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A Better Answer to 'What Are You Telling Clients Today?'

By David RichmanManaging Director, Advisor Institute

When it comes to attracting clients, it is better to be discovered than announced. Let prospective clients discover you socially, instead of cold calling them.

In the months ahead, be prepared to encounter bewildered investors given today's dire headlines about inflation and a looming recession amid strengthening equity markets. Here's how bewilderment may manifest during a first encounter with a prospective client, John.

 "You're a financial advisor? I am sure we are headed for a recession with everything going on right now, so I am sitting on my cash. What are you telling your clients today?"

Your response may be what turns this first encounter into a follow-up conversation. Rather than debating a prospective client's view and overconfidence, lift the conversation to a higher plane by using an ism.

An ism is a timeless, pithy sound bite that connects the dots between your foundational beliefs and the advice you give to clients. Consider one of our favorite isms from Jim Caron, Co-Lead Global Portfolio Manager and Co-Chief Investment Officer of the Global Balanced Risk Control Team at Morgan Stanley: "Noise is often confused with signals."

Much more likely to pique their interest than hearing your counter opinion, isn't it?

Ideally, John will ask you to explain, which opens the door for you to suggest a follow-up meeting. Alternatively, he may want further explanation of the ism, which opens the door for you to add a bit of complexity to help disrupt his overconfidence.

Let's devise a response using Jim Caron's thoughts from a recent episode of Caron's Corner:

 "The consensus narrative actually harmonizes with your negative outlook. Much of this is noise. What are some signals? Consider the US dollar which is currently trending weaker, and the yield curve which is priced to reverse much of its flattening going forward. These are a few signals we are watching that may indicate easier financial conditions ahead."

What have you accomplished? First, you have showcased a professional's perspective that looks past the headlines. Second, your complex response may cause John to rethink his overconfidence and become curious about your potential value.

Bottom line: Articulate your isms during first encounters to pique a prospective client's interest, and when prompted, showcase your thoughtful perspectives.