Financial planners want long-term relationships with clients. However, clients expect quarterly reports from investment advisors. Doesn’t that undermine a long-term perspective? How should financial planners approach quarterly performance reporting? Here are some suggestions from someone who has produced quarterly market-updates since 1993—the past 80 quarters.
For example, the video above, and an article that goes with it and gets posted on advisor websites, focus on diversification. It shows how combining different asset classes worked well over the past five years. By discussing current trends over a five-year period, you illustrate that short-term ups and downs usually little effect over long term. You make it easier for clients to stay attuned to what’s important and ignore the “noise" and emotion of the markets. By explaining asset allocation and systematic investing techniques, in the context of this past quarter's performance, you align clients with your views. By continually training clients to resist reacting to short-term volatility, you will improve their long-term results and can better justify your fees.
A New Approach: Quarterly Reports In Video
Advisor Products, which makes advisor websites, content, and tech tools for advisors since 1996, has for many years produced a "Quarterly Market Summary." It's provided to advisors as a Word document and PowerPoint presentation, so RIAs can use it to accompany the quarterly portfolio reports they send to clients. Advisors can also use the text and charts in print and email newsletters, in-person presentations with clients and prospects, blog posts, and social media content, etc.
Starting with 2Q2013 quarter, I'm making the Quarterly Market Summary available as a 10- to 15-minute video for $400 a year. (We continue to offer QMS as a slide presentation and Word document for $1200 a year). You can post the QMS videos for clients to view in AdvisorVault's "Share" folder or in a Dropbox, Box, SkyDrive or other file-sharing system. This video is especially important if you present your reports to clients electronically. If you're sending clients reports quarterly and they're not opening them, you're obviously not connecting with them. That's not good. And if you are sending them and they are opening them, then you want to give them more information than just a statement. An educational video based on long-term investing and broad diversificatoin is easy for clients to understand. Video is easy to consume.
In addition to presenting the QMS videos to clients to put performance in proper perspective, you can post these quarterly videos as a lead-generation report for prospects to view. If you ever hope to succeed in online marketing, you will need to provide prospects with content. The quarterly performance reports might be subscribed to by a prospect for a year or two, or even longer, before that prospect will seriously consider hiring you. It's drip marketing but the tools have changed to suit the Internet.
Keep in mind, the quarterly market update videos are just one element in a content stream that you need to produce and share on social networks. We strongly recommend you post a blog at least twice a month that you write, or you might prefer to speak into a camera about issues your target markets need to know about and post those videos to your blog. Point is, the quarterly market updates and other content from Advisor Products are a complement to your blog. To succeed in content marketing and search egnine optimization, you need create your own content by producing blog posts regularly. But you'll need to create a lot less content if you use our videos and articles as part of a content marketing strategy.
The Quarterly Market Update Videos are produced based on research from Fritz Meyer, an independent economist. Meyer's a brilliant analyst and provides monthly advisor educational webinars that CFPs, CIMAs, and CPWAs can attend for continuing professional education credit, and we hope to be spporved for CPA CPE soon.
The approach we're executing is likely to set a new standard for quarterly performance reporting by RIAs.