Background: Our theme in October has been communicating in this time of crisis.
Last week, we discussed how an advisory crisis communications team can help you reach out to your best clients.
The challenge: Because of the market turmoil, your 2008 yearend reviews will be unlike any you’ve conducted in the past. The reviews won’t be typical updates, but rather should be treated as crisis portfolio reviews because clients may raise uncomfortable issues and accusations. The challenge is how to prepare for such a meeting.
The solution: Deliver a crisis portfolio review (CPR) by following the four steps outlined below. It is important that this meeting not be your first contact with clients since the markets fell. Therefore, if you haven’t had the opportunity to do a market update with clients recently, call them this week. Once that is completed, proceed as follows:
Step 1: Focus on your top 20% to 30% of your clients.Use the segmentation discipline we outlined in weeks
one and
two to determine your best clients — often the top 50 or fewer clients in a typical practice of 250 clients.
Step 2: Send out an e-mail and schedule your reviews. Since time is short, invite your top clients to the review via e-mail. Even if you complete three or four reviews each day, it will take you at least three weeks to complete your reviews. Before your clients come in for the review, make sure you have sent them one or two compliance-approved market volatility pieces from your wholesalers. You can refer to these pieces during your reviews.
Here is a sample e-mail you can send to clients inviting them to their review:
Dear Mrs. Smith:
In order to provide the highest level of service to clients I value most — especially during trying times such as these — it is important that we meet to review your long-term plan in light of current conditions. For this reason, I would like to schedule a yearend review with you for Nov. 1 at 2 p.m.
The review will give us an opportunity to discuss any changes in your financial situation, review your portfolio and prepare for meetings with your tax advisor. Of course, we will discuss any other questions or concerns you may have.
I will contact you next week to confirm our review meeting or schedule another convenient time. In the meantime, please note any financial questions or life-changing events that we should discuss, and take a look at the market overview explanation I’ve enclosed from [fill in the name of the firm that provided the piece]. It also would be helpful to gather any documents, such as tax returns or retirement account statements, to bring to the review so we can discuss all aspects of your financial picture.
I look forward to seeing you soon.
Best regards,
[Signature]
Step 3: Conduct your reviews. Make sure that during the course of the review, you collect or update the following information:
Client name
Names/contact information for CPA, attorney and insurance agent
Address, phone numbers, birthdays/anniversaries
Life-changing events (marriage, divorce, deaths, illnesses, births)
Verify assets and liabilities; recalculate net worth and review tax returns
Reaffirm investment goals
Review mortgages
Review risk tolerance and asset allocation
Review tax strategies and investment implications
Review insurance coverage
Update beneficiary designations on all retirement plans and insurance policies.
Review retirement savings goals, including target retirement date and withdrawal expectations
Review plan contributions
Review stock options, including amount and exercise dates
Review 401(k) plan totals and allocations; identify all plans and check statements.
Review any defined benefit pension plans, including start dates and amounts.
Review distribution planning, including minimum distributions.
Step 4: Automate a crisis portfolio review plan for remaining clients
Second-tier clients. Assign the next 50 clients below your top tier to a partner or junior associate, who should conduct most of the reviews by phone. There may be a few clients where in-person reviews are appropriate, but be selective. Don’t take on more than you can handle. Have your office send out an e-mail with a client review survey and a suggested time for a phone interview. Keep the review focused and reassure clients about their long-term plan. The goal during these reviews is to confirm the financial status of your second-tier clients and identify future retirement rollover assets. Keep in mind some of your lower-tier clients may be incredible savers with substantial 401(k) plans.
Remaining clients. Assign the responsibility for coordinating mail or e-mail reviews for your lowest-tier clients to an associate. The goal of these reviews is to identify all of your lowest-tier clients’ assets and look for ways to streamline their investment choices with solutions that provide asset allocation and diversification. By e-mailing a survey requesting the information in Step 3, the phone reviews can be kept to 30 minutes.
Results and referrals. During the course of your yearend reviews with your top clients, ask if any of those clients’ friends and family would benefit from a similar review. Try to capture two names in each review. In this market, many investors are open to hearing from an adviser who delivers great service.
Next month: A time to give thanks by helping clients gives back.
Maureen Wilke has helped thousands of advisers increase the value of their business. Her firm offers The Connected Advisor: 8 Steps to Building an Extraordinary Practice (connectedadvisor.com) for value-added programs, keynote presentations and effective practice-management systems for advisers. She has two decades of wealth management; marketing and sales experience with firms such as Nuveen Investments LLC of Chicago and can be reached at [email protected].
