this optimistic attitude has continued despite a series of rules and regulations, instituted ten years ago, that were intended to improve the quality of analysts' long-term earnings forecasts, prevent conflicts of interest, and restore investor confidence.

Of course, not all blame should be directed towards the analysts themselves. This all appears to be part of a grotesque minuet that is performed between Wall Street analysts and industry executives...many of whom go to great lengths to satisfy Wall Street's financial expectations rather than report the on-the-ground realities of their own industries.

The important takeaway for investors is that they will need to do more of their own homework, which is not realistic for the all-too-busy American today. The bigger takeaway for financial advisors is that investors will be increasingly seeking to pay someone honest and reliable who could do it for them. In order to serve their clients and potential new clients and truly fulfill their role as wealth advisors, advisors must step into the breach and protect their clients from the Pollyannish optimism of the equity analyst culture.

For financial advisors, this situation begs some obvious coaching questions:

• Are you taking full advantage of today’s financial culture by communicating your role as a trusting, reliable full service wealth advisor?
• How are you protecting your clients from the "Pollyannas" of Wall Street?
• How are you positioning yourself with your clients? Are you on their side of the table...or the opposite?
• How do you currently explain today’s market expectations? What could you be doing differently to explain actual, rather than inflated, results?
• For those advisors who work for investment firms who use equity analysts who are consistently and optimistically wrong…what is your role with regard to serving your clients?

by Chris Holman

Are you working hard enough?

As a preface to my thoughts today, I wanted to say a few things.

In the first place, I am assuming that many of the readers of this column work in the financial services industry, as financial advisors or otherwise. I happen to be the senior executive coach for ClientWise, an executive coaching firm that serves the financial advisory industry…and have been in financial services myself for 25+ years. No surprise, but many of my observations and ruminations reflect my own world view.

For those of you who aren’t in the financial services industry, we welcome your eyes to our prose, too. We certainly invite all comers to our musings…and presumably, you are reading this right now because of something that has caught your eye.

Whatever your background and interest, thank you and welcome!


With this prelude out of the way, I wanted to share a question that is of particular relevance to those of you who are financial advisors, or are in the business of marketing to prospective investor clients.

Are you working hard enough?

Here’s why I ask this.

I live in an upper-income zip code in Minneapolis, one block away from one of our city’s famous lakes. I’ve lived in this house for seven years. In thinking back over the past seven years, I can honestly say that I have never, ever received a phone solicitation (i.e. cold call) from a financial services representative. Not once. Moreover, I have probably received a total of 3-5 direct mail invitations, inviting me to some sort of financial seminar, over the same period.

7 years and 5 solicitations. That’s about 0.002 calls/contacts per day.

Thinking about this statistic, I wanted to see if my circumstance was an anomaly. Over the past month, I’ve taken an informal survey of 10-15 of my friends… attorneys, executives, entrepreneurs who live in “good” zip codes where there is presumed to be affluence. Same answer, i.e. they have rarely been contacted through any sort of solicitation and/or outreach by financial advisors.

What makes this observation all the more interesting is that I remember breaking into the financial services business during the 1980’s. During this time period, whenever I would introduce myself as a “stockbroker” to a stranger at a cocktail party or similar gathering …invariably I’d get a very audible groan as a response, and a complaint about the number of times each day people were being “hit” upon by random financial salespeople. My reaction would be to sympathetically nod my head and fake some sort of empathy for their situation…knowing full well that I was one of the perpetrators myself. Each day I would call lists of 50-100 investors out-of-the-blue. No big deal. That’s just what you did back then.

OK, I absolutely am not suggesting that we dust off our boots and return to being cold-calling cowboys (and cowgirls.) Generally speaking, cold-calling is a pretty ineffective way for financial advisors to connect with affluent investors.

However, with approximately 634,660 registered financial advisors in this country…you’d think I’d hear from 1 or 2 of you.

Rather than ask, “Are you working hard enough?” perhaps the more appropriate coaching question should be, “Are you working hard at finding new ways to connect with prospects?”

• What could you be doing more often in order to reach out to prospective clients?

• What tasks could you delegate to others that would free up more of your time to solicit new business?

• What strategies could you use to effectively “cold call” in today’s environment?

• How could you utilize the newest technologies, such as webinars and social networking sites like Facebook and Twitter, to communicate to a wider audience?

• What is your unique value proposition that distinguishes yourself from your competitors?

• Rather than direct cold calling, try networking in new and different ways that you haven’t tried before—you may even have some fun in the process. Take a cooking class. Volunteer on a local fundraising project. Participate in a Walkathon. Volunteer with Habitat for Humanity. Attend gallery openings.

The good news is that these days the number of ways you can “cold call” is only limited by your creativity and your commitment to keep working at it.

Cheers!

by Chris Holman

"PowerPoint makes us stupid!"

So says Gen. James N. Mattis, Joint Forces commander of the Marine Corps.

This quote is from a fun article in the NY Times this week, authored by Elisabeth Bumiller, entitled, "We have met the enemy and he is PowerPoint."

The gist of the article is that the pervasive use of PowerPoint in the military has reached dangerous levels. In fact, there are platoons of junior officers, known as PowerPoint Rangers, who do nothing but prepare PowerPoint slides for daily briefings that seem to accompany the quotidian realities of military life.

The backlash against PowerPoint stems from concerns that it: stifles discussion, critical thinking, and thoughtful decision-making. Says Gen. H.R. McMaster, who banned PowerPoint presentations when he led a successful effort to secure the northern Iraq city of Tal Afar in 2005, "It's dangerous because it can create the illusion of understanding and the illusion of control. Some problems in the world are not bullet-izable."

Speaking of presentations, I want to thank OnlineUniversities.com for posting a remarkable compendium of 50 historical speeches, all posted on YouTube. Containing many of the well-known classics, e.g. Martin Luther King Jr.'s "I Have a Dream" and Sir Winston Churchill's "Finest Hour"...this article also links to some of the lesser-known but excellent speeches, e.g. Randy Pausch's "Last Lecture" and Steve Jobs' "Stay Hungry. Stay Foolish." (As a sobering counterpoint to the inspiration and soaring oratory of King and Churchill, the list also contains excerpts from speeches by Joseph Goebbels and Adolf Hitler. The power of words cuts both ways.)

Spend some time listening to these master speakers. Quite moving. Good learning too!

Presentations, whether they include PowerPoint slides or not, are a critical component of a financial advisor’s arsenal. After listening to some of the best prose ever written, spend some time thinking about your own presentations, then ask yourself some serious coaching questions.

• How are you currently using PowerPoint? Can your presentations be improved, so that your message is conveyed more clearly or more succinctly?
• Does your speech match up to your PowerPoint slides, or do you tend to go off on tangents? Would it be helpful if you created some notes for yourself to keep you on track?
• If you’re not comfortable giving a formal presentation or using PowerPoint slides with a client or prospect, spend some time practicing with someone you know. Become comfortable with the process, so your confidence shows through to your audience.
  

Remember, what you say is just as important as how you say it. PowerPoint shouldn’t make us stupid, and it certainly shouldn’t be the enemy. If you use the written and spoken word to your advantage, the “enemy” could just very well become your best friend.

by Chris Holman

Trusting Your Gut

A great example of the power of intuition is the story of Juan Manuel Fangio, an Argentinean race car driver. Fangio dominated Formula One racing in the first decade of the sport, in the 1940’s and 50’s. In the 1950 Monaco Grand Prix, as he exited the tunnel on the second lap, Fangio braked (inexplicably) as opposed to the normal behavior of maintaining speed. As a result, he avoided a horrendous accident, which was beyond his vision around the bend…and subsequently went on to win the race.

It wasn’t ESP that triggered his immediate reaction. Fangio had picked up a remarkable detail in his peripheral vision. Normally, the spectators in the stands have their faces turned towards the drivers as they exit the tunnel (pale color). At this particular moment, the spectators were looking up the track towards the scene of the accident and had the back of their heads facing Fangio (dark color). This subtle change in color registered instantaneously in Fangio’s non-conscious mind, and caused him to brake, thus avoiding the wreckage, and led to his winning the race.

“In the same way that I tend to make up my mind about people within 30 seconds of meeting them, I also make up my mind about a business proposal within 30 seconds based on whether it excites me.”…Richard Branson

Intuition Facts

• Dutch researchers have recently discovered that with many complicated decisions, such as buying a house, the better the outcome if one simply doesn’t dwell on it.
• In a survey of managers and executives, 90% said they combined intuition with rational analysis when making decisions.
• In another survey, the use of intuitive judgment tends to correlate to job level, i.e. C-level executives are most likely to use intuition, and lower-level managers are least likely.
• There are no consistent research findings that identify “female intuition”. However, some social scientists postulate that females have a more acute sense of social intuition (the ability to read peoples’ motives and intentions) than males do.
  

What is Intuition?
Intuitions are judgments imbued with feelings that arise rapidly and non-consciously on the basis of recognizing a pattern of clues in the environment. This is in contrast to instincts (biological and reflexive, i.e. a knee-jerk reaction) or ‘eureka!’ moments (sudden insights that explain the answer to a problem that has been pondered for some time).

This definition of intuition helps us to understand the Juan Fangio anecdote. He was able to recognize the pattern of clues in his environment (the turned heads of the spectators) based upon his previous experiences, which caused him to react instantaneously.

The Power of the Non-Conscious Mind
Has this ever happened to you? You have been struggling with a perplexing issue for hours, or maybe even days… and you just can’t make a decision, find a solution to a problem, or remember something you’ve forgotten. So, you decide to take a break. Perhaps you turn to something else, walk away, go for a run, or decide to simply “sleep on it”. As you focus on these other activities, your mind is “freed” up. Then, Eureka! You suddenly make a decision, find that solution or remember what you had forgotten.

Here’s what’s happening. During sleep, the linear mind is turned off. It’s pure intuition. During running, walking, intense exercise, or yoga…where one is paying attention to the physical, the unconscious mind is freed up, letting the quieter, non-conscious process integrate the various sources of data that we have gathered. In other words, the brain doesn’t stop when we’re not conscious; it only processes information in a different manner.

The Limits of Intuition
As an interesting counterweight to this discussion, I would refer one to an excellent book, authored by Michael Maubossin, entitled, “Think Twice: Harnessing the Power of Counterintuition.” Maubossin, who is the chief investment strategist for Legg Mason Capital Management argues convincingly that intuition only works well in “stable environments where conditions remain largely unchanged, where feedback is clear, and where cause-and-effect relationships are linear.” He points to the ideas of psychologist and Nobel prize-winner Daniel Kahneman who describes two systems of decision-making. The first is experiential, i.e. it’s fast, automatic and difficult to control. The second is analytical, i.e. it’s slower, serial, and takes effort. The trick is recognizing which is which.

Developing Intuition
Eugene Sadler-Smith, the author of “The Intuitive Mind” and “Inside Intuition” believes that one’s intuition can be honed and developed. He offers the following suggestions for those interested in accomplishing this:

• Open up the ‘closet’, i.e. be accepting of your intuitions,
• Track when/where your intuitions tend to be accurate. Get a feel of your ‘batting average’ for when you are right…and wrong,
• Don’t be literal all of the time. Use metaphor and imagery to help visualize potential future scenarios,
• Play devil’s advocate to test out your intuitive judgments,
• Create the inner state that will give your intuitive mind the freedom to roam,
• Capture your intuitions before they are censored by your rational analysis.
  

Your intuition is a muscle. It gets stronger by repetition and practice. In the words of Michael Horowitz, president of The Chicago School of Professional Psychology, the power of the unconscious mind is underrated and underused by many.

Coaching Question: Are you currently using intuition to make decisions about your practice, your colleagues, or your clients? For financial advisors and others who work with people for their profession, how can you use intuition to your advantage?

Rather than spend an inordinate amount of time trying to figure out a solution to a problem, go for a walk, do some exercise, focus on something else, or sleep on it. When trying to make a decision about a client, just trust your gut instinct. Chances are, you’ll probably be right…plus, you can save valuable time in the process.

On a Personal Note
One year ago, I was recovering from cancer surgery.. During my recovery, I noticed a remarkable thing. I observed that my powers of intuition had increased quite markedly. I'm certainly not an expert in this area, but here's what I think may have happened.

In the 6-9 months before and after my surgery my days were consumed with a rather intense investigation into my medical welfare and the desired course of treatment. During this urgent focus, I was filled with a certain amount of self-reflection and analysis. Post-surgery, I believe that this heightened sense of self-awareness morphed into something much greater, i.e. an increased sense of awareness and sensitivity towards others. Moreover, my enhanced intuitive skills seemed to feed on themselves...the more that I used them, the more accurate I became. It was all quite remarkable. This may give some truth to Mr. Sadler-Smith’s theory that intuition is a muscle and gets stronger with repetition.

by Chris Holman

Alan Greenspan Missed the Last Bubble, Will Your Clients Miss the Next One?

Last month, in an apparent attempt to burnish a bruised reputation, Alan Greenspan presented a 66-page kinda-sorta apology to the Brookings Institution entitled, "The Crisis."

Although not a full-on mea culpa, Greenspan acknowledges that the Central Bank failed to grasp the magnitude of the housing bubble. Surprisingly, he continues to maintain, on the macro level, little could have been done to prevent this global breakdown.

The operative question for all financial advisors is...can we do better?

In an excellent recent article in Horsesmouth, "How to Ride Out the Next Market Bubble" (subscription required), author Steve Utkus argues that financial advisors can prepare themselves and their clients to "counteract the human tendencies that go into making a bubble and get into a position to ride out the next inevitable collapse as comfortably as possible." [Steve Utkus is the director for Vanguard's Center for Retirement Research.]

In this insightful piece, Utkus goes on to explain the four common "bubble biases" and the innate tendencies that contribute to investors' bubble behavior:

1. Representative Bias is the tendency of investors to add an overlay of emotion to the interpretation of statistical information...and overweight events that have happened more recently.
   
2. Investor Overconfidence and Aversion to Losses are the flip sides of the same coin. The former is the predilection to overestimate one's own investment acumen. The latter is to extrapolate that, when markets are declining, that everything could go to ZERO.
3. Group Polarization is the idea that people take more risks in a group than when standing alone, i.e. the herd mentality.
4. Past is Prologue is the recognition that the social and group aspects of risk, as well as wild, over-excessive views of the future (both positive and negative) are nothing new. "There is nothing new except what has been forgotten"...Marie Antoinette
   

Deferring to the viewpoint of Mr. Greenspan, bubbles may be inevitable. How we respond to them...isn't.

For financial advisors, the following coaching questions seem opportune: How did you and your clients respond to the last bubble? What did you learn? How are you and your clients positioned to handle the next bubble? Rather than wait for the next upheaval to materialize, start asking your clients, and prospective clients these questions now..."I'm curious, how is your portfolio positioned for the next bubble?" or "Have you analyzed your investment portfolio for the four 'bubble biases' that investors are susceptible to?"

Do you think this might lead to some interesting discussions?

by Chris Holman

How to Serve Your Clients Better? (Ask Them!)

There’s a thought-provoking article in the April issue of On Wall Street.

Entitled, “Life Style Referrals: Savvy financial firms understand that acquiring new clients is more than just getting one customer to give them a recommendation”…the gist of the article is the changed dynamic between advisor and client. In the author's view (Lauren Barack), the “ubiquity of information” means that investors no longer need advisors in the way they once did.

She's right, of course...and she cites two examples that bolster her premise. Here they are from the article verbatim:

Example #1: It seemed as if John Thiel just could not land this one client. An officer of a firm about to go public, the potential client wouldn't even consider meetings with Merrill Lynch Private Banking and Investment Groups, despite numerous overtures. Then Thiel and his team discovered the prospect had concerns about how his new wealth would affect his two adult daughters. Solution? The team invited the two women-without Dad-to a financial boot camp that the firm began offering several years before. "They were so ecstatic, and he was so impressed by how their attitudes had changed, that he created a meaningful relationship with us," says Thiel.

And…

Example #2: Doug Lockwood's firm Harbor Lights Financial Group in Manasquan, N.J. ran a survey among his clients a few years back. But instead of asking them about the things they liked about their advisors, he asked about favorite sports teams, wines, and what stressed them the most. Their top answer to what created anxiety in their lives? Buying a car.
So Lockwood and his team hit every car dealer in Monmouth, N.J., found the ones that would treat their clients with white gloves and began doing the negotiating for them. And restaurants with impossible-to-book tables? No problem for Lockwood's clients. He called them as well. And after 12 months, the firm saw a 100% growth in assets under management, including one investor who had just inherited a $7.8 million estate from his mother. That client came in after the firm helped lease a car for a close friend, Lockwood says.

In the first place, kudos to these twofinancial advisors for their creativity in finding solutions that matched the needs of their clients.

Here's the other thing. How did these two advisors learn about the concerns of their prospective clients?

They asked them.

It's not unusual how this works. It's called 'The Answering Reflex'. It's followed most of us through our entire life. When asked a question, we answer. To do otherwise is rude and ill-mannered.

For financial advisors, the key is having the understanding, insight, and curiosity...to ask that one good question that uncovers something telling, interesting, or revealing about a person.

When was the last time you asked a coaching question of someone whose response was..."Gee, that's a good question. No one has ever asked me that before."?

Ask and you shall receive.

by Chris Holman

Quest for "The World's Greatest Salesperson"

David Ogilvy is one of the icons of advertising. He is also the quintessential salesperson.

He began his career in the 1930's in Scotland, selling stoves door-to-door. Ogilvy got his start in sales by persuading middle-class Scottish matrons to buy pricey Aga Cookers, during the midst of the Depression. His selling proficiency was such that Aga asked him to write a sales manual, which Fortune magazine called "probably the best sales manual ever written." Among its suggestions, "The more prospects you talk to, the more sales you expose yourself to, the more orders you will get. But never mistake quantity of calls for quality of salesmanship." [Here's a link to the manual.]

Soon enough he gravitated to Madison Avenue, where he founded Ogilvy & Mather. His firm was predicated on the belief that the function of advertising was to sell, and that successful advertising for any product is based upon information about its consumer. When David Ogilvy retired in 1973, he was known as "the Father of Advertising."

In a brilliant attention-grabbing maneuver, OgilvyOne Worldwide (the modern-day version of David Ogilvy's original firm) has created a contest that celebrates selling, entitled, "The Search for the World's Greatest Salesperson." The premise of the contest is straightforward. To create a level playing field, all contestants must submit a YouTube presentation/performance that sells just one thing...one red brick.

No sales experience is required to enter. The winner will be awarded a three-month fellowship at OgilvyOne, where they will help write a guide to selling in the 21st century. Contest deadline is May 16th, 2010.

It is interesting to hear the executives at Ogilvy describe the factors whereby they created this contest. Says Rory Sutherland, vice chairman at Ogilvy & Mather, "There's an interesting case to be made that advertising has strayed too far from the business of salesmanship, which is unfortunate because it can be a good test of how well you understand people and your creativity."

Parallels to Financial Services
As one who has been in the financial services business for 29 years now (Yikes!), it has been intriguing to witness the growing de-emphasis on the role of "sales" in our profession. In the '70's and '80's, during the era of stockbrokers buying-and-selling, full-on salesmanship was a recognized skill set. As the transactional nature of our business has yielded to a more holistic wealth advisory model, the role of sales has become less clear. Indeed, most financial advisors today would recoil at being described as "just a salesperson."

Nonetheless, if one considers selling to be a "systematic process of repetitive and measurable milestones, by which a salesman relates his or her service and product in return enabling the buyer to achieve their goal in an economic way*," it is hard to deny that selling is not a significant success component of today's wealth advisory practice.

* Greening, Jack (1993) Selling Without Confrontation

by Chris Holman

The Anti-Creativity Checklist

Youngme Moon is a well-regarded, and highly popular, professor of marketing at the Harvard Business School, and has been on the HBS faculty since 1998. She received her Bachelor's Degree from Yale, and her MA and Ph.D. from Stanford.

In her first years of teaching at Harvard, Dr. Moon found comfort in conformity. She taught what she was supposed to teach. She did the kind of research that was expected of her. She published in the scholarly journals, and wrote for the Harvard Business Review. By her own reckoning, she did not take a lot of risks.

She found this whole persona to be a sham and a facade...as well as terribly frustrating. Her carefully cultivated public persona was not who she really was. Over time, she made the determination to evolve in a direction that was more authentic. She began saying what she wanted to say. She began writing what she wanted to write. In her classroom, she began speaking in her own voice.

Guess what? Her students began responding to her with a new passion. Her colleagues began treating her with a new regard and respect. Her research began taking on a new dimension. In her words, "The amazing thing about authenticity is that once you commit to it, it becomes by nature effortless to pull off."

But the thing I really want to tell you about is her really engaging vimeo, "The Anti-Creativity Checklist"...which looks to be all of the lessons that she has learned in the blood-sport of academia...told with a heavy dose of sarcasm.

For those of you who don't have 5 minutes, here is her tongue-in-cheek list of 14 things "guaranteed to stifle creativity and innovation."

1. Play it safe.
2. Know your limitations.
3. Remind yourself: It's just a job.
4. Be skeptical. Show you're the smartest guy in the room.
5. Demand to see the data.
6. Respect history. Always give the past the benefit of the doubt.
7. Crush early ideas.
8. Been there, done that. Use experience as a weapon.
9. Keep your eyes closed. Your mind too.
10. Assume there is no problem.
11. Underestimate your customers.
12. Be a mentor. [Actually, I don't know what she means by this one.]
    
13. Be suspicious of the "creatives" in your organization.
14. When all else fails, act like a grown-up.

What's interesting to me is that, for a lot of us, this list could easily be expanded...and called The Anti-Success Checklist!

By the way, in April, Dr. Moon publishes her first book, entitled "Different: Escaping the Competitive Herd." Looks like a great read!

by Chris Holman