David R. Evanson

On Wall Street, Summer, 2004

She knew they were disappointed.

Because the laptop computer wouldn’t work with the projection equipment at the hotel, the visual portion of Laura Norris’s presentation was gone. Unfortunately, since she relied on the slides to prompt her, the audio portion was pretty much shot too. She worked through the presentation by memory, but interrupted herself often to apologize. And because she could see the disappointment written plainly on the faces of the audience, she overcompensated by apologizing too much and started to get embarrassed about that. Mercifully, when the whole sad affair was over, Norris, a broker with Smith Barney in San Diego, had learned her lesson: when you are hosting an investment seminar, always bring two computers. In this case, a technical glitch had a domino effect.

Yet despite the challenges associated with marketing through seminars, Norris would not have it any other way. From a standing start three years ago, she’s built her book to approximately 300 clients almost exclusively through seminars. She has also added to her prospect database 500 warm leads that know her and whom Norris continues to ply with still more seminar invitations.

Your Best Bet
According to marketing professionals as well as brokers, the use of seminars is – bar none – the most effective tool for building your book of business. Advertising, direct mail and cold calling, are a distant second.

The primary reason seminars work cuts to the heart of the business. At its core, retail brokerage is a relationship business and seminars are fertile ground for building the stuff of relationships. People can look one another in the eye. They can shake hands a take and take a measure of each other. The broker can read and take cues from the subtle and not so subtle facial expressions. According to marketing consultant Larry Klein of NF Communications, Walnut Creek, CA, an investor must go through the phases of attention, interest, desire, conviction, and close. “In seminar I can get through the first three.”

Another reason is efficiency. A good ad or direct mail piece might pull eight or 10 prospects. A seminar, on the other hand can accommodate as many as 60 prospects that Qualitatively, are world’s apart. Using consultant Klein’s new client continuum, a prospect that comes in through direct mail or has in essence surrendered only their attention. The broker must still work hard to build interest and desire, and must do so at discrete future intervals, which in turn, lengthens the lead time for converting these prospects.

Finally, despite your premonitions to the contrary, consumers never tire of investment seminars. It’s not just that the pool of prospects is large – equal roughly to the pool of working Americans which stands at about 100 million – but that financially, their needs are constantly changing. For instance, every one point increase or decrease in unemployment creates one million consumers who need to roll over a 401(K), or rebalance their portfolio. Likewise, according to the Census Bureau, there will be some 51 million Americans in 65-69 year old cohort over the next five years. And each market swoon brings out do it yourselfers who are now insecure and want advice. “Every 60 days or so, there is a whole new group of investors out there for whom your investment seminar is no longer noise, but something of genuine interest,” says Klein.

Despite these arguments, many brokers don’t use seminars. There are two primary reasons, and if they apply in your case, you must disabuse yourself of them. First, public speaking for many is a fate worse than death. Second, many tried an investment seminar once, and they were unhappy with the results. While the former might require therapy, the latter problem is easy to solve according to financial advisor and consultant Ed Slott, Rockville Centre, NY who has built a practice around IRAs using seminars and is so successful at filling rooms that he’s now hired by fund companies to help train financial advisors on seminar marketing. “If you want to win in the seminar game,” he says, “You need to commit to doing them frequently, once a month, or perhaps 10 a year.”

Gene Melamud, a broker with Raymond James in Largo, FL, who did four seminars a month from 1995 through 1999, which helped catapult him into the firm’s vaunted RJ Chairman’s Council says triumph comes from consistency. “Long term commitment to the process, above all else is what will spell success.” Melamud has since pulled back to two seminars a month.

The Doing of the Doing
Although there is no end to the many nuances that will add to the success, and at times failure, of your investment seminar efforts, the larger pieces are quite straightforward consisting of: targeting, promotion, content and prospect conversion.

At the broad brush level, targeting is very simple: you either want just about anybody in the room, or you want a very specific audience in the room. Much of this will depend on where you are in the stage of your career, and to a certain degree, your philosophy about sales. For instance, Smith Barney’s Norris, beyond her initial targeting, primarily people taking early retirements or voluntary layoffs (more on this later) – has a come one, come all approach. She’s a younger broker, but also, she says, that even small clients can make big referrals. “My biggest referral ever came from a client who had just $20,000 invested with me,” says Norris.

But Lee Eybell, a broker with Legg Mason in Baltimore MD wants a very specific person in his investment seminars: executive directors of trade associations. Eybell is plying the firms’ specialized expertise in helping trade associations craft investment policies, and helping to manage short and long term cash, a business that for Legg has gathered some $550 million in assets. [Evan: They are sensitive about this number. Asked me not to use it after they said it.]

And while the marketing to associations utilizes a full-fledged marketing effort, marketing director, Rob Kirkonnell estimates between a quarter and a third of the group’s resources are channeled through investment policy seminars.

Worth noting is the notion of affiliation or sponsorship with a group that needs financial services. For instance, venerable Legg has an exclusive relationship with the American Society of Association Executives – a trade group of trade groups – which grants them assess to all ASAE events to run seminars, and to market directly to members with ASAE’s imprimatur. In the trenches such a relationship gives brokers like Eybell the opportunity to focus on a market that has been warmed up to Legg’s presence.

Likewise, Norris’s Smith Barney focuses her practice, and her seminars, on employees at companies that are downsizing where employees taking early retirement, or a severance, must make decisions about their 401K. At times she says, she will work directly with the outplacement agency managing the transition.

Helpful hint: If you are just starting out, and are nervous talking with strangers, have a seminar with the ultimate affinity group: your own clients. They will appreciate the gesture, and over time might be convinced to bring friends.

The Caller on the Midway
Promoting seminars is at once difficult and easy. It’s challenging if you are looking for a silver bullet, but quite easy if you are willing to accept the fact that elbow grease and persistence are going to be your primary tools. Within this framework, the old one two punch of direct mail and with telephone follow-up is ubiquitous.

Smith Barney’s Norris says that she expects to generate about a 1% response rates on her mailings: one thousand outgoing letters nets 10 prospects for the seminar. To bulk up the attendance to Norris’s preferred audience size of 15 to 20 participants, she has her cold callers get on the telephone. With just three years as broker, sometimes she gets on the phone.

Legg’s Kirkonnell also uses direct mail when trying to get association executives to a “Lunch and Learn” investment policy seminar. He says, “Even though Legg is a preferred provider for the ASAE, we still need to pay attention to the staples of direct mail marketing to get the prospect’s attention.” That means Legg uses high quality materials, personalized letters, real signatures on each letter, and the direct imprint of names and addresses on envelopes, small differences that can add to response rates.

Then there is advertising. It works, but the decision about whether to use it has more to do with your targeting strategy on cost. A three by five inch ad could cost as little as $250 in an independent local publication, but as much as $2,500 in a major metropolitan daily newspaper.

Advertising is an art unto itself which consumes the passion of an entire industry, so it’s easy to quickly find yourself in over your head over thinking advertising and placement strategies. Still a couple of points to keep in mind. First, your ad does not have to be provocative to sell. Melamud runs ads about as bland as they come. But remember, a certain portion of your target market is going through some change in their life that transforms your ad from background noise to extremely relevant. For instance, ever notice how auto advertisements are actually interesting when you are in the market for a new car?

Second, if you are going to get creative, use it, as practical to segment your market. Financial advisor Slott did this to brilliant effect with ads that read “Are you Going to Leave Your IRA to the IRS?” in the headline. With one deft touch, Slott was able to draw from older investors with an IRA large enough to be concerned about.

Next Slide Please . . .
Oddly, the content of your seminar almost doesn’t matter. “This is because,” says marketing consultant Klein, “You’re not there to show people how smart you are about a particular subject – even if you are a genius on the topic — but rather to build relationships and set the stage for getting appointments.”

With this construct in mind, your delivery and management of the prospects in the room will have a larger impact on your success than the subject matter. For instance, Melamud focuses on the most pedestrian of topics for his audiences: recent economic trends, his firm’s latest mutual fund research – nothing close to the bleeding edge.

And while nine years of investment seminars have made him a skilled public speaker – you don’t have to be (italicize) to succeed. Style and delivery will come with experience. Until then, a workmanlike performance will carry the day, if you simply manage to avoid the common pitfalls. There are many, but the deadly seven are:

– Your presentation is too long. The whole affair should last no more than 90 minutes, and you should talk no more than 45 minutes, with the rest of the time reserved for Q&A.
– Too many slides. Smith Barney’s Norris says her original presentation ran some 60 slides. But she says experience taught her to cover one slide every two minutes and now her total presentation is has just 20 slides.
– Confusing slides. Think billboards instead of S&P tear sheets. Slides are simply a visual prompt. Your remarks are the real substance.
– Inappropriate remarks. Consultant Klein says too many brokers venture off into off color jokes or remarks. Sometimes this is nervousness; sometimes it’s just bad manners.
– Mentioning specific products. Remember, seminars are the anti-sales pitch sales pitch. When you mention specific investment products, your break the magic spell and the prospect starts to withdraw.
– Too many attendees. There is nothing wrong with five attendees per se, as long as the room is sized correctly. But on the other end of the spectrum, most experienced seminar hands says the 25 attendees is optimum. “It’s like a college class,” says Melamud. “If it’s in a lecture hall with 100 students, the professor does not know you from a hole in the wall. But if there’s just 20 students, the professor gets to know each student.”
– Choice. Lunch or dinner is a good draw, and in the scheme of things, not too expensive. But never make the mistake of giving your prospects a menu with choices. “The waiter or will run the show,” says Norris, and provide inexperienced public speakers with a challenge they don’t need.

The Rubber Hits the Road
Converting prospects to clients happens before they even attend your seminar. Specifically, you should arrive early to set up a registration desk so that you can collect information on each attendee. You’ll already have contact information from enrolling the prospect, so the registration desk is the opportunity to go a little deeper. But be careful, the prospect’s suspicion grows with level of detail you ask for. Melamud asks an open ended ‘Tell me something about yourself,’ question in addition to what investments the prospect currently has, and what their concerns and fears are. “Learning a prospect’s concerns is crucial,” he says, “Because it provides the foundation for the solutions you can provide.”

Motivated buyers might ask you for an appointment at the seminar. If they do, that’s great, but you should not wholesale request a show of hands for who wants one. Better says Norris, to has a self addressed “consultation card” card in the registration packet you give attendees. “You can quite reasonably refer to the consultation card in your closing remarks.”

If you’re on top of your game, thank you notes should go out the very next day. But after that you know the routine. It’s follow-up, and then more follow-up. But there should be a difference. You have a prospect with a known need, with whom you have shared an experience and perhaps even shared a laugh with. Your odds of getting an appointment are dramatically higher than other leads, save a direct referral. And your odds of getting a hale fellow, well met thanks but no thanks are better too, which has value, since it lets you move on to more promising territory.

Many brokers have their own protocols for following up prospects. For many, three unanswered calls puts a prospect in the lukewarm bin. Melamud says however, “If I think I can help a prospect, and they have the assets, I’ll keep after them.”

The most important point he says is to keep in mind is there is no silver bullet with seminars. “There are no magic words, ads, and direct mail or investment products. It’s all generic, except the hard work you put into it. If you are professional, diligent and honest, a seminar will give you a platform to showcase this, and you will earn people’s trust and their business.”

Sidebar Check, Please!
Were it that not only warm leads attended your seminars, but they paid to be there. Sorry. Truthfully, investment seminars are not really expensive, but they are not altogether cheap. Here are some common costs .

Direct mail: $1.00 per piece in the mail, on the low end. One thousand invitations equals $1,000.
Cold callers: Figure between $500 and $750 per seminar.
Room reservation: Rooms in hotels are relatively modest, perhaps $500. Unfortunately there is no free lunch (except for the seminar attendees). The hotel will make its margin on food and A/V equipment.
Food: Meals can range between $15 and $30 per person; more with drinks, although no one with experience in investment seminars endorses mixing investments with alcohol.
A/V Equipment Rentals: These costs are not high, but they are always higher than you think they should be. A screen and projector might be $150, and you might have to hire a technician for another $75 to hook it up for you.
Advertising: From a low of $250 to a high of $2,500. Remember, the more you advertise the lower your rate. This notion is consistent with a long term commitment to seminars. Also, the major metro daily, the most expensive advertising, may not be the best.
Materials and Handouts: You may not have to pay this, but somebody is paying, so you better know the cost. Figure $10 per package, $30 if your firm’s materials are really high end.
Time: Assuming it’s not your first seminar, figure an aggregate of 20 hours planning, promotion and organization, and eight hours aggregate the day of the seminar.

Big Brother is Watching
The National Association of Securities Dealers recently revised its Rule 2210, Communications with the Public. These amendments, approved by the SEC in May, and effective in November of 2003, broadened the definition of communications with the public “to include not only advertisements, sales literature and correspondence, but also public appearances,” according to the Notice to Members. The most tangible effect of this regulation means brokers giving seminars must now adhere to the content standards spelled out by rule 2210(d). Specifically, and in short hand, member (read broker) communications: shall be based on the principals of good faith and fair dealing . . . not make any false, exaggerated, unwarranted or misleading statement or claim . . . not predict or project performance or imply that past performance will recur . . . . and not contain testimonials on a technical aspect of investing from individuals that do no have the knowledge and experience to form a valid opinion.

It’s too early to tell how the NASD will police investment seminars under the amendments for communications with the public, but what is known is that you don’t want to be the Guinea pig.