I met this morning with the head of a national ultra high net worth service firm in Chicago - which is really the core of their national practice. They serve clients with over $500mm and have as clients over 75% of the Midwest's billionaire families and individuals.
Their core business is estate planning strategies, family office services and setting up family investment partnerships. Business is very good and growing rapidly. They are well established and benefit from significant barriers to entry for competitors.
He made a couple of interesting observations:
- The main concern of his clients is instilling good values into their children. This is however, he said, next to impossible once a liquidity event occur. The only strategy that seems to work is addressing these issues when there is still an active family business.
This topic is a good one for HNW and wealth management marketing in general.
- One of the most successful marketing and client development tools they have developed is bringing together key executives from family offices for twice a year day or two day events. They have cut back on presentations at these events and instead work to encourage personal interactions and networking between the attendees. They have created a highly confidential environment where people can share freely.
Finally, he noted that one of the keys to their success is their background in closely-held businesses. This has grounded them in the core skills needed. He also said that, generally, the young, ultra HNW clients are almost impossible to work with. They are just "smarter then everyone else" so will not take guidance. Ah youth!
3/12/08
Getting New HNW Clients from Financial Times
It's got many nuggets so I reproduce in toto:
By Ian Driscoll
Published: November 20 2007
Once a year, the Cleveland office of private bank The Glenmede Trust invites clients and prospective clients fly-fishing at an exclusive club in north-western Ohio. The all-day outing and lunch comes with the imprimatur of the bank's Philadelphia headquarters, which encourages its satellite offices to sponsor locally flavoured events.
"It has become something that people want to attend," says Chip Wilson, the bank's client services director.
He attributes the event's effectiveness to the mix of current and potential clients. "If your existing clients are your best referral sources, it's always good to have them mingling with prospective clients," he says.
But co-mingling existing and prospective clients is just part of the equation. "Whether aimed at clients or intermediaries, you have to find something that is somewhat different," Mr Wilson says. "And inviting them to another lecture on the current state of the economy doesn't light their fire."
He offers another clue as to why events such as the fly-fishing day are small yet essential elements in Glenmede's marketing effort: "Our differentiation is very hard to articulate in a print advertisement."
For private banks, courting customers can be an arduous process, one that may last several years. Complicating this is the desire for anonymity that many of the wealthy seek. Brand building may cultivate awareness, but when it comes to wooing prospective clients and getting them to sign on the dotted line, most banks rely on three tools: intermediaries, entertaining and referrals.
Known in industry jargon as "centres of influence", intermediaries are often viewed by clients as impartial advisers. "At the high end of the private banking model," says Carol Pepper, an industry veteran and family office head, "getting a name through an accountant or a lawyer is an effective way to reach potential clients."
Not only do private banks develop these relationships through one-on-one information sessions, but some also create targeted advertising for intermediaries.
"We do have specific adverts for capability awareness aimed at lawyers and CPAs," says Doug Regan, group president of wealth management at Northern Trust. "The advertising goes to centres of influence such as trade journals, or to where we could highlight our expertise in an area like estate planning."
Glenmede's Mr Wilson says his bank hosts a variety of engagements for intermediaries. Events range from a breakfast forum with the American College of Trust and Estate Counsel to less industry-specific talks with outside speakers such as Michael Beschloss, a presidential historian and author of several books.
The process can be very segmented, allowing banks to "speak" directly to certain existing and potential clients. UBS in particular has attracted new business because of its long-standing sponsorship of various art-related events.
"Our clients have different interests - art, philanthropy, music - and you have to communicate in a language that they understand," says UBS's John Strauss, head of private wealth management and chairman of the private bank. To that end, the bank invites some of its most important existing (and prospective) clients to Art Basel and Art Basel Miami.
In New York, the bank holds dinners or lectures where the guest numbers range from 15 to 40. The topic is not always art. Fouad Ajami, the Johns Hopkins University Middle East expert, spoke at one such event, a dinner followed by a Q&A. At these events says Mr Strauss, "the bank isn't talking about UBS. What we are hopefully conveying is that we are thinking on multiple levels."
When it comes to the ultra-high-net worth sector, Northern Trust's Mr Regan believes referrals are the gold standard. "While a brand-building campaign can help foster an image of solidity, giving your life savings to an organisation is a very intimate and personal process," he says. "The more the bank emphasis new services for its existing clients and keeps its attention on them, the more likely the bank is to benefit from referrals."
Northern Trust's wealth management group handles clients with minimum assets of $100m. Mr Regan says the unit recently launched a series of new initiatives for these ultra-high-net worth individuals. One such programme, titled "Inspiring Human Capital", aims to help families communicate their values to the next generation. Offerings like these, he says, "create a new kind of appreciation for the organisation", one that clients pass on to other wealthy individuals outside the Northern Trust fold.
Within its ultra-high-net-worth group, three quarters of Northern Trust's clients are referred through existing clients, says Mr Regan. Other banks claim referral rates that are equally high. So why do so many spend considerable sums on brand advertising? In fact, not all do.
JPMorgan Private Bank does not advertise, says a spokesman, adding that its existing customers are its best selling tool. That doesn't surprise Lucian Camp, chairman of the London-based financial advertising agency CCHM: Ping. "At the top, there may be some banks that will tarnish their image if they advertise," says Mr Camp.
However, he believes what holds for most advertisers also holds for most private banks. "Familiarity breeds favourability," he says, "and that's just as true of luxury brands as it is of other brands. We scarcely encounter these institutions unless they advertise. Given their invisibility and intangibility, they need to advertise."
One private bank heeding that kind of advice is the former US Trust. Now part of Bank of America, the renamed US Trust, Bank of America Wealth Management recently launched a $25mnational advertising campaign. Following the dissonance caused by its sale to Charles Schwab and then to Bank of America, the brand needed to be burnished.
In their print form, the adverts are a refreshing change. Eschewed are the wood panelled boardrooms and impeccably dressed bankers standing before oil paintings of their fiduciary ancestors. Absent, too, are the Bauhaus-like contemporary office settings also common to much of the industry's advertising.
Instead, the backdrops to US Trust's "New Face of Wealth" campaign, with its then-and-now undertones, include one advert featuring an everyday diner. To one side is a smaller image of a man and his extensive wine collection. The implication is that while the entrepreneur boasts a 2,000-bottle cellar, his values are solidly meatloaf.
The campaign is in part a response to several rounds of research. US Trust learned that both old and, primarily, new wealthy clients "have a core set of values that go back to their roots. And they want to deploy these values across all dimensions of their success - philanthropy, investing and their family," says Raj Seshadri, executive vice-president for strategy and marketing at the bank.
It remains to be seen if US Trust's focus on values succeeds. But its intent is to build not only brand but also consideration, says Ms Seshadri.
One way to build that consideration is through the constant "noise" of advertising. It's especially important, say some bankers, when the sell cycle can be anything from three months to four years. And unlike smaller banks and wealth providers that may face budgetary pressures to produce content-heavy advertising, the big ones have the resources to run more subliminal campaigns.
"It takes an average of 18 months to develop a new relationship, so that means it sometimes takes three to four years for a client to understand the conviction we have to serve them," says Mr Strauss of UBS. "Many people were very concentrated in an activity that created a large pool of assets. At that point they are experts in making widgets but not choosing a wealth provider."
But perhaps most important is a message that connects with the audience, such as UBS's "You and Us" campaign.
"The way we portray the firm is by using two people - that the relationship is about two people and not about the thousands of people and the deep resources the firm can offer," says Mr Strauss.
That portrayal worked, he adds, because feedback from customers shows "we have created a certain expectation that we will listen to our clients. The brand is one of our most important vehicles for acquiring new relationships".
Over at the much smaller Glenmede, where the bulk of business comes from referrals, "there's a tremendous debate about advertising", says Mr Wilson.
But he offers one reason why the bank will continue to advertise, and it is one that other bankers say applies to their institutions: "Our advertising should validate a client's decision to work with Glenmede."
By Ian Driscoll
Published: November 20 2007
Once a year, the Cleveland office of private bank The Glenmede Trust invites clients and prospective clients fly-fishing at an exclusive club in north-western Ohio. The all-day outing and lunch comes with the imprimatur of the bank's Philadelphia headquarters, which encourages its satellite offices to sponsor locally flavoured events.
"It has become something that people want to attend," says Chip Wilson, the bank's client services director.
He attributes the event's effectiveness to the mix of current and potential clients. "If your existing clients are your best referral sources, it's always good to have them mingling with prospective clients," he says.
But co-mingling existing and prospective clients is just part of the equation. "Whether aimed at clients or intermediaries, you have to find something that is somewhat different," Mr Wilson says. "And inviting them to another lecture on the current state of the economy doesn't light their fire."
He offers another clue as to why events such as the fly-fishing day are small yet essential elements in Glenmede's marketing effort: "Our differentiation is very hard to articulate in a print advertisement."
For private banks, courting customers can be an arduous process, one that may last several years. Complicating this is the desire for anonymity that many of the wealthy seek. Brand building may cultivate awareness, but when it comes to wooing prospective clients and getting them to sign on the dotted line, most banks rely on three tools: intermediaries, entertaining and referrals.
Known in industry jargon as "centres of influence", intermediaries are often viewed by clients as impartial advisers. "At the high end of the private banking model," says Carol Pepper, an industry veteran and family office head, "getting a name through an accountant or a lawyer is an effective way to reach potential clients."
Not only do private banks develop these relationships through one-on-one information sessions, but some also create targeted advertising for intermediaries.
"We do have specific adverts for capability awareness aimed at lawyers and CPAs," says Doug Regan, group president of wealth management at Northern Trust. "The advertising goes to centres of influence such as trade journals, or to where we could highlight our expertise in an area like estate planning."
Glenmede's Mr Wilson says his bank hosts a variety of engagements for intermediaries. Events range from a breakfast forum with the American College of Trust and Estate Counsel to less industry-specific talks with outside speakers such as Michael Beschloss, a presidential historian and author of several books.
The process can be very segmented, allowing banks to "speak" directly to certain existing and potential clients. UBS in particular has attracted new business because of its long-standing sponsorship of various art-related events.
"Our clients have different interests - art, philanthropy, music - and you have to communicate in a language that they understand," says UBS's John Strauss, head of private wealth management and chairman of the private bank. To that end, the bank invites some of its most important existing (and prospective) clients to Art Basel and Art Basel Miami.
In New York, the bank holds dinners or lectures where the guest numbers range from 15 to 40. The topic is not always art. Fouad Ajami, the Johns Hopkins University Middle East expert, spoke at one such event, a dinner followed by a Q&A. At these events says Mr Strauss, "the bank isn't talking about UBS. What we are hopefully conveying is that we are thinking on multiple levels."
When it comes to the ultra-high-net worth sector, Northern Trust's Mr Regan believes referrals are the gold standard. "While a brand-building campaign can help foster an image of solidity, giving your life savings to an organisation is a very intimate and personal process," he says. "The more the bank emphasis new services for its existing clients and keeps its attention on them, the more likely the bank is to benefit from referrals."
Northern Trust's wealth management group handles clients with minimum assets of $100m. Mr Regan says the unit recently launched a series of new initiatives for these ultra-high-net worth individuals. One such programme, titled "Inspiring Human Capital", aims to help families communicate their values to the next generation. Offerings like these, he says, "create a new kind of appreciation for the organisation", one that clients pass on to other wealthy individuals outside the Northern Trust fold.
Within its ultra-high-net-worth group, three quarters of Northern Trust's clients are referred through existing clients, says Mr Regan. Other banks claim referral rates that are equally high. So why do so many spend considerable sums on brand advertising? In fact, not all do.
JPMorgan Private Bank does not advertise, says a spokesman, adding that its existing customers are its best selling tool. That doesn't surprise Lucian Camp, chairman of the London-based financial advertising agency CCHM: Ping. "At the top, there may be some banks that will tarnish their image if they advertise," says Mr Camp.
However, he believes what holds for most advertisers also holds for most private banks. "Familiarity breeds favourability," he says, "and that's just as true of luxury brands as it is of other brands. We scarcely encounter these institutions unless they advertise. Given their invisibility and intangibility, they need to advertise."
One private bank heeding that kind of advice is the former US Trust. Now part of Bank of America, the renamed US Trust, Bank of America Wealth Management recently launched a $25mnational advertising campaign. Following the dissonance caused by its sale to Charles Schwab and then to Bank of America, the brand needed to be burnished.
In their print form, the adverts are a refreshing change. Eschewed are the wood panelled boardrooms and impeccably dressed bankers standing before oil paintings of their fiduciary ancestors. Absent, too, are the Bauhaus-like contemporary office settings also common to much of the industry's advertising.
Instead, the backdrops to US Trust's "New Face of Wealth" campaign, with its then-and-now undertones, include one advert featuring an everyday diner. To one side is a smaller image of a man and his extensive wine collection. The implication is that while the entrepreneur boasts a 2,000-bottle cellar, his values are solidly meatloaf.
The campaign is in part a response to several rounds of research. US Trust learned that both old and, primarily, new wealthy clients "have a core set of values that go back to their roots. And they want to deploy these values across all dimensions of their success - philanthropy, investing and their family," says Raj Seshadri, executive vice-president for strategy and marketing at the bank.
It remains to be seen if US Trust's focus on values succeeds. But its intent is to build not only brand but also consideration, says Ms Seshadri.
One way to build that consideration is through the constant "noise" of advertising. It's especially important, say some bankers, when the sell cycle can be anything from three months to four years. And unlike smaller banks and wealth providers that may face budgetary pressures to produce content-heavy advertising, the big ones have the resources to run more subliminal campaigns.
"It takes an average of 18 months to develop a new relationship, so that means it sometimes takes three to four years for a client to understand the conviction we have to serve them," says Mr Strauss of UBS. "Many people were very concentrated in an activity that created a large pool of assets. At that point they are experts in making widgets but not choosing a wealth provider."
But perhaps most important is a message that connects with the audience, such as UBS's "You and Us" campaign.
"The way we portray the firm is by using two people - that the relationship is about two people and not about the thousands of people and the deep resources the firm can offer," says Mr Strauss.
That portrayal worked, he adds, because feedback from customers shows "we have created a certain expectation that we will listen to our clients. The brand is one of our most important vehicles for acquiring new relationships".
Over at the much smaller Glenmede, where the bulk of business comes from referrals, "there's a tremendous debate about advertising", says Mr Wilson.
But he offers one reason why the bank will continue to advertise, and it is one that other bankers say applies to their institutions: "Our advertising should validate a client's decision to work with Glenmede."
Goldman's Latest - Private Banking
Here's a shortened article"
'Goldman Hires Pulitzer-Winning Journalist to Snare Millionaires
Feb. 22 (Bloomberg) -- The conference started with a cookout at the Mandarin Oriental hotel on Elbow Beach in
Bermuda and ended with a talk by 23-year-old Lauren Bush, an anti-hunger activist, former model and niece to President George W. Bush. In between, executives at Goldman Sachs Group Inc. taught scions of wealthy families how to invest in hedge funds.
Last October's ``Next Generation'' gathering was a small prod in Goldman Sachs's push into the lucrative profession of private banking. It's an area of finance that New York-based Goldman -- the world's largest securities firm by revenue and profit -- doesn't dominate. Instead, Swiss and U.S. banks reign.
Goldman Sachs is shooting for individuals with $10 million in financial assets or more -- not counting the beach house, Lamborghini or art collection. The set of ultra-rich isn't tiny: Individuals with a minimum of $30 million totaled 94,970 worldwide in 2006, up from 85,400 in 2005, according to a resort last year by Merrill Lynch & Co. and Cap Gemini SA. Their assets rose 17 percent to $13.1 trillion in the same period.
``Rich people as a business model are sensational,'' says Russ Prince, president of Prince & Associates Inc., a Redding, Connecticut-based consultant on financial services for the wealthy. ``They're willing to pay to make it easy on themselves. They don't fight over fees if they see value.''
200 Billionaires
Goldman Sachs Chief Executive Officer Lloyd Blankfein says he's pursuing fortunes in Asia, Latin America and Russia.
Blankfein put the best face on his company's status as an also-ran in wealth management. ``I'm happy to say we're not No. 1,'' he said. ``We're not maxed out. There's a long, long way for us to go, and we're going to go there.''
Spearheading the push is Peter Scaturro, 47 Blankfein, 53, hired Scaturro in July after private banking stints at New York-based U.S. Trust Corp. (once owned by Charles Schwab Corp. and now part of Bank of America Corp.) and Citigroup, where Weill was his boss. Fees earned for managing the money of the rich, cutting them in on private equity deals and planning their estates might ease Goldman Sachs's heavy reliance on its own trading.
Goldman calls itself an investment bank, but in its 2007 fiscal year, ended on Nov. 30, just 16 percent of its $46 billion in revenue came from advising on mergers and helping companies raise capital. Another 16 percent came from money management and brokerage, a segment that includes parts of private banking. A full two-thirds, or $31 billion, came from trading, making Goldman look more like a giant hedge fund than any kind of bank.
That reliance on trading can be a liability when markets stumble and recession looms.
Complicating Goldman Sachs's pitch to the rich is last year's stumble by some of its hedge funds. Global Alpha -- once its largest, with $10 billion of assets -- was hammered by unwise bets in volatile markets and fell about 40 percent last year, according to a report to investors obtained by Bloomberg News.
Goldman spokeswoman Andrea Raphael confirms that some private banking clients are invested in Global Alpha, and Blankfein alluded to the fund's plunge when he was asked about private banking at the New York conference. ``We feel terrible about it,'' Blankfein said of the fund's performance.
One lure for clients may be Goldman Sachs's ability to avoid other pitfalls. It's one of the few financial companies that hasn't had to take a reputation-sullying writedown recently. Zurich-based UBS AG, ranked the No. 1 wealth manager by Scorpio, wrote down $14 billion in subprime mortgage investments in January. UBS said it planned to raise $12 billion from the government of Singapore and an unidentified Middle Eastern investor.
Rockefeller Methods
As Blankfein seeks multimillionaire clients, he'll be battling more than just Swiss banks such as UBS. An old-fashioned idea, the so-called family office, is making a comeback. Traditionally, a family office handled investments, taxes and estate planning for opulent clans. Rockefeller & Co., one of the world's oldest, got its start in 1884 when oil baron John D. Rockefeller hired two men to handle his personal affairs.
These days, family offices cater to more than one family to gain economies of scale.
Assets supervised by family offices in North America grew 20 percent to $305 billion in 2006 from 2005, according to the Family Wealth Alliance LLC in Wheaton, Illinois. Almost one firm in five boosted assets more than 50 percent.
The rivalry cuts both ways. Tom Livergood, CEO of the alliance, asked family offices in 2007 to name the firm they bumped into most when making pitches to wealthy families. The most frequent answer was Goldman Sachs.
Smelling a Deal
``Goldman is a formidable competitor,'' Livergood says. ``They smell when a deal is going to close.'' Elizabeth Nesvold, founder of Silver Lane Advisors, a New York-based investment bank that serves the financial services industry, says Goldman Sachs's cachet is real. ``People love to say, 'Goldman showed me a deal,''' she says.
Many clients come to Goldman Sachs for a chance to invest in private companies the firm has identified as smart buys. In April 2006, Goldman, along with private clients and investors in Goldman funds, paid $2.6 billion for a 5 percent stake in Beijing-based Industrial & Commercial Bank of China Ltd.
ICBC sold shares to the public six months later, giving Goldman a paper profit of almost $4 billion. During the past three years, Goldman says its private clients have committed more than $25 billion to such deals.
`Perfect Profile'
Goldman Sachs has been building up its private banking capabilities in recent years. In late 2006, it opened a commercial bank in the U.S., letting it manage cash, sell mortgages and take deposits, which have grown to $16.4 billion. It got a similar banking license in Ireland last year. Over the past two years, it has hired about 100 private wealth advisers, bringing the total to 600.
Among the new Goldman Sachs hires: Sheryl WuDunn, 48, who shared a 1990 Pulitzer Prize with her husband, Nicholas Kristof, for reporting on Beijing's Tiananmen Square protests for the New York Times. Before becoming a journalist, she was a loan officer at Bankers Trust Co. (now part of Frankfurt-based Deutsche Bank AG) and got a Master of Business Administration from Harvard Business School in Boston. And she's worldly and intelligent, says Scaturro. ``She's the perfect profile,'' he says.
Expanding Market
The trend in private banking is to divide the roles: one team for asset management and another for attracting new clients and handling customer service. That may not always work with multimillionaires, says former Goldman Sachs private banker Nicolas Sarkis, founder of AlphaOne Partners LLP, an investment advisory firm in London. He worked in Goldman's private wealth unit from 1997 to 2005.
``Very wealthy clients want to speak directly to the person who is managing their money, not a salesperson,'' Sarkis says.
Goldman Sachs may have a natural advantage when it comes to recruiting some clients. In its investment banking role, it assists with initial public offerings. The founders of companies going public often turn to Goldman for personal investment advice.
``The source of their private banking business has always been their investment bank,'' says Scorpio analyst Graham Harvey.
In private wealth, Goldman Sachs is attacking a growth industry. The market is expanding as the rich get richer in the U.S. and Europe and new dynasties are created in Asia and Latin America, two private banking hot spots.
To understand how lucrative private banking is, consider New York-based Citigroup. It has both a brokerage, Smith Barney, and a private bank. The brokerage had $1.55 trillion in client assets at the end of 2007, more than six times the $236 billion that Citigroup's private bank had. Even so, Smith Barney's earnings were $1.35 billion last year, just over two times the $623 million the private bank earned.
Credit Suisse in 2001 bought Chicago-based Frye-Louis Capital Management Inc. The firm was co-founded in 1991 by Jeffry Louis III, a descendant of Samuel C. Johnson, who in 1886 founded S.C. Johnson & Son Inc., now the maker of Windex cleaner and Ziploc bags. Frye-Louis clients have $30 million or more each.
Follow the Money
``Their real goal is to gather the assets because that's where the money is,'' says Patricia Soldano, president of Cymric Family Office Services in Costa Mesa, California. ``Our culture is a service culture, not a products culture.''
Like most family offices, Cymric charges clients a percentage of assets under management: 25 basis points to 100 basis points. (A basis point is 0.01 percentage point.) Charging a family with $50 million in assets 25 basis points would bring in $125,000 a year. Family offices often charge extra for special projects, such as overseeing construction of a vacation home or archiving family photographs.
Scaturro says Goldman Sachs offers clients plenty of choice. ``Goldman has made a serious commitment to open architecture,'' he says during an interview in his 41st-floor office at One New York Plaza, on the southern tip of Manhattan.
He says one-third of his unit's private wealth assets are in funds run by independent managers. As for hedge funds, clients have $29 billion in Goldman funds and $22 billion in non-Goldman funds, Scaturro says. It shows Goldman's system is open, he says.
With funds that are performing well, Goldman Sachs can win more rich clients. That would add to the firm's income from management fees and help provide extra profit in lean years. Like most hedge funds, Goldman funds charge a management fee of roughly 2 percent of assets, regardless of performance.
Goldman has been managing money for the wealthy since 1869, when founder Marcus Goldman invested for his family. It added outside clients in 1906 after selling shares to the public for Sears, Roebuck & Co. Afterward, Goldman helped Sears's founders manage their windfall.
The wealth management unit got a boost in 1967 when a future Goldman partner named Roy Zuckerberg took it over. He kept the Private Client Services group small and picked brokers carefully, according to a former member of the group. Zuckerberg, 71, became a vice chairman in 1997 and left Goldman in 1998. He didn't return telephone calls seeking comment.
$10 Million a Year
In the past decade, Goldman Sachs's private bank has been in flux. Zuckerberg's group of bankers got much of their pay in commissions, keeping a portion of the fee that Goldman charged clients for buying and selling securities, according to the former broker. Whether they brought in new clients, retained them and made them money also helped determine pay, he says.
By the 1990s, some of the best brokers were taking home $10 million a year, the ex-broker says.
Just before Goldman Sachs became a publicly traded company in 1999, the firm brought in McKinsey & Co., the New York-based management consulting firm, to help increase profits from the private wealth group, according to the former broker. McKinsey recommended cutting the portion of pay that came from commissions and giving more weight to other factors, such as winning new clients, says the ex-broker.
`Red Ink'
The change in pay structure prompted many managers to leave, the former broker says. Many took their clients with them, and in Europe, the private banking business started to lose money, according to two people familiar with the situation. ``It was in red ink,'' says one.
Goldman's Raphael declined to comment.
Goldman Sachs asked McKinsey to come back in 2005 to examine the European business, and the consultants recommended that the firm require brokers to focus almost exclusively on finding new clients, the two people say. Brokers would then pass the assets along to Goldman fund managers. This way, Goldman could build the business faster and manage clients' money more efficiently, according to one of the two familiar with the situation.
Goldman made the change in Europe. In the U.S., commissions still determined much of the brokers' pay, according to a person familiar with the matter. Many brokers who wanted to continue managing money left, according to the former broker. McKinsey spokesman Christopher Colford said, ``We never comment on any work we do for clients.''
`Payday'
For all the glamour implied by the term ``private banker,'' some of the work can be mundane. ``My job was a lot of bending over backward and kissing butt,'' says a former private banker who worked at City
National Corp. in Beverly Hills, California. The banker says he spent much of his time filling out loan paperwork and pitching clients to invest with City National, generating fees. ``Your ultimate goal is to capture the investments,'' he says. ``That's where the payday is.''
City National spokesman Cary Walker declined to comment.
Christopher Trokey, 35, says Goldman Sachs is no different. He worked in private wealth management at the firm from 2000 to 2002 before being dismissed in a round of job cuts. He says he remembers a class where trainers referred to the aspiring private bankers as the sales force.
``They said, 'sales force,' and I said, 'Who are those guys?' and it was us.''
GenSpring
Now, Trokey works in New York for GenSpring Family Offices, a unit of Atlanta-based SunTrust Banks Inc. GenSpring says it can get clients into the best third-party hedge funds. Like other family offices, GenSpring doesn't have its own funds.
Last May, the company organized a men's weekend in Las Vegas for client families. Jamie Dinan, founder of York Capital Management LLC, a $13 billion hedge fund firm based in Manhattan, was one of the speakers. His flagship fund returned an annualized 17.2 percent from inception in October 1991 through June 30, 2006. Some of his clients are GenSpring families.
Hap Perry, whose extended family made its fortune in Ballantine beer, started GenSpring in 1990 in Palm Beach, Florida. In 2005, he hired Maria Elena Lagomasino, former head of JPMorgan Chase's private bank, to run it.
To woo the rich, GenSpring opened an office on 54th Street in Manhattan, just behind the Museum of Modern Art, in a townhouse that once belonged to the Rockefellers. GenSpring redecorated, putting in bamboo floors and tables.
`Lose $12 Million'
There are even board games. GenSpring created ``Shirtsleeves to Shirtsleeves,'' which challenges players to keep a fortune from being usurped by the tax authorities and squandered by grandchildren.
``Your daughter Brittany just returned from Vegas announcing her marriage,'' reads one of the game cards. ``You realize that you never mentioned the word 'pre-nup.' They get divorced a year later, and he takes half her trust money. LOSE $12 million.''
To hear Lagomasino tell it, being an adviser to wealthy families is a calling, not unlike the priesthood or social work. ``This is like a vocation,'' she says.
The high-mindedness may be working. GenSpring, which charges a percentage of assets under supervision for all of its services, has 600 families as clients. It says assets have doubled to $15 billion from $7.5 billion in less than two years.
Quitting Wall Street
David Rosenberg is another private banker who quit Wall Street for a family office. He was chief investment officer at Citigroup's U.S. private bank in New York. In January, he joined Threshold Group, a family office in Gig Harbor, Washington, on the wooded shores of Puget Sound.
Threshold makes many private banks look middle class. The company pursues families with financial assets of more than $100 million and a total net worth of at least $200 million.
George Russell, who started Threshold, made about $1 billion after selling the family business, pension adviser Frank Russell Co., to Milwaukee-based Northwestern Mutual Life Insurance Co. in 1998.
Rosenberg, 49, says he moved to a tiny, rain-soaked town across the country and took a pay cut because family offices are the future. Banks care more about getting wealthy clients' assets into their hedge funds, he says.
``It's not about long-term relationships,'' Rosenberg says.
Scaturro, meantime, is sticking with the big banks. The recent market turmoil plays to Goldman's strengths, he says. ``With complexity and volatility comes a flight to quality,'' Scaturro says.
If Scaturro is right, then Goldman Sachs's bid for the rich will be a no-brainer. The Standard & Poor's 500 Index was down 8.6 percent for the year as of yesterday. A prolonged slide, though, might be too much complexity, even for
Goldman."
'Goldman Hires Pulitzer-Winning Journalist to Snare Millionaires
Feb. 22 (Bloomberg) -- The conference started with a cookout at the Mandarin Oriental hotel on Elbow Beach in
Bermuda and ended with a talk by 23-year-old Lauren Bush, an anti-hunger activist, former model and niece to President George W. Bush. In between, executives at Goldman Sachs Group Inc. taught scions of wealthy families how to invest in hedge funds.
Last October's ``Next Generation'' gathering was a small prod in Goldman Sachs's push into the lucrative profession of private banking. It's an area of finance that New York-based Goldman -- the world's largest securities firm by revenue and profit -- doesn't dominate. Instead, Swiss and U.S. banks reign.
Goldman Sachs is shooting for individuals with $10 million in financial assets or more -- not counting the beach house, Lamborghini or art collection. The set of ultra-rich isn't tiny: Individuals with a minimum of $30 million totaled 94,970 worldwide in 2006, up from 85,400 in 2005, according to a resort last year by Merrill Lynch & Co. and Cap Gemini SA. Their assets rose 17 percent to $13.1 trillion in the same period.
``Rich people as a business model are sensational,'' says Russ Prince, president of Prince & Associates Inc., a Redding, Connecticut-based consultant on financial services for the wealthy. ``They're willing to pay to make it easy on themselves. They don't fight over fees if they see value.''
200 Billionaires
Goldman Sachs Chief Executive Officer Lloyd Blankfein says he's pursuing fortunes in Asia, Latin America and Russia.
Blankfein put the best face on his company's status as an also-ran in wealth management. ``I'm happy to say we're not No. 1,'' he said. ``We're not maxed out. There's a long, long way for us to go, and we're going to go there.''
Spearheading the push is Peter Scaturro, 47 Blankfein, 53, hired Scaturro in July after private banking stints at New York-based U.S. Trust Corp. (once owned by Charles Schwab Corp. and now part of Bank of America Corp.) and Citigroup, where Weill was his boss. Fees earned for managing the money of the rich, cutting them in on private equity deals and planning their estates might ease Goldman Sachs's heavy reliance on its own trading.
Goldman calls itself an investment bank, but in its 2007 fiscal year, ended on Nov. 30, just 16 percent of its $46 billion in revenue came from advising on mergers and helping companies raise capital. Another 16 percent came from money management and brokerage, a segment that includes parts of private banking. A full two-thirds, or $31 billion, came from trading, making Goldman look more like a giant hedge fund than any kind of bank.
That reliance on trading can be a liability when markets stumble and recession looms.
Complicating Goldman Sachs's pitch to the rich is last year's stumble by some of its hedge funds. Global Alpha -- once its largest, with $10 billion of assets -- was hammered by unwise bets in volatile markets and fell about 40 percent last year, according to a report to investors obtained by Bloomberg News.
Goldman spokeswoman Andrea Raphael confirms that some private banking clients are invested in Global Alpha, and Blankfein alluded to the fund's plunge when he was asked about private banking at the New York conference. ``We feel terrible about it,'' Blankfein said of the fund's performance.
One lure for clients may be Goldman Sachs's ability to avoid other pitfalls. It's one of the few financial companies that hasn't had to take a reputation-sullying writedown recently. Zurich-based UBS AG, ranked the No. 1 wealth manager by Scorpio, wrote down $14 billion in subprime mortgage investments in January. UBS said it planned to raise $12 billion from the government of Singapore and an unidentified Middle Eastern investor.
Rockefeller Methods
As Blankfein seeks multimillionaire clients, he'll be battling more than just Swiss banks such as UBS. An old-fashioned idea, the so-called family office, is making a comeback. Traditionally, a family office handled investments, taxes and estate planning for opulent clans. Rockefeller & Co., one of the world's oldest, got its start in 1884 when oil baron John D. Rockefeller hired two men to handle his personal affairs.
These days, family offices cater to more than one family to gain economies of scale.
Assets supervised by family offices in North America grew 20 percent to $305 billion in 2006 from 2005, according to the Family Wealth Alliance LLC in Wheaton, Illinois. Almost one firm in five boosted assets more than 50 percent.
The rivalry cuts both ways. Tom Livergood, CEO of the alliance, asked family offices in 2007 to name the firm they bumped into most when making pitches to wealthy families. The most frequent answer was Goldman Sachs.
Smelling a Deal
``Goldman is a formidable competitor,'' Livergood says. ``They smell when a deal is going to close.'' Elizabeth Nesvold, founder of Silver Lane Advisors, a New York-based investment bank that serves the financial services industry, says Goldman Sachs's cachet is real. ``People love to say, 'Goldman showed me a deal,''' she says.
Many clients come to Goldman Sachs for a chance to invest in private companies the firm has identified as smart buys. In April 2006, Goldman, along with private clients and investors in Goldman funds, paid $2.6 billion for a 5 percent stake in Beijing-based Industrial & Commercial Bank of China Ltd.
ICBC sold shares to the public six months later, giving Goldman a paper profit of almost $4 billion. During the past three years, Goldman says its private clients have committed more than $25 billion to such deals.
`Perfect Profile'
Goldman Sachs has been building up its private banking capabilities in recent years. In late 2006, it opened a commercial bank in the U.S., letting it manage cash, sell mortgages and take deposits, which have grown to $16.4 billion. It got a similar banking license in Ireland last year. Over the past two years, it has hired about 100 private wealth advisers, bringing the total to 600.
Among the new Goldman Sachs hires: Sheryl WuDunn, 48, who shared a 1990 Pulitzer Prize with her husband, Nicholas Kristof, for reporting on Beijing's Tiananmen Square protests for the New York Times. Before becoming a journalist, she was a loan officer at Bankers Trust Co. (now part of Frankfurt-based Deutsche Bank AG) and got a Master of Business Administration from Harvard Business School in Boston. And she's worldly and intelligent, says Scaturro. ``She's the perfect profile,'' he says.
Expanding Market
The trend in private banking is to divide the roles: one team for asset management and another for attracting new clients and handling customer service. That may not always work with multimillionaires, says former Goldman Sachs private banker Nicolas Sarkis, founder of AlphaOne Partners LLP, an investment advisory firm in London. He worked in Goldman's private wealth unit from 1997 to 2005.
``Very wealthy clients want to speak directly to the person who is managing their money, not a salesperson,'' Sarkis says.
Goldman Sachs may have a natural advantage when it comes to recruiting some clients. In its investment banking role, it assists with initial public offerings. The founders of companies going public often turn to Goldman for personal investment advice.
``The source of their private banking business has always been their investment bank,'' says Scorpio analyst Graham Harvey.
In private wealth, Goldman Sachs is attacking a growth industry. The market is expanding as the rich get richer in the U.S. and Europe and new dynasties are created in Asia and Latin America, two private banking hot spots.
To understand how lucrative private banking is, consider New York-based Citigroup. It has both a brokerage, Smith Barney, and a private bank. The brokerage had $1.55 trillion in client assets at the end of 2007, more than six times the $236 billion that Citigroup's private bank had. Even so, Smith Barney's earnings were $1.35 billion last year, just over two times the $623 million the private bank earned.
Credit Suisse in 2001 bought Chicago-based Frye-Louis Capital Management Inc. The firm was co-founded in 1991 by Jeffry Louis III, a descendant of Samuel C. Johnson, who in 1886 founded S.C. Johnson & Son Inc., now the maker of Windex cleaner and Ziploc bags. Frye-Louis clients have $30 million or more each.
Follow the Money
``Their real goal is to gather the assets because that's where the money is,'' says Patricia Soldano, president of Cymric Family Office Services in Costa Mesa, California. ``Our culture is a service culture, not a products culture.''
Like most family offices, Cymric charges clients a percentage of assets under management: 25 basis points to 100 basis points. (A basis point is 0.01 percentage point.) Charging a family with $50 million in assets 25 basis points would bring in $125,000 a year. Family offices often charge extra for special projects, such as overseeing construction of a vacation home or archiving family photographs.
Scaturro says Goldman Sachs offers clients plenty of choice. ``Goldman has made a serious commitment to open architecture,'' he says during an interview in his 41st-floor office at One New York Plaza, on the southern tip of Manhattan.
He says one-third of his unit's private wealth assets are in funds run by independent managers. As for hedge funds, clients have $29 billion in Goldman funds and $22 billion in non-Goldman funds, Scaturro says. It shows Goldman's system is open, he says.
With funds that are performing well, Goldman Sachs can win more rich clients. That would add to the firm's income from management fees and help provide extra profit in lean years. Like most hedge funds, Goldman funds charge a management fee of roughly 2 percent of assets, regardless of performance.
Goldman has been managing money for the wealthy since 1869, when founder Marcus Goldman invested for his family. It added outside clients in 1906 after selling shares to the public for Sears, Roebuck & Co. Afterward, Goldman helped Sears's founders manage their windfall.
The wealth management unit got a boost in 1967 when a future Goldman partner named Roy Zuckerberg took it over. He kept the Private Client Services group small and picked brokers carefully, according to a former member of the group. Zuckerberg, 71, became a vice chairman in 1997 and left Goldman in 1998. He didn't return telephone calls seeking comment.
$10 Million a Year
In the past decade, Goldman Sachs's private bank has been in flux. Zuckerberg's group of bankers got much of their pay in commissions, keeping a portion of the fee that Goldman charged clients for buying and selling securities, according to the former broker. Whether they brought in new clients, retained them and made them money also helped determine pay, he says.
By the 1990s, some of the best brokers were taking home $10 million a year, the ex-broker says.
Just before Goldman Sachs became a publicly traded company in 1999, the firm brought in McKinsey & Co., the New York-based management consulting firm, to help increase profits from the private wealth group, according to the former broker. McKinsey recommended cutting the portion of pay that came from commissions and giving more weight to other factors, such as winning new clients, says the ex-broker.
`Red Ink'
The change in pay structure prompted many managers to leave, the former broker says. Many took their clients with them, and in Europe, the private banking business started to lose money, according to two people familiar with the situation. ``It was in red ink,'' says one.
Goldman's Raphael declined to comment.
Goldman Sachs asked McKinsey to come back in 2005 to examine the European business, and the consultants recommended that the firm require brokers to focus almost exclusively on finding new clients, the two people say. Brokers would then pass the assets along to Goldman fund managers. This way, Goldman could build the business faster and manage clients' money more efficiently, according to one of the two familiar with the situation.
Goldman made the change in Europe. In the U.S., commissions still determined much of the brokers' pay, according to a person familiar with the matter. Many brokers who wanted to continue managing money left, according to the former broker. McKinsey spokesman Christopher Colford said, ``We never comment on any work we do for clients.''
`Payday'
For all the glamour implied by the term ``private banker,'' some of the work can be mundane. ``My job was a lot of bending over backward and kissing butt,'' says a former private banker who worked at City
National Corp. in Beverly Hills, California. The banker says he spent much of his time filling out loan paperwork and pitching clients to invest with City National, generating fees. ``Your ultimate goal is to capture the investments,'' he says. ``That's where the payday is.''
City National spokesman Cary Walker declined to comment.
Christopher Trokey, 35, says Goldman Sachs is no different. He worked in private wealth management at the firm from 2000 to 2002 before being dismissed in a round of job cuts. He says he remembers a class where trainers referred to the aspiring private bankers as the sales force.
``They said, 'sales force,' and I said, 'Who are those guys?' and it was us.''
GenSpring
Now, Trokey works in New York for GenSpring Family Offices, a unit of Atlanta-based SunTrust Banks Inc. GenSpring says it can get clients into the best third-party hedge funds. Like other family offices, GenSpring doesn't have its own funds.
Last May, the company organized a men's weekend in Las Vegas for client families. Jamie Dinan, founder of York Capital Management LLC, a $13 billion hedge fund firm based in Manhattan, was one of the speakers. His flagship fund returned an annualized 17.2 percent from inception in October 1991 through June 30, 2006. Some of his clients are GenSpring families.
Hap Perry, whose extended family made its fortune in Ballantine beer, started GenSpring in 1990 in Palm Beach, Florida. In 2005, he hired Maria Elena Lagomasino, former head of JPMorgan Chase's private bank, to run it.
To woo the rich, GenSpring opened an office on 54th Street in Manhattan, just behind the Museum of Modern Art, in a townhouse that once belonged to the Rockefellers. GenSpring redecorated, putting in bamboo floors and tables.
`Lose $12 Million'
There are even board games. GenSpring created ``Shirtsleeves to Shirtsleeves,'' which challenges players to keep a fortune from being usurped by the tax authorities and squandered by grandchildren.
``Your daughter Brittany just returned from Vegas announcing her marriage,'' reads one of the game cards. ``You realize that you never mentioned the word 'pre-nup.' They get divorced a year later, and he takes half her trust money. LOSE $12 million.''
To hear Lagomasino tell it, being an adviser to wealthy families is a calling, not unlike the priesthood or social work. ``This is like a vocation,'' she says.
The high-mindedness may be working. GenSpring, which charges a percentage of assets under supervision for all of its services, has 600 families as clients. It says assets have doubled to $15 billion from $7.5 billion in less than two years.
Quitting Wall Street
David Rosenberg is another private banker who quit Wall Street for a family office. He was chief investment officer at Citigroup's U.S. private bank in New York. In January, he joined Threshold Group, a family office in Gig Harbor, Washington, on the wooded shores of Puget Sound.
Threshold makes many private banks look middle class. The company pursues families with financial assets of more than $100 million and a total net worth of at least $200 million.
George Russell, who started Threshold, made about $1 billion after selling the family business, pension adviser Frank Russell Co., to Milwaukee-based Northwestern Mutual Life Insurance Co. in 1998.
Rosenberg, 49, says he moved to a tiny, rain-soaked town across the country and took a pay cut because family offices are the future. Banks care more about getting wealthy clients' assets into their hedge funds, he says.
``It's not about long-term relationships,'' Rosenberg says.
Scaturro, meantime, is sticking with the big banks. The recent market turmoil plays to Goldman's strengths, he says. ``With complexity and volatility comes a flight to quality,'' Scaturro says.
If Scaturro is right, then Goldman Sachs's bid for the rich will be a no-brainer. The Standard & Poor's 500 Index was down 8.6 percent for the year as of yesterday. A prolonged slide, though, might be too much complexity, even for
Goldman."
Love and Respect (and Performance) - Marketing Wisdom from Saatchi
You will find below nuggets from some very good Saatchi articles, books and papers on marketing, advertising and new media. Words to ponder as we struggle to build new and compelling brands in investment services and connect with our clients, prospects, partners and referral sources.
And I quote (or paraphrase):
We are in age of screens. Images on the screen touch emotions through stories and experiences must be emotionally compelling. The screen is the new marketplace...making great content for screens is the task.
People relate to brands the way they relate to one another. People treat screens the way they treat other people. To illustrate think about your face-to-face interactions today and then the interactions by phone, email, text, computer, tv and movies.
Our minds and feelings don't easily distinguish between what we see on a screen and what's "real" why we close our eyes at scary or painful scenes.
Like people, the screens that populate our world have different personalities, ambitions and expertise.
Guidelines that Trigger:
- Get personal - quickly
- Get animated - new rule: whatever is static will soon be animated
- Believe in the screen's magic - it can convey emotions and moods like no other form.
- Play music - voices, songs or sound effects make stories come alive. Music is the mood.
- Go for the long term -- your stories must enthrall your audience/clients over and over again. The test -- do they want to see it again? Does it become meaningful to them?
- Love humor - it's an attitude and tone not a quick or cheap joke, it shows professionalism, balance and humility.
Your clients want to see themselves and their stories on screen. They want to feel part of a local, regional and global community.
Screens enable commerce, access to information and speed transactions. Local identities are becoming more important.
Young people will realize the potential of screens and their transforming power.
Screens are where people form communities and hope.
Screen's currency is attention.
Emotional connections transforms brands.
Intimacy is the challenge. It demands time and genuine feeling -- both in short supply -- e.g., attention
We are essentially emotional anyway "emotion leads to action, reason leads to conclusions". In conflict, or decisions, emotion wins everytime.
More than most, the HNW investor trusts their emotions. (My comment. Ed.)
"The key is making genuine emotional connections with communities and the networks they live in. This means getting up close and personal. And no one is going to let you get close enough to 'touch' them unless they respect what you do and who you are...Respect is what you need when you are in for the long haul. Respect looks to performance, reputation and trust as its organizing principals. Together they are inspiring principals for a code of business conduct to lead you forward.
Respect grows out of performance. Performance at each and every interaction. Peak performance as the ultimate table-stake of all table-stakes.
More guides:
Pursue innovation -- Innovation is continuous improvement, for consumers. Every business today is expected to innovate meaningfully while creating value.
Commit to total commitment -- Going the full distance is the price of Respect. The new active consumer judges you at every encounter, every touchpoint, and will punish failure by not coming back.
Make it easy -- The increasing complexity of many goods and services has raised the stakes. The equation is simple. If it’s hard to use, it will die.
Don't hide -- People can only respect you if they know who you are. Remember, in today’s Internet environment there is now here, if you cannot be found -- don’t even try.
Jealously guard your reputation -- Built over a lifetime. Destroyed in an instant. Consumers today are ruthless if you let them down. So don’t.
Get in the lead and stay there -- To be out-front can be lonely and uncomfortable, But remember, the lead husky gets the best view.
Tell the truth -- Be open. Front up. Admit mistakes. Never cover up; it will get you every time. Believe in yourself – at times like this it may be the only thing you have. And at times like this, your reputation is your premium defense.
Nurture integrity -- The corporate shake-ups of the last few years have put the spotlight back on integrity: the integrity of your people, your products, your services, your financial statements and, most importantly, your personal integrity.
Accept responsibility -- Take on the biggest responsibility of all–to make the world a better place for everyone, creating self-esteem, wealth, prosperity, jobs, and choices.
Quality is the measure by which you exceed expectations. Quality is all about standards. Keep it simple: set high standards and then exceed them.
Meet, Beat, Repeat -- Never pull back on service. Service is where transactions are transformed into relationships. It is the first moment of truth.
Deliver great design -- Attention Economy 101. Competition is hot and getting hotter. If you’re not aesthetically stimulating and functionally effective, you just merge into the crowd. You have to be different, not just act different.
Don't underestimate value -- Not just real dollar value but the perception of value. Only when people perceive the value they are getting as higher than the cost will they respect the deal you offer.
Deserve trust -- Consumers want to trust you. They want you to remain true to the ideals and aspirations you share with them.
Practice what you preach -- Never let them down. Never, ever fail the reliability test. Expectations skyrocket: cars always start first time, the coffee’s always hot, the ATM is always open. Today reliability is the door charge for Respect
Without Respect, there is no foundation for any long-term relationship.
Every person we deal with is an emotional human being and yet business had been treating them like numbers. Targets. statistics.
The best brands capture the new emotional connections we were seeking.
Love is about action. It’s about creating a meaningful relationship. It’s a constant process of keeping in touch, working with consumers, understanding them, spending time with them.
Shopping is emotional. Delight at a bargain. Satisfaction at filling the refrigerator. Anyone who thinks shopping is rational has spent too long in the office. Shoppers arrive at the store with hope, anticipation, excitement. The right experience, the perfectly pitched service, ensures they leave enchanted and uplifted. The wrong note triggers resentment and disappointment.
“Most brands do not realize that the consumer is in control now. The need to transform them into something consumers love is the greatest challenge to business and brands today,”
“We are living in an attraction economy and the power to attract consumers is what branding, marketing and advertising is all about. The only way you can do this is with empathy, authenticity and a dedication to creating emotional connections.”
To establish that connection, brands should have — the emotional drivers that stir up consumers.
And I quote (or paraphrase):
We are in age of screens. Images on the screen touch emotions through stories and experiences must be emotionally compelling. The screen is the new marketplace...making great content for screens is the task.
People relate to brands the way they relate to one another. People treat screens the way they treat other people. To illustrate think about your face-to-face interactions today and then the interactions by phone, email, text, computer, tv and movies.
Our minds and feelings don't easily distinguish between what we see on a screen and what's "real" why we close our eyes at scary or painful scenes.
Like people, the screens that populate our world have different personalities, ambitions and expertise.
Guidelines that Trigger:
- Get personal - quickly
- Get animated - new rule: whatever is static will soon be animated
- Believe in the screen's magic - it can convey emotions and moods like no other form.
- Play music - voices, songs or sound effects make stories come alive. Music is the mood.
- Go for the long term -- your stories must enthrall your audience/clients over and over again. The test -- do they want to see it again? Does it become meaningful to them?
- Love humor - it's an attitude and tone not a quick or cheap joke, it shows professionalism, balance and humility.
Your clients want to see themselves and their stories on screen. They want to feel part of a local, regional and global community.
Screens enable commerce, access to information and speed transactions. Local identities are becoming more important.
Young people will realize the potential of screens and their transforming power.
Screens are where people form communities and hope.
Screen's currency is attention.
Emotional connections transforms brands.
Intimacy is the challenge. It demands time and genuine feeling -- both in short supply -- e.g., attention
We are essentially emotional anyway "emotion leads to action, reason leads to conclusions". In conflict, or decisions, emotion wins everytime.
More than most, the HNW investor trusts their emotions. (My comment. Ed.)
"The key is making genuine emotional connections with communities and the networks they live in. This means getting up close and personal. And no one is going to let you get close enough to 'touch' them unless they respect what you do and who you are...Respect is what you need when you are in for the long haul. Respect looks to performance, reputation and trust as its organizing principals. Together they are inspiring principals for a code of business conduct to lead you forward.
Respect grows out of performance. Performance at each and every interaction. Peak performance as the ultimate table-stake of all table-stakes.
More guides:
Pursue innovation -- Innovation is continuous improvement, for consumers. Every business today is expected to innovate meaningfully while creating value.
Commit to total commitment -- Going the full distance is the price of Respect. The new active consumer judges you at every encounter, every touchpoint, and will punish failure by not coming back.
Make it easy -- The increasing complexity of many goods and services has raised the stakes. The equation is simple. If it’s hard to use, it will die.
Don't hide -- People can only respect you if they know who you are. Remember, in today’s Internet environment there is now here, if you cannot be found -- don’t even try.
Jealously guard your reputation -- Built over a lifetime. Destroyed in an instant. Consumers today are ruthless if you let them down. So don’t.
Get in the lead and stay there -- To be out-front can be lonely and uncomfortable, But remember, the lead husky gets the best view.
Tell the truth -- Be open. Front up. Admit mistakes. Never cover up; it will get you every time. Believe in yourself – at times like this it may be the only thing you have. And at times like this, your reputation is your premium defense.
Nurture integrity -- The corporate shake-ups of the last few years have put the spotlight back on integrity: the integrity of your people, your products, your services, your financial statements and, most importantly, your personal integrity.
Accept responsibility -- Take on the biggest responsibility of all–to make the world a better place for everyone, creating self-esteem, wealth, prosperity, jobs, and choices.
Quality is the measure by which you exceed expectations. Quality is all about standards. Keep it simple: set high standards and then exceed them.
Meet, Beat, Repeat -- Never pull back on service. Service is where transactions are transformed into relationships. It is the first moment of truth.
Deliver great design -- Attention Economy 101. Competition is hot and getting hotter. If you’re not aesthetically stimulating and functionally effective, you just merge into the crowd. You have to be different, not just act different.
Don't underestimate value -- Not just real dollar value but the perception of value. Only when people perceive the value they are getting as higher than the cost will they respect the deal you offer.
Deserve trust -- Consumers want to trust you. They want you to remain true to the ideals and aspirations you share with them.
Practice what you preach -- Never let them down. Never, ever fail the reliability test. Expectations skyrocket: cars always start first time, the coffee’s always hot, the ATM is always open. Today reliability is the door charge for Respect
Without Respect, there is no foundation for any long-term relationship.
Every person we deal with is an emotional human being and yet business had been treating them like numbers. Targets. statistics.
The best brands capture the new emotional connections we were seeking.
Love is about action. It’s about creating a meaningful relationship. It’s a constant process of keeping in touch, working with consumers, understanding them, spending time with them.
Shopping is emotional. Delight at a bargain. Satisfaction at filling the refrigerator. Anyone who thinks shopping is rational has spent too long in the office. Shoppers arrive at the store with hope, anticipation, excitement. The right experience, the perfectly pitched service, ensures they leave enchanted and uplifted. The wrong note triggers resentment and disappointment.
“Most brands do not realize that the consumer is in control now. The need to transform them into something consumers love is the greatest challenge to business and brands today,”
“We are living in an attraction economy and the power to attract consumers is what branding, marketing and advertising is all about. The only way you can do this is with empathy, authenticity and a dedication to creating emotional connections.”
To establish that connection, brands should have — the emotional drivers that stir up consumers.
Marketing Lessons from Obama Campaign – It’s All Web 2.0
Look at the excerpts from a Financial Times article on Obama’s use of technology. Some good lessons here. We’ll help you execute these kinds of changes in your marketing.
Obama Steals A March With Technology - By Edward Luce in Washington - Published: February 21 2008
Mr Obama has run the model new technology campaign, in which staff and volunteers have the autonomy to make their own decisions and in which potential supporters who visit his website are offered multiple online materials.
The Obama website offers almost instant video replays of his speeches, which are also packaged by Obama officials for YouTube. A few mouse clicks from each webcast provides a simple procedure to make online donations. Users can set up blogs, join the Obama Facebook group and even download ring tones featuring recordings of his speeches.
The contrast with Mrs Clinton's relatively conventional website is instructive. In one of her first webcasts Mrs Clinton offered to "have a conversation with America". But the questions she received were obviously screened. The fact these "conversations" took place online could not disguise the fact they were controlled.
"Even businesses find it hard to change their organizational structure to fit the demands of new technology," says Mr Leyden. "But for political campaigns, which are classic command-and-control operations, it is particularly difficult. Mrs. Clinton maintains a competent and solid website but Mr Obama has made it the central organizing tool of his campaign."
it is hard to avoid the conclusion that Mrs Clinton has maintained a much less flexible campaign than her surging opponent, in which technology has been treated as an add-on rather than a central tool. Early on, Mr Obama hired Chris Hughes, co-founder of Facebook, the social networking site, to advise his campaign.
"Candidates get the campaigns they deserve," says Bill Galston, a veteran of Democratic contests. "The media needs a narrative and Mrs Clinton did not provide one.
Mr Obama's better use of technology has enabled him to raise funds at more than twice the rate of Mrs Clinton in the past six weeks from an expanding universe of online donors. She, in contrast, has had to divert valuable time to attend traditional "offline" fundraising events. "Once you have your online fund raising network in place it operates at virtually zero cost - in time and overheads," says Mr Leyden. "Mr Obama has built a kind of online ATM. Mrs Clinton doesn't have that."
You can build the same kind of compelling technology strategy. You can do it for your clients, prospects, partners and referral sources. We’ll help you do it.
Obama Steals A March With Technology - By Edward Luce in Washington - Published: February 21 2008
Mr Obama has run the model new technology campaign, in which staff and volunteers have the autonomy to make their own decisions and in which potential supporters who visit his website are offered multiple online materials.
The Obama website offers almost instant video replays of his speeches, which are also packaged by Obama officials for YouTube. A few mouse clicks from each webcast provides a simple procedure to make online donations. Users can set up blogs, join the Obama Facebook group and even download ring tones featuring recordings of his speeches.
The contrast with Mrs Clinton's relatively conventional website is instructive. In one of her first webcasts Mrs Clinton offered to "have a conversation with America". But the questions she received were obviously screened. The fact these "conversations" took place online could not disguise the fact they were controlled.
"Even businesses find it hard to change their organizational structure to fit the demands of new technology," says Mr Leyden. "But for political campaigns, which are classic command-and-control operations, it is particularly difficult. Mrs. Clinton maintains a competent and solid website but Mr Obama has made it the central organizing tool of his campaign."
it is hard to avoid the conclusion that Mrs Clinton has maintained a much less flexible campaign than her surging opponent, in which technology has been treated as an add-on rather than a central tool. Early on, Mr Obama hired Chris Hughes, co-founder of Facebook, the social networking site, to advise his campaign.
"Candidates get the campaigns they deserve," says Bill Galston, a veteran of Democratic contests. "The media needs a narrative and Mrs Clinton did not provide one.
Mr Obama's better use of technology has enabled him to raise funds at more than twice the rate of Mrs Clinton in the past six weeks from an expanding universe of online donors. She, in contrast, has had to divert valuable time to attend traditional "offline" fundraising events. "Once you have your online fund raising network in place it operates at virtually zero cost - in time and overheads," says Mr Leyden. "Mr Obama has built a kind of online ATM. Mrs Clinton doesn't have that."
You can build the same kind of compelling technology strategy. You can do it for your clients, prospects, partners and referral sources. We’ll help you do it.
Referral Source Relationship Building -- Getting Real Engagement and Advocates for Your Firm
Some organizations thus have trouble understanding and optimizing their ongoing interaction with referral sources, leading to more guesswork than understanding when it comes to building an firm referral source relationship management strategy.
It is the professional advisors who are most effective in driving demand. These "referral sources" serve the individuals with business problems who need real solutions to their issues. In many cases, they won't show up in pipeline reports or end up as qualified leads, but they are in the lion's share of cases the ones driving the really big deals.
Furthermore, referral sources are far more likely to have many connections in the community. Positive attitudes or recommendations will be amplified, along with negative ones.
Referral Source Engagement and Advocacy: The 'Pipeline' for Relationship Marketing
Two objectives are most important when building relationship marketing strategies:
(1) maximizing ongoing behavioral engagement with referral sources
(2) driving toward advocacy for a firm and its offerings
Engagement can be defined as a "give-and-take conversation" between a referral source and your firm. Advocacy is, simply stated, the willingness to recommend or "go out on a limb" to recommend your firm.
Engagement and advocacy are linked: Proactive engagement of referral sources at the best professional firms and consultants is a fundamental driver of these individuals' perceptions of your brand and their willingness to advocate doing business with your firm.
One could say that the fundamental job of the relationship marketer is to encourage referral source engagement and promote referral source advocacy.
Engagement Drives Advocacy and Value –
Engagement drives advocacy over the long term and that advocacy is the most powerful attitudinal predictor of successful relationship – for both parties.
Generally, it is not outbound marketing, but rather a discussion that takes place over months or years and covers relevant topics that drives deal flow. This engagement ultimately drives referral sources to recommend your company and its solutions in competitive situations and to think of your company first when client financial and investment problems arise.
Examples of engagement include:
- Attendance at hosted face-to-face events such as conferences, roundtables, and seminars;
- Subscriptions to firm-published newsletters, whitepapers, and magazines
- Participation in online activities such as webcasts, virtual meetings, and online communities.
With the framework in place, the following four steps form an outline for a relationship marketer developing an engagement—advocacy—value strategy.
Step 1: Develop an Engagement Mix
An engagement mix is the combination of tactics, content, and targeting to drive referral source advocacy. Events designed explicitly for referral sources have a stronger impact than events designed for more technical audiences. Among referral sources, events with outside strategic content were more effective than events focused solely on a set of offerings or on a specific solutions.
In determining the best mix of engagement vehicles, however, it is important to factor in the cost of hosting various types of activities, and to determine the ROI of the different engagement activities, seeking a balanced and cost effective mix.
Step 2: Integrate Outbound Marketing
Once an engagement mix is defined, an effective contact strategy must be developed to promote engagement. Different outbound marketing touches can be more or less effective in driving engagement depending on audience.
For example, content-rich email is a powerful method for contacting more technically oriented referral sources, while telephone touches can be very effective with generalists.
Referral sources want to talk to someone who can answer their questions, and feel like their relationship is important. A focused campaign by principals, for example, can work wonders after an initial email to drive referral sources to engage.
Step 3: Practice Continuous Contact
Determining the sequence and cadence of outbound tactics and hosted engagement activities is important to campaign success. Since an referral source engagement program can take up to 18 months or more to generate a "win," engagement continuity is imperative. We have found that lapses in active engagement greater than three months are associated with loss of advocacy and lower probability of referrals.
In addition, the sequence of touches and engagement activities should provide content appropriate to and facilitative of a referral sources progression along the advocacy stages.
For example, at early stages, "Seeker" referral sources gain awareness and seek information regarding the company's offerings. Accordingly, "Seekers" should be provided solutions-oriented content to ensure comprehension and understanding of available products. Once referral sources are familiar with the firm's value proposition, strategy-focused interactions should feature more prominently in the mix.
Step 4: Implement Measurement, Tracking, and Analysis Tools
Accurate measurement and tracking of outbound marketing touches, engagement and advocacy, and firm-level sales activity are requirements for developing a rigorous, data-driven approach to understanding and managing relationship marketing. A basic relationship management measurement system will include the following four data sources:
• Outbound RM touches
• Engagement
• Advocacy
• Value
When the various component data sources have been linked and enough historical data has been compiled (a two-year period is usually adequate), it is possible to construct an analytic model connecting the constructs and revealing the dynamic inter-relationships among marketing stimuli, engagement, advocacy, and value.
Conclusion
Relationship marketing has lost its meaning in many organizations. The function, in many cases, has become dominated by a "stimulus-focused" approach that advocates increased contact, whatever the reason or content, in lieu of true engagement. This approach is deeply flawed and distorts the true objective of RM—to generate a conversation that will eventually lead to advocacy among key referral sources.
This advocacy does not manifest itself in weeks or even months, but can take a year or more; and when it bears fruit, it is difficult to measure.
However, this is all the more reason to undertake true relationship marketing, because the advocates it generates are long-lasting and uniquely suited to influence large opportunities that otherwise would go to competitors.
It is the professional advisors who are most effective in driving demand. These "referral sources" serve the individuals with business problems who need real solutions to their issues. In many cases, they won't show up in pipeline reports or end up as qualified leads, but they are in the lion's share of cases the ones driving the really big deals.
Furthermore, referral sources are far more likely to have many connections in the community. Positive attitudes or recommendations will be amplified, along with negative ones.
Referral Source Engagement and Advocacy: The 'Pipeline' for Relationship Marketing
Two objectives are most important when building relationship marketing strategies:
(1) maximizing ongoing behavioral engagement with referral sources
(2) driving toward advocacy for a firm and its offerings
Engagement can be defined as a "give-and-take conversation" between a referral source and your firm. Advocacy is, simply stated, the willingness to recommend or "go out on a limb" to recommend your firm.
Engagement and advocacy are linked: Proactive engagement of referral sources at the best professional firms and consultants is a fundamental driver of these individuals' perceptions of your brand and their willingness to advocate doing business with your firm.
One could say that the fundamental job of the relationship marketer is to encourage referral source engagement and promote referral source advocacy.
Engagement Drives Advocacy and Value –
Engagement drives advocacy over the long term and that advocacy is the most powerful attitudinal predictor of successful relationship – for both parties.
Generally, it is not outbound marketing, but rather a discussion that takes place over months or years and covers relevant topics that drives deal flow. This engagement ultimately drives referral sources to recommend your company and its solutions in competitive situations and to think of your company first when client financial and investment problems arise.
Examples of engagement include:
- Attendance at hosted face-to-face events such as conferences, roundtables, and seminars;
- Subscriptions to firm-published newsletters, whitepapers, and magazines
- Participation in online activities such as webcasts, virtual meetings, and online communities.
With the framework in place, the following four steps form an outline for a relationship marketer developing an engagement—advocacy—value strategy.
Step 1: Develop an Engagement Mix
An engagement mix is the combination of tactics, content, and targeting to drive referral source advocacy. Events designed explicitly for referral sources have a stronger impact than events designed for more technical audiences. Among referral sources, events with outside strategic content were more effective than events focused solely on a set of offerings or on a specific solutions.
In determining the best mix of engagement vehicles, however, it is important to factor in the cost of hosting various types of activities, and to determine the ROI of the different engagement activities, seeking a balanced and cost effective mix.
Step 2: Integrate Outbound Marketing
Once an engagement mix is defined, an effective contact strategy must be developed to promote engagement. Different outbound marketing touches can be more or less effective in driving engagement depending on audience.
For example, content-rich email is a powerful method for contacting more technically oriented referral sources, while telephone touches can be very effective with generalists.
Referral sources want to talk to someone who can answer their questions, and feel like their relationship is important. A focused campaign by principals, for example, can work wonders after an initial email to drive referral sources to engage.
Step 3: Practice Continuous Contact
Determining the sequence and cadence of outbound tactics and hosted engagement activities is important to campaign success. Since an referral source engagement program can take up to 18 months or more to generate a "win," engagement continuity is imperative. We have found that lapses in active engagement greater than three months are associated with loss of advocacy and lower probability of referrals.
In addition, the sequence of touches and engagement activities should provide content appropriate to and facilitative of a referral sources progression along the advocacy stages.
For example, at early stages, "Seeker" referral sources gain awareness and seek information regarding the company's offerings. Accordingly, "Seekers" should be provided solutions-oriented content to ensure comprehension and understanding of available products. Once referral sources are familiar with the firm's value proposition, strategy-focused interactions should feature more prominently in the mix.
Step 4: Implement Measurement, Tracking, and Analysis Tools
Accurate measurement and tracking of outbound marketing touches, engagement and advocacy, and firm-level sales activity are requirements for developing a rigorous, data-driven approach to understanding and managing relationship marketing. A basic relationship management measurement system will include the following four data sources:
• Outbound RM touches
• Engagement
• Advocacy
• Value
When the various component data sources have been linked and enough historical data has been compiled (a two-year period is usually adequate), it is possible to construct an analytic model connecting the constructs and revealing the dynamic inter-relationships among marketing stimuli, engagement, advocacy, and value.
Conclusion
Relationship marketing has lost its meaning in many organizations. The function, in many cases, has become dominated by a "stimulus-focused" approach that advocates increased contact, whatever the reason or content, in lieu of true engagement. This approach is deeply flawed and distorts the true objective of RM—to generate a conversation that will eventually lead to advocacy among key referral sources.
This advocacy does not manifest itself in weeks or even months, but can take a year or more; and when it bears fruit, it is difficult to measure.
However, this is all the more reason to undertake true relationship marketing, because the advocates it generates are long-lasting and uniquely suited to influence large opportunities that otherwise would go to competitors.
Your're Pitching a Movie Idea - Your Firm's Story - Who's The Star?
You're leaving the winter behind. (I can tell you it's bloody cold in the Midwest -- I'm wearing my long underwear -- actually my wife's!)
You're on the plane to LA. Who would have thought! An investment advisor gets to pitch a movie idea in Hollywood. Who says the investment business isn't glamorous? Remember to wear your open collar shirt.
All those years, decades really, of hard work building the firm. Holding client's hands. Compliance, systems, overhead, staffing, trading and reporting platforms. Managing through up and down markets. Yep, pretty hard work.
Now they want you! Really they want the story of your firm. But you have to act fast. You need two things:
* A concept you can explain in less then 10 words. (Preferably 5) It's got to communicate the drama and tension and pay-off immediately. You have to grab them in the gut so they want to "greenlight" the project.
* A story -- or at least the story outline. Again, drama, human interest, a real story is needed. Some conflict and challenge that's overcome and of course, a happy ending.
So here's the test -- who is the star of your firm's movie? (Of course, it's a trick question. This is Hollywood!)
Your website and marketing pieces, I know, you mainly talk about the firm and its principals. Probably a lot of information on investing and markets and technical discussion. You may have gone in for complicated design and graphics. All good and useful, but -- (some soul searching is required here) who is the site - and the marketing material designed for?
Who is the star of your firm's story that you are now telling? Hmmm?
You know, the star of your firm is your client.
We (all) tend to forget. It's all about the client s****d -- and other professionals who refer us new clients. They are the real stars of our business.
Aren't they the ones that bring the drama, the challenges, the success and gratifications in your professional -- and sometimes personal -- life?
* Needs
* Feelings
* Problems
* Experiences
* Hopes
* Dreams
* Goals
* Frustrations
* Pleasures
* Passions
* and most importantly - the STORIES of your clients.
It's their stories that matter most. Whenever/however you can -- help tell them, celebrate them!
You, of course, are a key supporting actor in those stories. You are the "white knight" coming to the rescue. Slaying the dragons. The wise advisor. So it's really your story as well.
And anyway, let's be honest, aren't the client's stories (even the painful ones) more interesting then the technical details of what you offer?
So, enjoy the sun and poolside meetings. Stay at the best hotel and bill the studio. And wow 'em.
What could be more bankable? Affluent investor, wandering in a confusing, uncertain investment world and they find - you. They find safety, professional skill -- financial success. A happy ending. Roll the credits!
You're on the plane to LA. Who would have thought! An investment advisor gets to pitch a movie idea in Hollywood. Who says the investment business isn't glamorous? Remember to wear your open collar shirt.
All those years, decades really, of hard work building the firm. Holding client's hands. Compliance, systems, overhead, staffing, trading and reporting platforms. Managing through up and down markets. Yep, pretty hard work.
Now they want you! Really they want the story of your firm. But you have to act fast. You need two things:
* A concept you can explain in less then 10 words. (Preferably 5) It's got to communicate the drama and tension and pay-off immediately. You have to grab them in the gut so they want to "greenlight" the project.
* A story -- or at least the story outline. Again, drama, human interest, a real story is needed. Some conflict and challenge that's overcome and of course, a happy ending.
So here's the test -- who is the star of your firm's movie? (Of course, it's a trick question. This is Hollywood!)
Your website and marketing pieces, I know, you mainly talk about the firm and its principals. Probably a lot of information on investing and markets and technical discussion. You may have gone in for complicated design and graphics. All good and useful, but -- (some soul searching is required here) who is the site - and the marketing material designed for?
Who is the star of your firm's story that you are now telling? Hmmm?
You know, the star of your firm is your client.
We (all) tend to forget. It's all about the client s****d -- and other professionals who refer us new clients. They are the real stars of our business.
Aren't they the ones that bring the drama, the challenges, the success and gratifications in your professional -- and sometimes personal -- life?
* Needs
* Feelings
* Problems
* Experiences
* Hopes
* Dreams
* Goals
* Frustrations
* Pleasures
* Passions
* and most importantly - the STORIES of your clients.
It's their stories that matter most. Whenever/however you can -- help tell them, celebrate them!
You, of course, are a key supporting actor in those stories. You are the "white knight" coming to the rescue. Slaying the dragons. The wise advisor. So it's really your story as well.
And anyway, let's be honest, aren't the client's stories (even the painful ones) more interesting then the technical details of what you offer?
So, enjoy the sun and poolside meetings. Stay at the best hotel and bill the studio. And wow 'em.
What could be more bankable? Affluent investor, wandering in a confusing, uncertain investment world and they find - you. They find safety, professional skill -- financial success. A happy ending. Roll the credits!
Client Video Testimonials
You will find one of the best ways, to articulate your value and services to the market is -- let your clients do it! Video testimonials can have a strong impact on your website.
Coupled with ways for clients, prospects and referral sources to interact with you online, you can significantly improve the effectiveness of your web presence and brand.
Below an article from an ad agency (evolution media in Australia - evolutionmedia.com.au) that talks about this approach:
Standing Out Online
Most research on financial services products and services is undertaken via the web.
In the digital world, there are many techniques that can be use to create online engagement. One of the most effective and as yet unexplored medium is online video, or 'slivercasting'. Slivercasting is TV quality entertainment, broadcast via the internet, on a particular niche or subject.
The appeal of a slivercasts is that the medium is tailored to the end user, who is typically time poor and inundated with information, therefore anything that makes technical information more digestible, is attractive to this audience.
For the reason that most viewers are accustom to the way television delivers information, slivercasts are a logical extension of this format.
Changes to the internet and the way people are consuming information has heralded a new online world, known as Web 2.0. In which the levels of personalization, engagement and focus on the individual are unheralded.
The most obvious example is You Tube. Financial services brands can learn a lot about how to engage and interact with the online consumer from them.
Like any other community branding exercise, targeting the right community is crucial, and two way communications is fundamental - so set up the facilities that allow customers to be heard - and listened to.
HSBC, for example, have their own moderated blog page for customers, dedicated to their opinions on hot topics ranging from music to restaurants. While this information may not be directly related to financial services, it recognises the holistic nature of consumers, who want to be seen as individuals with opinions, rather than a transactional based relationship (www.yourpointofview.com).
The bottom line is that the end users expectations of the online experience have grown exponentially. They want to choose rather than be told. And want to be recognized and valued as individuals in the online world, just as in the real world.
Coupled with ways for clients, prospects and referral sources to interact with you online, you can significantly improve the effectiveness of your web presence and brand.
Below an article from an ad agency (evolution media in Australia - evolutionmedia.com.au) that talks about this approach:
Standing Out Online
Most research on financial services products and services is undertaken via the web.
In the digital world, there are many techniques that can be use to create online engagement. One of the most effective and as yet unexplored medium is online video, or 'slivercasting'. Slivercasting is TV quality entertainment, broadcast via the internet, on a particular niche or subject.
The appeal of a slivercasts is that the medium is tailored to the end user, who is typically time poor and inundated with information, therefore anything that makes technical information more digestible, is attractive to this audience.
For the reason that most viewers are accustom to the way television delivers information, slivercasts are a logical extension of this format.
Changes to the internet and the way people are consuming information has heralded a new online world, known as Web 2.0. In which the levels of personalization, engagement and focus on the individual are unheralded.
The most obvious example is You Tube. Financial services brands can learn a lot about how to engage and interact with the online consumer from them.
Like any other community branding exercise, targeting the right community is crucial, and two way communications is fundamental - so set up the facilities that allow customers to be heard - and listened to.
HSBC, for example, have their own moderated blog page for customers, dedicated to their opinions on hot topics ranging from music to restaurants. While this information may not be directly related to financial services, it recognises the holistic nature of consumers, who want to be seen as individuals with opinions, rather than a transactional based relationship (www.yourpointofview.com).
The bottom line is that the end users expectations of the online experience have grown exponentially. They want to choose rather than be told. And want to be recognized and valued as individuals in the online world, just as in the real world.
Being Unfair to Clients?
Start with a story:
A Billion$ money management firm approached me last week. They had heard good things about my work and wanted to talk about boosting their marketing. We met at their offices during which the head of the firm said: "I don't believe in marketing. I concentrate on picking good stocks and finding undervalued companies. My clients are the main source of new business anyway."
I agreed with him and thanked the group for their time. Said I was always available to help in any way I could. I left.
Couple of points:
First, I won't try and talk anyone into marketing. I provide the tools and coaching but they have to already want to make the effort and allocate the time and resources.
Second, and perhaps most important, it's simply unfair to depend on your clients for your growth. You are the business manager of your firm - it's your responsibility. That's not to say you don't have a process in place for reminding clients to think of you when someone they know is looking for help. But would you depend on your clients to find you new employees, or software or (God forbid) investment ideas!?
You can't abdicate your business development responsibility to your clients.
A Billion$ money management firm approached me last week. They had heard good things about my work and wanted to talk about boosting their marketing. We met at their offices during which the head of the firm said: "I don't believe in marketing. I concentrate on picking good stocks and finding undervalued companies. My clients are the main source of new business anyway."
I agreed with him and thanked the group for their time. Said I was always available to help in any way I could. I left.
Couple of points:
First, I won't try and talk anyone into marketing. I provide the tools and coaching but they have to already want to make the effort and allocate the time and resources.
Second, and perhaps most important, it's simply unfair to depend on your clients for your growth. You are the business manager of your firm - it's your responsibility. That's not to say you don't have a process in place for reminding clients to think of you when someone they know is looking for help. But would you depend on your clients to find you new employees, or software or (God forbid) investment ideas!?
You can't abdicate your business development responsibility to your clients.
FUD - Best Time To Market
A quick story :
After about a year of building referral relationships with attorneys and accountants - and their own clients - one of our clients has now started to see a real influx of new client prospects. What's changed is that the current uncertainty - and poor performance - of their advisors has forced people to look for new approaches. Investors are concerned.
My client however, does not sell performance, but a very personal approach tailored to each client's risk tolerance, income and tax needs and family situation. The referral sources are also searching for advice on their own portfolios and financial matters.
There is no better time to be marketing.
After about a year of building referral relationships with attorneys and accountants - and their own clients - one of our clients has now started to see a real influx of new client prospects. What's changed is that the current uncertainty - and poor performance - of their advisors has forced people to look for new approaches. Investors are concerned.
My client however, does not sell performance, but a very personal approach tailored to each client's risk tolerance, income and tax needs and family situation. The referral sources are also searching for advice on their own portfolios and financial matters.
There is no better time to be marketing.
Branding & YouTube
Here's a video which talks about financial services branding. Took an Aussie to say it! http://youtube.com/watch?v=wicuCVjV8Os
But the real message is -- how come u r not on YouTube? It's the future.
But the real message is -- how come u r not on YouTube? It's the future.
All About Relationships
Referrals Are Important To Growth -- The majority of affluent investors (75%) and advisors (88%) agreed that a referral is the preferred method used for locating an advisor. Affluent investors and advisors disagree on the effectiveness of social settings, events and seminars. Forty-two percent of advisors said social settings are effective, compared with 11% of affluent investors. (From recent Fidelity study)
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