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market spotlight | monthly review

Equities continued their positive trend in February as each of the benchmark indexes listed here posted monthly gains. The Dow recorded 12 record highs in February and posted a monthly gain of 4.77% — its best month since November. The S&P 500 (3.72%) and Nasdaq (3.75%) each climbed over 3.50% for the month. For the S&P 500, February marked the best monthly gain since last March. Since the presidential election, investors have continued to pour money into stocks, likely in anticipation of tax cuts and policies intended to boost corporate earnings. The yield on 10-year Treasuries fell as bond prices increased with higher demand.

By the close of trading on February 28, the price of crude oil (WTI) was $54.00 per barrel, up from the January 31 price of $52.80 per barrel. The national average retail regular gasoline price was $2.314 per gallon on February 27, up from the January 30 selling price of $2.296 and $0.531 higher than a year ago. The price of gold climbed at the end of February, closing at $1,248.80 on the last day of the month, up from its January 31 price of $1,212.50.

did you know?

A recent investor study reveals insight into the behaviors and attitudes investors have towards their advisors.

  • 58% of clients have switched advisors at least once and 23% of them have switched advisors in the past five years.
  • 43% of clients say they only want to hear from their advisor—not from someone else in the office.
  • 65% of clients prefer dealing with a single advisor versus a team approach.

Source: The Spectrum Group 2016 Market Insights Report

bright ideas
The Top Five Reasons Clients May Fire Their Advisors

To run a successful practice, the most important thing a financial advisor needs is qualified clients. The second most important thing advisors need is client retention. After all, you can bring in all the clients you want, but if you’re not holding on to them, then you have a problem.

Each year, The Spectrem Group surveys more than 25,000 American households to gain better insight on client behaviors regarding investments and their attitudes about financial advisors. The study broke down investor demographics into mass affluent ($100K-$1M net worth), millionaire ($1M-$5M) and ultra-high-net-worth ($5M-$25M). This year’s survey revealed some startling information about why clients ditch their advisors.

First of all, most clients, regardless of their demographic, do switch advisors. According to the study, nearly 60 percent of clients have switched advisors at some point in their investing lives and roughly 25 percent have switched advisors in the past five years. The top five reasons clients may fire their advisors:

Reason 1: The Advisor Does Not Return Calls in A Timely Manner
Reason 2: The Advisor Is Not Providing Me with Good Ideas and Advice
Reason 3: The Advisor Is Not Being Proactive in Contacting Me
Reason 4: The Advisor Is Not Returning My Emails in A Timely Manner
Reason 5: My Portfolio Is Underperforming Compared to The Market

Something becomes apparent when we take a closer look at those five reasons. While two of those refer to the ideas and returns advisors provide to their clients, three of the reasons deal with something easily within your control—how you are responding and interacting with your client on a timely basis.

Communication is Key
Let’s take a look at a hypothetical scenario that could send some clients looking elsewhere. Imagine a client calls into your office early one morning. They have questions about the markets or their portfolio. An hour goes by, and they don’t hear back, then two hours. You plan to return all client calls, perhaps after the markets have closed. Meanwhile, the client is waiting and waiting and waiting. Finally, the client calls back. They want answers on what’s going on and why you haven’t responded. As the lead advisor in your office, you’re tied up in client meetings so you designate an associate to call them back. The associate answers the client’s questions, but a seed has been planted. This client is a candidate to bolt.

What went wrong in this scenario? The study revealed that almost all clients (95 percent) want a return call within 24 hours, but nearly 25 percent want a callback within two hours. Also, 43 percent said they only want to hear back from their advisor, not an associate or other team member.

Frequency of Contact
The study also revealed that clients want at least quarterly, face-to-face contact with their advisor. If you only meet with clients on an annual or semi-annual basis versus quarterly, their overall satisfaction with you drops by more than 15 percent. And, clients much prefer face-to-face meetings over other types of communication they receive from you. Ninety-eight percent of investors gave face-to-face meetings an excellent or satisfactory rating versus newsletters (84 percent), blogs (41 percent), and social media (36 percent).

Outsourcing Revisited
One way to make a move towards better client communication is to free yourself up as an advisor. As we wrote about in the December issue of our newsletter, you need to ask yourself: Do you want to be an asset manager or an asset gatherer? Time you spend managing portfolios could be valuable time spent meeting with and responding to your clients.

For further assistance on how to implement any of the tips or ideas above, contact your wholesaler today!

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For more on the backtesting procedures and philosophies that support each of the Beacon investment portfolios, visit our website to download our newest white paper: “Portfolios Benefit with Accurate Scientific Testing: Backtesting Can Show Strategy Performance In Various Scenarios.”



Beacon Capital Management, Inc. is an investment advisory firm registered with the Securities and Exchange Commission. Additional information about Beacon Capital Management is also available on the SEC’s website at under CRD number 120641. Beacon Capital Management only transacts business in states where it is properly registered, or excluded or exempted from registration requirements.

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