CEO Advisor Institute: Compelling Conversations … · 2 compelling c onveRsations Your value proposition “What do you do?” Eloquently and concisely describe what you do for your

Compelling Conversations

For Institutional Use Only | Not for Use with Retail Investors

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Because what we do as an industry is so complex and abstruse, what we say and how well we say it is often what differentiates us and our practices from the competition. In an increasingly virtual industry, how we frame our business model, express our value proposition and articulate our thoughts, insights and convictions, have become progressively more important over the last decade. We all sound the same and as a result the client/prospect assumes that we are. For the vast majority of financial advisors, when it comes to communication, whether in written or verbal form, we are a left-brain industry attempting to communicate with a right-brain client. We are far more comfortable speaking to the head with information, data, charts and graphs, than to the heart using analogy, metaphor and story. Like most of life this is not an either/or proposition. Recent neuroscience studies show that we most often make decisions based on emotion and then justify and execute them based on reason. So the former is the catalyst for action and the latter hopefully insures that your emotions don’t take you over a cliff.

everything you hope to accomplish...begins with a conversation.

RecuRRing conveRsations: a Key to youR success

We often have well over 100 conversations in the

span of an average week with both clients and

prospects, most of which are extemporaneous,

situational and very tactical. However, given the

nature of our profession, we have many “recur-

ring conversations,” where we say the same

thing over and over again to different

clients and/or prospects on the

same topic or situation. These conversations

are your “scripts,” which more often than not,

simply evolved over time. This guide will help you

begin to consciously architect those conversa-

tions which are designed to achieve the desired

outcome—a thriving practice and a satisfied

clientele. Feel free to modify these so they fit

you comfortably and stylistically, but be sure to

maintain the underlying theme and structure.

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compelling conveRsations

Your value proposition“What do you do?”

Eloquently and concisely describe what you do for your clients.

“My team and I spend pretty much all day, every

day, answering the two fundamental questions

that everyone has of our industry: ‘Will I make it,

and do I have any financial

blind spots?’ In answer to the

question, ‘Will I make it?’ I have

found the majority of people

I speak with, haven’t even

defined ‘it!’ So the first thing

our team does is to sit down

and help you define everything

you are trying to accomplish

with your wealth...with a high

degree of specificity. We then

take a look at everything you’re doing financially, to

determine if what you want to happen actually has

a chance to occur. We basically map your current

financial structure to your overall short-term and

long-term financial objectives. If those two things

align we pat you on the back and tell you congratu-

lations. If they don’t align, we point out your

specific challenges and give you detailed recom-

mendations to help get you back on track.

“Once we have addressed Question 1, we move to

Question 2: ‘Do I have any financial blind spots?’

At this stage, our team takes a 360° look at you

financially, to determine if there is anything you

might have overlooked that might do you, your

family or your business harm. Any risk exposure we

uncover will be brought to your attention and again

our team will provide a rational strategy designed

to help mitigate the risk.

“At the conclusion of this exhaustive process, you

not only have a comprehensive wealth manage-

ment strategy in place, but you have addressed

the only two questions that have ever kept you up

at night: ‘Will I make it, and do I have any financial

blind spots?’”

Your Customized approach“so hoW do you do it?”

Explain how you incorporate a “professional model” of leading with process, rather than a “sales model” leading with product, to help your clients achieve their unique and personal financial objectives.

“As I said on the phone Mrs. Jones, I’d like to

explain briefly how I work with my clients, my

philosophy and methodology…and if that makes

sense I’d like to find out a little bit about you and

what you’re trying to accomplish. If you don’t

mind I’ll start. Our industry has evolved in a very

strange way. If you have ever received a call

from someone in our industry it’s usually about

some hot product or idea, isn’t it Mrs. Jones? I

don’t know any other profession that leads with

product. I have never received a call from my

doctor because she was running a special on

appendectomies this week. I’ve never received a

call from my attorney because he was running a

special on divorces this week! Think about a call

like that, ‘Paul, this is John, I’m running a special,

50% off divorce proceedings this week, how are

you and Susan doing?’

‘Well, John, I appreciate you thinking of me, but

Susan and I are doing fine.’

‘Oh…well…that’s great, Paul, could I talk to Susan

for a second?’

It’s not just what you say...but how you say It’s not just what you say...but how you say it. Use metaphors, analogies and stories it. Use metaphors, analogies and stories to speak to both the clients’ head so they to speak to both the clients’ head so they understand, as well as their heart… so they understand, as well as their heart… so they are spurred to take action. Remember, are spurred to take action. Remember, none of this will likely “ring true” if you don’t none of this will likely “ring true” if you don’t run your practice guided by this architecrun your practice guided by this architec--tural and philosophical framework.tural and philosophical framework.

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“All professionals start with process. They want

to find out what you’re trying to accomplish and

apply their services to effectively get you there.

I incorporate the same three-step process used

by the medical profession. When you go to see

a doctor for the first time you go through a three-

step process:

STEP 1 The Diagnostic Phase: where the doctor

reviews your past medical history, your current

symptoms (and if they’re really good), your future

objectives for your overall health.

STEP 2 The Prognosis Phase: where the doctor

takes all of that information, analyzes and/or

researches your case and comes back with…

STEP 3 The Treatment Phase: a specific and

appropriate form of treatment to address your

unique medical needs and objectives.

So does this overall structural approach

make sense?”

Your team rationale“so Why aRe you on a team?”

Explain the rationale, structure and value of your team in helping clients “pick the lock of complexity” in their financial lives.

“Mrs. Jones, I formed a team because of one

simple word: complexity. Never in human history

has life been this complex. Better in many ways,

but increasingly complex. There is demographic

complexity (people living longer and blended fami-

lies becoming the norm), geopolitical complexity

(economic and political changes continue to alter

this landscape), technological complexity (causing

the average person to reach “information overload”

shortly after breakfast each morning) and financial

complexity (the proliferation

of financial instruments and

strategies continue to grow

unabated). And ironically, the

more wealth you accumulate,

the greater the complexity. It

gets to a point where you need

the fully integrated capability

of three institutions—banking, brokerage and

insurance—to begin to deal with these complex

challenges. People spend their entire careers in one

of these industries and you need all three brought to

bear on your financial challenges.

ttaKe action aKe action applying this 3-step pRocessto youR pRactice

◆◆ First we go through a deep discovery process where we look at your past financial history, current financial structure and future financial objectives.

◆◆ In our second step, we do a thorough and in-depth analysis and return with a written prognosis and comprehensive plan of attack.

◆◆ Then, and only then can we offer specific treatment, i.e., written recommendations, necessary to help achieve your overall financial objectives.

You could have the most sophisticated and You could have the most sophisticated and elegant practice in your community, but elegant practice in your community, but if you sound like every other advisor, your if you sound like every other advisor, your prospect will never give you the opportunity prospect will never give you the opportunity to demonstrate how different you are.to demonstrate how different you are.

Equity securitesEquity securites

Fixed incomeFixed incomesecuritiessecurities

Insurance-basedInsurance-basedproductsproducts

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“This is why we formed a team; to begin to apply

the collective insights and capabilities of those

three industries to solve the complex financial

needs of our clientele. We believe one individual is

simply incapable of knowing all that’s necessary to

address these challenges. So our team members

(both actual and virtual) have all subspecialized, to

bring our clientele the breadth of capability and the

depth of insight necessary to help address their

complex financial challenges.

We then wrap this capability in

a overarching strategic plan,

which we design shoulder to

shoulder with our clientele, to

ensure that everything works

seamlessly and harmoniously as clients seek to

achieve their goals and objectives.”

You can then go on from here to address the specific roles and responsibilities of your actual team (those that reside within your practice) and your virtual team (those individuals you call upon for highly technical expertise both within the firm and your local community).

the Boat analogyexplain youR Wealth management stRategy

Address complex financial needs utilizing three institutional capabilities—banking, brokerage and insurance.

“Mrs. Jones, I would like to take a couple of

minutes and explain the evolution of the financial

services industry and my position in that evolution

through the use of an analogy. No matter what

financial institution you might be talking to, they’re

all trying to accomplish basically the same thing for

you. They’re trying to construct a financial craft, put

you and your family in it, and ship you off to your

destination. For illustrative purposes, that meta-

phorical craft being built is a boat. So basically

what we’re trying to do is construct a financial craft

in the form of a boat and put you and your family in

that craft and ship you off to your destination.

“That boat is comprised of three elements: a sail,

a hull and a life preserver. Those are the three

component parts of the financial craft that we’re

trying to build for you. The sail represents equity

securities. These securities have the potential

to increase or decrease in value over time. For

example, Mrs. Jones, your home is an equity-

based security. It appreciates or depreciates in

value over time. Other examples include stocks,

gold and other commodities, as well as other

forms of real estate.

“The hull represents any kind of fixed income

security. That would include investments such as

CDs, treasuries and municipal bonds; all designed

primarily to throw off an income, versus appreciate

or depreciate in value.

“The third element of the financial craft that we’re

constructing is a life preserver. The life preserver

represents any insurance-based products that are

primarily designed to protect you and your family,

versus throw off an income stream or appreciate or

depreciate in value over time. Although it may have

some of those components, it is designed primarily

for protection.

Establishing a coherent and compelling Establishing a coherent and compelling rationale for your team can dramatically rationale for your team can dramatically expand both the perceived and actual value expand both the perceived and actual value you are capable of bringing to your clients.you are capable of bringing to your clients.

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“Now, Mrs. Jones, let’s say you have $1 million to

invest. There are currently three institutions that

would be happy to build that financial craft for you.

Those three institutions are the banking, brokerage

and insurance industries.

“Let’s first go down to the local bank and say ‘Mr.

Banker, would you please build my financial craft

for me?’ The banker would be happy to do so.

‘Absolutely, I can do this as well, Mrs. Jones. Here

you go. Have a nice trip.’ You look at that craft

and say, ‘Well that’s very interesting Mr. Banker.

If the financial seas get really turbulent, at least

I’m stable. However, I was actually hoping to retire

sometime before I keel over (no pun intended),

and I’m not quite sure this tiny little sail is up to the

task. And that life preserver doesn’t really look like

it’s going to meet the needs for myself, my family,

or my business, if there’s any kind of unforeseen

catastrophe. This thing kind of reminds me of the

Titanic. I appreciate your help. Let me go see my

buddy the broker.’

“So you call your broker and his assistant says,

‘Paul should be getting back today from his third

trip to Vegas this month—how does 3:15 look?’

While you’re sitting in the reception area, your

broker comes flying through the door and says,

‘Man am I on a hot streak! You want a boat? I’ll

build you a boat. I’ll build you a boat that will blow

your socks off. Hey buddy, let’s rock and roll.’ You

look at that boat and say, ‘That’s pretty exciting,

Mr. Broker. With that sail, it looks like I could retire

in the next six months, and I could send my 6-year-

old to college next year. But what if the economic

seas get a little turbulent? With that tiny little hull,

at best I’m seasick and at worst I’m capsized. And

by the way, I can barely see that breath mint you’re

calling a life preserver. I appreciate your help. Let

me go see my buddy the insur-

ance guy.’

“By now you can see this one

coming, Mrs. Jones. You call

the insurance guy and he says,

‘You know it’s funny that you

should call. I had a vision last night and a voice

said, “build it, and she will come.’ And you end up

with this thing. I guess you stick the sail on the life

preserver and hope for the best.

“For over a century, that’s been the problem with

the financial services industry. Many had a very

narrow view of your portfolio and your financial

needs based on limited training and limited access

to products and services. It’s the old saying, Mrs.

Jones: If all you have is a hammer, everything

looks like a nail.

“Well, we work for a firm that’s basically a giant

financial warehouse, which allows me as your

advisor to go into that warehouse and pull out

whatever is necessary and appropriate for you to

build a proportional craft that is designed to help

take you safely and effectively to your destination

over the long haul. Does that make sense as a

methodology, Mrs. Jones?”

This boat analogy can crystallize the This boat analogy can crystallize the importance of a comprehensive wealth importance of a comprehensive wealth management approach to both your management approach to both your prospects and your clients.prospects and your clients.

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Faith versus Feardealing With emotional volatility

Emotional volatility can do far more damage than market volatility. The first step is to establish the philosophical context to address this challenge and then provide the historical framework to support it.

“I believe there are two ways to go through life:

faith or fear.1 I choose faith: faith in the long-term

viability of a free people, in an open society,

under the rule of law, with private property rights,

to improve their condition over the long-term.

Now this has only been true for 6,000 years of

recorded history. However, if it ever ceases to be

true, the last thing you and I

will be worried about is our

portfolio, because we will be

too busy trying to find a local

library to obtain a book on farming...because we

will have reverted to an agrarian society! I believe

it is this reasoned faith and historical perspective

that informs us and guides our long-term wealth

management strategy. We can therefore only work

with clients who make their financial and invest-

ment decisions with the same philosophical and

historical perspective. So Mr. and Mrs. Jones, how

do you make your decisions...faith or fear?”

“Now let me speak to the issue of faith for one

moment. There is a vast difference between faith

and credulity. Let me illustrate. When a pilot

gets into the cockpit they go through a

preflight checklist to minimize as many

knowable risks as possible. Once they

complete that checklist their final act is...

an act of faith. They start that engine with

the knowledge that there are risks that might

lay ahead, that could never be captured on that

checklist. Another pilot hops into the cockpit, takes

the preflight checklist and tosses it into the back

seat, then starts the engine and takes off! That is

an act of credulity...blind faith...and that is not what

we’re talking about here.

“Our checklist is composed of your unique risk

profile, time horizons, specific financial objectives,

current assets and contribution levels. This highly

personalized checklist is combined with historical

rates of return and a highly diversified portfolio,

which is designed to give you the best chance of

achieving all of your financial objectives.”

‘Heck no’pRotecting clients fRom themselves

Explain to clients that there will be times you might say not only “no” but “heck no” because you refuse to allow them to fall into financial ruin.

“Mr. and Mrs. Jones, one of the primary reasons

you are hiring me is to periodically over the next

20–30 years, protect you and your family...by

telling you no. Let me explain. At some point in the

future, the markets may go straight up for three

or four years and you might feel like you missed

out and be tempted to mortgage everything you

own, put your young children to work full-time,

take on an extra job and put all that extra capital

into the market. At that point, I will not only say

‘no,’ but ‘heck no!’ At another point in the future,

the markets may go straight down for two or three

years, and you will come to me and want to sell


Always address the greatest challenge Always address the greatest challenge facing your clientele: emotional volatility.facing your clientele: emotional volatility.

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everything and invest it in tin

cans and a shovel...to help

you bury your assets in your

backyard...and again I will say

not only “no,” but “heck no!”

Because here is the agree-

ment we are making today: I won’t let you do

something I know will cause you to fall into financial

ruin on my watch. If you want to do something like

that, you will have to fire me and find someone else

to do it for you. Does that make sense?”

Over the years, I have had the opportunity to work with many physicians. What always impressed me was not just the deep knowledge and insight they possess, but also the philo-sophical framework of “First, do no harm.” If you wanted to pursue a medical strategy which contravenes your physician’s recommenda-tions, you were free to do so, but not with your physician. They would simply refer your case if you didn’t believe in their strategy.

social prospecting“BReaKing the dance”

We all know someone that we run into regularly at social events, whom we know would be a great client, but we have never “found the right opportunity” to broach the subject and/or you’re waiting for them to approach you (since they obviously know what you do and would say something if they had an interest). Your reluctance is all based on fear: your fear of coming across like a ‘pushy salesperson’ and their fear of being rejected by you. I know what you are thinking...’ Wait a minute, I understand the first one, but the second one...no way!’ (More on that later.) The next time you run into your “social relationship,” find the appropriate time to say the following:

“Mary, you know we run into each other all the time

at these social events and I just want you to know

something...if you ever have any financial or invest-

ment question, or need a second opinion, I would

be happy to make myself and my team available to

you. However, our friendship is far more important

to me than any business relationship we might ever

develop, so I will rely on you to reach out to me, if

and when that need arises. I just want you to know

that the door is always open to you. So with that in

mind, ‘How ‘bout them Cowboys?’”

Again, feel free to play around with the language,

however, just be sure to maintain the two key

concepts of “second opinion” and “the door is

always open to you.” Now back to the fear of being

rejected by you. You must understand how you are

perceived in your community. Many of you have

been extraordinarily successful in an industry that

is both fascinating and mysterious to those on the

outside looking in. People often see you (contrary

to the characterization in the popular press), as

a hybrid of Milton Friedman and Warren Buffett,

and assume you are given a stable of well-heeled,

white-gloved clients to work with.

Consider this true story from an advisor who

learned the hard way:

A number of years ago I was speaking on this very

issue to a group of around 150 financial advisors.

When I concluded, an individual in the back of

the room yelled out, “Where were you six months

ago?” To which I responded, “I don’t remember

what I had for lunch yesterday, so where I was six

months ago is a long-lost memory. Why?” He then

went on to tell the following story:


Any client that consistently disregards your Any client that consistently disregards your advice should be asked to seek their counsel advice should be asked to seek their counsel elsewhere. Ironically, this level of conviction elsewhere. Ironically, this level of conviction often helps you retain that same client.often helps you retain that same client.

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“Six months ago I was playing golf with one of

my best friends from childhood, who was both

my college roommate and the best man at my

wedding. As we approach the first tee he says,

‘Since I’m now contributing to the financial health

of your firm...this round’s on you.’ I of course asked

what he was talking about. He said

that he became a client of my firm a

couple of weeks ago. I said...what?

He said there was an advisor whom

he was impressed with that worked

for my firm and had been talking to

him on and off for the last couple of years; and

that heck, if the firm was good enough for me to

work with over the last 15 years, it should be good

enough for him to help with his investments. After I

recovered from that punch in the gut, I asked him,

‘why hadn’t you approached me?’ he said that

he assumed I was ‘full’ and not taking on any new

clients. If I had this script six months ago I would

more than likely have my best friend (who was

quite wealthy I might add), as a client. I just didn’t

know how to frame the message in such a way that

it didn’t look totally self-serving and as though I

was trading on our friendship. I will never allow this

to happen again!

referral request #1the “ideal client” stRategy

Have this conversation during your annual review or over lunch with clients you wish to replicate.

“Mary, have I ever explained to you how we manage

our practice? Great, let me take a moment and

explain it because it impacts you as a client. At its

essence, every business in the United

States has two fundamental require-

ments if they’re going to survive:

to grow and to serve. Fail at either,

and over time the business will atrophy and die.

One of the greatest challenges is allocating time

and resources appropriately to those two critical

requirements. Many advisors spend 70% of their

time trying to grow and only about 30% of their time

actively engaged in serving their existing clien-

tele. We have reversed those percentages in our

practice, which is one of the many benefits of our

team structure. We spend 70% of our time working

with our existing clientele and only about 30% trying

to grow our practice. I assume that, as a client, you

would like us to continue to work that way? Great!

The only way we have been able to accomplish this

is with the help of our best clients. Those clients

consistently introduce our team to individuals and

families that they believe can benefit from our

services. Now before you give me any names, let

me describe the kind of people that we are best

designed to serve. And frankly Mary, this is the easy

part. If we had 100 clients just like you, not only

would we be one of the most productive practices in

Dallas, we would be one of the happiest; because

our friendship transcends a purely business rela-

tionship. So Mary, I’d like you to think of two or three

people that when you look at them, you feel like

you’re looking into a mirror. Now when I said that...

who just popped into your mind?”

Now, the key to this referral request is that it only works for those clients that you wish to clone. If this is not true, it will be blatantly disingenuous and therefore fail miserably. However, for the right client, whose relationship with you truly transcends a purely business relationship, this can work beautifully for the following reasons:

◆ It’s genuinely flattering

◆ It engages one of the most powerful human instincts, enlightened self-interest. “It is in my interest to keep you off the streets and in front of my portfolio”

◆ The request is specific (when you look at them...) rather than general (who do you know...), which of course brings specific and prequalified people to mind


Remember two key points for Remember two key points for opening the door to a social prospect opening the door to a social prospect without coming across like a without coming across like a desperate salesperson.desperate salesperson.

Change the focus from “Help me, help Change the focus from “Help me, help me” to “Help me, help you.”me” to “Help me, help you.”

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referral request #2niche maRKet stRategy

Evaluate your clientele for possible centers of influence.

One day I was analyzing my practice and noticed

that I was beginning to build a fairly significant

presence in the local medical community, among

doctors generally, and surgeons specifically.

I then asked what turned out to be two very impor-

tant questions about my practice: what is it about

the medical profession in general and surgeons

in particular that is so attractive to me, and how

can I more effectively grow my practice within

this particular niche market? The result of this

thought process resulted in the following script,

which I tried out on a physician that was not only a

good client but a great friend. I scheduled a lunch

meeting the following week under the premise of

wanting to pick his brain regarding the direction

I wanted to take my practice. We met for lunch the

following week and after a few pleasantries I said

the following...

“Hey Bill, as I said on the phone, I stumbled upon

something as I was analyzing my practice which I

need your insight on. I really appreciate your taking

the time to allow me to pick your brain. I noticed

that over 30% of my clientele are physicians, with a

fairly large percentage being surgeons. I knew

I worked with a number of doctors but this number

surprised me. As I thought about why this was

occurring I came up with a couple of interesting

insights. I think the first catalyst was my mom, who

like many mothers hoped her little boy would grow

up one day to be a doctor. To plant that seed she

bought me a book entitled, “The Making of the

Surgeon.” (At this point Bill stopped me and said

that was his favorite book about his profession

and that he too had read it as a young boy, about

a young doctor going through his internship and

residency at the famed Bellevue Hospital in New

York. Dr. Nolan’s journey was so captivating that

I decided that I too would become a surgeon.)

“I later ran up against my lack of affinity for math

and science...but as you know Bill, I never lost my

fascination with and respect for your profession.

My second discovery was how much I enjoyed

working with surgeons temperamentally.

I have discovered over the years I work

best with individuals that are extremely

decisive. People who continually

vacillate and equivocate drive

me to distraction. Surgeons are

temperamentally wired to make

tough decisions, with the best infor-

mation available, and continually move

forward towards the best result. Being wired

that way myself makes us a great fit.

“So with my affinity for both the profession and the

practitioner, I decided that I wanted to consciously

grow my practice much more in this arena. And, as

I thought about the best way to do that, I realized

something: I could never know as much about your

profession as you do Bill. So here’s my question.

If you were me (and you know me and my busi-

ness model as well as anyone), how would you

more consciously and systematically attract more

surgeons into your practice? What would you do?”


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At this point...say nothing...and

let your client talk.

And here’s how the story

ended. My client thought for a

moment, smiled and said, “Well

the first thing I would do is take

me to lunch on Wednesdays.”

I responded somewhat quizzi-

cally, “You know I always enjoy

lunch with you Bill...but why?” He said, “Well, every

Wednesday a number of my colleagues and I meet

for lunch down here. On any given week there could

be anywhere from five to 15 of us sitting around just

shooting the breeze, telling war stories, complaining

about the bureaucracy...basically we’ve become an

informal support group.

“These are exactly the kind of men and women that

fit your profile. So here’s what we should do: the

next Wednesday you find yourself in the neighbor-

hood, give me a heads up and you can join us for

lunch. I’ll simply tell everyone that I was meeting

with my financial advisor and asked you to join us

for lunch. The rest is up to you.” I of course said,

“How does next Wednesday look?” He laughed,

and said that would be great. It went off just as

anticipated. He introduced me and because I was

the new kid on the block, I was both the center of

attention and conversation. At the conclusion of

the first lunch, I was not only invited back, “any time

you’re in the neighborhood,” but to stop by to chat

with a couple of the surgeons at the table on my

next visit.

The bottom line is I never would have consid-ered this approach without the direct insight and guidance of my client.

our investment strategypoint a to point B

People don’t invest their assets to beat an arbitrary index but to go on a journey with specific goals, objectives and critical demarcation points. Help them on this journey and they will beat a path to your door.

“Historically, our investment context has been

subjective: ‘My investment portfolio is better than

their investment portfolio.’

“Because each client has a different starting point

(point A) and different goals and objectives

(point B), our investment philosophy is very

simple: to craft a comprehensive and balanced

investment portfolio designed to take each client

from point A to point B with the greatest degree of

certainty and the least amount of risk necessary

to get them there.

“The simple postage stamp illustrates the one

constant threat we always take into consideration.

In 1974 that postage stamp cost a dime and today

it costs 46 cents, a 460% increase. This is the

greatest threat to reaching your point B. This risk—

inflation—is one of the greatest threats, and we

design your portfolio to combat it.”


Leverage centers of influence. Evaluate your existing practice and determine what are the 3–5 key niche markets that you have cultivated thus far and ask yourself two questions:

◆◆ What is it about that particular industry and/or profession that you find interesting?

◆◆ What is it about the people within that industry and/or profession that you find attractive?

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Historical market Contextexpanding youR client’s peRspective

Without historical context and market history, your client’s north star will be the most recent news broadcast.

How many times in the past few years have you

heard this one? This always happens after a

significant downturn, as the client continues to

navigate the future with a rearview mirror. (This is

a concept borrowed from Nick Murray, one of the

financial industry’s premier speakers, and simply

made visual.)

You should all have a laminated copy of the current

Ibbotson chart showing the markets over the last

century or so. Here’s how to utilize that chart.

You point to it and ask, “Mrs. Jones, has anyone

ever given you the English translation of the

famous Ibbotson chart?” Of course the answer will

be no.

“Historically, all of the downs are temporary,

and historically all of the ups are permanent. We

design a long-term investment strategy for each

of our clients to help them on their unique financial

journey. We do not make draconian investment

decisions each time the market goes up or down.

“Does that make sense as an investment meth-

odology?” It’s important to remind your clients

and prospects that past performance does not

guarantee future results.

market psychologytaKing advantage of fiRe sales

Your greatest challenge as an advisor is not managing your client’s assets but managing their emotions.

“Mrs. Jones, let me take a moment and explain

in simple terms the single greatest challenge

people face when dealing with the stock market.

When there’s a significant markdown in prices at

Nordstrom’s, people are very happy and run into

the store.

“Ironically, when there’s a significant markdown

in prices in the stock market, people are very

unhappy and run out of the store!

“One of my many jobs is to remind you of this

periodically.”

our insurance strategypRepaRing foR tuesday

Our industry historically chases relative performance as if it’s the Holy Grail and too often leaves our client’s entire financial life teetering on the edge of disaster because “we don’t do insurance.”

“Our insurance strategy is very simple. We protect

against the three major contingencies that can

devastate you financially:

“You can die too soon. You can live too long.

Or you could break down on the journey.

12

“Unlike any other investment decision you

make, this one is always on the clock because

everyone has a Monday and Tuesday in their lives

... on Monday you’re insurable and on Tuesday

you’re not. We always make sure to pack our life

preservers before we take your financial craft out

to sea.

“When death or disability occurs and expenses

and/or taxes are demanded there are only

three options:

“You can sell assets (often at fire sale prices)

getting pennies on the dollar.

“You can try to take out a loan (often at the time

you are least credit worthy).

“Or you can settle your liabilities with insurance.

“Only insurance provides liquid capital, on

demand, for pennies on the dollar.”

estate planning 101sell some milK to save the coW

Accumulating a large estate is only half the battle. Preserving it is the other half.

“Let me take a moment and make a very complex

subject easy to understand. Let’s assume for a

moment that you have one cow and a bucket of

milk. Someone comes along and demands that

you give up one of the two. Which would you

relinquish, the cow or the bucket of milk? Right,

obviously you would give up the milk, because with

the cow you can get more milk. You now under-

stand estate planning better than most lawyers.

Let me explain.

“Your estate today is comprised of all of your

assets both tangible and intangible.

“Now what can those assets generate? Right.

Income and capital gains.

“We’re now going to convert (metaphorically) all of

your assets into a giant herd of cattle.

“When you die, let’s say one of the first people to

come and visit your family is an IRS agent. The

agent then tells your family that with your death,

they will have to give up 50 percent of your herd.

“However, you had the foresight to take a little

bit of the milk produced each month, and you

bought a life insurance policy for pennies on the

dollar to satisfy the IRS when the time came. So

you preserved the herd for your children and your

children’s children.”

Disability DiscussionpReseRving the money machine

For most people, a significant loss of income is a terminal loss of lifestyle and legacy.

“Mr. and Mrs. Jones, if you had a machine in your

attic that generated $200,000 of income every

year like clockwork, what would you insure that

machine for in case it broke down or blew a fuse?

Nine out of 10 clients will say, ‘Well I would prob-

ably insure it for $200,000 or whatever it would

take to replace the income.’

“At this point I’d say, ‘I would agree with you. And

what’s ironic, I’m actually talking to that machine

right now! Bob, you currently generate $200,000

a year in income, year after year just like clock-

work. What happens if you break down and that

income ceases?’”

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Shares of Oppenheimer funds are not deposits or obligations of any bank, are not guaranteed by any bank, are not insured by the FDIC or any other agency, and involve investment risks, including the possible loss of the principal amount invested.These views represent the opinions of OppenheimerFunds, Inc. and are not intended as investment advice or to predict or depict the performance of any investment. These views are as of the date of this presentation and are subject to change based on subsequent developments.For Institutional Use Only. This material has been prepared by OppenheimerFunds Distributor, Inc. for institutional investors only. It has not been filed with FINRA, may not be reproduced and may not be shown to, quoted or used with retail investors.Oppenheimer funds are distributed by OppenheimerFunds Distributor, Inc.Two World Financial Center, 225 Liberty Street, New York, NY 10281-1008© 2013 OppenheimerFunds Distributor, Inc. All rights reserved.

CA1000.015.0813 October 4, 2013

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CEO Advisor InstituteSM

CEO Advisor Institute is designed to provide insight into

the biggest challenges to your success:

Complexity: An explosion of new investment prod-

ucts and services, the volatility of the capital markets,

a growing trend to multifaceted advisory teams and

evolving client demographics.

Commoditization: With advisors across firm affiliations

using similar approaches, techniques and technologies,

differentiation has become a real challenge.

CEO Advisor Institute will show you how to approach

those two challenges with a third “C”: Collaboration.

Greater collaboration with your clientele and improved

interaction with your team can help to simplify a complex

investment environment. This collaboration will enable

you to organize and deploy synergistic teams designed

to provide unparalleled advice, as well as proactively

service and consistently grow your bottom line.

Our seasoned OppenheimerFunds Consulting team

is well positioned to provide context, knowledge and

wisdom around these major issues. In the spirit of

collaboration, we view our role as an extension of

your team. Through in-depth interactions with the

OppenheimerFunds Consulting team, you may gain

better perspective and tools that can help you to

succeed in today’s dynamic global environment.

Documents

CEO Advisor Institute: Compelling Conversations … · 2 compelling c onveRsations Your value proposition “What do you do?” Eloquently and concisely describe what you do for your