Three Ways to Help Clients Get Through this Election

Election Day has finally arrived, and investors are nervous. Regardless of political affiliation, nearly 70% of adults report feeling stressed by the 2020 election1 and 84% feel the election will impact their investments.2

How can financial advisors help clients stay on track toward their goals, despite the uncertainties surrounding one of the most contentious elections in history? Here are three suggestions:

1.     Actively listen. Investors want an advisor they can trust, and an effective way to build trust is to be a good listener. Conscious listening forges deeper relationships and can help you understand why a client is truly worried about the election. It’s also essential for client retention, as the failure to understand a client’s goals and concerns is cited as a top reason for switching advisors. 3    

2.     Reassure. Clients pay advisory fees for personalized advice and guidance that gives them peace of mind. Now is the time to remind clients they have a financial plan in place based on their objectives and risk tolerance that considers the impact of potential market downturns. Let them know that the market has experienced increases under each political party. So, time in the market is what works, not timing the market.

3.     Provide thought leadership. Uncertainty creates an opportunity to demonstrate your expertise and commitment to client goals. Advisors who are consistently producing informative and useful blogs and social media posts provide added value by giving their clients a greater sense of participation and control.

Finally, remember that every vote counts! So please be safe, but vote!

Getting Out the Vote

Election Day is one week away, and campaigning has reached a fever pitch. And, the number of organizations using their brands to urge people to vote is at an all-time high. From tech giants like Amazon and Google to classic American brands such as Wells FargoLevi Strauss and Starbucks, businesses are promoting “vote and/or vote early” on social media, including Instagram, Facebook and Twitter. The big social media platforms all have resources to help people find out where and when they can vote, as do high traffic apps such as Yelp. Of course, Optima Group agrees wholeheartedly with this sentiment and urges everyone to vote and make their voices heard.

How effective are these tactics? Like all consumer marketing, we think of this initiative along the customer lifecycle. In this situation, the customer or voter journey is something like this:

• Awareness (voicing/creating the need – why one should vote)
• Lead generation (how one can vote)
• Fulfillment (the means to register to vote and information on how to make sure your ballot is successfully cast)
• Conversion (actual act of voting)
• Post-sale communication (“I voted” acknowledgment)

Large company efforts promoting the importance of voting are strong in building awareness, serving as “air cover.” Unfortunately, the audiences they reach are often the ones that are already convinced of the need and have the resources and knowledge to execute. So while the tactic may be brand enhancing, it may not be moving the voting needle that much, according to Christopher Mann, a political scientist at Skidmore College. The tactical information found on social media sites focus more on lead generation and fulfillment. These sites and apps have a diverse audience, including those who benefit most and are accustomed to obtaining news, information and resources digitally. They are widely used by younger audiences, helping boost historically low voter participation rates. The last two stages of the customer journey, lead conversion, or actual voting, and post-sale communication, acknowledging the voter’s contribution to the democratic process, are handled by public resources.  

Is ESG Reaching the Tipping Point?

A just-released survey by PwC’s Luxembourg branch highlights some dramatic trends. Seventy-seven percent of European institutional investors surveyed plan to stop using non-ESG investment strategies by 2022. In Europe, ESG fund assets are expected to comprise up to 57% of total European ESG mutual fund assets by 2025.

As ESG assets are set to boom across the pond, there are also indications in the U.S. that investors are becoming more socially aware. For example, ESG ETF assets have risen sharply in 2020, with iShares’ three largest broadly diversified funds alone gathering $13 billion in assets year-to-date through October 16. Both iShares ESG Aware MSCI USA ETF (ESGU) and Vanguard ESG US Stock ETF (ESGV) have outperformed the S&P 500 Index in the past year, reinforcing the hypothesis that ESG investors do not need to give up performance to be more responsible.

It appears that a growing number of institutional and retail investors may be choosing competitively priced products from index giants like iShares, Vanguard, and others to serve as the core of their portfolios. This shift replaces traditional S&P 500 and MSCI EAFE index-based strategies while providing exposure to sustainable and social impact investing. If broad ESG index offerings are able to sustain a performance advantage over broadly accepted non-ESG products for the next few years, it is not unreasonable to anticipate a significantly larger movement of assets to core ESG holdings. 

For institutional asset managers, this may represent a fundamental shift that must be considered in light of new product and distribution strategies. For wealth managers, this highlights the importance of having a defined approach for clients that are increasingly demanding ESG/sustainable investing solutions.

Building Strength Through Adversity

It’s no secret that unemployment has risen to worrisome heights this year as the impact of COVID-19 works its way through the economy.

In its September report, the Bureau of Labor Statistics put the latest unemployment rate at 7.9%. This was a significant improvement from the year’s high of 14.7% in April but still leaves close to 13 million people out of work.

The downturn in jobs has not impacted industries equally, however. In fact, recent media reports have anecdotally suggested accelerating growth in wealth management employment. Fidelity, for example, just announced that the firm was seeking to hire an additional 4,000 client-facing personnel, including financial advisors, licensed representatives and customer service employees. This is nearly a 10% increase in the firm’s overall employment. Fisher Investments also recently announced that it has completed construction of a new facility that will house an additional 1,100 employees, increasing that firm’s total workforce by about one quarter.

In both cases, the companies pointed to significant accelerations in growth among retail clients this year. Fidelity reported a 24% increase in households engaged in financial planning interactions during 2Q20 compared to a year before. According to the firm’s announcement, recent market volatility and growing economic complexity “has driven millions of new and existing customers to open accounts, increase trading activity and contribute additional savings.” Fisher spokespeople, too, pointed to the need to support “ongoing rapid growth.”

It is encouraging that the investing public appears to be reaching out to their wealth managers in significant numbers to help them navigate this time of crisis. As the industry continues to expand its capabilities and resources to meet the service demands of a new market reality, advisors can benefit in terms of client loyalty, retention and referrals by communicating their enhanced commitment, increased expertise and range of solutions to help clients navigate challenging times.

A November to Remember

With only a few weeks until the election, uncertainty regarding the outcome and the unprecedented circumstances we live in are reflected in jittery global equity markets.

One could even argue that it’s almost a reassuring sign that markets are exhibiting their usual election year October behavior, as illustrated in the chart below. Historically, election year September and October stock market performance tends to be weak.  

Providing some historical perspective may help wealth and asset managers reassure their clients that it’s key to focus on the long term. Trying to predict outcomes and reactions to the markets is impossible. Prior to the 2016 election, more than one expert predicted that if Trump were elected the markets could and/or would tank and the U.S. could enter into recession. Then on election night, as it became increasingly clear that Trump was going to win, stock market futures dropped dramatically, and the S&P 500 declined rapidly in pre-market trading, triggering the circuit breaker to temporarily halt trading. But by the closing bell, the index was up for the day. 

Markets are Agnostic
Another historical trend may help to alleviate fears, no matter the candidate each of your clients support. Markets don’t really seem to care which party is in power. Again, this speaks to a long-term perspective, while not losing sight, of course, of the impact that short-term market movements can have on cash flow and spending.   

Source: FMRCo. Monthly data since 1789 through end of 2019 (mix of S&P 500, DJIA and Cowles Commission). Note that since the party system was not “Republican vs. Democrat” for part of the period in question, the various occurrences used to calculate these results do not add up to the total number of elections since 1789.

It’s Your Website’s Job

Your eyes may be the window to your soul, but your company’s website is the window to your brand. With fewer in-person interactions happening every day, a compelling, engaging, and interactive website is key. Your marketing, communications, and business frankly depend on it.

For wealth management firms, some objectives when developing or updating your firm’s website are: 

Business development
Unlike e-commerce firms, sophisticated wealth management clients rarely “buy” your services directly through your website. Instead, your website brings your firm to life for prospects who “found you” through an existing client, center of influence, webinar, email campaign or thought leadership. A great website enhances each step of your business development efforts by showing how your clients benefit from your approach. To support lead generation and information capture, visitors to your site should be encouraged to read up to date information, subscribe to content, and submit inquiries for follow-up.

Brand building
Your value and brand should shine through your site with every view and click. If your firm is high touch, then reflect that through a website, with ample opportunity to engage and interact. If a disciplined, sophisticated investment approach is your calling card, then your site can demonstrate that process in a way that is easy for visitors to follow. And, if your team is extraordinary, then personality should be front and center, featuring their expertise and accessibility through videos, photos, and quotes. 

Information resource
To build your brand and reputation, your firm should regularly produce high quality, value-added content including videos, webinars, and commentary to engage and guide your viewers. This will encourage visitors to learn about the relevance of your thinking and how you help manage their lives and their wealth. 

Employee recruiting 
A great website can also help you recruit top-notch resources by quickly demonstrating that you are a “serious player.” Information that humanizes your firm, promotes your awards and recognition, philanthropic initiatives, corporate sponsorships and events will help you attract professionals whose skills match your culture and needs. 

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,