5 Reasons to Have an Investment Philosophy

David Booth, co-founder and executive chairman of Dimensional Fund Advisors, has said, “The most important thing about an investment philosophy is that you have one.”
 
Do you have one? And if you do, does anyone else know about it? Is it on your website, in your marketing materials and part of your prospect/client conversations?
 
Here are five ways an investment philosophy can impact your practice:
 

1. Efficiency
   Once you have a set of guiding principles that don’t change when the market changes, everything you do aligns with those principles. It may be easier to figure out what to spend time on — and what not to.
2. Client Experience
   You can’t provide a good client experience to someone looking for something you don’t offer. Having an investment philosophy — and being up front about it — may help you find clients who are a good fit, and avoid those who aren’t. Better to find out at the beginning than spend time cultivating a relationship that won’t last long term. And having one clear investment philosophy may allow you to be more efficient in working with clients and helps you deliver a more consistent experience.
3. Better chance of consistent investment results
   Changing investment philosophies every time the market changes is a bit like the driver who keeps changing lanes on a crowded highway. We’ve all done this before: The cars in the next lane keep passing you, so you change lanes…only to find that now the lane you were just in is moving and you’re stuck again. Choose a philosophy you can believe in, and stick with it.
4. Differentiation
   Having a clear and public investment philosophy may help you stand out from advisors who do not. You may also attract centers of influence who can help you build your expert team.
5. Client conversations
   Your investment philosophy provides a foundation for client meetings and conversations. Once your clients understand and believe in your philosophy, you can spend more time talking about their goals and how to reach them, and less time on what markets are doing.

“When you’re about to do something small, you need a reason. When you’re about to do something big, you need a plan. When you’re about to do something life-changing, you need a philosophy.”¹
 
Taking the time to determine your investment philosophy forms the foundation for your practice, and makes it possible to do something potentially life-changing for your clients.
 

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¹“How to Formulate an Investment Philosophy,” Investopedia, Zina Kumok, June 17, 2016.
 
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6 Ways We’ve Just Enhanced Loring Ward’s Blog

In January of 2014 we introduced our Advisor Insights Blog with the goal of providing financial advisors and their clients with timely and timeless financial education and insights.
 
Since then, we’ve published more than 200 articles — with 85,000+ views — on a wide variety of topics, from Asset Class investing to financial planning, retirement, behavioral finance, practice management and marketing. We’ve even included a few recipes from employees along the way.
 

Our Top Ten Blog Posts of 2016

As we prepare to ring in a new year, let’s look back at the most popular blogs for 2016. We had a total of 77 blogs by 20 authors. In case you missed a few, here are our 10 most-read blog posts in 2016:

Building Stronger Relationships via Your Digital Ecosystem

Two big revolutions have occurred in marketing in recent years:
 

1. Marketing has moved from being an art to becoming a science, with an ever-increasing ability to pinpoint the effectiveness (or failure) of marketing campaigns and initiatives.

 

2. There has been a broad move away from product to experience as the key differentiator. As McKinsey Quarterly noted in 2011, “Customers no longer separate marketing from the product — it is the product….In the era of engagement, marketing is the company.”

At Loring Ward’s National Education Conference at the end of September, we will look at what these two revolutions mean for financial advisors and how they establish and nurture client relationships across the digital spectrum, from websites to social media to CRM systems. Some digital ecosystem best practices to keep in mind:

Set Up Your Space for Success

I’ve had the great pleasure of visiting hundreds of advisors’ offices over the years. While I’ve certainly seen a distinctive shift to a warmer, less formal feel, many recently redecorated spaces are not always friendly for clients in mid to late retirement.
 
Why does this matter? Your office is an important part of your brand and your client experience. Unlike many younger clients, older clients tend to prefer visiting with you in person. And there is a great deal you can do to make their visits convenient and enjoyable.

7 Things to Do Before Hitting the “SEND” Button

Email has become one of the most popular ways to communicate — whether to family, friends, or someone from Craigslist inquiring about that old futon in your garage. Email is also a popular way for businesses to connect with prospects and clients. In a 2015 study done by MarketingSherpa comparing print, TV, email, text message and social media, an estimated 70% of people prefer that companies communicate via email.¹ (Unfortunately, this doesn’t mean that you will get a 70% open rate when you send an email!)
 
In partnership with Dimensional Fund Advisors, we recently surveyed more than 1,400 investors and found that when it came to email:

Your Website — What It Should (and Shouldn’t) Be

Many web development companies and marketing specialists suggest that you fill your website with articles and blog posts so that it will rank better in search engines. And by ranking well in searches your website will generate leads from “cold” prospects.
 
Although this tactic used to work, it often fails these days, because you’re going head to head with content providers such as Forbes and Investopedia. It’s much harder to come out near the top in search results these days.
 
In fact, putting content on your website for the sake of search engine optimization may have a negative impact on your most valuable visitor — the referred visitor.

Why You Are NOT Like Most Financial Advisors

Envestnet Compendum of Industry Trends, April 2015

With more than 300,000 financial advisors in America, why is it so hard to find good advice?
 
Let’s start with the fact that 60% of those calling themselves advisors aren’t even required to act in their clients’ best interests. And 70% still try to beat the market, even if few are ever consistently successful.
 
However, if you work with Loring Ward, chances are you are a different kind of advisor, someone who strives to provide the consistent, caring, comprehensive and knowledgeable advice that investors need.
 
And that makes you a rarity.

The Top Ten Blog Posts of 2015

As we prepare to ring in a new year, we took a look back at 2015’s Advisor Insights blogs: 55 articles by 17 authors. In case you missed a few, here are our 10 most-read blog posts in 2015:

Fifty Shades of Blue

Though the headline may suggest otherwise, the Loring Ward Marketing Department has not taken a scandalous turn, although we do get very passionate about our brand and the many details of our brand identity. During the recent brand overhaul here at Loring Ward, we took a few hours to explore fifty shades of the color blue in order to find the perfect one.
 
While the right shade of blue may not seem integral to a brand’s bottom line, we’re here to say that it just might. Consider the colors you see around you every day. How often do you encounter a restaurant with a red logo? What about a yoga studio with a green or purple logo? In most situations, brand colors are selected for a reason. Red is thought to make people hungry.¹ Green or purple are considered “peaceful” and “spiritual” colors.²
 
This leads us to the question, “Why blue?”

Try Tandoori Turkey This Thanksgiving

When I moved to San Jose from Hyderabad, India in 1998, I marked my first American Thanksgiving by learning from local friends how to roast a traditional turkey. Everyone liked it, but I just thought it could be tastier.
 
Well, you can take the girl out of India, but you can’t take India out of the girl. I realized that the fragrant spices of my homeland would work well on roasted turkey. That next Thanksgiving, I began experimenting with ways to incorporate warm Indian spices and aromatics into a turkey recipe. That recipe evolved over the years, including a yogurt bath similar to that of tandoori chicken, a popular South Asian dish.

Becoming More Persuasive #4—Liking

 
Note: This is the fourth in an occasional series on language, tools and techniques that can help you become more persuasive–a vital skill for making sure more investors are receptive to the advice and guidance they need.

 
We all want to be liked. And when we like someone, when we feel a connection, we are much more likely to listen to—and agree with—what that person says. Which is why liking is such a powerful force for persuasion.

Becoming More Persuasive #3 — Authority

Note: This is the third in an occasional series on language, tools and techniques that can help you become more persuasive — a vital skill for making sure more investors are receptive to the advice and guidance they need.
 
Your assistant gets an unexpected call: “Hi, I’m good friends with one of your clients. I just inherited a fair amount of money, and she said I should give you guys a call to discuss my options.”
 
Like most of us, your assistant probably goes right ahead and schedules a meeting for you with the prospect.
 
…And misses a significant opportunity to highlight your expertise and lay the groundwork for a more productive meeting and even relationship.

Becoming More Persuasive #2 — Reciprocity

Note: This is the second in an occasional series on language, tools and techniques that can help you become more persuasive–a vital skill for making sure more investors are receptive to the advice and guidance they need. The previous blog focused on a simple way to double your chances of “yes:” Becoming More Persuasive #1 — Freedom.
 
You are at the end of a nice meal at your favorite restaurant. The waiter approaches with the bill…
 
What she does next will have a major impact on the tip you leave behind.

Online Dating Lessons

The premise of online dating is to make it easy for two people with similar interests to find the perfect match in the digital world. It sounds so simple, but what increases the likelihood of making a match? First, it’s about knowing each other’s interests and ideal attributes. Secondly, it’s about being “heard” above all of the other candidates. Finally, it’s about making a good first impression.

Pet Smart—Why You Should Be More Dogged About Cataloguing Client Interests

Like many middle-aged empty nesters, my wife and I are passionate about our much beloved and terribly spoiled pets.
 
Our friends know they have to at least pretend to be interested when we share cute cat stories (gentle readers, I will spare you the details).
 
Yet no professional in my life, including financial professionals, has ever asked me a single question about my pets – or even if I have them.

Coffee or Relationships—What Business are You Really In?

Over the last few years I’ve looked at hundreds of financial advisor websites. Except for a select, thoughtful few, most of these sites are swimming in the sea of sameness.
 
Almost everyone says they provide sound advice and some degree of planning and great service and all the usual products.

Strategy or Golf Cart Ads: What’s Your Marketing Plan?

“A goal without a plan is just a wish.” 
-Antoine de Saint-Exupéry
 
Actual Advisor Conversation…
 
Advisor: “The golf carts at our local club have video screens you can run ads on. I was thinking of giving it a try.”
 
Me: “Okay…. What are you trying to achieve? What’s your goal?”

Advice You Can Eat! A Sweet Twist on the Pie Chart

 

At Loring Ward we often talk about pie charts, but in the spirit of Thanksgiving we thought we would just talk about pie. Actually, pumpkin pie to be more specific.
 

If you’d like to impress your friends and family, try out this traditional holiday pie recipe from a member of our Loring Ward family.

 
 
Have a safe, delicious and happy Thanksgiving!
 

Grow Your Business with Granovetter Transitivity: The Power of Weak Ties on LinkedIn

“It’s not what you know, but who you know.”
 
Nothing exemplifies the truth of this old saying better than LinkedIn, especially when it comes to growing your advisory business.
 
It’s all about Granovetter Transivity—otherwise known as the ability of casual acquaintances and colleagues to greatly expand your network and connect you with people you might never have been able to meet otherwise. This connectivity—first noted by sociologist Mark Granovetter in his ground-breaking, 1973 paper The Strength of Weak Ties—is why LinkedIn is one of the most powerful prospecting tools for Financial Advisors I’ve seen in my 20-year career.