t h o m s o n f i n a n c i a l effective use of technology in prospecting your book eric jones, cfa...

T H O M S O N F I N A N C I A L

Effective Use of Technology in Prospecting Your Book

Eric Jones, CFASenior Product Manager

Thomson Financial

Financeware Advisor CallFebruary 2, 2004


February 2, 2004 2


Introduction

February 2, 2004 3


Today’s Agenda

• What is Prospecting Your Book?

• Broadening Your Client Base– Technology Needs– Basic & Advanced features– Data Analysis

• Penetrating Your Client Base– Technology Needs– Traditional and Best Practice Methods– Holistic Analysis of Book

• Other Uses of Technology

• Summary and Q&A

Agenda

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What is Prospecting Your Book?

• First, Define Your Book…It should be more than just existing clientsFriends and FamilyPast ClientsRelated Parties (attorneys, accountants, investment

managers)

What do you want it to be?Small businessesPhysiciansRetirement age teachersDefine your niche!

What is Prospecting Your Book

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What is Prospecting Your Book?

• Second, Define Your Major Prospecting Objective…

• Two Ways to Prospect Your Book:

1)Expand Client Base = New Clients2)Expand Product / Service Base =

Existing Clients

• And you can always do both….but make sure you understand why!!!


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Expand Client Base


Joe & Sally Miller

Joe’s Co-

Worker

Sally’s Parent

s Miller’s

Church

Joe’s Uncle Bob

Sally’s Social Club

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Penetrate Client Base


Joe & Sally Miller

Variable Life Policy

Estate Plan

Hedge Plan

for Co. Stock

529 Plans

“Key Man” Insura

nce

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Expand Client Base

• Key Goal = get more clients

• Key Point = technology will not get the clients…you will

Expand Client Base

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Key Technology to Expand Your Client Base

• Ability to manage contacts, activities and schedules:– CM (Contact management)– CRM (Customer Relationship Management)– SFA (Sales Force Automation)

• Same animals, increasing level of functionality

• This presentation is not about selecting a CRM system

• Keep in mind two schools of thought for selection:– Research every detail because feature differences do matter– Pick something and then adapt to the system

Expand Client Base

My Preference

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CRM-type systems – a few names to consider:

• Microsoft Outlook

• ACT!

• Act 4 Advisors

• Goldmine

• SalesForce.com

• Junxure-I

• Protracker

• And don’t forget your firm-provided solution…– Ability to export data?– Ability to customize to your preferences to your business model?

Expand Client Base

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Basic features – CRM application:

• Track current clients – demographics & contact info

• Track referrals – demographics & contact info

• Call activity – notes, follow-up tasks, time spent, expenses

• Calendaring – appointments, reminders, conference calls, ability to schedule another calendar (Admin support)

Expand Client Base

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Advanced features – CRM program:

• Create workflow “programs” for existing clients (as well as prospects)

– Marketing campaign for leads

– Initial steps for new client relationships

– New product campaign for existing clients

• General service initiatives to “Delight the Client”

• Targeted programs for a sub-set of clients

Expand Client Base

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Marketing campaigns for leads

• Create a scripted program for any new prospect that enters your “pipeline”

– Mailing campaign– Phone calls– Emails (be sure to avoid “spam”)– Meeting solicitations– Etc.

• Use CRM to trigger activity and track timing in-between events

• Track responses and refine your marketing campaign

• Facilitates workflow with admin support and para-planners

Expand Client Base

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Initial programs for new clients

• Detailed steps to effectively integrate a new client into your practice:

– First meeting– Profiling session and material– Steps to complete financial plan (incl. internal activities)– Investment implementation process– Confirmation letters– Etc., etc.

• New product campaigns for existing clients– More to follow on this topic in next section

Expand Client Base

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“Delight the Client” initiatives – best way to drive a solid referral program

Examples of data to track and what to do with it:

• Client vacation destinations – email new vacation ideas

• Private business names – call to congratulate owners on positive news

• Clients in mid-60s – mail educational info on RMD law changes

• Client’s children’s birthdays – send token gifts

• Clients with children – email educational material of child tax credits

• New car purchases – send recall notice reminders

• Pets – send list of pet hotels in area

Expand Client Base

February 2, 2004 16


Advanced Data Analysis – related benefits of CRM

• Track “problem” clients– High service demands / low ROI

– Make sure ROI gives the entire picture of client value (production/fees + referrals + community ties)

• If these clients are not meeting your ROI objectives, prune them from your business

Why? Time spent servicing existing clients is the biggest obstacle to prospecting activities

Expand Client Base

February 2, 2004 17


Advanced Data Analysis – related benefits of CRM

• Track trends in your business– What do you always have to follow-up on after a

meeting?

– What are clients always asking for?

– What is your assistant always doing?

• All good questions, but in order to answer them you must:– Have a system to collect the data– RELIGIOUSLY enter that data into your system (or

make sure someone else does it)!

Expand Client Base

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Expanding Client Base - Summary

• To get referrals, you have to ASK!!! (and technology won’t do that for you)

• 1st priority – ensure your existing clients are happy!!!

– Best way to get referrals– Every time you “delight” a client, you are closer to a great

referral

• CRM Systems can also:– Manage referral programs– Improve productivity (which helps with everything you do!)

Expand Client Base

February 2, 2004 19


2nd Broad Approach to Prospecting Your Book

• Expand Business with Existing Clients

• “Penetrate” Your Book

• “Do more, with less”

• In most cases, requires breadth of services & product knowledge

• Requires careful analysis of profitability


February 2, 2004 20


Financial Advisors don’t penetrate their book

• Example...Insurance Products

• Evidence…penetration of insurance sales among “non-insurance” reps is extremely low

• Variable Life Insurance sales occur in:*– 4% of wirehouse brokers– 5% of regional brokers– 20% of financial planners

• Insurance Product Sales (in general):*– 1% at wirehouses– 1% at regionals– 5% at independents


* Source: Registered Rep., June 2003, pp. 58

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Key technology need

• Portfolio Management System, Portfolio Accounting System, Broker Info System

• Contrary to CRM, in many cases you don’t have a decision on which application to use

• Higher cost per application and fewer viable options that are not “firm-provided”

• Key features:– Data query functionality– Export Data– View portfolio data “across book”


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Funds Available / Cash Balance


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Total Account Value


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Upcoming Bond Maturities


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Specific Security Position (across book)


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All Securities Positions (across book)


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Market / Security AlertsPenetrate Client Base

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Lets Talk about Better Approaches

• Make technology really work for you

• You will need more than just a Portfolio Accounting system

• In some cases you need three systems:– CRM– Portfolio Management– Wealth Management (Wealth Care, Financial Planning)

• Ideally, all your systems will “talk” to one another

• The following ideas will differentiate you from the next Advisor

Innovative Approaches

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Interactive Goal Planning Sessions

• Example = Financeware

• Help clients make important decisions about Spending, Asset Allocation, Retirement Age, and Savings… all within the context of their most important Life Goals

• What better way to penetrate your book and manage a greater % of your client’s assets?

• Also uncovers key issues like Insurance needs, Estate Planning strategies, and Investment implementation approaches


February 2, 2004 30


Interactive Goal Planning Sessions – Make the technology work for you

• Get a big flat screen monitor in your conference room!

• Clients love interactive sessions & immediate feedback

• Why wait 4 weeks for the 3-ring bound financial plan?

• If you are comfortable using the technology, you can create a plan “real-time” and have it printed before you client leaves the office

• Create a powerful message to move forward with the next steps – THE CLOSE


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Identify and Analyze what is really important to your clients

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Illustrate the Most Critical Trade-offs…

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And how they impact your overall plan

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Next step – Real-time implementation

• Now that the client is sold on The Plan, why not take the next step?

• Too many things can go wrong if you let the client walk-out the door with their ACATS forms?

– Buyer’s remorse– Feel obligated to research other options– Analysis Paralysis (my favorite)– Get confused by the paperwork– Get too busy– Another Advisor calls them– Their son-in-law has a different opinion– They decide to buy a new car– Etc.

• So, why do we let them walk out the door with their new account paperwork!!!


February 2, 2004 35


Next step – Real-time implementation

• How many of you have the client fill-out the appropriate paperwork “online”?

– Why not have your assistant come into the conference room and walk the client/prospect through the account opening forms? Or the Life insurance application? Or the ACATS forms?

• Even if the client has to mail in a check later, you can have much of the paperwork done before they leave your office

– Why not make it as easy as possible for them to transfer the $$$?

• Use this online technology to the extent possible

• As a client, I would gravitate toward a simpler process!!!


February 2, 2004 36


Holistic Analysis of Book• What better way to “prospect your book”???

• Determine your very best clients…and focus on them!

• Requires a combined set of data from CRM, Portfolio Management, and Wealth Management systems

• Question – what would happen to your production if you reduced your total accounts serviced by 80 or 90%?

• The answer may surprise you…


February 2, 2004 37


One approach to analyzing your book…

• Source: Attract and Retain the Affluent Investor, Stephen D. Gresham and Evan Cooper, Copyright 2001

• A Case Study… “George K”

• When he started the process to review his book, he had 631 accounts.

• George identified a series of screens/filters to determine his best clients


February 2, 2004 38


11 Screens to Finding Your Best Clients


*Source: Attract and Retain the Affluent Investor, Stephen D. Gresham and Evan Cooper, Copyright 2001.

Screen * Evaluation / Tracking System

1. Account by production report Comp System / Port Acct

2. Value of assets report Port Acct

3. List of priority clients Subjective / CRM

4. Likeability Subjective / CRM

5. Approach acceptance Subjective / CRM

6. Financial wherewithal Subjective / Wealth management

7. Premier client capability Subjective / Wealth management

8. Hard-dollar profitability Comp System / Port Acct

9. Soft-dollar profitability Comp System / CRM / Time-tracking

10. Price-value test Subjective / CRM

11. Opportunity for future growth Subjective / CRM

February 2, 2004 39


11 Screens to Finding Your Best Clients*


*Source: Attract and Retain the Affluent Investor, Stephen D. Gresham and Evan Cooper, Copyright 2001.

• What happened after the 11 screens were reviewed and applied?

• 631 accounts became 100 accounts (33 clients)

• Gross production went from $422,000 to...$383,000

• 83% reduction in accounts…9% reduction in production

• Would this help your prospecting efforts?

February 2, 2004 40


Other ideas for how technology can help


• Self-produce CDs with your personal message– Digital video camera– Video editing software– CD burner

• Web sites for your practice

• Mutual Fund databases

• Separate Account Manager databases

• Online Investment Research

• Online Education & Training Programs

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In summary, there are three main technology applications that will assist you in prospecting your book:

Summary

• Contact Management, CRM, SFA

• Portfolio Management / Accounting system

• Wealth Management / Planning application

Ideally they all work together!

And remember, the technology does the facilitating…You do the asking!

February 2, 2004 42


Questions?

Q&A

Eric Jones

Senior Product Manager

Thomson Financial

[email protected]

301-545-4596

t h o m s o n f i n a n c i a l effective use of technology in prospecting your book eric jones, cfa...

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