The Power of Testimonials

The internet has made information sharing easy, and we’ve become a society of reviewers. We check to see what others have to say before making even the smallest of decisions, whether we’re selecting an Uber driver, a wine to purchase or a show to binge watch.

If you’re a financial advisor interested in expanding your client base, it’s important to understand the power of a positive review. Investors want to work with professionals they can trust, especially when it comes to their money, and testimonials are a way to persuade prospects and build confidence. Now that the SEC has modernized its marketing rules to allow testimonials in advertising (with certain limitations and disclosures), it may be time to learn more about creating them.

Why they work
Advertising typically takes the “trust me, I’m great and here’s why” approach. You may be convincing, but hearing that message from an unbiased client is much more credible and authentic, especially when that client is relatable.

What should be included
Every testimonial should indicate how you solved a problem or provided a specific benefit. Examples should vary and hit upon the key needs your target market faces.

Factors to consider
Prospects want to know that you have experience and success helping others like them, so cases should be representative of different demographics and financial needs. As with any form of advertising, messaging should align with your value proposition and mission.

Where they should be used
Client stories can be used across your marketing content to help you build trust, including your website, email marketing, brochures or hand-outs. Photos and videos can make testimonials even more compelling and impactful.

How to get them
Your clients may be willing to share their stories and sing your praises — sometimes all you need to do is ask. However, before you publish anything, make sure you’ve secured their permission and that you’re following the SEC’s revised guidelines.

The Evolution of the Family Office

Say the words family office or family office services, and for many in the industry, images of bill payment, tax preparation, comprehensive reporting, and other detailed administrative financial tasks come to mind. While these services are still an integral part of what a family office does for its clients, the modern family office is evolving to meet the needs of contemporary life.  

Family office 1.0
The origins of family offices in some form go back centuries but were “popularized” in the U.S. by families such as the Rockefellers and the Morgans. They were predicated on providing investment management, governance, and administrative services. In addition, some family offices provide concierge services including facilitating travel plans, property management, and other “luxury” activities. Typically, these “behind the scenes” duties are designed to make a family’s life easier.

The modern family office
The complexity of managing and maintaining multi-generational wealth has grown, and family offices are adapting to meet the new reality. On the investment side, family offices are honing their expertise and access to private investment opportunities, “increasingly investing in both young and established private companies,” according to a December 2020 article in Forbes. Family offices can make decisions relatively quickly and deploy significant amounts of capital, putting them on the same level as some institutional investors. Family offices founded by first-generation sophisticated entrepreneurs are accustomed to deal-making and are more aggressive in investing, with the goal of significant wealth generation. 

Going beyond investments
Firms are going far beyond both investments and traditional family office services. Another article in Forbes details how family offices are trying to be a single source for UHNW families. Martin Graham, Chairman of Oracle Capital Group in the U.K., provides, among other things, “help with immigration, finding a property to live in, getting children into school, setting up charitable foundations, or project finance.” Other firms are adding services that apply to today’s world. Firms such as Rockefeller Capital Management, for example, stress their expertise in working with families on family legacy, governance, and next-gen education, helping families focus on strategies that span multiple generations. Many family offices also offer concierge services designed to enhance their clients’ lifestyle, such as exclusive access to experiences, curated products and services, and recommendations to vetted partners. Other services include cybersecurity protection and VIP healthcare services, particularly relevant in the current environment. 

Most family offices have realized that basic family administrative services are table stakes commodities that can be obtained from many sources. In order to truly stand out and add value to their clients’ lives, they are elevating the family office offer to a differentiated and exclusive level.

The Consolidation Drive Continues

As we return to work in the new year, we are greeted with the news that serial aggregator Hightower has completed its largest acquisition to date. The private equity backed firm purchased the UHNW-focused, $8B Bel Air Investment Advisors from Fiera Capital. Hightower has been on an M&A roll, having completed some 14 acquisitions since 2019. This pace is likely to continue as the firm’s growth strategy was recently refueled with a $700-$800MM capital raise from Goldman Sachs, Neuberger Berman and Coller Capital. 

This auspicious start to 2021 marks a continuation of the record pace of RIA acquisitions in the closing quarters of 2020. In response to COVID-19, acquisition activity in the RIA market tanked in 2Q20. But as the financial markets rebounded, so did the longer-term consolidation trend. By the end of the year, annual RIA transactions hit a new record, as the chart from Echelon Partners below shows.

Source: Echelon Partners

Transactions in 2020 were dominated by roll-up firms, such as CI Financial, Hightower, Creative Planning, Mercer and Focus Financial. Together these five firms accounted for 39 deals. The average AUM per transaction also rose in the year to $1.8B, up 24% from 2019.

It’s likely that the consolidation wave will continue through 2021. The favorable demographics have not changed nor has the drive for scale efficiencies and brand dominance. It also seems to be the consensus that financial markets will remain relatively supportive of the wealth management business as the new year progresses, vaccines become more widely available and a return to “normality” approaches. 

An Economic Booster?

With the rollout of the first COVID-19 vaccine, many people are finally feeling more optimistic. While widespread distribution of the vaccine will take some time, the initial rollout is an important first step in stemming the pandemic.

Health Benefits
According to a recent paper by Charlene M.C. Rodrigues and Stanley A. Plotkin titled Impact of Vaccines; Health, Economic and Social Perspectives, the numerous benefits of vaccine rollouts are difficult to overstate. The vaccine is expected to play a significant role in reducing COVID-19-related mortality rates. Provided there is sufficient vaccine acceptance, there is also hope for the development of herd immunity which can greatly reduce the spread of the virus, particularly to the unvaccinated, who may be too young, too vulnerable, or too immunosuppressed to receive the vaccine.

Economic and Investment Benefits
Additional benefits to widespread vaccine rollout may help boost the U.S. economy. According to FundFire, a recent research study by Bank of America revealed that investor optimism has “skyrocketed” this month following news that the Pfizer and Moderna vaccines had proven effective in clinical trials. According to BofA Securities, many fund managers are increasing allocations to equities and commodities and decreasing cash holdings as a result of the vaccine news – representing the first time they are underweight cash since May 2013.

While it remains to be seen how big an impact the vaccines will have on the overall economy, the reduction in healthcare costs and increase in productivity from a healthier workforce will certainly move the economy in the right direction. Sectors and companies that are directly and indirectly related to the manufacturing and distribution of vaccines are attracting significant investor interest. Overall, it appears investors may be recognizing broader benefits as well. Advisors should leverage this opportunity to communicate with their clients and provide guidance on whether these represent short-term tactical events or longer-term strategic changes to the investment landscape.

Can We Have a Word…or Two or Three?

As we finally near the end of 2020 and look forward to 2021, a vocabulary check gives clarity to what is on everyone’s minds. Several dictionaries have announced their words of the year, and there are few surprises.

Both and Merriam-Webster’s word of the year (WOTY) is pandemic, “based upon a statistical analysis of words that are looked up in extremely high numbers in our online dictionary while also showing a significant year-over-year increase in traffic,” according to Merriam-Webster. Merriam-Webster saw the first big leap in searches, an increase of 1,621% over the previous year, for “pandemic” on February 3rd, when the first COVID-19 patient in the U.S. was released from the hospital. Lookups continued to surge and by March, searches were up an average of 4,000% over 2019. While other terms, such as “coronavirus” and “COVID-19” had dramatic increases then waned, “pandemic” has maintained its “popularity.”

Taking a different tack, The Oxford English Dictionary (Oxford) was unable to declare a single WOTY for 2020, since “It quickly became apparent that 2020 is not a year that could be neatly accommodated in a single ‘word of the year.’” Instead it issued a report, “Words of an Unprecedented Year” that explores “the hyper-speed at which the English-speaking world amassed a new collective vocabulary relating to the coronavirus, and how quickly it became, in many instances, a core part of the language.” Oxford also highlighted key words that rose to “prominence” in certain months, such as “bushfire” in January, when the terrible Australian fire season occurred, “COVID-19, lockdown, social distancing, and reopening,” all of which took off beginning in March, and “Black Lives Matter, cancel culture and BIPOC” starting in June. It is fascinating that many are either new or recently introduced words or words that are being used in a completely new context, such as “mail-in,” which saw a jump of 3,000% in usage versus 2019.

Finishing our WOTY tour, Collins Dictionary selected “lockdown” as its word of the year because “it is a unifying experience for billions of people across the world.” The dictionary saw over 250,000 uses of lockdown, defined as “the imposition of stringent restrictions on travel, social interactions, and access to public spaces,” in 2020 versus 4,000 in 2019. Other words on the Collins Dictionary short list include “coronavirus, BLM, key worker, furlough, self isolate, social distancing, and, on a lighter note, Megxit, TikToker, and Mukbang.

Words are powerful tools, helping us define both the topical and the enduring. They have the power to help us build community and experience events from a common foundation, as well as leave a record for the future.

When Clients Want to be Noble like Nobel

Alfred Nobel, the inventor of dynamite, left most of his fortune to endow the Nobel Prizes. They are awarded each year on December 10th, the anniversary of Nobel’s death, in Stockholm, Sweden. Recipients are those deemed to have made the greatest impact on humankind in physics, chemistry, medicine, literature, economics and fellowship among nations.

Like Nobel, many high-net-worth individuals are interested in using their wealth to better the world. How can financial advisors help them achieve their philanthropic goals?

Understand why clients give
In 2017, 90% of high-net-worth households gave close to $30,000 to charitable causes. And, the mission of the charities they choose motivates donors (59%) more than the tax benefits (17%) they receive.1

People like to give because giving makes them feel good, and many like to do so as a family. According to the Cleveland Clinic, it really is better to give than to receive, because giving yields a host of health benefits including lowering blood pressure, reducing stress and depression. It can truly make you happier–and lead to a longer life.2

Take a holistic, long-term approach to philanthropy
Although the end of the year is the traditional giving season, your clients should plan ahead. Discuss their giving goals throughout the year. In planning meetings, find out about the organizations they currently support, whether they want to include their family in their giving and the types of assets they want to donate. This will help you identify charities and giving platforms that match their requirements.3

Be social, and lead by example
Let clients and prospects know you understand charitable giving through social media posts that include relevant hashtags, such as #philanthropy, #charity, #philanthropicgoals and #NobelPrizeDay. Spread the word that you can help your clients who want to make a difference in the world. Share information about the charitable organizations your firm supports. It can help when you lead by example and make more meaningful connections with your clients.

1 The 2019 U.S. Trust Study of High-Net-Worth Philanthropy, conducted in partnership with the Indiana University Lilly Family School of Philanthropy,

2 Why Giving is Good for Your Health, Cleveland Clinic, October 28, 2020,

3 Advice for Wealth Advisers: How to Talk with Your Clients About Philanthropy, Page Snow, The Chronicle of Philanthropy, July 31, 2019.

Chart Attack

Source: Diagrams by Arthur Lockwood published in 1966. “Graph from scientific magazine showing US annual energy consumption of various energy sources: wood, hydro-electricity, gas, oil and coal. Use of third dimension to differentiate and dramatize information.”

From COVID-19 cases to the election and beyond, we’ve seen a lot of charts and graphs in the past year. And these include maps, bars, pies, dendrograms, heat, bubbles—frankly people are using everything they can think of to explain the data.

Graphs and charts are a great way to show information, but they need to make a point and they need to be trustworthy. In Data Visualization, Andy Kirk explains, “Being truthful and avoiding deception in how you portray data visually are fundamental obligations.” 

If a chart is complicated, it’s hard for people to understand it and relate to the information it contains. In successful charts you don’t always need a multitude of words, labels and numbers. Check out the visualization from Reuters showing how plastic bottles are piling up in the world. This graphic needs no numbers because the explanation and the visual tell the complete story in a compelling way.  

PowerPoint and Excel have, in a way, reduced charts to a generic and elementary form. These programs come with default chart types, typography and colors, and while helpful, they are just that—generic.

Below are some helpful tips for creating successful charts and graphs:

– Label each axis, this is simple but important

– Identify the components clearly—use a legend or some other way to describe what each color/shape/line means

– Quantify the units—is it a percentage or dollar amount or something else?

– Pay attention to geometry especially in charts that use bubble plots: circles should be measured by area, not diameter

– Always include sources

– Understand the prospective use. Is the chart part of a page in a presentation you’re giving? Or is it something your readers will keep and take the time to digest?

– Use simple typography and focus on readability

If the chart isn’t making the point you want, then perhaps you have the wrong data or need to show it in a different way.

Spread from Envisioning Information by Edward R. Tufte, 1990. (p. 24-25)

Do you love seeing the graphic representation of information? Here are some sources you might find interesting. 

Beautiful News Daily

Data Visualization: A handbook for data driven design by Andy Kirk 

From the renowned visual information design master, Edward Tufte, Envisioning Information, as well as other books he wrote. 

Sparking Joy, Not Controversy

It’s that time of the year again. In early November, Starbucks introduced its 2020 series of holiday cups, with the enticement of a “free” collectible cup when ordering a holiday drink.

This year’s cup theme is “Carry the Merry.” Starbucks explained in a press release that “This year’s holiday design brings forward all the joyful elements of the holiday season in ribbons of Starbucks greens and a jolly red like a cozy holiday sweater.” Each of the cups has a name, Ribbon, Dot, Sparkle, and Brand Wrap.

Some may remember that previous years’ cups had their share of controversy and debate. In 2015, many felt the plain red holiday cup did not sufficiently evoke the holidays, particularly Christmas. In 2016, Starbucks featured a green holiday cup with “a mosaic of more than a hundred people, drawn in one continuous stroke” – “a symbol of unity,” according to then Chairman and CEO Howard Schultz. This also drew criticism from some corners, as did the 2017 cup which had a white background and encouraged people to draw in their own colors and illustrations.

Since then, Starbucks has been playing it safe, creating cups that are decidedly holiday-spirited, but in a non-sectarian manner that uses graphics to evoke a mood. In both 2019 and 2020, “merry” is a key theme. This year, particularly, the company is focused on being a respite from everything going on, “that beacon for people, a brief moment that they can look forward to.” That’s a brand message that all can embrace!

A Campaign We Support

In honor of the 9th Giving Tuesday, we thought it might be interesting to share a little of the history behind the day.

Giving Tuesday, started in 2012 as a reaction to the commercialism of Black Friday and Cyber Monday. It is the brainchild of Asha Curran, formerly of the 92nd Street YMCA in New York City. The YMCA, in collaboration with the United Nations Foundation, envisioned a day focused on giving and generosity, whether monetarily, through volunteerism, or acts of kindness. So, what has made this “campaign” so successful?

Creating a Community
Giving was reimagined for the digital age to build a personal sense of community. Social media, websites and PR allow organizations to share real stories about the difference they make, promote charitable giving, and thank donors. Facebook, Instagram and Twitter promote Giving Tuesday, and #GivingTuesday has become instantly understood all over the world. Making giving as easy as possible through online giving platforms and payment processors has been key.

Facilitator not Recipient
Giving Tuesday succeeds because it is not a registered charity but promotes and helps others build visibility for their missions. Through comprehensive resources and tools, it provides nonprofits the means to get the word out. In 2012, more than 2,500 nonprofits participated in Giving Tuesday, with an estimated $10MM in online donations. In 2019, approximately $511MM in online donations were attributable to Giving Tuesday.

Going Global
Giving Tuesday has spread from the United States to over 70 countries and numerous organizations around the world., which became a separate independent organization in July 2019, has adapted to align with global growth, and its leadership and Board of Directors include Giving Tuesday regional directors from non-U.S. regions. also helps build community among nonprofit leaders and organizations around the world so best practices and ideas can be shared.

This year, of course, is like no other, and many nonprofits are experiencing a drop in funding at the same time need has increased. We applaud the work that does to help nonprofits reach their audiences and hope that everyone has an opportunity to give back in some way to those in need this holiday season.

Happy Thanksgiving

“When it comes to life, the critical thing is whether you take things for granted or take them with gratitude.”–G.K. Chesterton

This sentiment above seems particularly relevant this upside-down year. At Optima Group, we are thankful for the continued trust and partnership of our clients and colleagues. We know that this Thanksgiving poses challenges in getting together with friends and family, but we hope that you have an opportunity to visit with loved ones, even if it’s by Zoom, FaceTime or another virtual platform. We are grateful that technology has enabled us to remain connected with one another, although we are hopeful that we are moving toward a time when we can meet in-person again.

Just a reminder that Optima Group will be closed on Thanksgiving Day, November 26, 2020 and Friday, November 27, 2020. 

Happy Thanksgiving from all of us Optima Group!