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.

Elliot & Associates Research Global Markets: Japan at the Economic Crossroads

Japan finds itself once more at the crossroads as it strives to sustain economic expansion amidst an ongoing and challenging consumer-tax increase.

Around May of this year, the Japanese economy was showing fairly modest signs of resiliency in spite of the current fiscal tightening. In particular, improving labor market and increasing investment confidence has helped to propel expansion although such an expansion has been greatly affected by the export slump.  With growing world trade, however, annual growth is expected to reach 1¼%, triggering more expansion and an increase in inflation rate.

Bloomberg News reported back in May that “with gross public debt surpassing 230% of GDP, a detailed and credible fiscal consolidation plan to achieve the target of a primary budget surplus by FY 2020 remains a top priority to sustain confidence in Japan’s public finances.” Japan has planned a two-year sales tax hike beginning in 2014, with the 10%-target scheduled to be imposed in 2015.

In the Second Quarter of 2014, however, Japan’s GDP fell 1.8%, a result of an annualized 7.1% shrinking in the three months through June, according to the Cabinet Office in Tokyo. This was the biggest since 2009 and has put the burden of the economy upon Prime Minister Shinzo Abe’s ability to manage the country under the present and looming dire sales-tax conditions.

In the next quarter, retail sales and consumer spending fell in July, an obvious aftershock of the imposed sales-tax hike. With the next tax levy set in October 2015, the government is getting ready to boost the economic stimulus in order to lessen the impact upon consumers. According to Finance Minister Taro Aso in the first week of September 2014, a contingency stimulus plan will be prepared for that purpose.

Prime Minister Abe, according to Bloomberg News, is working to create “a sustained recovery after the central bank’s record stimulus brought initial success in fighting off two decades of economic stagnation.” In spite of the official optimism, the economy faltered in the Third Quarter, with the dismal increase in industrial production in July and August as car sales dropped to a record low in three years.

Japan has to find a quick solution to its economic woes as the world prepares to enter into an era of a new Asia-Pacific political and economic cooperation system that is sure to put a lot of pressure upon individual member-nation to come out and compete aggressively against equally competitive and aggressive nations. However, the new system might also bring new hope and opportunities for everyone in general.

Elliott & Associates Research Japan and Global Markets: The challenges of the Japanese economy

Since the Fukushima nuclear disaster triggered by the giant tsunami that hit Japan in 2011, the country has gone through a difficult transition as a developed country and as one of the global economic leaders.  As of 2012, Japan had the third highest GDP in the world but placed as the top nation with the greatest deficit in its national budget.

Several primary factors have brought about the present economic challenges of Japan in relation to the global market which used to be its primary source of its wealth, if not its virtual playground, from the 1960’s to the 1980’s. Here are the reasons for its economic woes at present.

1. Decrease in consumer confidence

Almost every country that experiences a calamity suddenly undergoes a period of depression, both economic-wise and socially. That is an obvious result to such devastating causes that can disrupt the natural, political and social environment, as well the human infrastructure needed for the delivery of essential public and private services. Business activity slows down as well as the consumption of non-essential goods. People prefer to save whatever resources they have for their daily survival needs.

As things improve, however, as they must have already done so in the interim in Japan, people might become more upbeat. Other factors, nevertheless, complicate the situation, as we can glean from the other factors that continue to challenge Japanese society.

2. Unbalanced Demographics

Japan, not unlike many developed and developing countries such as Singapore, Sweden and others, has a shrinking population with a big part of which is made up of aging citizens. On the average, Japan has a ratio of two workers for each retiree, a rather large and unsustainable ratio compared to its previous more productive years.

This ratio means the government will have a harder time sourcing out funds to support its growing elderly population while seeking to address the other side of the equation by enhancing its number of productive workers that will support and sustain its economy into the future.

3. Energy Insecurity

Ever since the Fukushima event, the use of nuclear energy to provide power for industrial and general use has greatly diminished. Energy shortage and power costs have battered the Japanese economy as if it were a daily tsunami hitting its shores and wreaking havoc over its traditional role as a powerful economic and trade force in Asia as well as in the entire globe.

Previously providing one-third of its energy requirements, nuclear energy has almost lost out totally to other power sources (coal or gas) which have to be imported; thus, aggravating the economic landscape that is already bleak as it is.

4. Lack of Confidence in Political Leadership

Until Prime Minister Abe came out with policies to revive the Japanese economy, the post-Fukushima scenario was a period of gloomy outlook for the nation’s economy. Inviting local and foreign investors to rejuvenate the dwindling economy in the face of natural and global economic causes has somehow given new impetus for people to spend more aggressively than before.

The renewed confidence might just be the signal for Japan’s recovery in spite of the existing challenges. However, implementation of new policies and economic thrusts sensitive to the realities of the present will determine how the nation will fare into the near future.

5. Establishing Productive Trade Relations

One factor that observers have felt must be addressed is the repositioning of Japan as a more active trade partner with growing economies in Asia as well as those in the trans-Pacific Region. The road ahead is not very clear; however, like most nations in general, the prospects of growth are rife. It could be the right direction that Japan needs to reinvigorate its economy and reclaim its position as a leader in global trading.

Rising from the literal ashes of the last world war to become a world economic power, Japan is not a newcomer in terms of overcoming great odds and achieving dramatic success and economic development. The character of the Japanese people has been proven time and time again in the past. No doubt, the nation will be able to face its challenges with the cooperation of other nations which share the same challenges. The great nation that once tried to live as an isolated island separated from the rest of the world cannot afford to move on without joining the global family of nations toward a more united, progressive and equitable global community.

Reference: “How can Japan compete in a changing global market?”, A round table report, Clara Gillispie.

Elliott Associates Research Global Markets: Global Energy and Natural Resources

Approach

The Global Energy & Natural Resources team oversees interaction with customers in the energy, mining, utilities, and agriculture sectors. We also initiate and synchronize research in these fields, customizing regional evaluation into pin-point market intelligence, risk control, and strategic-planning support.

Our customers include integrated oil firms, major mining multinationals, as well as many of the globe's prime global electric companies and power-generation utilities. Furthermore, we coordinate tightly with the Global Markets Group by supporting energy and commodity enterprise and sector analysis/portfolio management teams within investment companies. We also interact with the other client services groups on various strategic research endeavors and thematic seminars.

Primary Services

·         Direct advisory services: We present quarterly commodity status reviews in person, tailor-fitted to customer interests within our wide range of thematic scope. Moreover, clients have full accessibility to Elliott & Associates Research Global Markets research group of directors and experienced top analysts over the phone or online.

·         Tailored projects & consulting: We offer a variety of bespoke services in coordination with Elliott & Associates Research Global Markets regional research teams, including market-entry evaluation, executive memos, monitoring support, strategic goal-setting, country assessments, and sector-intensive comparative risk scenario-setting.

·         Regional and thematic research products: Our group's flagship product is Energy Trend watch, which is furnished to clients weekly. Our clients also receive Elliott & Associates Research Global Markets suite of daily, weekly, and monthly newsletters, varying from event-based notes to forward-looking regional and global viewpoints.

Elliott Associates Research Global Markets: Corporate Advisory Services

Approach

The Corporate Advisory Services team aids operating companies and strategic investors pinpoint, evaluate, and predict political risks when entering into or expanding within global markets. Elliott & Associates Research Global Markets integrated research platform can be adapted for every customer based on its particular business model, risk-capacity level, and industry classification.

Primary Services

·         Event-based monitoring and evaluation to stay up-to-date on political developments worldwide;

·         Quantitative risk measurements and assessments to integrate the business climate across national boundaries;

·         Country risk-evaluations for market entry and transaction-related due diligence; and

·         Consulting services to combine political risk management with customer's strategy and operations.