The financial advisor’s equivalent of the real estate agent’s “location, location, location” mantra is “communication, communication, communication.” Given the events in the Middle East, you have a perfect opportunity to communicate with your clients, deepen your relationship with them and position yourself as a thought leader with the investing public through a timely, well-written update letter.
I’ll make it easy for you by writing a timely letter about the Middle East situation and giving it to you for free. But first, I want to walk you through the anatomy of an update letter so you can use the template for your future letters.
To begin, what’s the objective of the letter? In this case, the objective is to let your clients know that you are on top of the Middle East situation, that you’re monitoring how it may affect their portfolio and that you are a proactive, engaged advisor.
Once you know the objective, write a great title.
Michael Hyatt says, “Great titles are PINC (pronounced “pink”). They do at least one of the following: make a promise, create intrigue, identify a need, or simply state the content.”
Here’s the title of your free letter: How the Three-Act Drama Unfolding in the Middle East May Affect Your Money
This title hits two of the four points; it creates intrigue (three-act drama, Middle East, my money—I want to know more) and identifies a need (I need to know how problems in the Middle East might affect my pocketbook).
After the title, you need a strong first paragraph to secure the reader’s attention.
After 30 years in power, it took only 18 days to topple Egyptian President Hosni Mubarak. He capitulated to the demands of the protesters and resigned as President. The quick toppling has led to a domino effect and instability throughout the region. What does this mean for you and your money?
This paragraph sets the stage for what’s to come and ends with a question. The question essentially invites the reader to keep reading because they know you’ll answer the question by the end of the letter.
As we get to the middle of the letter, we need to tie in the three-act play, which I’m using as the “lens” to put the Middle East situation in context.
Since the glory days of ancient Greece, we’ve had the three-act play. You know how it goes. Act I sets the stage, introduces the characters and identifies the main problem. Act II is the most important act because the main problem becomes much more dangerous and difficult and the protagonist of the story looks like they will lose. Act II usually ends on an emotionally-charged cliffhanger so you’ll be compelled to come back from intermission. Act III pulls it all together and the story wraps up with the protagonist (usually) winning and everybody (usually) living happily ever after. Ah, if only real life was so neat and tidy!
Skipping ahead in the letter, I describe two potential outcomes.
While it’s too early to know the outcome of Act II or Act III, it may make sense to look at two potential extreme outcomes. These bookends give us a sense for a possible worst case and best case.
Extreme Outcome One
On the negative side, if the Middle East erupts into a fiery ball of flames, it could be a serious problem for the world. The Middle East can be a powder keg and with its strategic importance in the oil market, any disruption there could send the world economy into a tailspin. Multiple countries are experiencing unrest among their people so the call for reform in the region is strong and certainly not over yet.
Extreme Outcome Two
On the positive side, the changes occurring in the Middle East could usher in a new era of democratic reforms that lead to faster economic growth and rising stock prices. Remember the fall of Eastern Europe’s Soviet satellite states and the toppling of the Berlin Wall in 1989? The decade that followed was a strong one for worldwide economic growth and stock prices. If the fall of Eastern Europe is a blueprint, then there could be some rocky, but survivable times ahead followed by a long period of growth.
Notice how I gave the bearish and bullish case? Rather than making you sound indecisive, it gives you credibility because you are aware of and looking at both sides. You’re not locking yourself into a position; instead, you’re analyzing the fluid nature of this situation and proceeding appropriately.
I also introduced Eastern Europe as a blueprint so I need to explore that a bit further. And, conveniently, I was able to find a way to tie another relevant topic into this letter—social media.
The Impact of Technology and Social Media
One of the big differences between the fall of Eastern Europe’s dictators back in the late 1980s and the situation in the Middle East is the rise of the internet, and, in particular, social media. The educated, internet-savvy young adults who helped fuel the protests in Egypt reportedly used Twitter and Facebook to mobilize their followers. While the fax machine was the technology of choice back in 1989, the tools of today are exponentially more powerful.
And let’s not forget the importance of a strategically placed quote that shows your knowledge of literature and history.
Victor Hugo said, "An invasion of armies can be resisted, but not an idea whose time has come.” For the Middle East, that idea is political and economic freedom. Our interconnected world enables the far reaches of the globe to see how the politically free and economically prosperous countries enjoy a relatively high standard of living. The people in these emerging countries see it on TV. They read about it on the internet. They travel to our country and become educated in our universities. They like what they see and now they want it for their home countries.
A few months ago, nobody was predicting the imminent downfall of Hosni Mubarak and the resulting domino effect in the Middle East. His swift decline is another example of how we live in a “speeded up” world of instantaneous communication and a desire for immediate gratification. That potentially dangerous combination means the ultimate denouement of this unfolding drama is any pundit’s guess.
Okay, now we need to wrap up the letter and tie together what we talked about earlier with a “we’re on top of this” point and a call to action.
As your advisor, though, we’re not in the pundit guessing game. Instead, we are actively monitoring the start of Act II and its potential implications for your portfolio. What this means for you and your money is that volatility and uncertainty are a fact of life. What happens in the Middle East can affect us very quickly—we have to look no further than the price of gas at the pump.
Regardless of how this drama unfolds, we will do our best to try and meet your goals and objectives.
Here’s the call to action.
If you have any questions or concerns about the Middle East situation and how it may affect you, please call us. We are here for you each step of the way. As always, thank you for your trust and confidence in our services.
You should write a letter like this any time something significant happens in the world or in the financial arena. For example, you could write a timely letter about the ramifications of the federal budget deficit and its potential impact on our standard of living.
Remember, communicate, communicate, communicate. Take this letter and send it to your clients, prospects and your local media. You can send it via email, regular mail and you can even blog it and tweet about it. Be creative.
As promised, you can click here to go to the Peak Advisor Alliance website and download a clean copy of the complete letter from the Free Tools section. Enter “3actdrama” as the code. As appropriate, please send it to your compliance department for review.
Steve Sanduski, CFP, is the managing partner of Peak Advisor Alliance, a financial advisor coaching and practice management resources organization. He is also a New York Times Bestselling author and co-author of Tested in the Trenches: A 9 Step Plan for Building and Sustaining a Million-Dollar Financial Services Practice. For more from Sanduski, visit his blog. Also visit here for more information on where Sanduski will be presenting live content to advisors.
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