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#FA Success Ep 265: Connecting With Ultra-HNW Next Generation Heirs By Fostering Real Family Trust And Communication, With Amy Castoro

January 25, 2022 07:08 am 0 Comments CATEGORY: Financial Advisor Success Podcast

Welcome back to the 265th episode of the Financial Advisor Success Podcast!

My guest on today's podcast is Amy Castoro. Amy is the president and CEO of The Williams Group, a coaching and consulting firm based out of San Clemente, California, that helps financial advisors engage with more than 800 high-net-worth families to develop solid foundations in heir preparedness and ensure their wealth can actually be transferred beyond three generations.

What's unique about Amy (and the Williams Group), though, is their coaching approach to family dynamics with ultra-high-net-worth clients, recognizing that avoiding the “shirtsleeves to shirtsleeves in three generations” phenomenon isn’t about the tax-efficient distribution of family assets, but whether the family can learn to effectively communicate in a manner that preserves their relationships as they inherit the family wealth.

In this episode, we talk in depth about the Williams Group’s research into what actually leads to the loss of multi-generational family wealth (which in 85% of the cases is due to breakdowns in family trust or a lack of preparedness of the heirs, and only 5% of the time is actually a result of investment or business challenges), how Amy and her firm works closely with ultra-high-net-worth families to learn the essential skills in strengthening relationships with each other (and with their advisors), and the 10 questions the Williams Group uses to help raise families’ awareness on these topics and gauge family readiness for passing on their wealth from one generation to the next.

We also talk about how Amy uses somatic coaching to guide her clients in taking a deeper look at what they’re saying and how they say it, how her skills as a coach are regularly challenged as she helps ultra-high-net-worth clients solve their own issues and realign family patterns of communication, and how Amy focuses on communication and trust building and not the dollar amounts when discussing estate plans.

And be certain to listen to the end, where Amy shares her suggestions of books to read and education to pursue for advisors who want to learn more about serving clients with true multi-generational wealth challenges, how advisors can deepen their own motivation for helping their clients by going beyond their inner why and asking how to serve ultra-high-net-worth clients, and why there’s so much opportunity in working with very affluent families that have complex family dynamics… because in the end, most families really do want to function better together as a family, they may just need a little help to resolve some of their existing family tensions with facilitated conversations, which is a value proposition that trained financial advisors can provide.

So whether you’re interested in learning about how Amy and the Williams Group emphasize connections to help their ultra-affluent client families keep their wealth past the typical three-generation cycle, how she prepares the family’s younger generation for the effects of wealth transfer, or how she navigates ultra-high-net-worth families’ communication and trust issues, then we hope you enjoy this episode of the Financial Advisor Success podcast, with Amy Castoro.

5 Design Tips To Boost Trust And Credibility On Your Advisor Website

January 24, 2022 07:02 am 0 Comments CATEGORY: Marketing

In recent years, the evolution in digital marketing for financial advisors has transformed advisor websites from a static, online version of the advisor's sales brochure into a crucial part of the marketing funnel and a place where many visitors actually decide whether or not to become clients (or at least to contact the advisor about talking further). But as the role of advisor websites in the marketing process has increased, so too have the standards for website design – since, in order to entice visitors to stay and (ideally!) engage with the advisor, the site needs to be a place where visitors actually want to stay to begin with. The ability to establish trust and credibility is one of the critical components of a website that creates a favorable impression for visitors – an impression that often extends to the advisor themselves.

In this guest post, Mikel Bruce, CEO of TinyFrog Technologies, explains why trust and credibility matter for financial advisor websites, what strategies can help with establishing trust and credibility, and how advisors can implement these strategies into their own sites.

First impressions tend to have a lasting impact on how a person views a business, so the earlier in the visitor's experience that the website can establish a baseline level of trust, the easier it is to build on that foundation until the visitor feels comfortable enough to take action. This is particularly important in the COVID era, where many potential clients rely solely on the internet for finding an advisor, because the advisor's website may be the only physical manifestation of the business for potential clients. And while it is difficult to objectively measure trust and credibility with website visitors, one way for advisors to know whether their site is effective at establishing trust and credibility is to track the site's conversion rates (e.g., the percentage of website visitors who submit a contact form), because website visitors who do "convert" are likely to be those who feel comfortable enough with their impression of the advisor to do so.

As humans, most of us rely heavily on our vision for sensory information; accordingly, one of the most immediate ways to establish a baseline level of trust in a website is to create 'visual trust' – which can be as simple as having a clean, modern-looking site, but can also involve creating a visual hierarchy that subtly emphasizes the most important information for the visitor to know. Another element, 'social trust', creates the reassuring impression to visitors that other people similar to them find the advisor trustworthy; this can be established by highlighting metrics about the advisor's existing clientele (such as the number of clients served or assets under management) as well as the advisor's prominence within the industry (for example, by showcasing the advisor's industry awards or media appearances). Finally, firms can seek to create 'longevity trust' by emphasizing the expertise and experience of the advisor (e.g., how long they have been in business or which industry credentials they hold) and reminding visitors of the advisor's stability, reliability, and professionalism.

Implementing a strategy to create trust and credibility begins with choosing which areas are the most relevant to the niche or target client that the advisor seeks to serve, which will then drive the decision of which elements to emphasize. For example, a "trust and credibility panel" located in a hard-to-miss place on the advisor's main landing page, with the information the advisor wants to highlight most (e.g., an "As Seen In…" section highlighting the advisor's media appearances), puts the most important information in the place where it is most likely to create a first impression. From there, advisors can build other credibility-generating elements into the site (such as a resource page or a case study), with the caveat that these sections will most likely build credibility only if they are well-organized and easy to navigate (and that cluttered, busy site can actually have the opposite effect of reducing trust!).

Ultimately, it's important to remember that building trust is a gradual process, and that a well-designed advisor website can establish a baseline foundation of trust with a positive first impression, gradually building layers of additional trust by incorporating other trust-building elements. And because trust and credibility are such crucial components of a website – since, after all, people naturally want to feel confident in the advisor to whom they entrust their finances – advisors who invest the resources to build those elements into their websites can boost engagement, bring in more prospects, and potentially grow their business!

Weekend Reading for Financial Planners (Jan 22-23)

January 21, 2022 02:07 pm 1 Comment CATEGORY: Weekend Reading

Enjoy the current installment of “Weekend Reading For Financial Planners” – this week’s edition kicks off with the news that subscription-based advisory firm Facet Wealth has raised $100 million from venture capital firms in a Series C funding round. At a time when private equity firms are buying up AUM-based RIAs for their current income generation, the venture capital firms’ huge investment in Facet suggests that they see the real potential for Facet’s subscription fee model to become the next big business model for financial advisors in the future.

Also in industry news this week:

Advocates for the fiduciary standard have sent a letter to the SEC requesting that it adjust its guidance to allow RIAs to specifically use the word “fiduciary” on their form CRS to better differentiate themselves from broker-dealers who are not full-time fiduciaries
A study finds that higher-income individuals have better investment returns in their Roth IRAs, suggesting that they (and their advisors?) are more often leveraging best practices in asset location to use the tax-free accounts to hold assets expected to appreciate the most

From there, we have several articles on advisor technology:

Cryptocurrency exchange Gemini’s acquisition of digital asset portfolio management platform BITRIA will give advisors a new way to invest client assets directly in cryptocurrencies (not just crypto futures) via SMA or TAMP structures
Fidelity plans to introduce a direct indexing product for retail customers with a $5,000 minimum investment, in a sign of the strategy’s growing popularity not only for tax benefits but also for allowing investors to adjust indexes based on ESG/SRI or other preferences
Four years after acquiring Junxure CRM, AdvisorEngine has released AdvisorEngine CRM, an upgraded cloud-based offering that perhaps signals a bet on the growing importance of CRM at the center of the advisor tech stack

We also have a number of articles on advisor marketing:

Why specializing in a niche can help an advisory firm overcome many of the challenges of marketing to prospective clients
How serving a niche can help advisors focus their communications, be more intentional with their marketing budget, and scale their practices more effectively
Why being bold in marketing may seem scary but ultimately helps advisors stand out from the rest in a crowded marketplace

We wrap up with three final articles, all about how to enhance your lifestyle:

The steps you can take during the daytime to sleep better at night
How to design a home gym that is both functional and aesthetically pleasing
How living a ‘rich’ life does not necessarily involve significant assets or material possessions, but rather features the experiences that are important to you

Enjoy the ‘light’ reading!

Reducing Digital Miscommunication By Setting Clear Expectations And Appropriate Tone

January 19, 2022 07:08 am 0 Comments CATEGORY: Client Trust & Communication

Communicating clearly and effectively online can often be a challenge, and the surge in digital communication during the pandemic has increased the potential for misinterpreting messages. Without the verbal inflection available in oral communication, conveying tone through written communication is much more difficult. In the absence of these tonal clues, our brains fill in the gaps with our own assumptions, which may not match up with the intended meaning!

Furthermore, online messages can lack mutually agreed-upon expectations for how to communicate; in a face-to-face meeting there is an immediate back-and-forth exchange of ideas with the opportunity to notice body language and facial gestures, but when communicating online, the time between responses (and the recipient’s unwritten/unspoken reactions) can be much more ambiguous. This can lead to anxiety and frustration, which can, in turn, lead to a passive-aggressive tone-deaf dance of digital (mis)communication. Stress related to online communication can lead to general unhappiness in an advisor-client relationship, which can adversely affect client satisfaction and retention. This is a particularly important risk to be aware of now, with the skyrocketing rise of digital communication!

Two simple changes – clearly stating what is needed and offering a concrete time frame to work with – can make a huge difference in setting clear expectations and reducing any potential stress that would otherwise arise from misinterpreting ambiguous expectations. One effective method of setting expectations for responding to email is using an email signature to outline what clients can expect from you. For example, you could write in your signature that you only check email on certain days of the week or do not respond to emails after 4 pm. Additionally, it helps the recipient understand expectations when messages include explicit descriptions of what is needed, and a deadline for when they are needed.

In addition to setting clear expectations, thoughtfully setting up the appropriate tone in digital messages can also have a tremendous impact to help mitigate potential stress and frustration that can arise from digital communication. For example, you can use punctuation marks (!!!) or emojis (😊) to convey tone. For those who feel uncomfortable using emoji faces or lots of exclamation points in their messaging, recording a simple video message (so that the recipient can hear your use of vocal expression and see your facial gestures) can also be a way to communicate tone.

Ultimately, the key point is that effective digital communication can reduce stress levels for both the sender and the recipients of the message, as good digital communication helps the recipient understand what the sender is trying to tell them and what needs to be done, without the need for body language or vocal cues. Accordingly, working to make digital communication more effective by setting clear expectations and thoughtfully setting up the appropriate tone not only helps advisors communicate with clients more effectively, but also reduces the stress levels for both advisors and their clients as well!

#FA Success Ep 264: Outsourcing Lead Generation To Accelerate Growth When Starting From Scratch, With Dan Callahan

January 18, 2022 07:05 am 0 Comments CATEGORY: Financial Advisor Success Podcast

Welcome back to the 264th episode of the Financial Advisor Success Podcast!

My guest on today's podcast is Dan Callahan. Dan is a Partner and the Chief Investment Officer at Capasso Planning Partners, a rapidly growing independent RIA based in Charleston, South Carolina that oversees about $250 million of assets under management for 300 client households across the country that are all served virtually.

What's unique about Dan, though, is the way he and his firm began with nearly zero clients but grew substantially in client acquisition over a 3-year period, especially in areas outside of the local Charleston area, by outsourcing lead generation to online third-party platforms.

In this episode, we talk in-depth about how Dan incorporates third-party lead providers like Zoe Financial, SmartAsset’s Smart Advisor, and Fee-Only Network (to name just a few) to maximize the reach of potential clients beyond his local area, how Dan highlights his firm’s fee structure and flexible meeting times to position the firm to stand out amongst a crowded marketplace of other virtual financial advisory firms pushing for the same leads, and how Dan justifies the non-trivial revenue-sharing and other marketing costs that it takes to buy leads by having gotten from $0 to almost $50 million of assets under management in barely 3 years.

We also talk about how Dan’s perseverance in client outreach allowed him to keep pace with larger firms (despite not having a business development or marketing team), how Dan’s experiences at fee-only firms gave him opportunities early in his career to experience senior-level investment and portfolio work (which lead him to acquire his CFA designation), and how those experiences and his CFA designation gave Dan the confidence to start and grow an advisory firm from the ground up.

And be certain to listen to the end, where Dan shares how developing a financial firm from scratch involved enduring a rollercoaster of fluctuations in his own satisfaction and disappointment (especially when dealing with acceptance and rejection from prospects), why Dan feels strongly about taking risks and being vulnerable to create better career goals and overall achievements, and how Dan places importance on the flexibility of meeting clients virtually to create a less stressful work-life balance for him and his firm.

So whether you’re interested in learning about how Dan leveraged online third-party platforms to generate client leads, how he aids his firm in standing out to compete with larger firms, or how he grew his firm to $50M of AUM in close to 3 years, then we hope you enjoy this episode of the Financial Advisor Success podcast, with Dan Callahan.

Bundling Financial Planning To Recurring Advice Fees For Long-Term Profitability

January 17, 2022 07:08 am 8 Comments CATEGORY: Practice Management

Providing financial planning services takes time. A lot of time. In fact, according to a recent Kitces Research study, the average advisory firm spends 10 hours just constructing a financial plan, and more than 30 hours across the firm servicing a client throughout the first year to gather data, analyze and produce a financial plan, deliver it to the client, implement the recommendations, and begin the ongoing monitoring process. Which means, not surprisingly, that it’s often necessary to charge clients a non-trivial financial planning fee upfront to recover the time investment. Especially as financial advisors are increasingly shifting to AUM fees and other recurring revenue fee-for-service models, rather than earning a (potentially sizable) upfront commission for the products implemented after the plan is delivered.

Yet the reality is that with the rise of AUM and subscription models in particular, along with their recurring revenue potential, it’s actually not necessary to charge upfront for time-consuming financial planning to get paid for it. Instead, as long as delivering financial planning still provides value, deepens the advisor-client relationship, and, most importantly (from the business perspective), improves long-term retention, it’s entirely possible to be ‘paid well’ for financial planning without charging for it separately at all! Because even a relatively small improvement in client retention rates can produce a very sizable Return On Investment (ROI) for putting in the time and effort to do the financial planning in the first place.

In fact, charging separately for financial planning (and maintaining lower ongoing fees once the upfront planning work is completed) actually introduces the risk that clients will have ‘sticker shock’ about the upfront cost and will choose not to purchase it at all, which means, ironically, that charging for financial planning can actually reduce the number of clients who engage in it. By contrast, bundling financial planning into an AUM or subscription fee changes the client psychology, subtly encouraging clients to take advantage of the service by making it already included… knowing that clients who do engage in financial planning will be more likely to stick around for the long run anyway.

On the other hand, there is a simple appeal to the ‘purity’ of having clients pay for financial planning at the time they receive financial planning, and keeping costs and fees more directly aligned in each and every year. Nonetheless, the reality across a wide range of industries is that it’s quite common to bundle services together, in a manner that makes some clients more profitable and others less so in any particular year, as long as it averages out over time. And at least with a recurring revenue model, it’s the client’s less-time-intensive years that help to cross-subsidize the more-time-intensive ones (and with retention rates for ongoing financial planning firms approaching 98%, most clients appear to be quite comfortable with that reality!).

Of course, it’s still impossible to offer ‘free’ financial planning, paid for with AUM or subscription fees over time, for clients who don’t have assets to manage in the first place; for those clients, a fee-for-service model where clients pay directly for financial planning is the only option. Yet for those who do have other means to pay, and other business models to reach them, it’s important to recognize how an advisory firm really can ‘give away’ financial planning and still be paid well for their efforts over time… at least for firms that have the confidence in their client retention and the patience to grow profitability over time!?

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#FA Success Ep 265: Connecting With Ultra-HNW Next Generation Heirs By Fostering Real Family Trust And Communication, With Amy Castoro

5 Design Tips To Boost Trust And Credibility On Your Advisor Website

Weekend Reading for Financial Planners (Jan 22-23)

Want CE Credit for reading articles like this?

Reducing Digital Miscommunication By Setting Clear Expectations And Appropriate Tone

#FA Success Ep 264: Outsourcing Lead Generation To Accelerate Growth When Starting From Scratch, With Dan Callahan

Bundling Financial Planning To Recurring Advice Fees For Long-Term Profitability

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