The Frank Maselli Blog

A Question about Gate Keepers

2010-01-18T10:10:00.003-05:00

A rep recently sent in a great question that I thought would make for an interesting discussion. Please add your thoughts and comments!

Hi Frank

I'm having a tough time making any headway with cold calling to set up possible appointments with prospects. I've listend to your CD and internalized your Pre-Call mental checklist. I also feel like i've got a pretty good script. My problem is reaching decision-makers at work...classic challenges of voicemail, gatekeeper, etc. When I ask the gatekeeper for best way to approach contact, they generally say email...which is another way of dismissing me and typically not getting through. Any suggestions on the best way to cut to the chase? Thanks!

MY REPLY

Dear X,

Gate-keepers (GKs) are a constant challenge in the world of cold-calling and there are many ways to deal with this issue. The key, in my opinion, is to change the rules of the game.

In the old profession, a gate-keeper was a person to be hated, feared, avoided, and side-stepped. Because of that attitude, some folks would tell you to break through by calling super early or late in the day either before or after the staff people are in. Others said you need to blow past the GK with an extremely authoritative approach or a trick like "I'm calling from my plane...please put him on NOW!"

These old-school techniques might work sometimes...but they made me feel sleazy when I did them and they created a negative relationship environment which no one needs today.

In the modern profession, I prefer a creative approach that allows me to actually build a relationship with the gate-keeper. This is much more fun and relaxing and it differentiates me from the army of strangers contacting his/her boss.

For example, if the prospect warrants it I might start by sending the GK a personal note with a small gift of chocolates, a candy jar, or a Starbucks gift certificate. The note might say something like:

"You must get a hundred calls a week from financial salespeople who want to talk with Mr. Big. It's hard to tell the winners from the losers and the valuable information from the tired sales pitch. We do things a little differently here at the Maselli Group and I hope to convince you of the value of our extraordinary work."

Next week I might send a research report with an empty (but branded) three-ring binder and a note addressed to the GK saying, "I'd really like to share some of our best thinking with Mr. Big. Here's a simple way to keep track of our information that you both might find helpful."

Everything I do is designed to elevate me above the crowd. I might even try to set an appointment with the gate-keeper herself. Stop treating here like a mere obstruction but instead like a valuable partners to the boss. If you ignore, demean, trick or try to intimidate them...not only do you strengthen their defenses and resolve to never put you through, you also demonstrate that you are a heavy-handed sales person who is does not deserve consideration.

Humor is a great tool for breaking down the gate. Send them a video clip of the “Bridge of Death” scene from Monty Python & The Holy Grail. That should get anyone laughing.

I did a brief web search and found an interesting set of ideas from a guy named Craig Harrison. I agree with almost everything he suggests…which means he must be very sharp! Take a look for more gate keeper strategies! http://www.expressionsofexcellence.com/ARTICLES/gatekeepers.htm

You also said that some folks tell you e-mail is the best way to approach the contact. Why is that bad? I will take e-mail all day long! But now you have to send something valuable and interesting that gets my attention. This requires serious thought and creative effort…something the typical financial advisor doesn’t want to do. DON’T BE TYPICAL! Learn how to conduct a professional e-mail campaign. There are many tools for developing a program that will distinguish you and your firm may have certain restrictions on e-mail so I can’t give blanket advice here, but e-mail is a valid marketing tool even in today’s crowded in-box world.

AARP Seminar Guide

2010-01-07T09:04:00.003-05:00

Special thanks to John McCloskey for sending this along. It's AARP's guide for financial advisors who want to do seminars witrh seniors. It's filled with a lot of great ideas...many that you should know but need to remind yourself of when working with seniors. For example...using large typeface fonts and keeping your bullet points simple and short; using chairs with arms;

In my book (Seminars: The Emotional Dynamic) we talk a lot about audience comfort. I was at a seminar recently where the room was set up as theater style (chairs only, no tables) and I can't tell you how uncomfortable I was along with many others in the audience. The speaker handed out several items and we were all trying to take notes but it was useless. I finally moved to the back of the room and set myself up at the corner of one of the refreshment tables so I could write.

There was plenty of room and it would have been easy to make everyone a lot more comfortable...but the speaker wasn't thinking of US!

Making your audience comfortable is the first step toward getting them to like you and bond to you. It also says that you care about them. That's a mini-metaphor for your entire relationship!

Any questions...please e-mail me at frank@frankmaselli.com.

One Sit-Up

2010-01-06T09:25:00.003-05:00

Jan. 6, 2010

ONE SIT-UP!

Make a very simple 2010 resolution to contact one "new" person each day. Certainly this could be a new prospect, but I'm thinking beyond that. It could also be an old client who left you; a former colleague now at a new firm; a wholesaler you haven't worked with in a while; a local business owner you might want to get to know, etc.

This seemingly simple activity gets your brain juices pumping and sharpens your interpersonal skills. It also gives you a chance to spread your networking roots into a variety of different areas. I think of this as a way to expand your presence in and awareness of your marketplace. You never know what business or ideas can come from this process. It's fast and easy but it's the start of a habit.

One per day may not seem like much, but based on what I'm seeing out there it would be an uptick for most advisors. It's also a safe dosage that will enable you to take small risks that could pay big rewards.

Let's be honest...prospecting is not easy. If it were we would all be superstars. It's much safer to muddle through the day working only with people you know or on admin problems or reading research reports. But in this profession, it is personal interactions that drive your success and also drive a positive mental attitude. If you want to feel energetic, passionate and enthusiastic…DO SOMETHING!

I've joked in many of my meetings about my strict workout regimen. I try to do one good sit-up each day! I know that’s a laugh but it’s also a serious message about goal-setting. Activity goals are your best friends, but set too high they can turn against you. So start low...give me one new contact every day and work up from there.

An Industry Re-born!

2010-01-03T06:46:00.000-05:00

The Financial Services Industry as we have known it for over 250 years is officially dead! Since the first days under the buttonwood tree in lower Manhattan the industry has existed mainly to serve a small number of wealthy clients and to benefit the brokers, insiders and wheeler-dealers within the clubby fraternity called Wall Street. Those days are over...and thank goodness for it! Or as Mae West said..."Goodness ain't got nothin' to do with it." We've blundered, lied, and cheated ourselves right out of business and it's the best thing that could have happened to us and to our clients because finally we are going to be able to focus only on them!

This re-birth I'm talking about has been gestating for quite a while now. The changes in our industry started roughly two-decades ago when millions of new investors began to get interested in the markets. I would probably point to the start of IRAs as the moment when things began to shift...when investing left the realm of the privileged few and became a mass market activity. Over the past 27 years we've gradually, painfully begun to transition from a business driven by commissions, transactions and slick sales skills to a new profession built on trust, relationships and attentive service. The pain we are feeling now is the final delivery phase. Major firms are merging or going completely out of business. Hundreds of thousands of our colleagues are being laid off. Blood is being spilled on Wall Street in a very real way...and more may yet come. Out of all this anguish, however, is a bright new future.

The new Financial Services Industry will be simpler, cleaner and more responsive to clients. You see, the need for advice has not gone away. If anything it's even greater now than ever before. Americans are desperate for financial help but instead of fancy products and arcane investment crap that dazzles as it destroys assets...they need us to listen, tell them the whole truth and be a calming force when emotions run high. That's what the best advisors of the future will know how to do.

For some of you this may require new skills. We've wasted so much time, decades focused on the technology of money management and look where it's gotten us! Now lets spend some serious effort learning about people...how to help them think about their futures, how to guide them through life's most difficult decisions, many of which seem to involve money but even others that don't. Many of us have figured out the "financial" part of our title...now it's time to master the "advisor" part as well.

This new industry may not work for all of you. Some of us are mired in the old ways and we will cling to what we know even as the profession evolves beyond us. You still see it in the media. We are told that to succeed we all need to be hyper-active traders who can parse the second-by-second moves in a wildly gyrating market. Frankly, one of the best things the new Obama administration could do for investors is to outlaw CNBC, Bloomberg and Fox Business news. I'm not blaming the market's meltdown on the media...but I swear to you, in their own insideous way, these bastards are killing us. Their constant drumbeat of fear, controversy and sound-bite stupidity undermines the very fabric of investing. Don't get me started!

So as we begin this new year, let's look backward briefly to bid farewell to an old, worn out industry that collapsed under it's own greed and short-sightedness. Let it go! It's better off dead and we are well rid of it. The future belongs to the professionals who take the best care of their clients and to the companies that support and nurture their advisors in a non-sales, zero-hype, people-centered way. New metrics of success involving emotional maturity, client interviewing and psychological awareness may be needed...no problem. We will see new models for team-building, firm management, concept wholesaling, and training. Comp may go down across the board for a while until the new winners begin to differentiate themselves from the crowd. It's all part of the re-birth process...but the good news is that this baby is beautiful and it's all ours! I already love it.

Happy New Year!

Free Referral book chapter for download!

2010-01-04T17:20:00.002-05:00

Hey folks...Happy New Year! I just love the clean feeling of a fresh start that comes every January. I hope you have a wonderful 2010!

I resolved to do more of this blogging thing which everyone seems to think is a good idea. So let's start off with an invitation to read Chapter 1 of the latest edition of my book Referrals The Professional Way. You can download it free from my website at: http://www.frankmaselli.com/articles-and-downloads.

Learn a new approach to referrals that works with top clients and befits your stature as a valued professional.

Stay tuned for more ideas and tips. And drop me a line with any specific questions. I answer all my e-mails. frank@frankmaselli.com

All the best!

2009-11-29T11:17:00.002-05:00

Good morning!

Thanksgiving has passed into gastronomic memory and I'm busy uploading some new workbooks sheets to the website. Check them out when you have time. They're part of my new training program "An Industry Reborn" and should help you.
Got here: http://www.frankmaselli.com/articles-and-downloads

More on the way...the need for help right now is mind-boggling. BTW, how did you like that BusinessWeek cover and main article on "Wall Street vs. America"? Can you even believe the tone these days? Every major firm has to be thinking of spinning off their Broker/Dealer/Advisory division.

It's like that guy who got stuck in the rock while mountain climbing. He waited as long as he could then he had to hack off his own arm with a pocket knife to escape death. Advisors need to break free of this insane "Trash Wall Street" mob mentality. We didn't do it...but we are being dragged down with the people who did. And even worse...they are anonymous, while we remain the public face of these companies. Lord...please put me in charge of this industry for one year...I will clean it up!

Yeah...good luck with that.

Later...

Frank

Instrument Flying

2009-05-13T05:05:00.000-04:00

Back in flight school, my instructor told me “Your body will lie to you…don’t trust it!” When you think you’re flying straight and level…you could actually be in a slow spiraling downward dive…or even upside down…and never know it by looking outside the plane or by how you feel internally. This can kill you very quickly and you need to learn to trust your instruments.

I want to believe we are in a recovery. My emotional equilibrium is telling me that we are at historic buying levels and I should be bullish. I want to tell you that I see the end of the nightmare and your business is on its way back. But every time I look at the instruments they are saying the storm is not over for our economy nor for our industry.

In every meeting I do, I ask my audience the same question, “How many of you can’t wait to leverage yourselves up and start spending more money?” CRICKETS! “Now, how many of you are looking for ways to cut back, reduce spending, do more with less, stretch your car for another year, save more, reduce your debt and your consumption?” EVERYONE! I realize this is an unscientific poll, but any economic scenario that is based on the cheerful return of the consumer is, in my opinion, a non-starter and a dead-wrong strategy.

There are many speakers out there on the circuit singing “Happy Days are Here Again” and I think they’re letting their body lie to them. They are allowing an all-too-recent memory of past market declines tell them that when it goes down it must come back up. If they have any experience at all…they may remember the Crash of 1987 which ranks up there with Y2K as the great non-event. This is a different world. What I’m seeing is a continued downward slide and a depressing market environment for some time. I think smart professionals must build this scenario into their business model. Even if I’m 180 degrees off…it’s still a smarter way to help people.

You Don’t Need to Be a Bull to Grow! The days of the cheerleader advisor are over. Clients today are not looking for a Pollyanna happy face and a perpetually rosy outlook. They want realism, honesty and a savvy leader who can get them to their goals no matter what the market environment. That can be you, but you have to stop cowering in the corner, praying for the end of the storm. Learn to love the storm!

This means new investment strategies, new marketing approaches that brand you as a realist and a serious, caring professional, and new ways to talk with clients honestly about their future and the changes required to get them home safely. It means action and hard work…not sitting around thinking about what to do. Get moving again…and watch what happens to your attitude and your business.

The image that pops into my mind when I think of the ideal advisor in today’s world is Gene Hackman’s character Reverend Scott in the Poseidon Adventure.

He quickly accepted the reality of the upturned world and he recognized the tremendous change of thinking that was necessary to survive. The “experts” said he was wrong but he stuck to his guns with passion, logic and determination. He tried to convince people to join him but he didn’t waste too much time arguing with the un-savable. He knew that quick action was essential and that apathy would end in death. He used all his resources (like Ernest Borgnine and Shelly Winters) and improvised when necessary. Ultimately he led his small flock to safety. And if you forgo the typical Hollywood ending…he did a damn good job for his people.

Folks…this ship is under water and likely to stay there for a while longer yet. The consumer is down for the count. The government has shocked the economy with about 3 trillion volts and it ain’t moving off the table. When the false glow from an overly optimistic “stress test” wears off (bend down, touch your toes) we might find that we’re in deeper trouble than we think. Get your people up to the engine room and out to fresh air. Be as bold and creative as you can be. This is a time when leaders are made!

Lifeboat Drill: A Proactive Strategry for Uncertain Times

2008-11-02T10:34:00.000-05:00

Lifeboat Drill is a simple but powerful conversation you can have with top clients right now.

It is intended to not only help clients be less anxious about the stock market's turbulence, but also to assure them that you are proactive, thoughtful, and looking out for their best interests. Please download a copy of The Lifeboat Drill and left me know what you think of it.

Whatever you choose to say to your clients about the distressing market news, please say something--if you want to keep them, that is. Client retention depends on communication.

Because of the stock market's plunge, we are about to see a mass migration of clients in the next few months.

It can be an extraordinary opportunity to build new relationships. Lifeboat Drill will help you do just that.

Thriving on CHAOS Continued

2008-10-13T05:40:00.000-04:00

The New World

It has been about 3,000 Dow points since my last blog on CHAOS, but the message is even stronger now than it was a couple of months ago. So I want to close the loop on that, but first…I would ask you, as I've asked advisors in several meetings over the past few weeks, to stop for one moment and absorb the historic implications of the time we are living through right now. Columbus discovered the New World 516 years ago and our industry is discovering its own new world right now!

First…let me give all of you some serious props. I was in the business during the Crash of 1987 and never thought we would see a worse market meltdown than that day. But the last three weeks make 1987 look like a naked romp in the hot tub! Sure we had a one-day 22% decline, but it was over in 24 hours! We all blamed the program traders and got right back to the bull market with a 10% rally the next day. This is a fundamental downturn of infinitely greater scope and depth. There is no one group to blame. Sure, it’s the mortgage crisis, but it’s also recession level earnings, oil and food prices, political turmoil, and a deep mistrust by people of seemingly everything. Add to that the PGA is missing Tiger and my Pats are struggling without Tom Terrific…and you have a reason for severe emotional depression. So my hat is off to you. You are the living through the most difficult battle our profession has faced in almost a century. I salute you!

That said…what do you do now?

Back to Thriving on CHAOS

The O stands for Opportunity. It’s definitely out there. We may be seeing a buying window unlike anything since ‘87 or even the 1940s! Real values for longer-term investors are extraordinary across many sectors. But the first person who must be convinced of this is you. The client can’t believe unless you do…so get yourself the confidence you need to step up to the plate. I’m not saying you put all cash to work immediately. Placing all-or-nothing bets with market volatility like we have these days is sheer stupidity. So start scaling into positions; use index ETFs; get clients into a good variable annuity. It has never been profitable long-term to be bearish on America. Unless you really think that we are going to hell in a handbasket, then you simply MUST start buying at these levels.

Oh, I could make a bear case…believe me. There are fear scenarios out there that would have you stocking up on ammunition and canned food. But I don’t think we are going there…so I am on the lookout for great companies trading at historically low valuations. And after the last three weeks there are hundreds of them! One potential source of great information are portfolio managers. I would be looking for some smart folks with grey hair.

And please, as my final plea on this subject...stay away from hedge funds. I'm not going to say I told you so, because I probably haven't spoken to any of you before, but I've been railing against these animals for years and I think the proof is clear now. These are the pole dancers at the seedy fringes of investment world...steer clear!

Tap every wholesaler in your world for the thinking of their very best retail and institutional managers and analysts. Talk to everyone. It's not the time to shut your office door...it's time to open your mind up to all ideas and insights and to listen carefully. Write down everything you hear and log it on a spreadhsheet. Even if you don't use their advice, you will have a track record of what they said. In a year, you will know who is truly smart and who was just blowing smoke. Then you can begin to cut back on your relationships based on intelligence instead of marketing skill.

Finally the S in CHAOS stands for SELL. But sell what? Folks there is only one product you ever have to sell to a fellow human being…yourself! You are the only “product” that cannot be commoditized. Stocks, bonds, funds, annuities, money managers…everything that we spend so much time pitching are all the same and are all available from every other advisor. You are not!

So how do you sell yourself? This is a complex issue but I like to start with a little product knowledge. What do you do for your clients? What makes you different and special? What skills and natural gifts do you bring to the relationship and what specific value do those provide for the client? Many of you have answered these questions already, but if not I would get started right away since this is the core driver of all business success. Let me suggest a tool that might help you develop a clearer definition of your product’s attributes.

The Kolbe A Index

I talk about this in nearly all my meetings and it’s been one of the greatest tools I’ve found for helping people succeed in this industry. It’s a simple 36-question test that measures your natural instinctive strengths. This ultimately identifies those "hard-wired" behaviors or actions that you will do on a regular and consistent basis. Not what you want to do or know how to do…but that you WILL do. When I took my Kolbe test as part of the Strategic Coach program several years ago, I was filled with two powerful emotions. One was incredible joy that I had a clear picture of my deepest strengths and scientific validation of the things I knew were a core part of my being. The other was a deep regret that I didn’t know this stuff 25 years ago! All the stupid mistakes I had made in my life came flooding back to my mind and it was as if someone had lifted a blanket from in front of my face and said, “Now…do you see?”

Kolbe will reveal clearly the things you do best and the things you might want to avoid. It’s a profound realization that should underlie all the marketing and branding efforts you might engage in for the rest of your career. I strongly recommend you take this test immediately and if you take this step…I will take it with you! When you get your results from Kolbe, e-mail them to me. I will do a free Kolbe analysis for you and tell you specifically what your instinct scores mean for success in this profession. Kolbe will give you a complete report right there on-line, but they do not speak about our role as financial professionals. I will translate those instincts into our world. I’ve done several thousand of these so I feel pretty confident that this will help you.

To take the Kolbe test simply go to http://www.frankmaselli.com/kolbe and take the A Index. It costs $50 and you can do it in 20 minutes right on-line. I don’t get any part of the fifty bucks by the way…just so you know.

One caution!

Do NOT send me the results of your Kolbe test directly from their website. If you do, I won’t be able to reach you since it comes without your contact information. Instead just send me a separate e-mail with the four-digit score you get from Kolbe. I will take it from there. And because the Kolbe test identifies “hard-wired” characteristics, you don't need to take it again if you already have, so just send the scores you have.

Last thoughts...

The CHAOS we have been discussing is going to be with us for quite a while. You simply must be able to succeed in this kind of environment because it's a permanent climate change. We are going to see huge swings and dramatic events for the rest of our careers. So learn to function above the noise. Learn to grow your business and stay focused despite the pressure of external forces. Keep your eye on the activities you can control and keep your clients emotionally protected from the storm. If you do these things...you and your people are likely to remain happy, healthy and wealthy.

The "A" in CHAOS Stands For Activity

2008-05-05T06:22:00.000-04:00

A = Increase Activity

Now is the time for massive energy and maximum business building effort because you have money in motion. There are millions of unhappy investors and the competition is light. Our business, like many others is cyclical. It has its good and bad times. During the good times when clients are making lots of money, it’s very hard to pry folks away from their existing advisory relationships. During the tough times, people are much more willing to listen to a new story…so now is when your extra activity will really pay off.

For a good-activity guideline, use The Rule of 2.

2 appointments per day

These are in-person get-togethers with your top clients or prospects. If you are already averaging two per day then try boosting it to three. Many of you are wonderful when you’re in front of people. Your natural interpersonal skills really shine. I call this the revenue moment and you should strive to maximize the amount of time you spend here.

2 work-nights per week

I work nights for one main reason…it’s the best time to reach many clients and prospects. Some advisors tell me that they refuse to work nights and I understand their reasoning. They may have worked hard for years to get to a certain level of success and they feel that working nights simply isn’t something they want to do anymore. If you feel that way let me plant one thought in your mind. You are working nights not to make more money…you may have plenty of that already. You are working nights to help more people. It’s not about your success…it’s about your clients. Consider that before you reject this out of hand as something that’s beneath your stature.

2 Saturdays per month

Same rationale as above.

2 seminars per quarter

Obviously I love seminars and I’m a great believer in their ability to connect with people. If you’re not currently doing seminars or events, now is the time to get started. They work very well for both growing your business and for cementing your relationships with existing clients. If you would like more information on seminars, you might want to read my book, “Seminars: The Emotional Dynamic”. It’s filled with practical advice and techniques that will make your events remarkably successful.

2 tele-conferences per quarter

Tele-conferences are like seminars where no one needs to leave their desk. They are easy to set-up and fun to do and they will differentiate you from the crowd.

2 mailings per quarter

Direct mail can be a great marketing tool and in today’s world of electronic communication, hard-copy paper mail is enjoying a resurgence in impact. But in our industry, it’s rarely used for some reason. Many advisors swear that “junk” mail doesn’t work and I agree. Junk never works…but I can tell you of advisors who are generating five to eight new prospect appointments each month from a professional direct mail campaign. Like anything else, do it well and the results will follow. If you would like to learn more, contact Bob Wilgus at Response Mail Express ((800) 795-2773 ext. 5304) and ask him about the Concierge Program. It’s a revolution and it’s producing extraordinary results.

2 referrals per client

Referrals are not easy and getting top clients or centers of influence to refer you is a risky business for both parties. In order to make that risk disappear, you need to approach referrals in a sensitive and professional way that is the opposite of many of the techniques we’ve all been taught. I’ve given the subject a lot of thought and research and I’ve actually written a new book called “Referrals The Professional Way.”

2 campaigns per year

Campaigns are very powerful ways to grow your practice. They can also be fun and exciting for everyone on your team. There are four main types of campaigns: sales, marketing, theme, and service. I prefer theme campaigns which allow me to use a variety of specific financial solutions depending on the client’s needs. One of my favorite themes is global investing. It’s broad enough to be applicable to everyone in your world and it has a wide range of applications and programs that support the theme.

The best part of doing campaigns is the goal setting / reward process. This critical element allows you to unify the conscious and subconscious parts of your mind in a dynamic partnership that will help grow your business and have more fun doing it.

The Rule of Two will help keep you focused on activity during a difficult period. Activity is one of the few variables that you can control (along with attitude and skill) so stick to that and let your competition worry about things like market action, interest rates, and the economy. In the end, activity will drive your business success more than any other component. We are a business about doing!

The "C" In CHAOS Stands For Communicate

2008-01-21T07:15:00.001-05:00

“A riot is a very ugly thing. And I think it’s about time we had one!”
Inspector Kemp in Mel Brooks’, Young Frankenstein

This time, it’s the other ugly “R” word, Recession, and baby we’ve got it. Whether the specific economic definitions are present doesn’t really matter. Investors feel lousy. Combine a bi-polar market with the domestic political turmoil of an election year, and then overlay a difficult war in the Middle East, and you have the ingredients of massive discontent. Even my Pats going undefeated can only partly allay these negative emotions.

So what do you do in a brutal psychological environment like this? Beyond mere survival, how can you actually thrive on chaos? The secret lies within the word itself.

C = Communicate

The best advisors use tough times like these to reach out proactively to their top people. They don’t hide under the desk or avoid difficult situations. Now is the time for extra communication and enhanced visibility.

My simple rule is contact everyone in your book. Your “A” clients get a face-to-face meeting. Your “B” clients get a phone call (a scheduled phone appointment would be better). And your “C” clients should get a letter. You shouldn’t really have any C clients, but that’s another story.

Do it now. Start immediately. You want to have this done within the next six weeks. This might coincide with your normal quarterly or start-of-year meetings anyway, so it may not be too much of a stretch for you and your team but regardless. It must be done.

What do I say at these meetings?

There are two main messages. First: “Our financial plan is intact!”

Assuming you’ve done some kind of plan for the client and are not just pitching products, this message is vital to your long-term success. Market and economic activity, no matter how disturbing and bizarre, cannot be allowed to shake the foundations of a good financial plan. You can’t call the plan into question every time the ground shakes. It’s going to shake probably another 20 times during the tenure of your relationship with that client. And if every spike in volatility causes you to reassess or re-evaluate the plan, then you’ve undermined the entire process of planning in the first place!

The only thing that gets to change the plan is the goals of the client. If those change, then the plan must change. I’m not saying you don’t make some portfolio course corrections. Major shifts in market climate may indeed call for some asset rebalancing. But that’s normal, and it’s absolutely NOT a change in plan. In fact, it’s totally part of the plan. You have been expecting this and you’ve prepared for it. As a professional, market volatility and economic uncertainty cannot catch you by surprise. Or why does the client need you?

The second message is more emotional. It basically says, “We are on guard!”

I want my clients to understand that my team and I are standing on the bridge of this ship, wide awake and watching the seas every minute. They can sleep soundly. It’s my job to lose sleep when necessary. Frankly, we’re not that concerned at the moment. This is nothing we haven’t seen a dozen times already, but we are professionals and this is why you hired us. I hope you understand the power of this kind of subliminal messaging.

Isn’t this overkill?

You may think it’s not necessary to do this. In fact, you might believe it would make things worse by calling a special client meeting and talking about market volatility. All I can say is I hope that my competition feels that way too because I’m going to put your lights out! In tough times like these, I am going to radically differentiate myself from the typical financial professional. And ultimately the best advisors will take this rare and valuable moment to gather tremendous market share.

Long-term success and your ultimate value as a trusted advisor for your people are not measured by how you behave during good times but in bad times. This is a thrilling opportunity to shine!

The "H" In CHAOS Stands For Handholding

2008-02-27T05:48:00.002-05:00

"You gain strength, courage and confidence by every experience in which you really stop to look fear in the face."
Eleanor Roosevelt

H = Handholding

Addressing often-hidden emotional concerns clients may have is essential during periods of market volatility. On an intellectual level, most investors realize that difficult markets will pass and lead to new bull market upswings. Yet many individuals become fearful in the face of sharp declines. It’s hard to reason the fear away. Whether or not you think people should be scared is immaterial. They are scared, and you have to deal with it.

Handholding Rule #1: Be Proactive.

Don’t wait for clients to run screaming into your office. During tumultuous times, assume clients are a little frightened whenever you speak with them, and reach out with calming reassurance. I hate scripts, but this might be the way to begin a handholding conversation

“George, I know you’ve been watching these markets and they are pretty wild. I’ve had a few clients tell me they were a little concerned. They’ve been asking me if I thought things will get worse. So I just wanted to reassure you that we are just going through a normal market cycle and there is nothing hiding under the bed. I think we understand all the forces that are moving these markets right now and, while the storm isn’t over yet, this is not the time to panic. How are you feeling by the way? Any concerns I should know about? Has anything changed in your long-term goals?”

There’s no need to be hyperbolic or make any guarantees. The present storm may be raging for a few months. So you don’t want to make unrealistic predictions. But you know that the market looks out six to 12 months in advance. It is a future-pricing mechanism and it will often bottom and turn around just when things look their darkest and panic is the prevailing emotion.

Remember, you are basically dealing with emotions. It’s unwise to try to overcome fears with excessive use of facts, statistics, or detailed analysis. It’s almost as if you’re reassuring a frightened child.

“Rachel, there is no dragon under your bed. Dragons are animated fantasy characters drawn on computer workstations. They do not exist in real life. No creature can breathe fire because there is no gland or natural organ that can secrete a petro-chemical or flammable substance under high pressure. It’s just impossible bio-chemically! Do you feel better? Now go to sleep.”

Hand-holding Rule #2: Have A Hand Available!

I saw a very scary movie 35 years ago called The Exorcist. (It was actually the last scary movie I’ll ever see because it kept me awake for three straight nights!) At the movie, I saw something happen in the row in front of me that has stayed with me till this day.

Right in front of me was a woman and a young boy, maybe 10 or 11 years old. There was no movie-rating system back then and she probably thought it was safe to take her child to the movie. I’m not faulting her for that. But during a very scary scene, I saw the child reach out to hold his mother’s hand, and there was no hand to hold! Her hands were covering her own eyes. She was obviously terrified! The boy looked over at her and in a split-second his fear level jumped noticeably. He leapt from his seat and into her lap! It was a sad episode to observe. I felt for this little boy.

How’s this related to our world?

When a client reaches out to you, you have to be there! And you must come across as calm, controlled, and in-command. If you are scared yourself, the client will pick up on that and it will magnify his fear.

Go back to that scenario with the frightened child who can’t sleep. You couldn’t run into the child’s room screaming, “A dragon! Oh my God, there’s a dragon under your bed! Run for your life!”

So before you try holding hands, make certain you are on firm emotional ground. If you’re not, talk to someone who has seen this all before. Find a mentor or another advisor who lived through the Crash of 1987.

You want to talk about market volatility? Try a 22% train wreck in a single day. Five hundred points! My pulse doesn’t even pick up for anything less than two or three thousand now! If that’s not calming enough for you, dig up a relic who remembers 1973-74, when 50% of the brokers were purged from the industry!

Developing a historical perspective can give you a tremendous amount of confidence in the face of seeming uncertainty. You come to realize that there has always been uncertainty and market confusion. Severe shocks, extreme fluctuations, and exogenous calamities are not new. Nick Murray calls this phenomenon “The Apocalypse d’jour.” Yet somehow we’ve always come through okay. The markets just keep going up because they are ultimately a reflection and a gauge of the human spirit.

The time to truly panic is when you believe we’re undergoing a massive shift in human nature to something dark and demonic. So barring an alien invasion or takeover by the Taliban, I’m still bullish on human nature—at least the next 18 months!