What if the way financial advisors communicate during the Coronavirus crisis impacts the success of their businesses when the virus is behind us and the economy is back to producing new records every month?
The fear of the unknown causes the imaginations of investors to run wild. The stock market declines by 50%. The shutdown causes a recession or even a depression.
Recession: A period of temporary economic decline during which trade and industrial activity are reduced, generally identified by a fall in GDP for two successive quarters.
Depression: A depression is a severe and prolonged downturn in economic activity characterized by a sharp fall in employment and production.
Financial advisors have the opportunity to be the voice of reason. They should take advantage of this opportunity to polish their images as effective communicators during this severe time of need.
This strategy should be utilized to reach out to all types of relationships.
4 Primary Types of Relationships
Financial advisors do not have one type of relationship with investors. They have four types that can be sub-divided into additional specialized categories.
The four primary types of relationships include:
- Current clients
- Recent leads that have contacted you
- Active prospects that are based on mutual interest
- Existing contacts on drip lists
Advisors can divide the four types into several additional types based on age, work status, profession, and other criteria.
Financial advisors should have communication strategies for each type of relationship. For example:
- The 65-year-old client who wants to retire at the end of 2020
- A recent lead who wants to replace a current advisor
- A prospect who is a 40-year-old business owner
- A 35-year-old contact on a drip list
Frequency of Communications
Think about the type of content that clients, leads, prospects, and contacts are seeing in the media every-day. The media uses scary headlines to attract readers. The more readers they have the more advertising revenue they produce for their companies.
Scary headlines are not the point. The real point is they are seeing these headlines every day and potentially more frequently than that if they are working from home or have been laid-off by their employers.
Financial advisor communications have to offset all of this noise that is produced by a conflicted media. A weekly email or podcast would not be too frequent.
Advisors should have two goals with this type of communication. One is to help clients make prudent, rational investment decisions. The second is to build advisor brands by producing top-quality communications for their leads, prospects, and contacts. Building a reputation during bad times, that produces great references for the good times.
Building a Brand
Three of the four types of investors (leads, prospects, contacts) are not current clients that produce revenue. They represent an advisor’s best opportunities to produce new clients in the future.
Effective communications keep advisor names in front of investors. It is also a way to build goodwill during times of stress. Think of the first impression this creates when financial advisors send thoughtful communications to investors who may or may not be clients.
This is a relatively rare marketing opportunity. A high percentage of investors are not blaming their advisors for the rapid, steep decline in the stock market. They are blaming the virus and the source, but not advisors. That will not last forever.
How advisors treat the four types of relationships will have a major impact on the future success of their businesses and practices. Investors may not blame advisors, but they are very aware of the types of advice, services, and communications they receive during the market decline and the ensuing recovery.
Communications are key to building financial advisor relationships with current and future clients. Just any type of communication is not enough. Ideally, the communications have some relevance to the financial interests of the client, lead, prospect, or contact.
The more advisors know about clients and contacts the better prepared they are to produce tailored communications that resonate with their various audiences.
For example, do you send an email that targets millennials to pre-retirees? Or, do you identify the pain points of pre-retirees and produce emails, eBooks, and other content that address the pre-retirees’ financial concerns.
All advisor communications should stress their accessibility. In the near term, financial advisor accessibility may be limited to Zoom or telephone calls while social distancing rules are in effect.
It is important to communicate advisor accessibility and how clients, leads, prospects, and contacts can reach advisors by telephone or email.
Some advisors even give their cell number to their clients or all four types of relationships. This becomes a major differentiating characteristic when the dust settles and relationships remember how some advisors stepped up to the plate.
Every investor communication that goes out to all four types of relationships should be viewed as a marketing opportunity.
Perhaps there is a postscript on advisor emails. The PS asks recipients if they know anyone who is saying their financial advisor has disappeared in their time of need. This is a common concern when advisors are compensated with commissions. They have no incentive to communicate with concerned investors during down markets.