ADVISER KNOWHOW EPISODE 22 26 MARCH 2013 HOW TO ENTERTAIN YOUR CLIENTS ADVISER KNOWHOW EPISODE 22 26 MARCH 2013 HOW TO ENTERTAIN YOUR CLIENTS ADVISER KNOWHOW EPISODE 22 26 MARCH 2013 ADVISER KNOWHOW ABOUT BNY MELLON ADVISER KNOWHOW THE WEEKLY TV PROGRAMME FOR ADVISERS BY ADVISERS A PROGRAMME FOR ADVISERS BY ADVISERS BNY Mellon is a leading investment management and investment services company, with US$1.4 trillion assets under management and more than 47,000 employees worldwide*. Produced in association with BNY Mellon, Adviser KnowHow is a new groundbreaking programme, created specifically to help you and your business. Every week we speak directly to your peers in the industry to understand how they have addressed some of the key issues that advisers face every day of their working lives. The BNY Mellon asset management model encompasses the investment skills of world class specialist asset managers, including those from Insight, Newton, Standish, The Boston Company Asset Management and Walter Scott ensuring our clients benefit from market leading experts in every asset class. HOW TO ENTERTAIN YOUR CLIENTS The multi-boutique structure encourages an entrepreneurial, focused approach to investment, ensuring our asset managers are ahead of market trends and at the forefront of investment management. Get involved and add your views on twitter: @Adviserknowhow Clear, independent thinking from some of the world’s sharpest investment minds HOW TO ENTERTAIN YOUR CLIENTS Building a close and trusting relationship with your clients is vital for any financial adviser. With an increasing focus on financial life planning over product selling, knowing your clients’ hobbies and passions can help you understand your clients better and, ultimately, provide a better service. But, how do you best do this, and how do you make sure you avoid the pitfalls? KEY POINTS Contact BNY Mellon: tel: 0500 66 00 00 email: brokersupport@bnymellon.com web: www.bnymellonam.co.uk 1 Target your events so they are specific to your clients’ hobbies or pastimes 2 Have a variety of different events for different purposes 3 Be careful with your budget 4 Reward loyal clients Important Information TRANSCRIPT – This is a financial promotion for Professional Clients and/or distributors only. This is not intended as investment advice. The value of investments and the income from them is not guaranteed and can fall as well as rise due to stock market and currency movements. When you sell your investment you may get back less than you originally invested. 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This video may not be used for the purpose of an offer or solicitation in any jurisdiction or in any circumstances in which such offer or solicitation is unlawful or not authorised. This video is issued in the UK and in mainland Europe (excluding Germany) by BNYMAMI, BNY Mellon Centre, 160 Queen Victoria Street, London EC4V 4LA. Registered in England No. 1118580. Authorised and regulated by the Financial Services Authority. In Germany, this is issued by Meriten Investment Management GmbH (formerly named WestLB Mellon Asset Management Kapitalanlagegesellschaft mbH, which is regulated by the Bundesanstalt für Finanzdienstleistungsaufsicht. Meriten Investment Management GmbH is wholly owned by The Bank of New York Mellon Corporation. CP9434-17-01-2013(6M) 21165 02/13 *As at September 30, 2012 ADVISER KNOWHOW EPISODE 22 26 MARCH 2013 HOW TO ENTERTAIN YOUR CLIENTS ADVISER KNOWHOW EPISODE 22 26 MARCH 2013 KEY POINTS PROGRAMME TRANSCRIPT KEY POINTS FROM THIS WEEK’S ADVISER KNOWHOW FEATURING AN INTERVIEW WITH LEE ROBERTSON OF INVESTMENT QUORUM “We try to choose something that’s different, that our clients wouldn’t normally go to.” 1 3 ¬¬ You should always put your clients’ needs at the front of organising any event and make sure it is something they will enjoy - entertaining clients should be entertaining, you do not want them to feel as though you have wasted their time and money on activities that do not interest them. ¬¬ Ask your clients what they want to do and make it happen and match certain events to certain clients; don’t organise an annual rugby match when half of your clients are female and not into sports but organise two events and cater accordingly 2 HAVE A VARIETY OF DIFFERENT EVENTS FOR DIFFERENT PURPOSES ¬¬ If you have three varied events: a drinks event, a sporting event and a seminar you will get to know your clients in various scenarios and situations and understand them better and build a stronger relationship. ¬¬ Seminars and workshops may not always excite your clients but, equally, only having drinks events could be unproductive and only prompt ‘social’ conversations which don’t help you build your business better. ¬¬ Mix one-on-one events with big group events. One-on-one events make clients feel special and they enable a stronger bond of trust and understanding. Big group events promote clients talking to each other and possibly doing business with each other and creates a community BE CAREFUL WITH YOUR BUDGET ¬¬ Establish an annual budget on how much you can afford to spend on entertaining clients. Lavish dinners are not necessary and it is important to be sensible to your own budget ¬¬ Clients will be wary if they think you are spending their money on frivolous or extravagant events and will be incredibly cost sensitive in the new post-RDR world. Clients could easily mistake firms showing off their financial success as wasting their money. 4 REWARD LOYAL CLIENTS ¬¬ Use entertainment as a way to reward your clients’ loyalty, whether it is referring other clients on or staying with your firm for many years, as it will make the client feel trusted, respected and valued. This week we’re talking about how and why you should entertain your clients. Building a close and trusting relationship with your clients is vital for any financial adviser. With an increasing focus on financial life planning over product selling, knowing your clients’ hobbies and passions can help you understand your clients better, and ultimately provide a better service. But, how do you best do this? And how do you make sure that you avoid the pitfalls? Here with me now is Lee Robertson, chief executive at Investment Quorum. But before we speak to him, let’s look at how other advisers across the country entertain their clients. VOX POPS What client entertainment events do you host? RICHARD RANDALL, AV Trinity We have done the traditional golf days. But we tried to look a little differently at things more recently, over the last few years. We now do a sailing day for clients that works very well. DUNCAN HANNAY ROBERTSON, Hannay Robertson For one of my clients, we asked about their holidays and they said they were quite interested in going on a train journey because they had seen Michael Portillo on television. I knew ADVISER KNOWHOW EPISODE 22 26 MARCH 2013 Lee Robertson, Investment Quorum Richard Randall, AV Trinity Michael Portillo was coming to the local Cambridge word festival, and so I got tickets for them and invited them along to that, and we had lunch afterwards, so that was very enjoyable. That was quite targeted. The other event that we had was up in the jockey club in Newmarket. We try to choose something that’s different, that our clients wouldn’t normally go to. if you have [unintelligible] clients, but you’re taking them to a Michelin star restaurant, it doesn’t link together. So your clients are always thinking, how are you spending their money. You’ve got to be seen to be spending it wisely. What is the benefit in entertaining clients? JUN MERRETT, reporter, New Model Adviser So, Lee, when did you first decide to entertain your clients and what was the thinking behind this? RICHARD RANDALL It’s a way of getting closer to our clients. Of course we want clients to go away thinking all the better of us and hopefully for referrals. Ostensibly it is to get clients realising something about the charities that we support and hopefully for them to start supporting those charities as well. DUNCAN HANNAY ROBERTSON Well, the key benefit clearly is building on that relationship and you know, when you’re in a seminar, people don’t really get to talk to each other, but when you go down to the pub, everyone completely opens up, and it’s the same kind of thing. You really get to know people over a drink. What are the pitfalls when hosting client entertainment events? Duncan Hannay Robertson You’ve got to pitch it; you’ve got to mirror and match. You’ve got to match your events to your clients, because an economist speak, or a fund manager. So it’s part educational and they get a nice breakfast. It’s a nice way to mix with them. Professional connections (solicitors and accountants) particularly like that because they can bring clients of theirs along as well. END OF VOX POPS LEE ROBERTSON Advisors are in a very privileged and interesting position. They’ve got relatively low numbers of clients that they get to know extremely well. It’s a nice thing to be able to do. To have clients you like and to entertain them. JUN MERRETT What kind of things do you do for your clients? How do you entertain them? LEE ROBERTSON It’s mixed and varied, I think. There’s always a regular series of lunches that go on, either with a specific client or with a small group of clients. The big thing – our centrepiece - has always been the advocates breakfast club. It’s for a select group of clients who’ve been very good to us, who refer to us; real advocates for the business. We get them together bi-monthly and we have HOW TO ENTERTAIN YOUR CLIENTS “You can go too far, but I think to meet with your clients in a completely social environment, is incredibly powerful” “It’s a way of getting closer to our clients. Of course we want clients to go away thinking all the better of us and hopefully for referrals. ” Duncan Hannay Robertson, Hannay Robertson TARGET YOUR EVENTS SO THEY ARE SPECIFIC TO YOUR CLIENTS’ HOBBIES OR PASTIMES HOW TO ENTERTAIN YOUR CLIENTS JUN MERRETT Great. And what’s the benefit to entertaining your clients? Do they like it? Do they enjoy it? LEE ROBERTSON They tell us that they do. I think there’s a line to be drawn here. You can go too far, but I think to meet with your clients in a completely social environment, not part of the process of financial advice or investment management or any of that, is incredibly powerful. You get to know them very well, socially. Clients can interact with other clients, and that’s been a benefit that we’ve seen – clients end up doing business with each other because they’ve met at these social events that we’ve run. JUN MERRETT How do you avoid the pitfall of potentially having clients think that you’re using their money, using their fees and spending it on these ‘lavish’ lunches and so on? Do you ever get that confrontation from clients? LEE ROBERTSON You’ve obviously never been to one of my lunches – they aren’t that lavish! [laughs]. We’ve never had a pushback from a client on this. It’s not that we’re flying them to Paris; it’s a lunch in a decent restaurant, where it’s totally non-threatening. The big spend that we did was on our tenth birthday party, where about a third of our clients came, and we’re very privileged that they did. They came to the Barbican, we had this huge party; in fact some people from Citywire were there. That was our big spend, but we wanted to mark ten years. But unfortunately that’s all we’ve got time for. JUN MERRETT What are the potential challenges about entertaining your clients? I mean how far is too far? Or you can find the link and add your views at @AdviserKnowHow on Twitter. LEE ROBERTSON I don’t know. I think it’s difficult for an intermediary-type firm, an advisorytype firm to go too far. We don’t have investment bank budgets, where you fly clients around the globe to sporting events, etcetera. I think if you are sensible with it, it’s decent lunches, it’s decent sporting events and you don’t over-cater. I think it’s quite hard to go too far. You’ve also go to bear in mind that the clients are incredibly cost and charge sensitive at the moment, particularly with the RDR etcetera. So I think there is a line to be drawn, but common sense tends to dictate. If you know your clients well, you know what they would accept. JUN MERRETT Great, well, thanks so much for your time Lee, it’s been great talking to you. LEE ROBERTSON Thank you. JUN MERRETT You can download the fact file for this week’s edition at citywire.co.uk/ adviserknowhow or bnymellonam.co.uk/adviserknowhow.