When investment advisor Alan Rae worked for what was then Pemberton Securities early in his career, he was the first broker in the office to have a desktop computer. Later, he acquired an early version of the laptop — a Compaq that cost him $12,500.

“I’ve always tried to maintain the ability to communicate and stay in touch with my clients,” he says. “Computers told me that was the way to go.”

Today, Rae, a vice president and top producer at RBC Dominion Securities Inc. in Richmond, B.C., is part broadcaster, part publisher and part technologist, as well as a full-time advisor. It’s what an advisor has to do in order to stay ahead in the radically changing communications game, he says. And that is where the challenge lies. While new media and technologies make it easier to reach out and touch clients on a 24-hour, seven-days-a-week basis, it makes it harder for an advisor to stay on top of the growing array of communication devices.

No longer does an advisor simply call a client, meet a person face to face or send a client a piece of literature in the mail. Now, advisors have access to everything from electronic newsletters to Webcasts, podcasts, blogs, online meetings and RSS feeds (“really simple syndication” is an Internet format designed for sharing Web content such as news) to reach out and touch their clients. But these can be richer forms of contact that are more personalized and interactive than simply mailing out marketing literature.

Dave Porter, an associate portfolio manager with Sanders Wealth Management Group Ltd. in Edmonton, incorporated new media into his practice six years ago. He started using Advisor Mailout, an electronic newsletter delivery service geared toward financial advisors. The delivery service, from Advisor Mailout Interactive Inc. in Edmonton, was an improvement over what Porter had been doing.

“We were doing a hard-copy newsletter and mailing it out in a PDF format or faxing it,” Porter explains. “That was time-consuming and not really aligned with our goal to provide clients with an efficient and non-invasive method of communication.”

“Now,” he says, “there are more people actually reading it. Our goal is 80% readership. Right now we’re at 60%-65%.”

Those client contacts are important, notes Pierre McLean, vice president of national sales at Franklin Templeton Investments Corp. in Toronto. He cites U.S. studies that show the most satisfied clients are those who have on average 12 contacts a year with their financial advisor. There has to be a “broad range” of contact, he says, and, over time, financial advisors “are all going to move to some form of electronic media” to facilitate those contacts.

Electronic newsletters

According to John Larson, who runs Advisor Mailout: “People spend more time in their e-mail program than they do watching TV.” Which is why it makes sense to use e-mail to reach clients.

Advisor Mailout, one of many such services, tracks the contact and can tell Porter when someone has opened his newsletter and which stories were read. The service also provides Web templates that dovetail with an advisor’s Web site or corporate branding. Advisor Mailout manages the mailing and can provide editorial content from financial writers for advisors to use, or advisors can provide their own copy. Advisor Mailout handles the distribution and manages the advisor’s e-mail list in the same way a regular mailing house would.

“What advisors use us for is top-of-mind awareness, not for prospecting. It’s to keep present clients up to date,” Larson says.

The service is also reasonably priced. “One of our goals was to look at an efficient means of outsourcing. We cut our costs in half,” Porter says.

Advisor Mailout is extremely easy to use, he adds: “Administration wouldn’t take more than an hour or two hours. It’s a 48-hour turnaround, including compliance.”

There’s a $500 set-up fee and a $100-per-month subscription fee. “The only limit is 20,000 e-mails per month. A financial advisor is never going to hit that number,” Larson says.

Rae is also a proponent of electronic newsletters. After clients overwhelmingly gave him the thumbs-up to send newsletters to them via e-mail, he began sending his Rae Report in an electronic format.

Instead of paying more than a $1 to mail each one, it’s now available on his Web site and through an e-mail “blast” — messages sent in bulk via e-mail — that he sends to clients. He has tinkered with the newsletter’s format, making the fonts larger and the articles “more punchy.” He also finds it easier to add colour and charts.

@page_break@The beauty of an electronic communication is that it can be highly interactive. For example, Rae includes a quiz — entitled the “Bow Tie Quiz” after his resplendent neckwear — to which readers can e-mail or call in the answer and win a prize.

Another advantage of electronic newsletters: they can provide readers with links to more information so clients have the option to develop a deeper understanding of financial topics. Also, there are no printing costs to the advisor and distribution is cheap.

Frank Ortencio, a vice president and investment advisor at Richardson Partners Financial Ltd. in Toronto, has an electronic newsletter dubbed The O Report.

Depending on the time of year, he includes certain items, such as financial checklists. The beauty of an electronic newsletter is the fast turnaround, he says. This RRSP season, he sent out a newsletter with an RRSP reminder and checklist.

“Within a couple of hours after we sent it out to all our clients and people who want to receive it, we had quite a few phone calls,” he says. “They like the idea that it gets to them right away and doesn’t get bogged down. Compared with having it printed, the information is timely.”

Electronic business cards

One of Rae’s most recently acquired communication tools is an electronic business card. It is essentially a 30-second, online infomercial in the form of a talking business card. Clients and prospects can click on the card, which is located on his Web site, and their Web browser will automatically load a video program that plays a broadcast of Rae talking about himself, his investment team and his approach to wealth management while soothing music plays softly in the background. (To have a look, go to www.rbcmedia.ca/ds/bc/alan.rae/vbc/.)

“The electronic business card has been a huge success,” Rae says, noting he can easily update it, recording changes to the message to make it dovetail with the time of year. For example, he can provide a Christmas or Easter message, or an RRSP or tax alert.

“It gives people a visual and tells them how we operate and the strict discipline to which we adhere,” he says. He doesn’t use it for cold calls, but more as a means to support connections he’s already made. So, when he meets people at an event or gets a phone call, Rae e-mails the leads a link to his e-business card; when users click on it, they “get a sense of what we’re about.”

Podcasts find a toehold

The spoken word is playing an increasingly important role via broadcasting of both video and audio presentations. That’s especially the case at mutual fund companies, which have been pioneering different means of communication with advisors and their clients.

Take podcasting, for example. A podcast is an audio broadcast available via the Internet, and it’s something Ortencio has been making available to his clients through his electronic newsletter.

Clients can click on a link in the newsletter and hear a podcast, for instance, of Juliette John, a portfolio manager with Calgary-based Bissett Investment Management, talking about the state of the market.

“Because of our technology infrastructure, we have the ability to provide that service,” Ortencio says. It’s an extension of live conference calls; it’s stored in an archive and, if a person can’t participate in the live event, he or she can listen to it afterward. “We may have 10 participants in an actual conference call, but touch 100 people in the aftermath,” Ortencio explains.

“It is open to all clients and gives them an opportunity to understand different money managers,” he says. So, even if a client does not have money invested in that manager’s fund, the client can still access the information. “We open it up to clients who aren’t in that mandate. [They have] the opportunity to forward it to friends and family. We’re touching more people than just our clients.”

When it comes to video and audio broadcasting, advisors need only look at the fund companies to get a sense of what’s coming. The fund companies have been busy piloting video and audio broadcasts to reach out to the retail sales channel. Advisors can expect similar technologies to be incorporated into their own practices eventually, but the information will be geared toward their clients.

Templeton’s McLean notes that technology is “hugely important” when it comes to fund companies staying in touch with the advisors who sell their products. “E-mail is the predominant form of communication,” he says. “We see more and more advisors using the Web and finding resources.”

Templeton sends weekly e-mail blasts with updates on the markets and commentaries from portfolio managers.

“Podcasting is slowly emerging,” McLean says. He predicts it is a communications tool that will find its way into the arsenals of more advisors.

For his part, Rae sees a lot of potential in podcasting. There’s no reason why financial advisors can’t do their own monthly podcasts to clients, broadcasting their thoughts and views about financial matters — especially as the popularity of hand-held devices that play audio files grows.

In the future, users will listen to more than songs on devices such as iPods, Apple Computer Inc.’s hand-held digital media player. Lectures and audiobooks will be standard fare on such devices, and there’s no reason why financial advisors can’t create monthly podcasts for their own clients to listen to while in the car or on their way home.

So far, Rae says, clients have shown limited interest, but it could catch on quickly. After all, e-mail was in its infancy only a few years ago; today it’s a favourite mode of communication.

Webcasting opens doors

Webcasting is another area that could be developed when it comes to client communications. Currently, it’s used by public companies to speak to analysts and investors, and fund companies are using Webcasting for purposes such as continuing education or professional development.

Webcasts are live Internet broadcasts, usually featuring both audio and video components; there is often the ability to view a slide presentation through a Web site, which allows the user to follow the conversation better.

For example, the day after the release of the recent federal budget, Jamie Golombek, vice president of tax and estate planning at Toronto-based AIM Funds Management Inc. , held a Webcast to bring financial advisors up to speed. It featured audio, with a slide presentation that users could follow online by accessing a special Web address.

Ortencio, whose firm has Webcast portfolio manager presentations for its clients, says the presentation is key: “What we’ve normally done during a live broadcast is to send the PowerPoint presentation for [viewers] to follow. It’s an opportunity for clients to listen to the manager.”

“It’s a big country,” notes McLean, and one way to reach people is through Webcasts. His firm provides a quarterly Webcast in which up to 1,200 advisors participate.

Brent St. Pierre, assistant vice president of e-business at AIM, says his firm uses technology from Brainshark Inc. of Waltham, Mass., to engage in live Webcasting and collaboration. “It’s a content authorizing and authentication tool,” he explains. It allows users to create presentations quickly and make them available online with an audio component. “The tool is so easy to use. We call it ‘on-demand content delivery’.”

Presentations can be done live or recorded in advance and made available to users, who can access the information when they want.

Rae has also participated in Webcasts, taking on the role of journalist and interviewing portfolio managers in a segment that is later made available to clients. “It was quite intimidating when I did the first one,” he admits. It involved a manager with Frank Russell Co. “You become better at them,” he adds, noting that the key is preparation.

Webcasting can also include a video feed that can be viewed from a desktop, a hand-held computer or even a cellphone — now that cellphone technology has advanced to the point at which TV can be broadcast over them.

Such broadcasts have come a long way since they were first aired. The pictures used to be fuzzy and choppy and the lip movement wasn’t always in sync with the sound. Today, those problems are less of an issue.

A video Webcast can be stored in the same way as a podcast, to be viewed later. That’s the beauty of digital communication for clients, Rae says: “They can deal with it on their own time.”

Demand for Customization

Client communications are changing, not only in form but also in substance. On-demand content delivery is the way of the future, maintains St. Pierre. What that means is the ability to provide information to fit a moment — such as a federal or provincial budget, a market hiccup or specific investment recommendations — and tailor it in a way that suits an individual’s taste.

Stan Eng, senior vice president and chief technology officer at Richardson in Toronto, says the key to delivering on-demand content is RSS feeds.

An RSS feed is part of the extensible markup language (XML) formatting standard used on the Internet. It allows content providers, such as new organizations or bloggers — people who keep a daily Web log or online diary — to turn their information into text files that can be used and reformatted by others. That information then can be sent automatically to a user through e-mail.

“One of the things our guys are trying to do as we post news stories in our Web site is introduce an RSS feed to the people who actually follow us,” says Eng.

RSS allows end-users to indicate the type of content they want sent to them. St. Pierre says what is interesting about RSS is that “the user determines what content he or she wants to receive and from whom.” Usage levels are still “very, very low,” he says, and it requires “more technical savvy.” But over time, he says, “It will evolve and we will see more and more of it.”

So, an advisor could essentially keep a daily blog that automatically keeps clients up to date on his or her thoughts about investing and automatically feed that information directly to them. For more information about managing RSS feeds, see services such as www.squeet.com or the “news” link of www. google.com.

Compliance never goes away

The biggest challenge to the new modes of communication remains making them work with compliance. Just because it’s electronic doesn’t mean communication is outside the scope of compliance. It’s covered under the sales, marketing or communications requirements by the various regulators.

St. Pierre, whose firm offers Portfolio Manager Television, with Webcasts of its managers talking about their funds, notes: “We always make sure we have approval from compliance before going ahead with things such as presentations. We want to make sure they follow legal requirements.”

Porter notes the turnaround for his e-newsletter can be up to 48 hours. And Rae agrees that compliance is critical: “Every article we publish is approved by a manager, and it’s done in a highly efficient way.”

The compliance issue causes many in the industry to speculate that blogging will be slow to take off among advisors. The notion behind blogging is to post thoughts at random. “It would be difficult to get approval on that as the system is currently,” Rae warns.

When it comes to blogging, Leonie Tyler, vice president and managing director of e-business at BMO Nesbitt Burns Inc. , doesn’t see that it has any advantage over the wizard publishing tools Nesbitt presently offers. Those tools allow advisors to post materials to their Web sites and have them routed through compliance for approval. “We have that down to quite tight timelines,” she says. “It’s not something that holds investment advisors up.”

The key to keeping up with new modes of communication and ensuring compliance, she says, is to “automate as many processes as we can.”

The downside to all these new avenues of communication is that clients face information overload. The challenge of communicating today with clients is sending the correct information at the right time, says Porter: “If you send too much information or send it at the wrong time, it’s like trying to make a call on Mother’s Day.”

And while communicating with clients electronically is important, advisors note that it’s not a substitute for face-to-face discussions with them.

“Podcasts and newsletters are ways of keeping clients informed,” Ortencio says, especially if they are spread out geographically. “However, I still strongly believe that you have to have conversations with them and regular meetings. I believe you always have to have that human element.”

But by adding new media to the communication mix, Rae says, “You enable yourself to stay ahead of the pack.” IE