We participated in advisor sessions and presentations. We spoke with dozens of attendees to learn more about their businesses. And at the very end of a busy week, we put our heads together and compiled a list of insights from the event.
1. Part Advisor, Part Therapist
The job of an advisor is 50% related to the market and 50% psychological. "You need to train clients to turn off the TV, quit reading so much, and take a long-term view. If I had it my way clients would get a quarterly statement instead of a monthly one," says Raymond James financial advisor Mark Presley.
2. Pet Perks
Employee perks yield a terrific return on investment, resulting in happier, more productive workers, says consultant Angie Herbers. Try to offer a perk that’s connected to their lifestyle. “Life insurance for pets,” she says, “is really popular right now.”
3. Give a Little, Get a Lot:
If you’re looking to buy an advisory practice, “don’t let a little nuance cost you a major deal,” says Scott Brown, an Orlando-based Raymond James wealth manager who bought three practices in the past several years that now total $75 million in assets under management. Brown says too many potential buyers get hung up on sums as low as $1,000, which prevent deals from getting done. “You have to remember you’re buying someone’s life work,” he says. “I got my deals done because I didn’t feel I had to beat the other person up.” While others walked away from buying the firms he eventually bought, Brown says he paid a total of $245,000 for the practices which now generate $500,000 in recurring revenue.
4. Avoid Cyber Threats
Cybercriminals are becoming increasingly sophisticated, so advisors must become increasingly sophisticated when it comes to guarding themselves and their clients from hackers. To start, always verify any sort of money movement with clients by phone -- emails can be deceiving. Password protect all computers and mobile/portable devices. Use personal firewalls and frequently update anti-virus software. Always use encryption for sensitive data on computers. Report cybercrime threats to law enforcement. Advise clients to be wary of open Wi-Fi, especially when online banking, i.e. at hotels/any public places.
5. Lessons From Steve Jobs
Apple's Steve Jobs may not have been a financial advisor, but all industries can learn from this legendary innovator who strived for perfection. For advisors, Steve Jobs-inspired lessons are numerous. "You need to ask yourself what you would offer to clients if costs don't matter," Raymond James' David Patchen says. Jobs had a tremendous affinity for product excellence, refusing to compromise the product. Jeremy James, an advisor with Iowa-based James Investment Group, for example, says that if costs were not a concern, annuities with a living benefit rider would be more frequently pitched to clients. "They're more expensive but they offer clients an income they can't outlive," he says.
6. Becoming More Tech Savvy
Familiarize yourself with technology that will help you communicate better with next-generation clients and potentially make you, overall, more personable. For example, using the iPad during presentations to clients will allow you to present from across the table. It's less formal and more laid back, many advisors say.
7. Put Business Aside
High net-worth clients love the personal touch, says Raymond James advisor Gerry Klingman, who runs a $1.3 billion practice in New York City. Accordingly, Klingman says he texts clients all the time, “but never about business.” He asks about their children, spouses, vacations and their business – but not their portfolio. “They love it,” he says. As for his clients’ finances, Klingman says he makes sure to contact them at least once every three months.
8. Go for a Ride
Have a relationship with a bank? Ask a commercial lender if you can “ride-along” when he or she goes on site visits with clients, suggests Paul Stetter, vice president for Fulton Financial Advisor Bank in Ephrata, Pa. Don’t be intrusive, Stetter cautions, but if the client strikes up a conversation, you have a golden opportunity to explain your services.
9. Opportunities in Europe
An understatement: European equities are in the doldrums. The bight news for investors though is that it's the perfect time to allocate to the sector, some advisors say. "European equities may remain out of favor yet are unquestionably cheap by any valuation metric that most investors are looking at. This is the precise time to be buying European stocks but people are scared because the news there is so bad," says Raymond James' Josh Cohen. "For investors, this is a once-in-a-generation opportunity. For medium to long-term investors, the time to buy is when everyone knows the news is bad. With that said, finding the bottom is impossible but I expect European stocks will start moving up within the next year."
10. What’s Your Hurry?
When buying someone’s practice, make sure they stick around for a while, says Raymond James advisor Scott Brown. Brown, who has bought three practices, says he usually cuts a deal to have the former owner stay around to work with legacy clients. If the owner won’t or can’t stick around, “lower the multiple,” he says.