Facebook’s initial public offering went from a spectacle to a “nightmare,” RegisteredRep.com reports, with severe repercussions for Morgan Stanley Smith Barney advisors, whose company was lead underwriter on the IPO.

Morgan Stanley was originally going to limit sales of the stock to 500 per client, and limit the number of clients who were eligible, but Facebook CEO Mark Zuckerberg reportedly wanted the company’s shares to “get into as many hands as possible,” RegisteredRep.com reports. So the offer was open to all MSSB clients, limit was increased to 2,000 shares for some clients.

What this meant was that financial advisors had to go back through their emails and reach out to all their customers who had shown interest in Facebook. “I had maybe 20 or 25 people we had put in for originally, but now that number has grown to about 60,” one Morgan Stanley financial advisor told RegisteredRep. “I looked back at all the emails and calls of people who had said they wanted in.”

The article says that with Facebook’s lackluster stock performance so far Morgan Stanley brokers are being “hammered by angry clients who feel that once again they got beat by the smart money.” However, RegisteredRep says that the MSSB financial advisors ought to remind their customers that “one trade does not a relationship make,” that this short time in the market doesn’t indicate the company’s value, and that Facebook could end up being worth the money.

In closing, RegisteredRep says that “FAs should remind clients that you have added value before Facebook and will continue to add value after Facebook.”

Written by Lisa Swan

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Don’t show them the money. That is the advice many financial advisors give parents whose grown children are still trying to sponge off them. RegisteredRep.com says that according to a recent survey, only 54 percent of 18 to 24 year-olds have a full-time job, which is the smallest percentage since the federal government began tracking the data in 1948. Granted, some of those young people are still in school, but the less money they make, the more they may need to rely on the Bank of Mom and Dad.

Yet the parents need to save for their retirement. So what should they do? Kevin McKinley, author of the book Make Your Kid a Millionaire, writes for RegisteredRep.com  some suggestions for financial advisors to give to parents:

  • Stop showing them the money. “When the parents learn that their benevolence today could mean a shorter and stingier retirement,” RegisteredRep.com writes, it could be the wake-up call to re-evaluate what is actually affordable for them (and their children).
  • Put a limit on college costs. The sky should not be the limit for your clients’ children. They should set a budget for the amount of school costs.
  • The student should be the one getting the student loan. If the parents file the Federal Financial Aid Form to get financial assistance for their child, they should make sure that the student loans are taken out in the child’s name, not theirs.
  • Cut the credit spigot. Parents should keep track of their child’s credit, and make sure they don’t ring up any big debts, or get a credit card to overspend on.
  • Limit access to the Bank of Mom and Dad gradually. Encourage clients to gradually limit the money they put out for their children.
  • It’s OK to be the bad guy. Tell clients to simply say no to ridiculous money requests by telling their kids that their financial advisor recommends against it.

Written by Lisa Swan

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To give your affluent customers a good “client experience,” you might want to follow RegisteredRep.com’s checklist for how to treat wealthy customers. The idea is to run a “client-centric practice that always delivers” with commitments to keep promises and treat clients well. Here are the main tips:

  • Show, don’t tell how your business will serve them: Instead of just talking about how comfortable your office is, show them. Cultivate a friendly yet professional atmosphere at your workplace.
  • When it comes to courteous service, even the smallest things count: Greet your clients yourself, hold the door open for them, and then walk them out. Make them feel valuable.
  • Have 24/7 availability: Give your customers a number where they can reach you whenever. Don’t think of yourself as a 9 to 5 business anymore.
  • Make sure your clients can get answers from your staff quickly: “Transform your support personnel into a client response team,” the article says. Try to be have your staff trained so that they can get back to clients with answers within 15 minutes.
  • Say no to saying no: Try to serve your clients as much as possible.
  • Provide great customer service, with an assist from your clients: RegisteredRep says you should “help clients help you provide Ritz-Carlton-level service.” This means you should find out what your client may want, and set expectations.
  • Show leadership: This means that to be respected as a leader, you need to act like one.
  • Wow your clients: You ought to know your customers well enough to be able to do personal touches that they will be delighted by
  • Follow through on your work: You should “execute with FedEx efficiency,” the article says, being accurate and conscientious.
  • Solve your clients’ problems: If there is a problem, fix it quickly. RegisteredRep says that doing so is the top way to get loyalty.
  • Be for real: You need to be a “’go-to’ financial coordinator, a quarterback,” and to help your customers be able to organize their financial lives.
  • Consider whether to get rid of smaller customers: “The more clients you have, the more difficult it becomes to adhere to your ‘client experience’ game plan,” so might want to consider dropping smaller clients.  This is a tremendous challenge for many financial advisors. It is important to take a hard look at your smaller clients.

Written By Lisa Swan

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A new guidebook for financial advisors, published by Pershing Advisor Solutions, reveals that women are generally more dissatisfied with financial advisors than men are. RegisteredRep.com reports that the guidebook, called “Women Are Not A ‘Niche’ Market. They Are A Significant Business Opportunity” says that in “16 areas of a financial firm’s practice, women were more dissatisfied than men in every single category—from communication issues to transparency about charges and fees.”

Pershing also found that 70 percent of women fire their financial advisors within a year of their spouses’ deaths. This could be a significant financial loss for those companies, given that around 50% of women over age 65 outlive their husbands by fifteen years.

So what can financial advisors do to keep their female clients happy? Kim Dellarocca, who directs practice management for Pershing, has five tips for advisors to follow to help retain women clients:

  • If the women are part of a couple, make sure that both are included when having meetings to discuss finances, and to emphasize how smart financial decisions can help the woman as well, and protect the family.
  • Treat the woman as an equal partner in their financial decision-making.
  • Listen to the woman’s concerns, and not just the man’s.
  • Host financial planning events and workshops which are “couple-friendly” and which interest both husband and wife.
  • Get the woman’s own email address to be able to directly send her financial planning information.

Written by Lisa Swan

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Many financial advisors want to get on board with social media, but they do not want to make mistakes, alienate customers, or violate federal regulators. RegisteredRep.com has 10 tips on what not to do in social media, so that financial advisors are aware of the pitfalls.

First of all, the hard sell doesn’t work online. You don’t want to be “that guy” or “that girl” constantly pushing products, Registered Rep writes. Instead, think of it like an online cocktail party; you wouldn’t shout from the rooftops there about how great your services are, so don’t do it online. Also, do not cold-call the friends of your online friends, or the followers of your online followers. You will be perceived as making a huge faux pas. And don’t even think about spamming – all it will do will get you a bad reputation.

Needless to say, everything you do online should be in a professional manner. So that means skip the offensive jokes and pictures on your pages. You can have personal things, but please keep them non-embarrassing. Don’t put anything online that you wouldn’t want your clients to see.  And remember, skip the minutia. It’s too much information to tell everybody what you had for breakfast, lunch or dinner.

Also, keep up with your social media. In many cases, people make a huge effort at the start, then forget about it after a week. Don’t do that. In addition, please customize what you say to others – it’s more effective that way. But don’t simply recite back where the person went to school, or where they went to work after college. That could come across as creepy. Stay subtle.

Please check your spelling and grammar for typos and such before posting on social media. Errors in your tweets and Facebook posts could potentially take away from your credibility.

Finally, don’t think you are all that on Facebook, LinkedIn, Twitter or other social media sites. Don’t pretend you vacationed in St. Bart’s when you really went to Seaside Heights. Not only will you be perceived as putting on airs, but it could all catch up with you.

Written by Lisa Swan

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It looks like not everything is smooth sailing at Morgan Keegan these days, as the brokerage house becomes part of Raymond James. RegisteredRep.com reports that despite the retention offers Raymond James has put on the table to keep Morgan Keegan’s financial advisors in the fold, seven advisors have left since December, according to FINRA records. That’s not all – Morgan Keegan lost around 190 advisors in the six months before, the publication notes, after Regions Financial Corp put the brokerage up for sale. All told, Morgan Keegan has lost 15% of their advisors since they first went up for sale. In some of the recent defections, the people leaving were already planning on going elsewhere before Raymond James agreed to buy the company. This includes folks like Terrence Puricelli, who moved on to Wells Fargo Advisors, and Charles Allain III, who departed for LPL Financial. Other advisors left in January, with one going to Wells Fargo, two going to JP Morgan Securities, one departing for Wunderlich Securities, and another moving on to Ameritas Investment Corp. Ron Edde, a senior executive recruiter for Armstrong Financial Group, claimed that those who left in January were what RegisteredRep.com characterizes as “average or below-average producers.” He also said that the retention offers Raymond James put on the table would vest at the end of March, and were only for big producers. Edde also said that those financial advisors who brought in $200,000 or less did not have much of a future elsewhere. “A prostitute will have a better chance of getting a job at the Vatican,” Edde argued.

Written by Lisa Swan

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Financial advisors who want to keep up with the best ways to talk with their clients ought to consider social media, RegisteredRep.com argues. The publication says that many advisors are “behind the curve“ when it comes to interacting with their clients on social media, which could prove costly. This is because investors are more likely to refer a financial advisor to someone they know on both a personal and professional basis, as opposed to someone they only know professionally, so that means that those who are not savvy with social media could be missing out.

RegisteredRep.com says that their research has discovered that “social prospecting in affluent circles today is what cold calling was some 25 years ago,” and that “it’s what public seminars were about some 15 years ago.” Basically, that means is that those who want to be “elite” financial advisors need to get connected with social media, and use the tools to grow their business.

Social media, the article argues, may be a new technique, but it is directly related to an old one — word-of-mouth-influence, also known as WOMI. RegisteredRep.com says that WOMI is the “high-octane fuel” that motivates decision making.

Financial advisors who use social media “can now schmooze with their top clients, meet their friends in a non-threatening environment, develop rapport, build personal relationships, and transition their clients’ friends into new clients,” the article says. And those types of connections are critical when it comes to growing a financial advisor’s business. The article suggests using “strategic intent” with the socializing to prospect for new clients, and foster relationships with current ones, and says that those who do can see great success.

Written by Lisa Swan

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Financial advisors give their clients advice all the time on succession planning. But what happens when they are the ones who need to do the succession planning, for their own businesses?  RegisteredRep.com takes a look at one person in that situation.

Jon Ten Haagen, 68, of Huntington, New York, has $35 million in assets for his small company. He said he has tried to bring in junior financial advisors to his business, but it just has not worked out so far. He is not ready to retire, but he says he knows he needs to think about the next step. The financial advisor has a book, and makes regular appearances on local TV, and would like to find a way to capitalize on that, and to make his business more attractive to future buyers.

RegisteredRep.com talked with three advisors about Ten Haagen’s situation. Chip Roame of Tiburon Strategic Advisors says: “I think this advisor needs to understand what he’s up against. Solo practitioners, especially those with a pretty small practice, generally find it challenging to add people and do succession planning.” Roame suggests better marketing on his TV appearances — listing and saying his phone number right away – and to bring in another advisor on salary or a cut of the revenue, not on commission.

Philip Palaveev of Fusion Advisor Network, which is based in Elmsford, N.Y., says that the Long Island-based financial advisor ought to consider a different approach to bringing in a younger advisor. “I know of at least two or three practices in his area with guys in their 30s and 40s who would love to explore a partnership with him,” Palaveev tells RegisteredRep.com. “He would maintain his independent practice, use their administrative support, and when the time is right to retire, they would back him up.”

And Hellen Davis of Indaba Training Specialists suggested that Ten Haagen “go to a firm with some advisors in their 40s, people who are 15 years or so younger than he is. Then he’d tell them he just wants an office there, with a view to possibly transitioning his clients in five to seven years. That means going with younger financial planners already running a practice, instead of people with little experience.” She thinks that Ten Haagen’s TV appearances will make him even more marketable.

Written by Lisa Swan

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Most people do not want to think about the fact that they will eventually die, and some of them are afraid to even make plans for what should happen to their assets after they pass away. That also goes for financial advisors. RegisteredRep reveals the results of a new report by Pershing Advisor Solutions, “Developing a Sustainable Business and Succession Plan.” According to the report, 70 percent of financial advisors with revenue of $5 million or more either do not have a succession plan at all at their firms, or have an inadequate one.

Given that financial advisors work with such plans for their own clients, this news is surprising. “When you know you have to go to the doctor, you keep putting it off,” Kim Dellarocca of Pershing. “It’s the characteristics that make us human. It’s an element of, ‘Nothing’s going to happen to me, nothing’s going to happen to my business, everything’s going to be fine.’ We all prefer to go through life thinking that way.”

The report says that there are three big mistakes that those advisors who do have succession plans make:

• Picking the wrong successor: Advisors should choose someone whose skills are aligned for the future, not just the present. Dellarocca says companies ought to ask, “Who here aligns with what the future of this firm is going to look like?”

• Making choosing a successor an office competition: “Telling potential successors in a practice that they all have a shot at taking over is asking for trouble,” RegisteredRep says.

• Coming up with plans during a state of panic: No need for fear here. Instead, Dellarocca says, advisors should think about the three groups of people counting on them – their employees, their investors, and their own loved ones, in order to decide what to do. “When you think about these groups that are counting on you, that really starts the process from a place of heart,” Dellarocca says.

Written by Lisa Swan

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Some financial advisors are dipping their toes into the world of social media. But instead of worrying about accumulating massive numbers of Facebook friends and Twitter followers, RegisteredRep.com says some social media experts emphasize quality over quantity. 

“I’m telling them to connect to people they know already, then pick and choose who the right people are,” Lauren Boyman, who is Morgan Stanley Smith Barney’s director of social media, tells the publication. “We’re telling them to do this in a methodical way. But we’re not instructing them to try and connect with Maria Bartiromo and see if that helps.”

 The idea is to find people who financial advisors may be able to do business with, not just adding friends, acquaintances, and family members for the sake of numbers.

For example, LPL Financial is asking its representatives to write targeted messages instead of drumming up marketing. “Content needs to be memorable and appropriate,” Melissa Fox-Foley, a vice president at the firm, says. “We’re not going for mass appeal.”

Firms are still grappling with the social media world, tracking how much it helps the bottom line, and coming up with ways to use social media in their businesses. And different financial advisor firms have very different rules on social media. Some allow their employees to have a little bit of freedom with what they write, while others require preapproval of tweets and comments.

In addition, there is the concern about what regulators will allow. But much like email used to be more strictly controlled by companies, experts like David Ballard of Advisor Group says that “there will be adjustments” as time goes on.

Written by Lisa Swan

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