Two Investment Advisors with Differing Approaches to Newsletters and Differing Results
Posted: Tuesday, December 22, 2009
by Glenn Harrington
Articulate Consultants Inc.
The story of Lynne & Dave
Note : This is the actual story of Lynne and Dave, as told by Glenn Harrington of Articulate Consultants. Other renditions of this story are in circulation. This is the original.
two investment advisors
Lynne and Dave were two successful retail investment advisors. Each issued a custom newsletter with collaborative support from Articulate Consultants . After bear market troubles, one remained a successful investment advisor.
Lynne issued a custom newsletter for five bull-market years. She stopped it when the stock market turned in a bear run. She retired a few months later.
Dave also issued a custom newsletter . W hen the stock market turned in a bear run, he continued to issue his newsletter every quarter. Dave's story has a rebound, though not of the stock market. Recognizing his newsletter as a medium for client relations, he found the source of resilience in client relationships sincerity.
show your true colours
The Story of Lynne and Dave is a story of differing attitudes about newsletters and client relationships. It also reflects how people's characters show in their business practices. I believe that it's always rewarding to let your character shine through in your business dealings even if some people do not take to your true colours. By the end of the story, it ought to be clear what conclusions Lynne and Dave might have drawn.
Lynne, the achiever type
When Lynne signed up for her custom newsletter, she was a high-volume, top-grossing investment advisor. She put on seminars regularly. She advertised steadily in the local media. Her clients were pleased with their investment returns and her service. Accordingly, Lynne emphasised her stock-picking acumen when she presented herself to the world.
It's a common principle in marketing to focus on what you're best at, or what makes you unique. Lynne regarded this as the stock-picking performance that her clients enjoyed. So, she made that her sales promise.
Dave, the trustworthy guy
Dave differed. He turned to Articulate Consultants for his custom newsletter a couple of years after Lynne did. He was more modest. He seldom made performance claims. In terms of what was important to Lynne, Dave did speak of getting good returns for his investors. Yet, he did not take great personal pride in his ability to consistently generate competitive returns. Rather, he gave people confidence that he would make sure their money was well cared for, then he delivered on that.
seeking authenticity
Lynne was a higher-profile investment advisor. The main reason why Lynne came to us was her rejection of the corporate newsletter. She did not want a head-office newsletter that would include stock-picking advice, with her name and photo pasted onto it. Stock picking she regarded as her own specialty.
It was important to Lynne that she had her own claims to make. She had a reputation to maintain and build upon. It was important to her that her newsletter was authentically her own.
Dave had been buying an "off-the-shelf" or "canned" newsletter from a newsletter service, not from his head office. Though his head office did encourage investment advisors to issue newsletters, he would not even consider the firm's newsletter.
newsletter as true voice
Even though Dave regarded the off-the-shelf service as better than the corporate newsletter, he wanted an authentic, custom newsletter because, frankly, he felt embarrassed issuing a newsletter whose content was not really his. He felt uncomfortable about the lack of authenticity in the newsletters that his clients received from him.
Specifically, Dave was concerned that someday, somebody could ask a question about a topic discussed in his newsletter; he might answer contradicting what the newsletter said, or he might discover that the newsletter had dealt with a topic out of sync with his sentiments. Dave sought a more genuine connection with clients who would heed his newsletter as his voice.
cool professionalism & performance as brand
Over the five years that Articulate Consultants created newsletters for Lynne, I advised her several times that there was more to a client relationship than providing stock-trading advice and generating investment returns. She, as a woman in the investment business, considered it important to come across as professional rather than personal. Her philosophy: Why show a caring side when you deliver?
Lynne decided that the colours of her newsletter would be dark blue and black. She considered the blue to be professional. She would have her newsletter printed on standard white bond: an unnoticeable paper for any newsletter.
The combination of black and blue on white paper led to a somewhat cold newsletter. When I told Lynne this, she replied that professionalism is a little bit cold; it wasn't her responsibility to be personal or luxurious with her clients, but rather to make sure that they get good investment returns.
Lynne did follow my advice in a few issues. For example, she ran a little story about her son and a little story about her daughter. She also started a lending library of business books that she made available to her clients, announced in two or three issues of her newsletter. Then, she told me that she decided to can the person-to-person content, because it did not get the phone ringing or increase her income.
natural warmth & likeability as brand
Dave, on the other hand, took the advice to include some personal content. We ran suitable stories about his family. We ran commentaries that reflected Dave's personality. In photos from his client events, we let Dave's character show. Dave's involvement in the newsletter (collaboratively planning each issue, then supplying source material) made that easy. No magic tricks expected.
clarified brand promises
Lynne and Dave each had their character showing. By her choice, Lynne's newsletter consistently presented her as a conservative, professional, results-focused star technician. Dave's newsletter presented him consistently as a warm, intelligent, informed, conscientious guardian of people's savings.
when Lynne eased back
Eventually, Lynne's business became strong enough that she continued to follow basically her own formula for her newsletter. We were mainly doing cut-and-polish on Lynne's ideas plus assembly work for newsletter layout. I was concerned that her approach took unnecessary risk for her reputation, positioning her client relationships as based on transactions and investment performance. It turned out that these concerns were justified.
client losses cause client losses
When the stock market turned bearish in 1999-2000, Lynne lost clients. In fact, even though her stock-picking saved many of her clients from suffering as badly as the stock indices, over years Lynne had created a reputation for herself as somebody who would deliver above-average returns.
Her clients were not getting above-average stock returns. Nor were anybody else's in those days. Because Lynne implicitly promised that her clients would get above-average investment returns, when they did not get above-average returns, she lost clients. In fact, Lynne lost so many clients that, by the end of 2001, she retired.
Lynne had just stopped issuing her newsletter, because she didn't think that the newsletter could make a difference on her main problem: client attrition. The attrition had continued to a point where she basically would have to rebuild for years. Those years of rebuilding could only start after the stock market resumed an upward trend. So she left the business instead.
nice guy survives
Lynne now spends much more time with her children. Dave, on the other hand, maintained normal attrition while other investment advisors, such as Lynne, endured haemorrhaging in their clientele.
Not only did Dave maintain his clientele through periods of low investment returns, but he received new referrals. He continues to receive referrals.
when Dave eased back
In fact, Dave's business continued to grow so healthily after the bear market that he eventually declared, "My business is so successful that I don't need a newsletter anymore." Dave stopped his newsletter in the summer of 2003. By the summer of 2004, he had received so many expressions of concern from his clients that he felt he had to resume the newsletter to maintain that connection with them.
connectedness interrupted
Dave's clients became concerned they had lost their connection with their liked and trusted investment advisor. They were wondering, "Is my portfolio so small that I don't qualify to receive your newsletter anymore?" or "Are you not focused on people like me anymore?" or "Are you still in the business? What happened to you?" or "Have you been sick?" Dave received so many inquiries like these that he resumed issuing his newsletter in the summer of 2005.
connection restored
Dave found that attendance at client events became healthy again quickly. After his newsletter began again, his client attrition remained low and new referrals surged.
Dave soon brought on a partner to help manage his business. He has so many clients that he needs licensed help to serve them. He already had a full-time, licensed assistant with experience.
common-sense reasons
In summary, we can say that both Lynne and Dave rejected the conventional idea that any decent newsletter sent regularly will work (in Lynne's case, the corporate newsletter; in Dave's case, the off-the-shelf newsletter). They wanted their own voice with the Articulate Consultants value-add: writing, layout, arranging printing, and delivery on schedule.
lessons learned
In Lynne's case, her show of character was her pride in her stock-market performance. Then, her pride and her career performance both turned south quickly when the stock market did. She failed to develop her relationship with her investors. When her performance sucked by the high standard she had set, she lost clients.
Dave learned that when people like you and trust you, they stay with you and they bring more money to you. Let me say that again. When people like you and trust you, they stay with you and they bring more money to you.
some learn the hard way
We have discovered with Dave, and learned the hard way with Lynne, that professionals who get involved and put heartfelt sincerity into their newsletter can enjoy a loyal clientele with good depth of relationship, low attrition, and good referrals. Dave's business stayed so healthy that he had to bring on a partner.
What's important to you?
Two successful investment advisors. One built trust into client relationships and found resilience in his own career. One regarded client relationships as transactional, and so gave only passing attention to connectedness with investors in her client newsletter. She left her career when the going got tough.
Which would you rather be?
Dave and Lynne each represent many other financial services professionals. Which type are you: a Dave or a Lynne?
Glenn R Harrington, Articulate Consultants Inc.
http://www.articulate.ca/
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