If you want to fend off competition from Internet-based trading services, no-loads and other discount competitors, personal service is your most effective strategy, according to speakers at the second annual retail development conference sponsored by the National Association of Securities Professionals (NASP). Although volatility in the market dampened turnout, about 75 brokers and financial planning professionals attended the daylong session in Washington, D.C., Sept. 18.
The NASP was established in 1985 to promote the "presence and influence" of women and minorities in the securities industry, mainly through professional development (www.naspnet.org; e-mail: [email protected]).
Investors "need your advice and counsel," said keynote speaker Angie Clark, managing director of Oppenheimer Capital Management, formerly with EF Hutton and Shearson Lehman Bros. "Explain what you do, how you do it and why they need professional help." During her presentation on building a fee-oriented business, Clark criticized brokers for "apologizing" when they bill clients. "How many of you go to the cheapest doctor in town?" she asked. "We apologize, and we never should do that."
Clark also pointed out that Depression-era investors are quickly transferring their wealth to a younger, more sophisticated generation. "You'd better be meeting with their children," Clark said. "They are smart. They know all about the Internet. They can make trades on-line. Why is this generation going to use you?"
Personalized service is the answer. "It's gonna get ugly out there because the next generation entering the market is very much do-it-yourselfers," predicted Roger Key, a first vice president of investments for Robinson-Humphrey in Atlanta. "These are the people you want as clients."
Key's solution? Computerize your business so you can perform the same impressive computer analysis that the Internet services perform--and deliver that information in a face-to-face computer presentation with clients. "Internet transactions are very impersonal," Key said. "People want to talk to people. Build that relationship, because that's what's going to keep you in business."
Kathleen Colin, a vice president of investments at Prudential Securities in Detroit, pointed out that even discount brokers like Schwab want to become more "consultative and personalized," so full-service brokers must respond accordingly. "Turn your prospects and clients into your best advocates with personal service," Colin said. "You'd be surprised how far a box of Godiva chocolates goes when one of your clients has a baby."
The demand for one-on-one attention is encouraging, said Jesse Brown, a financial planner and CEO of Krystal Investment Management in Chicago. "I find I'm giving more financial advice than 10 years ago," Brown said. "We financial advisers are at a key point in our history."
The conference was supported by three corporate sponsors: Salomon Smith Barney, Prudential Securities and The Chapman Group, along with several others who did not want their support publicized, according to Carl Davis, resident manager at Prudential Securities in Torrance, Calif., and chairman of the retail conference.