John Anderson is the managing director of Practice Management for Independent Advisor Solutions by SEI. He has been with SEI for over 25 years, and is responsible for all programs focused on helping financial advisors grow their businesses, creating efficiencies in their operations, and differentiating their practices. John is frequently quoted in publications such as Investment News, Financial Planning magazine and The Wall Street Journal, and is a frequent speaker at conferences and industry forums. He is also the lead author of SEI’s practice management blog, “Practically Speaking,” and has written or cowritten over 15 industry whitepapers on topics such as advisory fees and the client experience.
On today’s episode, John discusses the strategies and tips for targeted and empathetic communication that financial advisors should be using right now.
- You don’t have to reinvent the wheel with ideologies you implement in your business
- Showing clients empathy builds more trust than the products you’re offering
- Use a targeted and specialized approach to your communication with clients
Q: Introduce yourself to our audience:
I started off many years ago back in the 80’s working in industrial relations for an investment firm, and I’ve just kind of evolved into that sales role—traditional wholesaling where you’re out selling products—mostly in the Midwest. I grew up outside of Chicago so that’s where I was, my first couple houses were there.
I joined SEI back in early 1995, and throughout my entire sales career, I was focused on, if it made sense to me I thought I could sell it. If the product and the philosophy was authentic, I think it worked. So over the years I always worked with financial advisors, but about 10 years ago, SEI decided to marry up all the competencies we were doing—we’re an investment management outsource, we’re a platform outsource, and we also prided ourselves on providing practice management expertise. If you’re working with advisors on a daily basis you can help them grow, differentiate, and create efficiencies in their business. We decided to take that practice management area and move it into one person, so I’m responsible for practice management. There’s all sorts of different sales and relationship managers using the techniques. And I like to say, frankly, I’m not a great creator of content, but I’m a great curator of content. I like to steal the best ideas and share them around with all the different advisors we work with. I’ve been doing that for about ten years now.
It manifests itself in a couple different ways. Our blog, practically speaking, is nine years old. It’s twice a week, non-product specific ideas to help advisors. And then the thought leadership papers are really more focused on the future. That’s how I interact with advisors today.
Q: How should advisors be marketing right now?
One of the first things is that I look around and see a lot of advisors taking the lead—they’re out there with their clients, they’re on the phone, they’re on webinars, they’re on Zoom—all sorts of media outlets. They are working and many are doing a great job. I literally just wrote a blog and it’s called “What Did We Learn So Far?” We’re a month into this environment that we’re in right now, and I started to jot down some notes on the marketplace. Number one, what I’m seeing more than anything else, is advice beats product. It’s having the ability to hold the hand of the client, helping them think about a plan in the longterm, and communicating with them that while we didn’t necessarily predict the pandemic, we did build into the plan things like a downturning market and a disruption. I wrote that empathy beats the bar chart. I talked to one advisor where she said she doesn’t walk and talk, she mostly listens. The empathy I can provide is something that is more important than just pointing to the bar chart and saying, “Every other downturn we’ve come back up.”
I wrote a number of other things, too, for example, co-planning, and the ability to put workflows in your system. When we were talking earlier about this disruption, who remembered to bring home the travel checklist? Who remembered to bring home the operations manual? Nobody. But having workflows integrated into your CRM, that’s when you see your business step to the next level because everyone is on the same page—whether they’re in front of you or virtually.
When it comes to marketing and sales, I don’t think it’s really that different. What I’m seeing in this business today is an evolution from what I had always called an advisor-driven market where the advisor picks the product, service, models, and the way they get paid, to much more of a consumer-focused business. What I think it is, is the challenge we’re in now is only going to drive the conditions for the consumer to say, “I want it my way, and I’m going to search out until I find what my way looks like and who can provide that.” So if I’m an advisor sitting in my office today thinking about the future, I’m going to start thinking about how I can turn pages away from saying, “This is how I want to meet in my office, and this is the type of pricing I want to deliver,” to “Let’s create segments so that the consumer can find me in the way they want to work and not the way I want to work.
Q: What are some of the things you’re seeing in the field advisors are implementing right now?
I’ve seen people take meetings just like this—they’ll tape them and send them out to their clients where they’re having conversations with money managers or planning firms. They can share with their clients that they’re still working, whether they’re in front of them or not. I think what it comes down to, though, more than anything else, is communicating with that client. I don’t think there’s a way to do it generically. You have to look at specialization instead of staying generic. I see so many different pieces coming out saying stay the course, things will come back, don’t mess with your portfolio, but what happens if the portfolio isn’t right? What happens if they built it themselves and didn’t plan for something correctly? So stay the course might not be the right message. One of the things I really believe in a lot is that we are coming into a bigger age of specialization, where the more specialized I am, the more I can communicate to my clients in a way that they’re going to be able to hear it and act on it. We’re taught a lot about segmentation in our business. We’re taught, ABC, gold, silver, platinum, whatever categories we use for segmentation. Almost every time I see somebody do it, they do it, in my mind, backwards. They segment based on AUM, they segment based on revenue, or on number of referrals—based on what’s important to them—not what’s important to the client. If I start segmenting based more on what’s important to the client, now I have the opportunity to turn that message around. Maybe I’m sending a message to my millennial clients out there right now that this is really the time to add money, when you’re given the gift of a down market. I’m saying to my clients in their mid-50’s and 60’s, “OK, we’ve done planning and we know that we’re good for this. While it’s difficult, that type of volatility is built in our plan.” Maybe for our senior clients, the conversation is a lot different. “Your cashflow is still good for the next 3 years.” So when we start to think about communicating a broad general message, especially in times like this, no one is going to read it. But the more specialized we get and segmented on the types of people we want to work with, the more that message is going to resonate.
That’s why I was talking about the advisor I talked to in Michigan who does her “walk and talks.” Her clientele is stay-at-home mothers and elderly people, where they want to get out once in a while. They want to take a 30-minute walk. This may be their only time to have a conversation, and she’s on the phone with them. And the more focused that conversation is, the better it’s going to be received and the stronger you’ll be thought of as their advisor.
Q: Why do you think some advisors don’t spend the time personalizing their marketing for each client?
You get into this business and you’re told to sell anybody who has a pulse. Early on it’s, “Who can fog a mirror? Who has money? I’m going to sell them.” I think that mentality gets started early on, but we don’t stop to say, “Is this the kind of business I want to be building?” This one guy I know called it a “Franken-business”—a bunch of businesses with all these different parts, like Frankenstein’s monster. And what happens at the end of Frankenstein? The monster eats the master. It’s really about stopping, sitting back, and saying, “What type of business do I want to run and what type of client do I want to work with?”
A couple of years ago we started sending out worksheets for advisors to work through. It was very simple, it was called a persona worksheet. But actually, let me take a step back. About 5 years ago we created an Excel spreadsheet—27 inputs per client to be able to really narrow down and say, “What does my book look like? What is the average occupation? What is the average industry?” We had it in a way where you would push a button and it would say, “OK, what does my client look like who has more than $3 million with me? What does my average client look like who belongs to this country club?” All sorts of different things, and what I found was trying to get someone to do 27 inputs for about 100 clients or families, it never happened. So we said, “OK, that’s not going to work.” We created this persona worksheet, and it’s a hypothetical ideal client you want to work with. It was maybe 3 pages, long questions, not a lot of work but enough to clearly identify who you want to work with and what’s important to those clients. The thing about that worksheet, though, is at the end you created this persona. First of all, you’d name it—you have to identify who this person is. But then it had questions that said, “What are the implications for marketing to this person, what are the implications for servicing this person, and planning for and paying for this person?” As I started to think about these personas, what we found was we had some great ones. We had an advisor down in West Texas and he had a persona called “second generation cattle ranchers” and he called them the “Clint Eastwoods.” So the “Clint Eastwoods” were not going to go to high-end marketing events. They would be seen at church events and football games and wanted more simplification. They wanted to understand cashflow better, and financing because they’re taking loans out to buy the cattle and things like that. What they did with these personas was they narrowed it down to the people that would work for them, the marketing that would work for them, and then programmed it into their CRM. That was really the unique part because the messages they were sending became relevant. They didn’t get a generic email.
Q: What’s the one thing for advisors to do during this time that, if they don’t do it, they’ll regret it?
Fortunately or unfortunately, I remember ’87, I remember 2000, I remember 2008, so it kind of repeats itself, these major market meltdowns. But the number one thing I tell people during this time is to be as visible as possible. Be visible with your clients, with your prospects, with your emails—we’ve got such a great platform to be able to do this now. In the dot com bust in 2000, the internet was just getting going. Today you’ve got social media and platforms and technology that allows you to get your message out a lot. It’s got to be the right message, and a targeted message, but be out there as much as possible.
The challenge that you’re going to run into though in this market is people who are offering relatively the same thing, and it’s become commoditized. Your ability to select a list of funds out of Morning Star—a lot of people say they can do that, right? I, as an individual, can go online to a custodian or a robo-advisor or a virtual advisor. I can do direct to a fund company. As a planner today, I can go to a place right down the road that, for 30 basis points, I can get a generic financial plan and generic implementation. So the idea today that I’m going to differentiate because of who I am or because I offer financial planning isn’t going to get it done. I need to offer the hand holding, and I’ve got to be specialized in the type of business that I want. So if I say I provide budgeting and cash flow analysis for millennials who are concerned about their future in this economy, that starts to become more targeted. If I want to say I want to provide retirement analysis for people who are nearing retirement but are concerned about their current 401K allocation or investment accounts in this challenging time, now I’ve got more of an edge.
Q: Do you think it’s important to be more niche because you can do business with so many more people, where in the past you were limited?
Absolutely. I grew up in a small town in central Illinois—a very rural area. If I needed a new pair of shoes when I was a kid, there was one store I could go to. I could get my pick, and maybe there were 3 pairs in my size, but at the end of the day, I was stuck with that one merchant. As I got older and got to high school and could drive, I could go to the mall and it was about 40 miles away. There were maybe 5 stores to choose from, but I was still stuck with the inventory. Think about how the retail shopping environment has changed. I can sit here at my desk and find any size, shape, or quantity. I can look at rating systems and pricing. I can compare. The consumer is really being taught that they’re allowed to have things their way. They’re being empowered to look for specializing. I think in this environment, it’s only going to get stronger. They’re going to say, “I’m not going to drive and fight traffic and look for a place to park to meet my financial advisor when I can do it on a Zoom call.” So the idea of specialization and focus and niche makes so much more sense.
Q: What are the routines you do consistently that have driven success for you?
I’m an observer. I love watching. I love seeing successful people and listening to their stories. I listen to podcasts. I get through about three-quarters of most business books and then I get bored. I don’t have a long attention span, so a podcast with entrepreneurs—I love that. I want to listen to what they went through and implement that in my business. One of the things when we started this work from home thing for my team at SEI, we do an every-other-day check-in. I want to see you on-screen, I want to look at your face and see what’s going on. One of the things I’m trying to show is, “Hey, I’m getting up and showering every morning. I’m getting up and being at my desk at 8:30–9:00. I want to make sure you’re doing that too.” I can’t say there’s one ritual I do, but I try to make sure, number one, it has to sound right if I put myself in the shoes of the consumer. And, on the other side, I make sure I don’t get stuck in one business. I think we sometimes get too stuck on who was successful in financial services. There’s great stories from people around the country in so many different businesses, and I want to see how I can take what they did and bring it into ours and do something different.
Q: What advice would you give younger John?
That kid was not that bright. I think I was very lucky, and one of the things I got lucky with was the company I worked at before I got to SEI had a very simple investment product. I was out there on the seminar circuit for probably 3 and a half years, 4 seminars a week, 40 weeks a year. As much as I didn’t like the repetition and tried to think about doing something different, that repetition made it better. I think we sometimes think too quickly about getting to the next level, but you haven’t honed your craft yet. But I think about those 3 and a half years, 4 seminars a week, for 40 weeks a year and now I do 40 conferences a year. And I love being able to do that and share. Don’t be too impatient. Take the time to learn your craft, and you’ll get better at it.
Connect with John:
- Think about the business you want to build, and start specializing in what you want to present to your clients.