Enjoy the current installment of “weekend reading for financial planners” – this week’s edition kicks off with the news that Washington is now seriously considering a potential $1T+ infrastructure bill, as President Trump indicates a trillion dollar proposal will be coming soon and Democrats are drafting their own $1.5T version, in the collective hopes that a second round of stimulus spending will help to support the economy as it continues to struggle from the impact of the coronavirus pandemic (not to mention accomplishing some long-overdue infrastructure projects for the country!).
Also in the news this week is a fresh look at what is really changing (or not) in the pandemic and whether current predictions (e.g., the death of cities, the end of colleges) are really likely or simply over-projections of trends that were already in place (while ignoring what may actually be more ‘real’ long-term changes occurring quietly in plain view), and an interesting exploration of how the divorce rate appears to be spiking in the aftermath of the pandemic (with real implications for advisory firms that may lose clients in divorces, or that could refine their value proposition by crafting a divorce expertise!).
From there, we have a number of articles around the challenges and opportunities in networking in a virtual world, from strategies to focus on quality over quantity (i.e., using the pandemic environment to eschew wide-net networking events and simply focus on more targeted quality networking opportunities instead), running your own virtual study/mastermind group to create networking opportunities, and how to effectively do outreach on LinkedIn to engage with connections and deepen the relationship.
We also have a few marketing-related articles, from the importance of looking at local media as a PR opportunity (rather than trying to get onto national media like CNBC that is more crowded and harder to sustain impact anyway), why email newsletters are still an effective marketing approach (even as it feels like we’re suffering from more email overload than ever), and tips on how to market for advisors who ‘hate’ marketing (hint: don’t put on the marketing mask and do what others tell you you ‘should’ do to market, and instead simply be your authentic self and try to make personal connections to the people you want to connect with).
We wrap up with three interesting articles, all around the theme of life lessons and finding what makes us happy: the first is a fascinating look at how books and articles from our past can take on new relevance and provide additional wisdom when we read them again a decade later; the second provides some insights about the conflicts between what we think will make us happy and what actually leads to happiness and life satisfaction; and the last explores the rise of the “Passion Economy” and the rise of platforms that support unique opportunities in the modern era to monetize our passions (including the ability to be a successful solo advisor who helps a focused clientele we want to serve profitably!?).
Enjoy the ‘light’ reading!
House Readies $1.5T Infrastructure Plan As Trump Team Also Weighs $1T Option (Kathryn Wolfe, Politico, and Jenny Leonard & Josh Wingrove, Bloomberg) – As the economic impact of the coronavirus pandemic continues to ripple through the economy, talk is picking up in Washington of a new round of stimulus, specifically focused on infrastructure. This week, House Speaker Pelosi indicated that the House is aiming to pull together a $1.5T infrastructure bill, dubbed “Moving America Forward”, in the hopes of passing the legislation through the House by its July 4th recess. At the same time, the Trump administration also indicated this week that it’s working on its own version of a $1T infrastructure package, currently being prepared by the Department of Transportation, potentially to be tacked onto an existing U.S. infrastructure funding law that is up for renewal by September 30th (the FAST Act). Notably, though, while both sides are indicating interest in major infrastructure legislation – the news of which helped to buoy markets this week – substantial disagreement remains about what, exactly, such legislation should cover. President Trump’s version is expected to focus primarily on ‘traditional’ infrastructure spending (e.g., roads, bridges, etc.), along with some funds to expand 5G wireless infrastructure and rural broadband, while the Democratic proposal is broader, also covering education initiatives, housing, clean water, and other ‘green initiatives’ to support climate resiliency. In addition to differences in the legislation, though, substantial debate remains about whether or how to pay for the infrastructure project, with Democrats proposing Build American bonds (private activity bonds), and the Trump administration has indicated a preference for tax cuts to continue stimulating the economy (which makes an increase in the Federal gas tax less likely). In the current ultra-low interest rate environment, though, even Federal Reserve economists are noting that debt is a particularly ‘cheap’ form of financing for public spending into infrastructure right now.
How Much Has The World Changed? Perhaps Not Much After All… (Barry Ritholtz, The Big Picture) – Financial advisors have long lambasted the popular-but-often-proven-wrong statement “This Time Is Different”, but Ritholtz makes the case that “This Changes Everything” should be met with a similar level of skepticism. The point is particularly salient today, as the impact of the coronavirus pandemic continues to ripple across the country, leading to predictions from the death of big cities to the collapse of colleges, the end of retail stores and the wind-down of most office space, along with major changes for everything from music and live concerts to sports and theaters, public transportation, and even online dating. Yet in practice, major ‘disruptive’ events have happened before – e.g., the September 11th terrorist attacks, and the 2008-09 financial crisis – and while some things did change in their aftermath, for the most part, we really did just mean-revert back to prior life. Accordingly, while large, expensive urban areas have been seeing mild population declines (about 1%/year) for several years already, in the end, it’s not a coincidence that “cities have been the dominant source of economic growth, cultural creativity, and business energy for five centuries” (because of the social and intellectual capital that cities build, which isn’t about to be replaced by Zoom calls); similarly, college tuition costs have already been rising faster than inflation for decades, but enrollment still has growth and online colleges have struggled to gain much uptake, the online tools we’re using for meetings (e.g., Zoom, Slack, Teams, etc.) have already existed for nearly a decade but weren’t undermining offices, and while retail stores are struggling, that appears to be more a result of Amazon’s 23-year growth arc since it went public in 1997 and not a sudden pandemic shift. At the same time, Ritholtz notes that the real drivers of major change often go unnoticed at the time (e.g., the Wright brothers’ maiden flight at Kitty Hawk was no big deal at the time, only with the lens of history after the fact). Which means in the end, while systems can and do change, human beings have a remarkable ability to adapt… which means ‘innovations’ that only had limited adoption before the pandemic aren’t likely to suddenly change (instead, we’re more likely to just revert back to our pre-pandemic behaviors when we can), and the real changes that will impact our future are more likely to be hidden in plain sight instead.
Once COVID-19 Storm Subsides, Will Advisors Lose As Clients Divorce In Droves? (Oisin Breen, RIABiz) – One of the indirect challenges of the coronavirus pandemic is that it’s forced couples and families to spend what, for some, is an ‘uncomfortable’ amount of time together in ‘uncomfortable’ closeness… and for a lot of couples with troubled marriages, is amplifying the existing problems that tend to culminate in divorce. In fact, as China initially emerged from the pandemic shutdown, and people could suddenly move about cities and conduct ‘normal’ business again… divorce filings suddenly spiked nearly 25%. And early indications are that U.S. divorce attorneys are also seeing a rise in calls as shutdowns end (potentially similar to a major spike in the U.S. divorce rate that occurred in the aftermath of World War II as soldiers returned home and coupled were suddenly thrust into spending far more time together than they had previously). The significance of this from the advisor perspective is that not only can divorce wreak havoc on a couple/family… it also wreaks havoc on the advisor-client relationship, from additional advice and support needs in the face of the divorce itself to a diminution of the client relationship when the couple splits and the advisor may only retain 1/2 of the couple (not to mention the economic damage of layoffs or business declines from the pandemic itself). On the other hand, a spike in the divorce rate may also create new opportunities for advisors, from crafting (or deepening) a niche in divorcees and pursuing designations like the CDFA (Certified Divorce Financial Analyst), to trying to more deeply engage both members of the couple in the financial planning relationship in the hopes of helping them to (re-)create a shared vision for their (financial) future that helps to keep the couple together after all.
How To Network When You Can’t Meet Up With People (Alexandra Samuel, Wall Street Journal) – The traditional approach to networking is all about in-person meetings, from gathering at conferences to breaking bread at a restaurant or shaking hands at a networking event… all of which have been disrupted by the pandemic’s stay-at-home orders and limitations on gatherings and forcing networkers to rethink how networking happens in the first place. The reality, though, is that networking is still feasible, and if anything, the pandemic may simply force a focus towards networking strategies that are more productive in the long run anyway. For instance, the traditional approach to networking is very focused on casting a wide net – large conferences, open networking events with lots of people to meet and trade business cards with – while in practice (and especially when it comes to financial advisors) it’s far more often about quality than quantity (as it only takes one or two active Centers Of Influence referring an advisor to gain significant growth opportunities). Accordingly, in the online world, networking is all about identifying the quality networking opportunities – who, really, are the Centers Of Influence worth connecting with – and then pursuing them more directly (even if only for a video meeting/introduction), whether it’s a direct outreach, amplifying their content to help get their attention (e.g., share their articles/content), or try to find ways to be of service to them in order to establish or deepen a relationship (e.g., a COVID business support group!?). In addition, for all those who ‘need’ to network but are naturally more introverted, the pandemic environment’s shutdown of large-scale extroversion-oriented networking events may even be a plus, and give an opportunity for introverts to connect in more intimate settings – from online to one-to-one networking meetings when restrictions initially begin to lift – that will likely be more effective for introverts anyway. And even those who are more extroverted can still create more large-scale networking opportunities for themselves as well… it might just mean organizing open Zoom-based video networking meet-ups, or social media ‘chats’ at a specific time/day, to facilitate the group networking interactions in an online environment.
5 Strategies For Networking In A Virtual World (Kristine McManus, Commonwealth) – Networking in a ‘traditional’ environment has a natural cadence to it… networking meetings, conferences, and other events that are created by external organizations at specific times and on specific dates, that generally just require the advisor to show up and attend in order to participate. In the pandemic world, though, where most in-person networking meetings have been suspended, networking time is greatly disrupted… to the point that McManus suggests the starting point is simply to put networking time back onto your calendar, even if you have to outright schedule it for yourself as a time commitment and then figure out what to actually do in a virtual networking environment. In terms of what can be done in a more virtual networking world, McManus provides several suggestions, including: increase your social media presence, using platforms like LinkedIn, Twitter, Facebook, or Instagram to substitute for your prior in-person networking time, as in the end social media is simply another medium for being social and making connections (which is what networking is all about!); form a Zoom study group with peers, as a recurring videoconference where you invite a mix of those you want to connect with (whether it’s Centers Of Influence, other advisors, or others you want to reach and establish a relationship with), using themed agendas to help focus the conversation and keep it productive (and ensure everyone understands why they’re participating and comes with proper expectations); and learn to host virtual client and prospect events, whether as a live webinar in lieu of a seminar, or a livestreaming conversation with prospects and Centers Of Influence. Whatever the channel, though, remember that establishing networking relationships – especially new ones – starts with making a good impression out of the gate, which means having good social media photos and a proper video setup in your home office matters more than ever (when your first impression will be a digital one!).
How I Made LinkedIn Worth The Effort (Bryce Sanders, ThinkAdvisor) – While LinkedIn has long been one of the most popular social media platforms amongst financial advisors, few have figured out how to turn “connections” on LinkedIn into actual meaningful engagements. Sanders suggests that the key, in the end, is that it’s essential to be proactive in communication, and actually reach out to those connections to engage and deepen the relationship. The starting point is to follow the prompts that LinkedIn itself provides to send congratulatory notes about birthdays, work anniversaries, and job changes. But Sanders suggests that in the end, real connections come from more direct and more personalized messages, for which Sanders uses a template (provided in the article) that includes the use of the individual’s first name (more personalized), some personal message to make it clear this is not simply a sales pitch, an outright statement that this is simply intended to get a conversation started (set proper expectations), a note about how long you’ve been connected on LinkedIn (makes it clear this is NOT an automated message), share some personal information and use an icebreaker question, and to the extent it can be gleaned from their public profile share a tidbit of shared interest (e.g., “it looks like we are both big wine fans!”). Of course, like any marketing and prospecting outreach, not everyone will respond (though Sanders had a nearly 40% response rate, far higher than many other marketing strategies!). And crafting personalized messages takes time (Sanders aimed to take an hour or two to do 12 per day, and it still took 8 months to work through 2,000+ connections). But in the end, 40% of 2,000 connections is 800 contacts with more meaningful engagement… which in the end is far more engaged prospects than many advisors will see in years!
Advisors Should Look Beyond CNBC, As Local TV Appearances Drum Up Business, Too! (Gary Stern, RIA Intel) – For many financial advisors who are inclined towards media and PR efforts for marketing, the ‘holy grail’ is to get visibility on a major national television platform like CNBC or Bloomberg TV. Yet the reality is that as active as those media companies are, the total number of opportunities is very limited relative to the number of financial advisors trying to make appearances and, in the end, with such a continuous stream of media personalities, it’s extremely difficult for any one (or few) appearances to turn into actual business opportunities. On the other hand, local media – e.g., the local news affiliate for a major network like NBC, CBS, or ABC – often has less competition for media opportunities, and arguably provides more opportunity for visibility in the local community that the advisor is most likely to get clients from anyway. And given the national network affiliation – i.e., the media appearance will still have NBC, ABC, etc., associated with it – the third-party credibility value from the media is arguably almost the same. Notably, though, it’s still important to be prepared for the (local) television medium, which is all about boiling down to a few key bullet points (the in-depth personalized advice comes when they meet you in your office!). But the end result is a piece of content that’s also very ‘snackable’ to share (i.e., for advisors to share out on their own social media channels to highlight their shared expertise). And with more and more media companies relying on Zoom, the good news is that media opportunities are more accessible than ever, as it’s often no longer even necessary to drive to the studio to make an appearance, instead relying on services like Cision or Meltwater to obtain media mailing lists and reaching out directly to offer expertise!
Why You Need An Email Newsletter (Crystal Lee Butler, Advisor Perspectives) – Most people have had the feeling of email overwhelm from the number of e-newsletters and (unsolicited) mailing lists they’re signed up for, a situation that’s only gotten worse in the pandemic environment as marketers have further amped up their email marketing to replace the lost opportunities of in-person events. Yet Butler notes that, despite these challenges, email is still a well-converting medium for marketing purposes (far more so than social media!), as showing up consistently in your prospective client’s inbox on a monthly (or more frequent?) basis helps to signal that you are a steady, reliable, trustworthy professional… and sending them helpful content on an ongoing basis provides them a constant reminder that you’re still ‘there’, ready and available to help whenever they may have a need. And while an e-newsletter may seem daunting to those aren’t familiar with the tools and technique, Butler notes that in the end the core of a monthly e-newsletter is simply a regular monthly email that covers a few key areas: a brief introduction (to remind them of who you are and what you do), the newsletter content itself (which doesn’t need to include long, in-depth articles about your company, but simply something that is useful and relevant to them, even if it’s simply helping to curate other articles you’ve read that you think may be of interest to them!), a brief market or economic update (the point is not to tell them everything that’s happening in markets, but simply your perspective on what matters as an opportunity to showcase your expertise), an update on upcoming events or happenings for your own firm (a chance to nicely toot your own horn on highlights in the media or industry, and to showcase events like a seminar or webinar where they can connect with you), and some call to action at the end about how they can take the next step if they are ready to reach out (e.g., a Contact Us page, or even an online scheduling app to set up a brief 15-minute introductory call?).
Advisor Marketing For Those Who Hate Marketing (Sara Grillo, Advisor Perspectives) – Marketing is an essential skill to develop for any financial advisor who wants to develop their own client base and/or build their own advisory firm. The challenge, however, is that not everyone is a natural marketer… and for some advisors, their choice of career was all about the love of servicing clients themselves and they may even ‘hate’ marketing, especially when it feels like wearing a ‘marketing mask’ that isn’t representative of your own authentic self (e.g., pitching canned elevator speeches, salesy website or other marketing messages, etc.). But Grillo suggests that in the end, it’s still possible to develop a marketing approach that fits your natural style even as a ‘hater of marketing’. The key is what Grillo has dubbed “OATS”, which is short for Observe (e.g., you don’t have to broadcast on social media platforms, just show up and observe to spot prospects who may have questions and be open to engaging in a conversation), Assess (is this someone who would actually appreciate hearing from you, and if so how will you approach them with your expertise), and use Two Sentences to succinctly make a connection, whether it’s “I really loved your posting about ADHD medication alternatives. Hit home for me and thanks for bringing this to light.” as a way to highlight how you connected with them, or “I can’t believe it’s been 20 years. You remember me from Thayer House, right?” as a way to re-connect (e.g., with an old acquaintance on LinkedIn). In other words, for those who don’t want to stand on the marketing podium with a microphone, it’s OK to stand back, try to spot targeted opportunities to make a one-off personal connection, and then pursue those directly. After all, we don’t actually need to cast a terribly wide net to find the 50 Great Clients it takes to make a successful practice; it’s just about connecting with the few who really are the right fit for you!
33 Inspirational Ideas I Stole From People Smarter Than Me On The Way To 33 (Ryan Holiday) – One of the ironic things about wisdom is that while we can all benefit from it (and there’s usually no shortage of people who are willing to share some with us), in practice, it doesn’t necessarily have impact and meaning to us until we’re ‘ready’ to hear it. Accordingly, Holiday notes that, as he was turning 33, he began to go back and re-visit books and articles he’d read from 10-15 years ago… and finding new wisdom and perspectives in the process. Some striking insights and ideas that resonated include: the importance of reading as a ‘moral imperative’, especially given our relative freedom to read whatever we want now, after centuries of people fighting to keep certain books and ideas from being read; General James Mattis in his autobiography suggested that if you haven’t read widely, you are ‘functionally illiterate’ (or as Mark Twain said, “if you don’t read, you’re not any better than people who can’t read”); as F. Scott Fitzgerald said in The Great Gatsby, “Whenever you feel like criticizing any one, just remember that all the people in this world haven’t had the advantages that you’ve had”; LOVE is best spelled T-I-M-E; recognize that not all time spent is the same, and it’s important to make a distinction between (as Seinfeld puts it) ‘quality time vs. garbage time’; amateurs focus on outcomes, but professionals focus on refining the process that leads to the outcomes; as Heraclitus said “no man steps in the same river twice” (thus why it’s so good to re-read and re-visit old books and ideas!); and from time to time, it’s good to reflect on what you do with your money at the end of the day (and if the answer is ‘nothing’, then why are you working so hard to earn lots more of it?), also recognizing that the less expensive stuff you have, the less there is to worry about!
Happiness & The Gorilla: Ideas For Greater Happiness In Life (Scott Galloway) – As a professor, Scott Galloway has had the opportunity to teach thousands of students and impact their lives academically, but while his focus historically has been on brand strategy, sometimes the world of teaching veers into life strategies instead. Accordingly, Galloway shares some of the visual images and ideas that have helped to shape his own life strategy, including: understand the Arc Of Happiness, that is higher in our 20s, troughs in middle age “as s#!t gets real” (from work and stress to the realization of life’s limits), but then lifts again in our 50s and 60s and beyond as we begin to appreciate the blessings we have; your success will be proportional to the time you sweat versus the time you watch others sweat (i.e., someone who watches TV sports all the time and fails to invest in themselves will not have a good ratio!); work/life balance is a myth for most, and instead about trade-offs… so if you want to be at the top of your career, be prepared for 10-20 years of hard work, and then you can tilt the scale the other way; happiness is a function of W(ork) x F(riends) x P(artner)^2; a good P(artner) is a combiation of shared Passion, shared Values, and being aligned about money (given that financial stress is the number one source of marital acrimony); hard work is important, but luck and background matter as well, which is why financial success is usually a combination of your credentials and your zip code (or the zip code you grew up in); money can’t buy happiness (at least beyond an initial level to get the basic things we need to live our lives); never, ever underestimate the power of compounding interest; and recognize that what “success” means and feels like will change for you, as at least for men (as Galloway speaks from his personal experience) the early years are all about being ‘the gorilla’ (feeling big and masculine), but in the later years the vines to swing on are very different (where masculinity is suddenly about relevance, citizenship, and being a loving dad).
The Passion Economy And The Future Of Work (Li Jin, Andreessen Horowitz) – In the past, the biggest marketplaces were all about flattening the individuality of workers to maximize their value (think: the assembly where each worker has a specific task and can be interchanged with anyone else who learns that task), but in the modern era a new form of marketplaces and platforms are emerging that help people to monetize their unique skills. Accordingly, the top-earning writer on Substack earns $500,000/year from a paid newsletter, the top video course creator on Podia makes more than $100,000/month, and teachers are now earning thousands of dollars every month teaching live virtual classes on platforms like Outschool and Juni. The starting point of this evolution was the emergence of “Uber for X” companies that gave people turnkey ways to turn their idle time into a money-making opportunity, from giving others a ride to delivering food or helping out with specific tasks. The next generation of such platforms, though, isn’t about creating opportunities for people to monetize their time around a specific needed task, but to monetize their passion and expertise, finding others who want to engage that passion and expertise. In turn, the most successful in the passion economy build an ongoing revenue stream around a base of audience/customers/clients they serve, and the most successful platforms have a wide variety of such providers (and thrive by adding more individuality in who offers services on the platform). In the context of financial advisors, this suggests we may only be in the early stages of a blossoming of solo/individual advisors with their own unique expertise who leverage new platforms to find and work with their ’50 Great Clients’, and that the key for larger advisory firms may be figuring out how to attract a wide range of advisors with a wide range of expertise (and provide them meaningful opportunities to monetize that passion and expertise with their ideal clientele, leveraging the advisor’s firm as the platform on which they build). The fundamental point, though, is simply that in the modern era, technology is making it more and more feasible for people – including financial advisors – to succeed, not by doing it the same way everyone else does, but specifically by doing it differently (in accordance with their own ‘passion’)!
I hope you enjoyed the reading! Please leave a comment below to share your thoughts, or make a suggestion of any articles you think I should highlight in a future column!
In the meantime, if you’re interested in more news and information regarding advisor technology, I’d highly recommend checking out Bill Winterberg’s “FPPad” blog on technology for advisors as well.