Building a Better Business

Tim Highland, Business Development Director July 19, 2006

This material is for financial representative use only and not for distribution to current

or potential investors.

Building a Better BusinessBest Practices for Practice Management

Financial Professional Use Only

Legal Disclosures

The content of this material is intended for use by advisors. You should check with your firm to determine whether or not you are appropriately licensed/credentialed to engage in the activities discussed.

Russell Investment Group is a Washington, USA corporation, which operates through subsidiaries worldwide and is a subsidiary of The Northwestern Mutual Life Insurance Company.

Copyright© Russell Investment Group 2006. All rights reserved.

Securities distributed through Russell Fund Distributors, Inc. member NASD, part of Russell Investment Group.

First used: July 2006RFD 06-5391


Revenue/ClientGross RevenueAUMClients

10/20058/2004

$2,583$866$775,000$650,000$165 M$110 M300750

How Fast Can You Grow in 14 Months? Actual FR Production

These numbers represent results by an FR who attended High Speed Strategic Planning and put the ideas into practice. Your results may vary.


Revenue/ClientGross Revenue

Clients4/20058/2003

$8,577$2,677$1,423,707$508,630

166190

How Fast Can You Grow in 20 Months? Actual FR Production

These numbers represent results by an FR who attended High Speed Strategic Planning and put the ideas into practice. Your results may vary.


MarketingStrategiesStrategic

FocusValue

Proposition& One-PagerViral Marketing

SalesStrategies

Fact FindingSPIN

Tracking VerifiableOutcomes

(Rline)Leveraging YourExisting Client

Base

OrganizationalStrategies

Service TeamsFunctional Org

ChartOrganizationalEfficiencyEffective

Compensation

ServiceStrategies

Client Engagement

Road Map“WOW” QuarterlyReviewsDefining ServiceModels

CustomerSatisfaction

Strategic Analysis – “IDA”

Business Benchmarking & Client Analysis (Rplan)

Purpose & Guiding PrinciplesMission and Goal Setting

Russell’s approach to Practice Management


Laying the groundwork

Gain Insight Make Decisions Take Action


Ineffective Habit: Cast a broader net to catch more clients.

You catch a lot of snails, slugs, garfish and a lot of suckerfish fish

It prevents you from becoming a specialist

This spray and pray approach prevents effective viral marketing


Geographic Opportunities

Referral Source Opportunities

Client Segment Opportunities

Product/Service Opportunities

Create a Community Via Your Strategic Focus


Strategic Focus

Cornerstone to your marketing effort Use the “common sense” principle The tighter the focus, the more appetizing the

opportunities (outside your focus) must be.


Ineffective Habit :The best way to drive client satisfaction and retention is as a fee-based Investment Counselor.

Too much of the perceived value is based on the performance of a client’s portfolio

An Investment Counselor is viewed as a next generation stock broker (new age stock jockey) – one that is more objective but lacks the value-add to justify a fee over time

Clients expect an Investment Counselor to respond to short-term performance


Consider the role of a Wealth Manager

Gives you the differentiation to build a value proposition that rises above the noise of the investment marketplace

Puts you in a position to do higher order work with clients

Your clients’ cost benefit analysis = client retention Cost of acquisition Life-time revenue value Life-time referral value


Client Needs

Wealth Manager 12 Financial Representative Use Only


Develop a service model that ROCKS!

Implement the Client Engagement Road Map Do good work for your clients and remind them

of it Play the role of the Wealth Manager Put the “WOW” in your business


4th Quarter • Goals Review• Roadmap• Tax Strategy Review• Family Meeting• ED: Legacy Planning

3rd Quarter• Goals Review• Roadmap• Investment Review• Long-term Care• ED: Alt. Asset Classes

2nd Quarter • Goals Review• Roadmap• Retirement Planning• Investment Planning• ED: Lifeboat Drill

1st Quarter • Data Gathering• Financial Goals• Risk Tolerance• Long-range plan• ED: Diversification Roadmap

for Mr. & Ms. Client

3rd Quarter • Goals Review• Roadmap• Investment Review• Survivor Income • ED: Long-term View

4th Quarter • Goals Review• Roadmap• Investment Review• Estate Planning • Client Satisfaction

2nd Quarter• Goals Review• Roadmap• Investment Review• Disability Income• ED: Fixed Income

Year 1

1st Quarter• Goals Review• Roadmap• Investment Review• Education Planning• ED: Equities Year 2




2nd Quarter • Goals Review• Roadmap• Retirement Planning• Investment Planning• ED: Lifeboat Drill

1st Quarter Data GatheringFinancial GoalsRisk ToleranceLong-range planED: Diversification Roadmap





Year 1





2nd Quarter Goals ReviewRoadmapRetirement PlanningInvestment PlanningED: Lifeboat Drill






Year 1



Now Really Give Them Something to Talk About!

Karl Albrecht

The WOW Factor!

The Only Thing That Matters


Consider being the quarterback of a best-of-kind team!

Outsource when you do not provide unique value-add

Outsource when external expertise and/or scale supports customer satisfaction and/or profitability

Visible to Clients Estate attorney Tax attorney Accountant Insurance Agent

Transparent to Clients Performance Reporting Accounting Compliance Billing Manager selection


This is not how the vast majority of profitable clients make decisions about selecting an advisor

Direct marketing efforts tend to stroke your ego and cause you to kid yourself about results and ROI

You do not have enough marketing spend to have any impact on demand generation

Ineffective Habit : Direct marketing is an effective way to reach prospects


ABC Viral Marketing

Asset Gatherer

Backer Existing Clients

&Centers of Influence

ProfitableClients


1. Data mine existing target clients for pockets of centers of influence

2. Brown Bag Listen-Listen-Listen Present the One-Pager Repeat – out of sight, out of mind

3. Mutual clients engage COI4. Referral5. Wow the referral and more will come

Creating a COI Backer


Create a Value Proposition in the form of a One-Pager

Value Statement: Help successful executives create, protect, and preserve multi-

generational wealth.

Proof Points: Forty-five years of successful professional relationships Relentless commitment to excellence and integrity as guiding principles Ongoing pursuit of professional competence (CLU, ChFC, CFP)

How we deliver these results: Provide customized Client Engagement Roadmap that crystallizes

expectations Provide solutions via QB of best-of-kind providers in area Leverage Russell’s investment manager research to implement

diversified portfolios

Strategic Focus: Client Focus: Corporate Executives Service Focus: Wealth Management Geographic Focus: Greater Seattle area Referral Source Focus: Current Clients & Estate Planning Attorneys




2nd Quarter Goals ReviewRoadmapRetirement PlanningInvestment PlanningED: Lifeboat Drill






Year 1



Consider a Team Approach

Financial Advisor Senior Client Manager Senior Client ManagerAsset Gather Manages clients roadmap Manages clients roadmap- Initial Meeting Day to Day Client Contact Day to Day Client Contact- Fact Finder Quarterly Reviews Quarterly Reviews- Proposal - Agenda for meetings - Agenda for meetingsThe Plan for each client - Supporting Documents - Supporting DocumentsInvestment Philosophy Group Plan Meetings Group Plan MeetingsOffice – Bills, Payroll, etc. In Force Marketing In Force MarketingOpportunity Identification -Term Conversions -Term Conversions -LTC -LTC Russell Proposals-PSD Russell Proposals-PSD Investment Policy/Allocation Investment Policy/Allocation Analysis Analysis Long Range Planning Long Range Planning Implementation of Invest

StrategiesImplementation of Invest Strategies

PPA/NaviPlan PPA/NaviPlan PSD PSD


Operations Manager Junior Client Manager Junior Client MangerOversee New Insurance Policies New Insurance Policies - New Accounts - Schedule Exams - Schedule Exams - Transfers - Follow up on AP - Follow up on APTrades, Qtrly Rebalancing - Past Due Letters - Past Due LettersOps Problems & Issues - Track Underwriting - Track Underwriting - Transfers - Split Dollar - Split Dollar - Cost Basis (splits, mergers) - Illustrations - Illustrations - Decedent Issues New Investment Accounts New Investment Accounts - Etc. Review, fill out & submit apps Review, fill out & subm appsBusiness Reports - Transfers-Submit, Track, Verify - Transfers-Subm, Track, VerifyTransition plan - Cost Basis - Cost BasisPPA data entry - Trade Confirmation - Trade ConfirmationSpecial Projects - Acct Maint-PIPS, DIST, Wires,etc - Acct Maint-PIPS, DIST, Wires,etcPayroll Client Qtrly Report prep Client Qtrly Report prep Computer Conv., Issues, etc. Phone Phone Filing Filing Schedule Appointments Schedule Appointments Office Hospitality Order Office Supplies Document Handling Dictation/Typing Licensing Document Handling


Being busy and productive are two different things It can lead to becoming a professional visitor

Ineffective Habit : Sales activities drive sales


1 Qualified Prospects

2 Fact Finder

3 Light Weight Planning

Focus on Verifiable Outcomes

$ 5 Signed Documents

4 Comprehensive Solution


Track verifiable outcomes!

Track Status:On TrackSlowingStalledClosed Sale


Resources


Good thoughts are no better than good dreams, unless they be executed.

Ralph Waldo Emerson


www.russell.com

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Building a Better Business

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