Develop an Investment Story That Sticks


How sticky is your investment story?

Growth in the financial markets has been exhilarating over the last decade as equities have shot up like a rocket. While the ride might not be over, it seems like the straight-up trajectory we’ve seen may be drawing down.

When everything is going up and almost everyone is winning, selling financial advice gets easier – something advisors across the industry have enjoyed. But that’s a double-edged sword. On one side, it’s nice to capture growth and manage happy investors. But on the other side, financial advice becomes more of a commodity with each passing year. Indexing is king and good returns are a commonplace.

Volatility is poised to change that. And as volatility enters the market and returns become less certain, the typical stock and bond discussion of the past won’t suffice. You’ll need a stickier story. One that works for multiple investor-types and market conditions.

Investors, like all humans, buy stories. Your investment story is the primary vehicle for winning and keeping clients. People may validate their decisions with data and logics (sometimes), but they buy the story.

Think about how you tell your story to clients. Is it positioned to pivot seamlessly and work in sideways or downward markets?

We’ve been helping advisors tell a story that resonates in all markets through Market Movement Strategies (MMS), a unique investment story that positions advisors to deliver on client expectations regardless of market cycle. This is how:

A Story That Fits Multiple Market Scenarios

MMS is essentially a process that simplifies portfolio diversification. Using a three-mandate approach, MMS helps you blend three distinct strategies in a single investment portfolio – Strategic, Tactical, and Diversifier.

Strategic assets mimic the market, providing wide exposure to both returns and losses. Tactical assets are actively managed, seeking select opportunities in the market. Diversifier assets seek to disengage from the market, providing protection from downward markets (liquid alternatives).

The mandates help you diversify the portfolio more easily, but they also help clients understand how their investments will interact with the market. The MMS story gives you the ability to align allocations with client expectations and provides clarity into the investment process – reducing subjective decision making as the markets twist and turn (because the client understands exactly what their investments are designed to do).

There’s nothing revolutionary about the investments. MMS just gives you a platform to more easily build, deliver, and manage portfolios.

A Story That Resonates with Multiple Investor Types

The beauty of MMS is that the story resonates with any type of investor. The blend of mandates, guided by a process-driven proposal system, is tailored for each client. It’s just as easy to craft a well-diversified portfolio for a younger, growth-oriented investor (heavier mix of Strategic and Tactical strategies) as it is to develop one for a retirement-ready investor in search of income and capital preservation (heavier Diversifier - liquid alternative - allocations).

A Story That's Easy to Implement

MMS is designed to make sophisticated portfolio construction simple for both you and your clients. A simple proposal system guides clients through a risk assessment that is linked directly to the portfolio construction tool. You can see, in real time, the impact of each allocation decision on the client’s overall risk score compared to their risk assessment score.

Custom reports also help validate your story. This is key in solidifying your strategy to clients. Breaking performance down by mandate helps the client understand why their portfolio performed as it did, reducing uncertainty and increasing adherence to their initial investment strategy.

MMS is also backed by a third-party due diligence firm. That means you can more comfortably and confidently deliver strategies to clients that are vetted for quality and consistency.

What's Your Story?

MMS might not be for you or your clients, but it serves as a good example of what a good story looks like. So, what’s yours? Is it poised to help you resonate with clients even in times of uncertainty? Is it easy to communicate and manage? If not, now is the time to act. Consider how your story fits into a volatile market, and even a down market. What will the client experience? If it isn’t a sense of security, then you may struggle to keep and win clients in the long-run.

Learn more about Market Movement Strategies, and how it’s helping advisors deliver a stickier story to clients.