Elliott and Associates Corporate Advisory Tips and Review: Client Prospects

3 tips to help advisers zero in on the best client prospects

As the advice industry evolves, focusing on landing the right clients increases in importance

Today's advisory landscape presents unique challenges for advisers. The numerous forces at play are mostly outside advisers' control, including fee compression, consolidation, rising operating costs and highly correlated markets.

There is, however, one thing that is very much in an adviser's control: the clients with whom they engage.

This realization came to me during my decade-long career as an RIA. Early on, I often felt alone on the island of independence, unsure of where to take my business. I quickly realized I needed to focus my attention on a subset of individuals that provided my practice with real scale. High net worth (HNW) individuals, defined as those with $5 million or more in liquid net worth, proved to be the clients I needed—and wanted—to work with, and who yielded a mutually beneficial relationship.

In this country there are millions of millionaires, 84% are self-made, and 75% accumulated their wealth through entrepreneurial endeavors and real estate investments. I knew I wanted to focus my practice on them, but first I had to understand what these wealthy, business-savvy individuals valued in an adviser. How could I stand out among the other advisers vying for their attention?

As I built my business, I learned a lot about strategic prospecting. Here are three tips to help advisers center their efforts on the most rewarding rung of the prospect ladder.

1. Differentiate to dominate.

The population of advisers is steadily growing, each year commoditizing the service and minimizing its value. The equation is as simple as the most basic of economic tenets: supply and demand. With so many people offering similar services, it should be clear why the fee you charge is constantly under pressure.

Finding a point of differentiation among the masses is not an easy feat. The struggle tends to lead many newly-minted advisers straight into a sea of sameness filled with canned value propositions and two-dimensional pie charts.

A few years of trying to grow your practice with this conventional and tired approach is sure to frustrate even the most astute of advisers. To truly differentiate yourself in a congested marketplace, play to your strengths and borrow a page or two from your all-star client's playbook. You know the public markets and your successful wealthy clients know the private market, where they made their money in the first place. Combining opportunities in the public and private markets creates a winning combination, and the ability for adviser and client to connect on a very tangible level, one an adviser offering a traditional 60/40 portfolio will never understand.

2. Change the conversation.

To attract and retain HNW individuals of the entrepreneurial mind you have to speak their language, understand what they expect from your relationship and then articulate and implement a philosophy that explains a formula for wealth creation.

HNW individuals want an entrepreneurial solution that they are not currently getting from the wealth management industry. The problem is financial advisers have largely constrained the asset allocation discussion to publicly traded stocks and bonds, and often times sprinkle in complex products that no one at the table understands, not even the adviser.

Advisers need to reconfigure how they look at their portfolios for HNW individuals. They need to think more like their entrepreneurial clients and less like an adviser – think more in terms of stocks, bonds and entrepreneurs – and include an allocation to Main Street, not just Wall Street.

3. Let nature take its course.

One of the biggest concerns facing advisers at present is the advent of the robo-advisers — online platforms that promise equal or better performance than human advisers at a fraction of the cost (0.15-0.35% in fees versus the industry standard 1%)

Rather than trying to compete with the robo-advisers, allow evolution to take its course. Embrace your new competitor for what it is and what it will do for the industry. The clients that robo-advisers will take over are lower margin accounts that typically require a disproportionate amount of work and attention compared to HNW clients. But, if they see your service as a commodity, you are better off letting those clients go anyway. Consider it an opportunity to reinvest that time towards prospecting and articulating your philosophy to high-margin clients that get it.

Entrepreneurial-minded HNW clients value an adviser who offers access to off-market deals that are tangible and relatable to how the client grew their wealth in the first place. As your business evolves, these are the deals you need to deliver to the investors you need to focus on.

Elliott and Associates Corporate Advisory Tips and Review Europe Tokyo Paris Asia: Five Tips for Great Customer Service

It goes without saying that a business cannot survive without customers. Nor can a business thrive without great staff who understand that customers are the reason their business exists.

You ask any successful small business why their business is successful and they will tell you they put the client at the centre of their business universe and they hire people who think the same way.

Providing customers with what they want while also exceeding their expectations on service is what will make you and your business a great one. Here are my five tips for great customer service.

1. Personal touches

To beat the big guys in the market, you need to differentiate yourself from their big brand messages. The best way is to emphasise what they can't do or don't do very well, which is the personal touches. Build relationships with your clients!

2. Systemise your service offering

Personalising your service offering requires a lot of client contact time, so you are going to need to find and keep developing efficiencies in your business processes. As a starting point, look for automation where you can or templates you can then tailor.

3. Add value

We work to a value formula where 'value = benefit over cost'. Consumers need to see value in your service proposition. Sure, as a mortgage broker, you might offer your services for no charge to the consumer, but so does everybody else. You and your business need to clearly show their value to the client. You must strive to add as must value as possible, and then show clients how this added value will benefit them.

4. Set client expectations

Doing home loans isn't a simple process. Some customers aren't in a position to borrow money; some loan applications will need extra work with the lender to get them over the line. Be open and transparent about this with the client up front as it will work in your favour every time. If things don't go well, then your clients understood this from the start; if they do go smoothly, then you look great in their eyes because you solved the problem for them.

5. Regular communication

I've left the most important to last. When I read our customer service feedback surveys, the one message that our clients value the most is our regular communication. We all know what's going on when we deal with the property purchasing and lending process, but you can't lose sight of the fact that clients don't do this every day. Keeping in touch with them as much as possible – even if there is nothing new to tell them – makes them realise you are on top of things and you are working hard for them.

Elliot & Associates Research Global Markets: Japan in technical recession

Japan's economy surprisingly shrank this quarter instead of getting revived, prompting a delay in the country's tax hike and a possible snap election.

Japan's gross domestic product (GDP) fell 1.6% in the July-September period, even with predictions of a rise. The previous quarter marked a 7% contraction which was the most drastic fall since 2011.

Surprisingly enough, all 18 economists consulted by Elliot & Associates Research Global Markets predicted a contraction as the average forecast was an expansion of 2%.

Its economy's current state has met one definition of an economy in recession, which is 2 successive quarterly contractions. According to a senior economist, Glenn Levine, "The Japanese economy is in recession and has now contracted in three of the last four quarters."

Prime Minister Shinzo Abe announced, "GDP figures for July-September turned out not so encouraging. We are seizing a chance to exit long-lasting deflation and we cannot miss that chance."

Experts are predicting that with the economy in such a state, the tax raise which was meant to fill in the nation's public debt will be postponed. Abe's popularity may have suffered since his election but this could change if he  would publicly oppose the tax increase.

Abe is now expected to delay the increase until late 2015 and then call a snap election in December aiming to keep the 'Abenomics' going. Consumer spending accounts for around 60% of the economy so it would make sense to delay yet another sales tax increase from the recent 8% to the planned 10%.

According to an analyst from Elliot & Associates Research Global Markets, the "likely course is a snap election in December in which voters obviously choose to delay the tax increase."

This comes after Abe' promise last year to revive Japan's economy with an ambitious strategy which was dubbed  'Abenomics' -- spending and reforms plus a huge monetary stimulus. It aims to help the country recover from 2 decades of deflation onto a growth trajectory. The Bank of Japan promptly went on a big spree and printed billions of dollars to purchase government bonds.

What happened then? Well for one it decreased the value of yen, and made their exports cheaper as a result. For another, it nudged investors from bonds to stocks. Tokyo's stok market skyrocketed and everything seemed to be going very well. Then earlier this year, the government took the risk of increasing consumption tax from 5% to 8%, a first in 20 years. They gave it a shot seeing that the economy is now growing. Unfortunately, the gamble did not pay off. Consumers have practically stopped spending and now their economy is in technical recession.

Looks like the soaring stock market only helped the already wealthy people (only 20% of the Japanese are in the stock market). The expected general increase of salary did not happen while the increase in prices did.