Lights, Camera, Action – The Stresses of Video

According to a new survey from Broadridge Financial Solutions, almost 60 percent of advisors are currently working remotely and more than half do not expect to ever be back in the office full time.

For many advisors, remote communications will often be their major form of interaction with clients and co-workers going forward. So, it is helpful to understand how virtual communications are different from in-person interactions and how to put your best face forward. 

An article in Medical News Today highlights five issues:

Gaze awareness
While it’s easy to make eye contact during an in-person interaction, during a video call, it can be difficult and confusing to decipher between where the camera is versus the person to whom one is speaking. Try to look at the camera so it’s clear you are paying attention and listening. 

Limited attention span
During an in-person meeting, taking notes, looking elsewhere or moving around is normal. When captive to a small camera, these gestures can be distracting or seem rude as if you may have left the conversation. Try to explain what you are doing – “I’m just taking some notes.” Or, “Hold on, I just want to grab a pen.”

Technical glitches
We have all been victim to dropped calls, muted participants, lags, frozen screens and other technological issues. This is frustrating and exhausting to everyone so try to stay technologically “up to date.” But also remember that some circumstances are beyond one’s control. If you do have difficulties, a “good old-fashioned” email explanation will diffuse the situation.

Performance pressure
Lights, camera, action – being “on camera” puts pressure on us to perform and be 100% present. Plus, seeing yourself on screen can result in exaggerated motions and/or talking louder. Try to act as normal as possible and minimize background distractions from pets, kids or appliances. But also keep in mind that everyone can be subject to the same disturbances, try not to stress about it and, if possible, use it to make the conversation more personal.

Too much screen time
Somehow, even the most casual conversation, whether for work, talking to family, online entertainment or getting together virtually with friends has become a screen activity. Where we used to have the ability to take regular breaks and decompress from the screen, this has become much more difficult to achieve. Take breaks, go for a walk, or segment your day. You and your clients will be happier you did. 

For financial advisors with client-facing responsibilities, it is important to understand the differences between in-person and virtual communications and work hard to manage a healthy and positive experience for all participants.  

What Lies Ahead for Global Asset Management

In BCG’s 18th annual report on the global asset management industry, there was a focus on several areas, including:

Evolution of Alternatives
Broadly defined, alternatives are one of the strongest, fastest growing asset classes and arguably the most profitable. According to the BCG report, while alternatives make up only 16% of global AUM, they account for nearly half of revenues and are expected to continue on their growth trajectory as investors seek nontraditional return sources. However, as the report states “not all alternatives are created equal.” Private investments, including private equity, real estate, infrastructure, and private debt, have grown rapidly as a percentage of overall alternatives and now represent about 60% of alternative revenues. More “traditional” alternatives, such as hedge funds, whose performance has suffered for a substantial period of time, have decreased in popularity. During these challenging times, with competition intensifying, technology, expertise and scale will provide the means for firms to succeed and dominate. 

Enhanced Client Experience
Given the pressure of competition, a superior client experience can provide an opportunity to stand out from the pack and help to move the conversation beyond mere performance. Data and technology are helping firms achieve best practices and provide an opportunity to build a comprehensive view of the clients and their needs. The integration of CRM, client communications and sales efforts are enabling personalized and proactive client experiences, allowing firms to focus on areas that are of growing client interest, such as responsible investing, and to structure compensation to incent behavior that benefits the client, while still retaining a business mindset. The report identifies five best practices that are driving an enhanced client experience:
• Leading with Data-Driven Business Intelligence
• Building Robust Data and Technology Organizations
• Realigning Sales and Marketing
• Upgrading the Product Development Cycle
• Strengthening Culture and Incentives

Advisor to Insurance Companies
Insurers represent a major investor segment and a significant portion, 80%, of global institutional asset management business annually, with more than $40 trillion in AUM. The current environment is putting pressure on insurers. This provides an opportunity for asset management firms to provide more robust advice and guidance to this segment of clients. This includes looking at short- and medium-term needs, and incorporating risk management and an assessment of potential scenarios in the future in terms of liquidity needs, fee structures and other factors. The goal is to help insurers meet their own risk/return goals, while also fulfilling policyholder return expectations.

What’s your type(face)?

In late August, The New York Times published an article about the new Goldman Sachs typeface called Goldman Sans. Goldman Sachs is not the first company to have a bespoke typeface and they won’t be the last. But why do companies spend so much money on a customized font and what can you do if you don’t have the budget for your own “Name of Company” Sans?

A short history of typefaces
Different type styles existed even when all content was handwritten. As Robert Bringhurst explains in The Elements of Typographic Style, “In the later Middle Ages and the early Renaissance, a well-trained European scribe might know eight or ten distinct styles of script… and each had certain uses. Sacred scriptures, legal documents, romance literature, business and personal letters all required different scripts…”1

Gutenberg changed written history in the 1450s. From that point through the 1900s, many of the classic fonts were designed, including Garamond (1540), Bembo (1495), Bodoni (1798) and Akzidenz Grotesk (1896). In the mid-1900s, new typefaces rapidly hit the market, especially in the 1970s-1990s. Now, it is estimated there are over 500,000 different typefaces. 

Font or typeface?
Although technically not correct, the modern-day use of “font” and “typeface” is interchangeable. As described by Stephen Coles in The Anatomy of Type, here are the real definitions:
• A glyph is the graphical representation of a character.
• A font is a collection of glyphs, represented by a digital file or a set of metal pieces for a typeface.
• A typeface is the design of a set of characters. In simple terms the typeface is what you see, and the font is what you use.2

Typography is an important part of a brand
As the scribes knew, typefaces can elicit different emotions, such as boldness, elegance, authoritativeness and many others. Because of this, a brand should have a typeface that expresses the company’s value proposition and positioning, as well as its culture. The typeface should also address specific company needs or requirements. In the case of Goldman Sachs, it wanted a font that aligned tabled numbers in a readable and accessible way.

Make it yours
Most companies can’t afford a bespoke typeface, but with over half a million available fonts, a firm can certainly find one that represents its brand and core attributes. Financial services in particular can benefit from fonts that express stability, transparency and confidence. Used consistently, a typeface will help shape a brand. A typeface itself does not constitute a brand’s look, feel or voice. However, as Robert Bringhurst so eloquently wrote: “Well-chosen words deserve well-chosen letters; these in their turn deserve to be set with affection, intelligence, knowledge and skill.”3

Choose your words (and your font) wisely.

When it Pays to be Inclusive

In 2013, Lululemon founder and CEO, Chip Wilson, resigned after blaming women’s bodies for a sheerness issue in its popular yoga pants. Like many other luxury brands, at that time Lululemon leveraged exclusivity, targeting the fit, thin and upscale to generate appeal. Heavyset women were not wanted.

By definition, exclusivity eliminates potential customers, whereas the quest for diversity and inclusivity (D&I) widens the audience. For wealth managers interested in expanding their businesses, D&I programs can help attract and retain different types of clients.

What does D&I mean? Diversity and inclusivity is about creating an accepting and welcoming community that includes groups that are often underrepresented and ensuring them equal access to services and opportunities. Recent tragic events, such as the death of George Floyd, have heightened the nation’s awareness of social injustices and inspired many financial services leaders to a commitment to ensuring inclusivity.

Why be inclusive? According to research conducted by the CFA Institute, financial services organizations consider inclusivity good for business and the right thing to do. With more and more women taking control of the family’s finances, and nearly 25% of millionaires who are minorities, it can be costly to ignore diversity.1

How can you demonstrate diversity and inclusiveness to your clients?Build diversity in your workforce, so that it’s clear to your prospect base that you value the skill and talent of all. Let each target client segment know that you see, understand and respect them, and that you want to work with them. Write blog posts and other thought leadership letting them know how you can help them specifically, and make sure each target is represented in marketing imagery. 

Even Lululemon, under new leadership, has realized that inclusivity is good for business, and at the end of this month their stores will be stocked with plus sized yoga pants.

1 Distribution of U.S. millionaires by race/ethnicity as of 2013,

2 Driving Change: Diversity & Inclusion in Investment Management, CFA Institute, 2018,

Product for the Times

This month, it was reported that Chime had closed a $485 million capital raise. The financing gave the digital bank operator a valuation of over $14 billion making it the most valuable capital-backed consumer fintech company in the U.S., edging out trading platform Robinhood. 

Catalyzed by the global pandemic, the popularity of Chime is in part a testament to the public’s growing reliance on, and trust in, electronic platforms as a means to access professional services. But, beyond its “works from home” convenience, the Chime brand reflects a broader set of features especially appealing in our new virus-defined normal.

Chime fits the bill for a social-contact deprived customer inclined to appreciate a company that seems genuinely concerned, relatable and client-centric. Chime’s stated mission to make financial peace of mind a reality for everyone is explicitly communal. Chime is built on the principle of protecting its members, making managing money easy and never profiting from customers’ mistakes or misfortunes. The promise of this mission is reflected in the following service features:

• Chime is almost completely no-fee banking. Chime makes money not from the customer, but from third-party firms like Visa who compensate Chime for transactions

• The Chime app allows customers to get paid up to two days early when they use direct deposit

• There are no minimum balance requirements, and the 1.00% rate on savings is well above the national average

• Saving is assisted by automatic purchase round-up and payroll savings functions as well as various account alerts

As the Pandemic wears on and people’s behaviors and sentiments adapt to new realities, we expect that consumer fintechs will increasingly project the type of relationship-centric brand evidenced by Chime, which promises electronic customers a safe and trusted social haven where they can transact business as respected and appreciated members rather than anonymous account numbers.

Finding the Right Advisor

In recent years, an increasing number of fintech referral platforms have been created to help investors find the right financial advisor. Examples include SmartAsset, Wealthramp and Positivly. These platforms ask prospective investors a series of qualifying questions, then align these investors with advisors who ideally are equipped to serve them.

In most cases, questions focus on the basics: age, income, investable assets, risk tolerance, retirement focus, comfort with and knowledge about investing, service requirements and location. However, some firms are trying to create more nuanced prospect profiles that will allow for enhanced alignment with advisors and ultimately a deeper advisor/client relationship and more customized client experience.

Positivly, for example, bases its referral service on what it claims to be the “world’s first financial personality test.” The test probes deeper into prospect’s psychology as it relates to investing, focusing on four primary components: 

Purpose  to what degree the investor is motivated by a deeper sense of meaning or purpose
Security – to what degree investments are made to provide physical security and peace of mind
Touch – how investing is tied to meaningful relationships
Viewpoints – how investing serves a need for intellectual satisfaction of getting things right

Unfortunately, Positivly offers little information regarding the scientific basis for its approach. However, we believe the firm is representative of a trend in fintech to develop richer and more meaningful client profiles. These move beyond simple risk tolerance to more behavioral models that can be instructive in client management, service, investment selection and portfolio creation.   We keep an eye on these referral firms to track innovative developments in their approaches to client profiling and to measure their success as viable referral engines for advisors.

Active Still Not Rebounding

Some observers have pointed to the volatility of the market this year as an opportunity for active managers to regain some of the ground lost to their passive competitors over the last decade.

July data from Morningstar did show some interest in active plays in sector funds, but overall investors have continued their avoidance of actively managed equities. Of the record $45.5 billion in estimated net outflows from U.S. equity funds in July, nearly 60% were accounted for by active equity managers. The picture was worse for international equities. Outflows from active international funds in the month were five times those from passive vehicles. Companies hardest hit included American Funds, Invesco, DFA and Fidelity.

It’s worthy of note that on a trailing 12-month basis, actively managed U.S. and international equity funds have lost a substantial $334 billion, while passive funds in the same classes have grown by a net $73 billion.

While renewed volatility is likely going forward, the broad market has recouped most of the losses suffered early in the pandemic. This gives added support to the “buy and hold” crowd as well as to the index investors that had the fortitude to stay invested. It’s likely that if active is to make a comeback, it will probably have to wait until next year and will depend in large part on any relative performance gains sustained through 2020. 

When Cash is no Longer King

With the prolonged global low interest rate environment, the attractiveness of cash holdings for wealth management firms is also at an all time low. UBS Group AG, in fact, announced yesterday that it is increasing fees for “international wealth management clients located abroad and holding deposits in Switzerland” in the face of persistent low/negative interest rates.

Beginning in 2021, the bank will charge 330 Swiss francs monthly for those not living in Switzerland on cash deposits of 500,000 francs or less. That is the current approximate total annual fee for that level of cash deposits, so this represents a twelve-fold increase. The goal is to “encourage” clients to move cash into longer-term investments. Other Swiss banks also have fees in place to offset the costs of negative interest rates. Credit Suisse charges clients on deposits of more than two million francs/one million euros.  

U.S. private banks and other wealth managers, at least for now, still consider client relationships based on overall assets and have not disaggregated the cash portion of a client’s relationship for fee purposes. It is possible, however, that the “lower for longer” environment could drive private banks to do so. One could, of course, argue that motivating investors to put their funds to work to achieve long-term goals is a good thing, but there are more collaborative, educative ways to do so. 

For RIAs and other wealth management firms that take a holistic approach to looking at a client’s total financial picture, this represents an opportunity to engage in positive dialogue regarding the impetus for UBS’ move. While the end goal of holding less cash may be common for all organizations and their clients, the means by which they accomplish this move can be a relationship-building move for those that do it in a client-benefits oriented way.

Teddy Bears at the Gate

Wall Street firms are not historically known to be the overly sensitive, “touchy feely” types. Anyone who has read the book “Barbarians at the Gate” might assume these firms would be the last to adapt to changing employee needs brought on by the pandemic. It appears, however, some of these same firms may be leading the way in providing accommodations to employees who are now working from home.

According to FundFire, KKR, Blackstone, Carlisle Group and others have implemented a number of progressive programs to support their employee base working from home. These programs include expanded family leave and flex time programs, as well as resources to help work from home parents navigate their work and parenting responsibilities more effectively.

According to PwC’s U.S. Report Work Survey, almost 70% of financial services workers expect to have at least 60% of their workforce working from home going forward, up from just 29% of firms expecting to do so prior to the pandemic. Clearly, financial services firms need to reconsider the support they provide to their work from home employees. The PwC findings below point to a number of important areas that work from home employees feel will enhance their productivity.

It remains to be seen what additional accommodations financial services firms will bring to the table to support their work from home employees. But it’s encouraging to see a number of firms stepping up their efforts to support their workforce during these trying times. In addition, this represents an opportunity for financial services firms to evolve their brands to incorporate this new sensitivity. A brand that recognizes a changing environment, employee considerations and the need to provide the resources needed for their company to succeed will enhance both new business development and recruitment of top talent. 

Sniffing Out an Engaging Client Experience

If you’ve ever bought or sold real estate, you may agree that the way to a homebuyer’s heart is through his or her nose. Baking cookies just before a showing is a realtor’s trick of the trade, generating a warm scent that lingers and triggers feelings of joy and hominess that can potentially inspire a bidding war.

There is a lesson to be learned from this tactic. When building your financial services brand, it’s not only curb appeal that counts. While the visuals, including your logo, color palette, and imagery are critical for a strong and unified brand, the other senses should be considered as well when mapping out the client experience. 

A holistic approach to marketing appeals to all the senses, including:

Smell. According to the American Marketing Association, exposure to pleasant scents (like the smell of warm cookies) can substantially increase customer satisfaction and have a positive impact on mood, intentions and behaviors.1 In fact, some financial services organizations have introduced signature scents in their physical locations to reinforce their brand, elicit desired emotions and help them connect with customers. 

Sound. A sonic logo amplifies brand recognition and helps define who you are. For example, last year, MasterCard introduced its sonic brand, a melody played with each customer interaction. Sound has become increasingly important in today’s world of virtual communication. You can use a sonic logo to introduce webinars and podcasts, on mobile applications, and as phone hold music to set the tone for your brand.  

Touch. We email, text and tweet for efficient, speedy and convenient communication. However, sometimes a tactile experience is best. A printed piece is more likely to be noticed and deemed important. Many advisors print wealth plans for this reason, as well as to encourage clients to refer to them over and over again. 

Taste. Business professionals pitch prospects and build relationships over a meal because breaking bread with others engenders familiarity and trust. Social events (even a Zoom cocktail party) creates a more relaxing, low pressure environment, and adding food and beverages into the mix can help make you more persuasive and your listener more receptive.2

1Press Release From the Journal of Marketing: Does Smell Sell? How Ambient Scent Improves Shoppers’ Mood—and Spending, American Marketing Association, November 6, 2019.

2Five Ways Buying Lunch for a Client Makes You More Persuasive, Entrepreneur, January 27, 2017.