When Rich Arzaga decided nearly five years ago he needed to boost his brand image and increase exposure to prospective clients, a weekly e-newsletter was just the ticket. The fee-only financial planner in San Ramon, Calif., says his initial mailing list of 300 has grown to around 450 since his newsletter's launch.
And it's not just a one-way conversation - it's also a great way for him to know what's on his clients' minds. Clients use the newsletter to interact with him, asking questions, thanking him for explaining complex topics and sometimes even disagreeing with him.
Another planner who swears by his newsletter is Mitchell Goldberg, president of ClientFirst Strategy in Woodbury, N.Y. When Goldberg launched his business six years ago, the newsletter helped with referrals and branding. "Writing my own content has been the best marketing I've ever done because it's genuine," he explains. "My clients really know what I'm thinking."
During times of economic uncertainty, Goldberg says client feedback to his newsletter surges. When clients want reassurance about their investments, the newsletter helps establish him as an expert in the complexities of the market, he says.
Although both planners have successfully boosted their brands and businesses with newsletters, each goes about the process very differently. Goldberg writes most content himself, while Arzaga relies heavily on pre-written articles from a newsletter service. Both approaches have benefits as well as possible drawbacks.
Planners considering writing a newsletter should ask themselves: Do I actually like to write? Am I any good at it? If the answer to one or both is no, using a newsletter service may be the best option. On the other hand, planners who enjoy writing say the personal touch of a newsletter they write themselves helps them connect with current and prospective clients in a way generic material never could.
"Most people use cookie-cutter newsletters. I don't think that's honest," says advisor Gary Harloff, owner of Harloff Capital Management in Westlake, Ohio. "One reason I send it is I want them to know I'm on the job."
Harloff and other planners who write their own newsletters acknowledge it can be time-consuming. Harloff says his newsletter takes about four hours. Beyond that, for many planners, it may make sense to allow time for another staff member to proofread, or to include the cost of a professional proofreader in your budget.
While newsletter services vet their content before making it available, planners who write their own newsletters also need to make sure they've complied with FINRA regulations. In firms large enough to employ one or more compliance specialists, this isn't a hassle. Small companies and sole proprietors, though, have to do a bit more work or risk running afoul of regulators.
Even experienced planners may have to hustle to keep up with regulations that change frequently. About four years ago, Harloff says he was contacted by state officials in Ohio and warned his compliance language wasn't up to par. "I thought I had it covered adequately before, but I beefed it up," he says.
One thing a newsletter can't do - among a variety of other restrictions - is make promises about future earnings or performance. "It can't make any hard statements like 'guaranteed to earn,' 'guaranteed to outperform' or any wording to that effect where the John Doe investor could be misled," says Tom Mulrooney, chief compliance officer at Rafferty Capital Markets, a broker-dealer based in Garden City, N.Y. There are also numerous disclosures that must be included; the number and the exact verbiage vary, but Mulrooney says they can be lengthy.
Mulrooney vets newsletters and flags anything that needs changing, then files the finished product with FINRA. His part of the process can be finished quickly, but he says getting the green light from regulators can take as long as three to four weeks. If regulators don't like what they see, they can tell a planner to stop using a particular newsletter or require changes in the way future pieces are written, as Harloff learned.
For some or all of these reasons, planners like Arzaga turn to a newsletter service. "What we realized is we didn't have the time, we didn't have the skills" of professional writers, he says. To personalize his newsletter, Arzaga says he includes a brief introduction that doesn't have to be rescreened.
Most planners say email is their preferred method of distributing their newsletters, although a few send hard copies to older clients who don't use computers. Emailing his newsletter lets Gerald Sparrow, president of fee-only firm Sparrow Capital in St. Louis, Mo., track who opens his newsletter, who clicks on links and who is requesting to be taken off the list. "You definitely want to call those people who click through and read it and ask if there's something you can do to help them," he says.
Of course, newsletter services aren't free. Arzaga says his service costs $120 annually, although he's used other services that charge around $75 a month.
Big financial services companies like Morningstar, Fidelity Investments and Dow Jones all offer newsletter services. Morningstar's Newsletter Builder costs $399 for a one-year license.
Each month, planners get a preassembled newsletter and a market commentary publication. Morningstar adds two to three new articles to its library monthly, and users have access to more than 50 FINRA-reviewed articles at any given time. Planners can customize the newsletters by adding their company name and logo or their own content.
A Fidelity representative says the company works with third-party vendors like McGraw-Hill Financial Communications. McGraw-Hill subsidiary Standard & Poor's offers a Newsletter on Demand service, which sells for $720 a year, according to the company's website. Planners can choose up to five prewritten articles per newsletter and can customize colors and fonts and add their own logo, photos and articles.
Dow Jones also builds custom, co-branded newsletters beginning at a price of $50,000 a year. The Dow Jones newsletters are custom-made to each planner's specifications, a company spokeswoman says.
For many planners, it's not a one-or-the-other choice to go with a service or a DIY solution; many mix and match original pieces with content they buy. Goldberg says about one-third of his missive to clients is from a newsletter service. Robert Keats, president of Phoenix-based Keats Connelly & Associates, says he uses a newsletter service for inspiration, but staff members write more personal perspectives on timely topics.
For some planners, newsletters have opened up even newer avenues for marketing. Keats, for one, shifted to a 21st-century distribution method a few years ago when he altered his newsletter into a blog format. The blog then led his company to explore other online and social media. "When we do a custom article, we send it out on our Facebook page, we'll Tweet it and we'll also do a blast email," Keats says.
"Every time we write something," he says, "it adds to our presence on the Internet." This visibility leads to media requests, and it "all circles back to us in the form of new client business and maintaining existing client business as much as possible," he says.
Martha C. White is based in New York and writes frequently about business and finance for The New York Times, Slate.com and Worth magazine.