You have an opportunity to provide meaningful value to clients who have emerged from their end of year wind-down and recalibrated to focus on the year ahead.
This opportunity comes in the form of an annual outlook letter.
In this month’s post, we’ll explore why clients would care to read it, the key parts of what your annual outlook should include, and the benefits that you receive with a high quality one.
As a spoiler, you don’t need to chop down a tree to create one worthy of building trust and rapport with clients.
That said, you need to communicate in a way that resonates.
Let’s get started.
While there’s no hard and fast rule on what you need to discuss, your clients do have some base-level expectations.
First of all, you should not assume that even your own clients will dedicate time to sit down and read a dense report from cover to cover.
It’s not just Gen Z Tik-Tockers that have short attention spans. The modern digital ecosystem means even the more seasoned readers among your clients expect to be hooked from the start.
With this in mind, you should choreograph your report so that it directs attention to the Executive Summary and/or summary of each section you intend to address.
Executive Summary
Your Executive Summary should be no longer than a page of A4 text, or the equivalent of 2-3 minutes to read.
In other words, if you had 2-3 minutes of time to communicate and articulate your thoughts to a time-poor client – what would you say?
Hook in the reader with a data point, a contrarian insight, or something unusual that spikes their attention.
If you can’t capture their attention in the Executive Summary, then you certainly won’t capture their attention for anything substantive.
Economic Update
Your clients expect clarity on the key economic trends to watch over the next 12 months.
What’s more, even RIAs that invest client assets using a bottom-up framework can’t get away from top-down asset allocation decisions across the core asset classes.
With this in mind, you should communicate your awareness of a handful of critical trends about which your clients are looking for clarity.
You should look to limit your focus to the most important 3 trends affecting the U.S. economy. Any more than 3 trends can overwhelm the reader.
These topics are broad enough to capture the main trends, but focused enough to appeal to time-poor readers.
Market Commentary: Equities and Fixed Income
For clients, the rubber meets the road on market returns.
For most RIAs, clients are invested in two core asset classes: equities and fixed income. Because most of your client assets under management are likely allocated across these asset classes, each one requires a dedicated section.
Each asset class section requires a brief recap of what happened over the previous 12 months to provide context for your outlook. Again, you should limit your focus to the most important 3 trends for each asset class. Any more than this risks overwhelming the reader.
In your equities section, these 3 trends could include a focus on corporate profits, market valuations, and volatility.
As for the fixed income section, these trends could include Treasury yield dynamics, income generation, and preferences for different maturities.
Whether each section takes up 3 pages or 3 paragraphs, focused attention to key data points and how they could affect portfolio decisions over the next 12 months are fundamental to communicate your conviction and give your clients peace of mind.
We have written extensively on the benefits that RIAs receive from a consistent cadence of thought leadership materials (see 10 Reasons Why Thought Leadership Materials Drive Higher Client Referrals for RIAs).
In short: thought leadership materials drive referrals.
Outlook pieces, ideally written at least semi-annually, can drive organic growth for your business by equipping clients with the tools to share your expertise with others.
When clients see you simplifying complex financial topics, proactively offering guidance, and consistently delivering high-quality insights, they become advocates for your firm and help you to generate more referrals.
Client referrals do not happen by accident. In a world where first impressions matter and expertise is paramount, thought leadership is your key to unlock a steady stream of referrals that drives sustainable growth for your firm.
Never forget that insight posts serve as an opportunity to build closer relationships with your clients.
By framing your annual outlook post around actionable insights, you’ll effectively engage your audience and strengthen your advisor-client relationships.
This is just the next building block that positions yourself as a trusted advisor who can give their clients peace of mind.
Want to know more best practices to establish your firm as a thought leader? Check out our insights library here.
Get access to a consistent stream of insights that provides value to your clients in a way that scales your time, deepens your relationships, and elevates your brand as a thought leader.
