The Internet and social media are impacting client behavior and expectations, creating a new breed of informed, socially engaged buyer. Let's call him or her Client 2.0. This client is more prone to use social media (as well as friends and colleagues in the physical world) than advertising and company promotions to inform their decisions about products and services.

But Client 2.0 has a hidden side advisors ignore at their own peril. The technology that fuels these individuals in their everyday lives-their phones, their screens, their data feeds-leaves them with an even deeper desire to connect and communicate.

At the same time, investment scandals and market meltdowns have left them wary of financial professionals. Here's what advisors need to know to communicate with these clients-and keep them engaged.



Regardless of whether you personally choose to embrace a web-based social network, building a strong online presence for your firm is more important than ever. David J. Hubbard, a regional director in the Financial Network Investment Corp. independent broker-dealer system and president of Chicago-based Exemplar Financial, agrees.

"I used to think that the Internet was purely a quick reference source, that people would go there to get your phone number and find out a little bit about you before they came in to the office, so I didn't put a lot of energy into our web presence. But I've changed my whole view on that," says Hubbard, who's been a financial advisor for more than 30 years.

His firm has spent a lot of time redesigning its two websites-one for current and prospective clients, and one for financial advisors who might want to join the Exemplar/Financial Network region. "The web is where people get a first impression about you and make a decision. We have to make sure that the site is putting our best foot forward, communicating to our clients in a language they can understand, and meeting their specific financial goals and objectives."

Hubbard has also been paying more attention to what comes up on the screen when his name or his firm's name is put into a search engine. It's important to proactively create good press and to be mentioned on other reputable sites. To help accomplish that, write more news releases and post them online, publish articles with your byline through credible media outlets and find ways to be quoted in stories.

"The whole way that people are using the web has changed. I still haven't figured out social media, but frankly, I think that's the future for us," Hubbard says.

"Our industry needs to find a way to let financial advisors interact much more extemporaneously than they are able to now under the present rules," he adds. "If we don't embrace it, we're going to lose."



Edward A. Jacobson, PhD, who is perhaps best known for his work in the financial services industry as a champion of the appreciative financial planning process, which shifts clients' attention away from problems as the motivation for change, says we're increasingly tethered to one another by technology. We're at the point, he says, where we sometimes have to make a conscious decision to untether for a while.

"I'm not sure that technology truly connects us in ways that matter," Jacobson explains. "It's important that we connect-that we're able to say what's on our minds and in our hearts, that we feel not just listened to, but heard and understood."

He believes these are fundamental human needs-all the more so since the 2008 meltdown-and meeting them takes more than technological connectivity. "Real connectivity requires good listening skills, patience and presence, caring and not rehearsing our next response while we half-listen."

"One of the great paradoxes of the Digital Age is that we humans have never been so connected yet disconnected at the same time," says Steve Saenz, consulting partner of Advisor Solutions Network and founder of the Copernicus Institute, an Atlanta-based leadership group for investment professionals. "The very tools that have brought us together when it comes to communicating have pushed us apart when it comes to interacting with others. Like it or not, we live in a high-tech, low-touch world. Our daily diet consists of rich media sound bytes coming at us like heavy snow on a windshield. We might even be approaching whiteout conditions," Saenz says.

Clients, like the rest of us, are dealing with a much more complex, interdependent and uncertain world than ever before, with information and clamoring opinions competing for their attention on a 24/7 basis. "The most valuable, and valued, financial planning relationships are those in which the planner serves as a calm shelter from the chaotic stimulation all around ," Jacobson says.

"Clients need someone to help them sort and make sense of things, someone who focuses on what has meaning for them in light of their unique circumstances, needs and personality. And that takes more than great technology and frequent 'client touches,' " he adds.

According to Cicily Carson Maton, CFP, founder of and partner in fee-only Aequus Wealth Management Resources in Chicago, many people are in a constant state of stress. "It isn't just the Great Recession, it's also the globalization of the world, Twitter, blogging, news headlines in your face constantly, the bombardment of more information, part of which nobody cares about, or they shouldn't. If not mitigated, all these little stressors can add up to the same amount of stress one experiences at the death of a spouse or while in the throes of a divorce."

Maton has embraced the transition planning methodologies taught by Susan Bradley at the Palm Beach Gardens, Fla.-based Sudden Money Institute. She also plans more visits to her office by Dr. William "Marty" Martin, a licensed clinical psychologist and money coach.

Martin has worked as a financial therapist with some of Maton's clients for about three years. "We have a lot of fun; clients leave just glowing. They learn more about themselves and their own decision-making. They implement [strategies] quicker and it's a wonderful experience," Maton says.

Michael Kay, CFP, founder and CEO of Financial Focus, an RIA firm in Livingston, N.J., says the aftermath of the market crash created an inflow of new clients who have something in common: They are tired of being scammed, taken advantage of and being talked down to. "What they find when they come through our doors is a focus on something entirely unfamiliar to them. We listen. No high-tech touch screen on the conference room wall, no PowerPoint slide show showing them images of long walks on the beach. We simply ask questions and then sit back and listen."

Kay's process and system kept his existing clients "in their seats" during the worst of the recession. He and his team are more focused on face-to-face meetings or phone conversations than electronic communications. "Emails and technology are great for making appointments or answering quick questions, but not a good substitute for building and maintaining excellent client relationships," Kay says.

Amy N. Mullen, vice president of Poulsbo, Wash.-based Money Quotient, a non-profit that offers tools and training on "life-centered" strategies to planners, says advisors tell her that qualitative communication is what helped them maintain their client relationships through the economic crisis. "They now see, more than ever, the importance of spending the time to really understand the needs, concerns and aspirations of their clients," Mullen says.

"This type of communication has helped their clients focus more on what is truly important to them and what they can actually control, rather than what they can't," she adds. "Also, because clients have completed this discovery process and know that the planner has their best interests in mind, the trust that is created has lessened their anxiety and stress about what the market is doing," Mullen says.



"If the past few years have taught us anything, it's that we need to communicate with our clients frequently and, just as important, communicate with them in the way they want to receive that communication," says Scott Hanson, CFP, CFS, ChFC, senior partner and founding principal of Hanson McClain Advisors, an independent financial advisory firm based in Sacramento, Calif., and Hanson McClain Retirement Network, a marketing group for advisors.

Hanson says his firm has always had a system in place to ensure it reached out to its clients on a periodic basis, rather than just waiting for them to call when they needed something. Some of the firm's 2,800 clients receive quarterly calls, while others prefer only an annual review. "We've used client relationship management tools to systematize this process so that we don't have to review client lists when we think communication is important," he says.

"If you don't talk to people, they think you have forgotten about them, that you don't care about them any more," Hubbard adds. His firm has also had policies for more than 20 years to stay in regular contact with its clients. "What we've learned over the last couple of years is that we need not only to communicate with our clients more, but also differently."

Hubbard finds clients are now in two camps. One is totally wired and connected. They subscribe to all kinds of news feeds. They want to see their accounts online. "If that's the case, we better be right there with them," he says. "For those clients, we've heightened our procedure so that we're out with information to them sooner."

For example, Hubbard was in Boston in March for a regional directors meeting when the earthquake and tsunami struck Japan. He immediately held a conference call with his staff, saying, "I want you on the phone tonight, calling clients, letting them know that we're watching, that we know what's going on. It wasn't 'call them all over a few days,' it was 'call them all at once.' "

But not all of his clients want to be bothered by calls about current events, even if it's a nuclear meltdown or a stock market meltdown. They trust that the firm is looking out for their best interests and want to focus on living their lives instead. So Exemplar Financial uses its customer relationship management system and rules engine to generate lists of clients who do and do not want to be contacted via phone for certain events.

Keeping clients invested in a portfolio that best suits their needs is not an easy process, Hanson notes. When times get tough, they begin to lose faith in the markets, the economy and their financial advisor. "Having the right kind of communication with them can not only inform them of topics we think are important, but can also help in building their belief and credibility of what we can do for them," he says.

Hanson and his business partner, Pat McClain, have done a weekly radio program for the past 16 years. "This show has done wonders for attracting new clients, but it's also been helpful in communicating with existing clients," he says.

"During the midst of the financial meltdown in 2008, we conducted a couple of market update radio programs, and we invited our clients to tune in to this special broadcast. We also made a copy of that program available to them on our website," he adds.

Realizing that technology has changed the computer to a media interface, they have created a quarterly video newsletter. Those who prefer to watch rather than read or listen can see an interview with Hanson and the firm's chief investment officer.

"The video feature is by far the most time consuming and most expensive of our outreaches," Hanson says. "We go to a television studio and use professional production folks. Because so much of our product is perception, we believe it's important that all of our communications are of high quality, including our videos."

To reinforce good perceptions, Hanson McClain hired a public relations firm to help get their message out to both existing and prospective clients. "The PR effort has been very helpful for us," Hanson says.

"We've been quoted in numerous publications. We always inform our clients when we've been quoted in a newspaper or magazine. We also list all our media mentions on our website. This enhances our reputation and our visibility-something that's especially important during troubling times like the ones we experienced during 2008 and 2009," Hanson says.



Despite his or her embrace of social media, Client 2.0 still enjoys some in-person peer interaction. To help bring clients together in the real world and improve communications, Don Heilbuth, an advisor at EFS Group in Sioux City, Iowa, has added client social events to his schedule as part of a 28-point annual contact system.

"We have various educational events, such as town hall meetings," Heilbuth says. "We also have been trying to do more golf outings, summer barbecues, wine tastings and other client/prospect events-things that get people together for fun and relaxation. While surveys, letters and reports are all part of our 28-point annual contact plan, it's important to connect on a personal and social level, as well." Heilbuth's fee-based firm offers securities through independent broker-dealer Securities America.

Maton also held town hall meetings fairly often amid the 2008 and 2009 crisis. She continues to hold them whenever there's bad news.

"I don't like to slate them too far in advance, for no real reason," Maton says. "Group communication is a tremendous thing. I'm always wishing that I could find more ways to get my clients together because they end up helping one another and there's a collective wisdom among the whole group. So taking advantage of that is something I've learned to trust."



Given how rapidly and unpredictably the world seems to be changing, planners need to use whatever tools work to help clients keep their eyes on the prize-their goals. To do this well, planners need to understand how each client processes information and learns, and how they prefer to receive information.

According to Jacobson, visual thinkers may work best with pictures and images, and with less text; they may welcome a mind map where they can readily see and remember what's in the center. Others prefer organized tables, numbers and bullet-pointed lists of specific goals and actions.

Kinesthetic learners need to literally get their hands on the information; they would benefit from having hands-on experience with an electronic version of their financial plan, where they could input different assumptions, press a button and see different versions of their potential future emerge. Verbally oriented people tend to work best with short, memorable, vividly worded phrases that capture their imagination.

For example, one of Jacobson's key goals for this year is "to have the most robust health and wellness ever." "I'm a verbally oriented person myself. It's amazing how compelling that phrase is in guiding me," Jacobson says. "For someone else whose brain is wired differently, the overuse of words could be counterproductive. We make a crucial mistake when we adopt a one-method-fits-all approach to helping our clients remember and focus on their big picture."



Although Client 2.0 may use technology differently, these individuals have the same goals as prior generations of clients. "My analysis of history is that the more things change, the more they stay the same," Hubbard says. "The Internet, newspapers, TV and radio are just communication tools. People have to deal with more information, but they haven't really changed."

Ultimately, most humans are relationship people, the advisor says. They form one-on-one relationships or join groups to be a part of a community.

Hubbard believes that the reason social networking online works well is because people desire relationships with other people. They just don't want a library of information, they want communication. They want interaction. They want to be able to build a trusted relationship with other people who feel the way they do.

"Regardless of what you do to communicate with your clients, if it's not interactive, if it's not a way to build trust and confidence, and make your clients and prospects feel like you're a human being that they can rely on and interact with, I think then you lose something," Hubbard says. "And so whenever you're developing your communications strategies, make sure you are always doing it with that type of mind-set. You can't just be a library or reference source."


Marie Swift is president and CEO of Impact Communications in Leawood, Kan. She contributes frequently to Financial Planning magazine and to other SourceMedia publications.



Digital Rx

Serving Client 2.0 is ushering in a whole new fast-paced world of 24/7 technology. We don’t know yet what the long-term effects of multitasking will be. But we do know this: There is a practical limit to how much stress the human body and mind can take before it starts affecting our health.

So how do financial advisors turn adversity into opportunity? Steve Saenz, consulting partner of Advisor Solutions Network and founder of the Copernicus Institute, offers these three simple but powerful tips:

* Make more time for yourself. Create some margin in your life by scheduling quiet time on your calendar. Use this time to rejuvenate your mind and body and reconnect with nature--walk in the fresh air more often, preferably near trees or water.

* Simplify your business and your life.

Cut out nonessential activities or projects. Stop over-committing. Disconnect yourself at least once a day--turn off all your electronic gadgets and devices. Don’t be surprised if you feel "naked" or start going through information withdrawals.

* Make more time for the people who matter to you--family, friends, employees and clients. Start acting like you have only one more year to live by reassessing your priorities. Encourage others to do the same. The best way to do this is to lead by example.

-Marie Swift

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