A Guide to Thriving as an Advisor in the Time of COVID-19

A Guide to Thriving as an Advisor in the Time of COVID-19

At the moment, the entire planet faces high volatility in the financial markets, not to mention other challenges.

In a world such as this, there are several steps that advisors can take to succeed, not just survive–and even thrive. Two executives at LifeYield and SmartAsset, two leading fintech firms, offer their takes.

During a recent webinar titled How Advisors Can Attract and Retain Clients in Volatile Markets, they provided four key takeaways.
Now is precisely the time to keep prospecting for new clients, not stop it.
Advisors’ messaging should be flexible and adjust depending on the news.

The willingness to shift mindsets is key to the ability to lead productive conversations.
Advisors should not hesitate to tell their stories via social media and other technologies.

Chris Sonzogni, director of advisor marketing at SmartAsset, says, “Every industry out there is being affected by the coronavirus, but advisors in the investment industry are especially susceptible” on account of a high percentage of revenues at most advisory firms being “driven by asset management fees.” “One of the best ways to shore up your position is to continue to grow and reach new prospects,” he said. Advisors habitually rely on in-person events to grow their businesses. Naturally, social distancing puts those marketing efforts at risk.

Advisors may need to rethink their marketing mix, noting that social media is the only online marketing channel that has gained any noticeable traction with most advisors.
Sonzogni suggested that advisors “think about the lines of communication that [they have] already opened with prospects and [might] be able to leverage.” A good place to start would indeed be social media, as many advisors have social media accounts—though ones they currently rarely post to. “Now is a good time to start thinking about new ways to potentially reallocate your marketing budget or look at new marketing channels.”

There is also the question of what new prospects are seeking from an advisor. “Prospects as well as clients are concerned about how well their portfolio is performing; at the end of the day, they’re looking for assurance and advice,” Sonzogni said. One big mistake advisors make when broaching a topic with a new prospect or beginning to post on social media is “immediately defaulting to talking about markets and performance”. They should instead “start talking about the human side of financial planning,” such as stories about the local community or smart money moves for investors.

He also stressed the importance of quickly contacting new leads, pointing to data showing firms that contacted a lead within the first five minutes were seven times more likely to convert the lead than those that replied even one hour later and 60 times more likely than companies that waited 24 hours or longer.

As far as COVID-19-related messaging, Sonzogni had four suggestions:
Be a community exemplar, highlighting how local citizens can do their part during a crisis.

Share your expertise; host a webinar or write posts on how followers can alleviate financial stress.
Humanize your practice; share stories about yourself or your employees working remotely.
Explore new ways to connect; partner with other services so as to reach a broader audience.

Steve Zuschin, Executive Vice-President of Advisor Success at LifeYield, believes advisors need to make a mindset shift. Among other things, that readjustment could include thinking beyond performance and increasing flexibility and availability.

Noting how much clients tend to love human-to-human contact with their advisors, and how that contact is most vividly achieved over a meal, Mr. Zuschin pointed to one idea he recently heard and thought was fitting for this new age of social distancing: “Consider sharing a meal with the client over a video conference;” for example, by using DoorDash or Uber Eats. You can, say, send your existing or prospective client a menu before a video meeting, ask him or her to pick out what they want to eat and then have it delivered to them so they can eat it while you virtually meet. “It gives you an opportunity to create that lasting impression, and I guarantee they won’t forget it.”

Naturally, advisors can scarcely influence or control market volatility. At the same time, there are things that an advisor can control. Mr. Zuschin gave four examples of such things:

  • Going over a client’s comprehensive financial plan.
  • Rebalancing a client’s portfolio.
  • Tax-loss harvesting for a short-term tax benefit.
  • Optimizing tax efficiency for a long-term tax benefit.

One advantage of tax-loss harvesting, according to Zuschin, is that it “kicks the can down the road,” essentially betting that tax rates would be lower in the future. Tax efficiency-oriented efforts provide asset-location optimization and can serve to increase the after-tax rate of return. It is also valuable for locating assets in the right places in order to reduce tax drag across a household’s portfolio.

Advisors should also use technology and indexes to differentiate themselves, he concluded. One example of the latter is LifeYield’s Taxficient Score. Among other things, it is another effort that can create a lasting impression.

According to Zuschin as well as other executives from firms offering tech tools, tax-efficiency tech strategies are proving to be particularly valuable tools that advisors can use to attract and retain clients in today’s volatile stock market environment.

For more information, please read: How Advisors Can Thrive in the Time of Coronavirus | ThinkAdvisor

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