The Disappearing Prospect

50 replies [Last post]
Andre017's picture
Offline
Joined: 2006-08-22

Ok, so you've had good meeting. No, a really good meeting with a couple - everyone seemed to make a connection, they were forthcoming about goals, concerns, assets. Agreed to second meeting for the "proposed solution" and showed up - on time. Proposal went well - still good "vibes" but they didn't move forward on the spot. "We want to think a little" they say. You probe a little, without becoming overly salesy and ultimately book a follow-up...

the phone rings couple of days later - we're still thinking they say... then... nothing. No return calls. Voicemail at each phone attempt.

For me this scenario has played out several times over the last several weeks. It's unusual for me so I'm tuned in to it. I'd like to hear from others about what types of things you do in this situation to attempt another move forward. We don't want to sit on these people and try to hatch them, but curious about the next few steps...

Thanks...

stokwiz's picture
Offline
Joined: 2004-12-04

Couple of points-
 
I use a tactic from the Sandler institute of giving an upfront disclosure at the first meeting.
"Mr prospect, through the course of our discussion you may find that what you need and what I do are two different things. However turnabout is fair play and I may find  that I can't help you. In any event, I will tell you, and I need you to tell me if that's the case. I can accept a yes or no, but not a maybe. Does that sound fair?"
 
On your current case if you can contact them again and they say they need more time, I would say "You know Mr. Prospect, we both know it takes information, not time, to make a decision. What other information were you looking for? Nows the time to ask while you have an expert on the phone."
 
 
If they say they aren't interested I would say" can you give me a reason or two why so I don't waste time calling with inappropriate ideas in the future?" This will tell you what he wants to buy.
 
Or Hell, maybe it's just you.
 
Stok

anonymous's picture
Offline
Joined: 2005-09-29

Was there any insurance involved?

Andre017's picture
Offline
Joined: 2006-08-22

regarding insurance: In one instance there was an annuity as part of the discussion, in the other instances, no...

Andre017's picture
Offline
Joined: 2006-08-22

anonyous: I just got it. nice

imabroker's picture
Offline
Joined: 2007-12-22

Andre, That happened to me once also.  I will not mention the "a" word until they become a client now.

anonymous's picture
Offline
Joined: 2005-09-29

"anonyous: I just got it. nice"
 
What did you just get?  I have no idea what you are talking about.  If there was insurance involved, I was going to tell you how to stop the "we want to think about it".
 
What did you say when you left messages? 
 
The only thing that they should be thinking about is whether they want to do business with you.

Andre017's picture
Offline
Joined: 2006-08-22

Sorry anonymous - I thought you were making a funny - please disregard. I am open to suggestion. As for messages, not too many - but what I did leave sounded something like: great meeting with you, you mentioned taking some time to consider (list a couple of things we discussed) could help you (insert benefit here), I'm looking forward to speaking with you further about how (whatever was proposed) may fit with your plans. Give me a call when you can - talk with you soon... that sort of thing...

anonymous's picture
Offline
Joined: 2005-09-29

Andre, tell us a little more.  What is it that they are thinking about?   Personally, I think that if they are deciding whether to follow your recommendations or not, you have messed up.   More specifically, it is ok if they aren't sure whether to go with your exact recommendations, but that should be absolutely secondary to whether they are doing business with you.  Typically, I will have the accounts set up and the money transferred before they are given any specific recommendations.  Maybe this makes things a little more personal because they have to reject me and not my recommendations.
With all that being said, I'm still not immune to "let me think about it".    You need to find out specifically what it is that they are thinking about.  They need to know that you are fine with them saying no and you just want them to tell you so you don't have to waste time calling them.  Don't let them leave without setting up a follow up appointment.  If one doesn't get set, they aren't serious.    If something happens and for some reason I don't have an appointment, I will call and leave a message.  If I have to leave a second message,  it will be very direct.  I want them to say "we don't want to do business with you."  Nothing's wrong with hearing no.  We have to stay away from the time wasting maybes.

Broker24's picture
Offline
Joined: 2006-10-12

Most people have to think about it because hey are scared - scared of the unknown. They know that their broker is average, or that their Vanguard stuff has done OK. But they are more comfortable with the "known" (their current situation) than the "unknown" (which is what you will do to them). Sometimes it is best to develop rapport so they begin to "like" you, and feel comfortable with you. Unless your philosophies are way out of the box, they will begin to trust you. Maybe invite them to dinner with a wholesaler ("industry specialist"), let them see that you are in fact the real deal.

Morphius's picture
Offline
Joined: 2007-07-21

I agree with anon that this is largely a result of your process, i.e. if you have a second meeting at which you present your specific proposals before they commit to working with you and moving their assets over.  I made that mistake early in my career and steadfastly refuse to do it again.  First I sell them on me and my process, but I don't give away my advice for free.

Andre017's picture
Offline
Joined: 2006-08-22

great posts - and thought provoking. I consider myself relatively people-savvy - try to create a comfortable environment right from the start, but I have not had much luck in the way of transferring assets in before presenting some solutions. I'm middle-aged but new to the area and this business (1 year out) - so could be a little bit of the "new guy" in town I suppose. But this thread has provoked a question: Do you get the assets in before explaining what you plan to do with them? I would be of the opinion (if I were the new prospect) that I'm not moving my assets until I know what your plan is for them... what's your process?

anonymous's picture
Offline
Joined: 2005-09-29

I almost always get the assets before the client knows the exact plan.   The client needs to know general things in advance like why we are moving the money from a 401(k) into an IRA and my general philosophy on investment strategies and the different ways that we can work together...fees, commissions, combination, etc.  They need to know what they can expect in terms of service and they must feel comfortable with me.  The one thing that they don't need to know is exactly what we are going to do with the money.
The primary reason for this is that it simply doesn't matter.   I do not take any discretionary authority.  I make recommendations, but all decisions are up to the client.  The client understands that it's not about my plan for his money.  It is about OUR plan for the money.   We work together on an ongoing basis to accomplish his financial objectives.  In short, it doesn't matter if the client agrees with my initial suggestions.   If he doesn't, we'll go back to the drawing board to put something together that he likes.  He's working with me because he wants to work with me and not because of some recommendations that I gave him before he was a client.
 
Sometimes I'll get a call from a client who has either met with another advisor or has been approached by one.  I have no problem with this happening.  I always tell my client that if they have time I have no problem with them meeting with someone else because maybe we'll pick up a good idea.   I then get a follow-up call and the client says the advisor said, "I should do X, Y, Z."  Normally, I can tell them why that isn't the best for them.   Other times, I get surprised, and the recommendation does have some merit.  So what happens?  I tell the client, "That makes some sense.  Let's give it a try.  I'll take care of that immediately for you."  You see, you don't lose clients over better ideas.  You lose client by not giving them good service.
 
The secondary issue why I transfer assets first is because of the insurance side of the equation.  I don't know what the insurance side looks like until after we apply, get approved and put the policies in force.  What gets done or doesn't get done on the insurance side has influence on the investment side.   Just as a simple example, someone who has a significant amount of whole life insurance can take more investment risk than someone who only has term insurance. 

Gaddock's picture
Offline
Joined: 2007-02-23

1) They don't fully understand what you presented that creates fear and apathy.
2) They spoke with their current rep or somebody they trust that has corrupted your proposal in thier mind.
 
3) Your solution demanded significant or even radical changes to what they now have creating fear perhaps resentment.
 
Mix and match the above

Andre017's picture
Offline
Joined: 2006-08-22

great comments everyone - and thank you. I finally got through to one of these prospects yesterday. good conversation - actually one of my goals on the phone was to reaffirm that we were putting a thoughtful plan together, not a quick sale. Anyway, I determined that the major cause for concern in this case is market volatility and a nervous wife. That's telling me that I may not have done quite enough to convince them that my approach is what counts - thoughtful, careful, etc. - not necessarily the "mix" probably should have talked a little more about DCA too...

Eyetattoo's picture
Offline
Joined: 2008-03-29

Sounds to me that maybe you did too much talking.........Get them in again and just start asking questions about them....find out what makes them tick.  This usually works all the time when your dealing with an unsure wife....get her to like you by getting to know her.

anabuhabkuss's picture
Offline
Joined: 2005-05-02

Same situation recently. Guy has a huge 401k sitting with former employer. Took him to lunch and showed him my proposal which had a mix of UITs in it. He had never heard of a UIT before so I made the education process very short and simple.
 
I called back and he wanted to take time to educate himself more he said he'd call me IF he decided to take action. That was my que that I dropped the ball.
 
On a second note, I read anonymous' philosophy about getting money in first and frankly I do not agree with it. Here's why. I recently ACAT'ed in a good sized account for a new client who was previously working with an FA who was his brother in law. The client first came to me with questions about his portfolio because he could never get a straight answer from his brother in law what he was being charged for his services.
 
I put his investments under a microscope and uncovered huge overlapes, trades, and unnecessary risks. I educated the client about needs and wants, careful asset allocations, good money managers etc, put a new allocation for him, told him how the mutual fund companies paid me, had a tax professional sit with me and talk about his distribution plan and he signed his account that his brother in law had been helping him with for 23+ years.
 
What you recommend for the client is a huge part of WHO you are as an advisor and is as important as them finding out that they want to work with you for YOU. Your recommendations do count because no matter who you are, one day someone is going to come along and challenge your recommendations. If you think your clients are entitled to liking and trusting you rather than have more money in their pocket you are a fool. What you can do for them at the end of the day is king, not who you are.
 
I dropped the ball on the UIT case but I did not give the sense of urgency I think.

anabuhabkuss's picture
Offline
Joined: 2005-05-02

and seriously anonymous, wtf is up with you not wanting your ideas stolen but stealing ideas yourself? You said customer service wins? Customer service would have been you coming up with the ideas and research yourself to take care of your clients. If you did not take the time to take care of your clients in the first place then why are you entitled to keep them by stealing other's recommendations?

Morphius's picture
Offline
Joined: 2007-07-21

anabuhabkuss,Interesting that giving your expertise away for free didn't work - by your own admission - and yet you attack anonymous for using an approach that would have prevented that very scenario. When you go to an attorney, does he give you specific written recommendations before you agree to engage him?  Does a doctor diagnose your condition and write a prescription before you sign on with him?  An architect give you blueprints before he's hired?I could go on and on, but I think you see my point.  It is a mystery to me why some think it is necessary or helpful to freely give prospects specific investment recommendations before they commit to work with us or pay us. 

Andre017's picture
Offline
Joined: 2006-08-22

Thanks all. Sounds like I need to think about my process with prospects and focus on listening a little more. Although I do understand about creating trying to create an environment where they are buying ME and not whatever investment plan(s) I may propose, I still would like to get a better understanding of how any of you get out of the "show me your plan and I'll transfer the money" and into the "transfer the money and I'll show you the plan". I'm going to make a guess that the latter is a little easier to accomplish when you're out of the "starving artist" phase of your business and more established - of course, that could just be a head game too...

anonymous's picture
Offline
Joined: 2005-09-29

Anabuhabkuss,   Let's use your 401(k) guy as a classic example.   Let's assume that we both thought that UITs inside of an IRA were the best move for this client. 
You spent your time educating him on how UITs worked and how they were a better option for him.  When you were done, he ultimately didn't like UITs or didn't understand them, so he didn't move the money.
I would have spent the time explaining the advantages of an IRA over a 401(k).   Getting someone to see this advantage is very easy, thus the money gets transferred.  This money will get transferred even if he wants to keep his investments the same.  However, once the money gets transferred, I am now selling to a client and not a prospect.  It is infinitely easier to sell to a client than a prospect.   When the money is transferred, the chances are very slim that he won't buy the UIT if that is what is recommended.  If he doesn't want the UIT, so what.  I still have the client.  We'll work to find investments that he wants.
As for your case where you took the money from the brother-in-law, that's the exception.  However, the reality is that you got the business because he didn't want to continue to work with his brother-in-law.   I'm making this assumption because the easy thing for him to do would have been to have his brother-in-law implement the changes that you were recommending.
 
The value that we bring to the table is not in specific investment picking.  Do we really have any idea if XYZ mutual fund is going to beat ABC UIT which is going to beat DEF VA?  I can't offer anything that someone else can't offer, so there has to be something above and beyond the specific investments that will cause the clients to do business with us.
 
You are correct that someone will always challenge my recommendations and yours and everybody else's.  They'll always be able to use hindsite to show why something else would have been better.  Our only protection against this is the relationship.   The client isn't coming to me because of my specific recommendation and the client isn't going to leave me because of someone else's specific recommendation.
 
and seriously anonymous, wtf is up with you not wanting your ideas stolen but stealing ideas yourself?
 
Can you take the time to explain this because I don't know what you mean.  I'm happy to steal the ideas of others and I'm on this board so that others can steal my ideas.
 
You said customer service wins? Customer service would have been you coming up with the ideas and research yourself to take care of your clients. If you did not take the time to take care of your clients in the first place then why are you entitled to keep them by stealing other's recommendations?
 
I think you may be completely misunderstanding me.  I don't steal others recommendations.  It's just premature to give my specific recommendations to someone who isn't a client.   I tell my clients that this is a lifelong process.  I tell them that we'll work together to design the best possible portfolio for them.   I actually like when they don't take my intial recommendations.   It makes them part of the decision making process.  Also, as I mentioned before, it is too difficult to make investment decisions before knowing exactly what is happening on the insurance side of the coin.
 
 
 
 

anonymous's picture
Offline
Joined: 2005-09-29

Ice, that is probably what he's talking about.   I look at that in two ways.  1) I don't have all of the good ideas.  If someone has a better idea, I'm always willing to go with it.  2) There's many ways to skin a cat.  If there is a reason why the idea is inferior, I will immediately tell the client why it is a bad idea. 
The point is that if someone is with me primarily because of my investment ideas, someone with "better" ideas (probably using hindsite) will be able to steal my clients.  If someone is with me because we've built a great relationship and we're on a journey together to help them achieve their goals, a good investment idea will not be sufficient enough for someone to capture the assets. 

troll's picture
Offline
Joined: 2004-11-29
anabuhabkuss's picture
Offline
Joined: 2005-05-02

Morphius,
 
Do not fool yourself for one second in believing you have the expertise and hardwork behind you as that of a doctor or a lawyer. You ARE not a doctor or a lawyer. A financial advisor can be a high school drop out and still be very very successful in this business. I have an uncle who is a doctor. The guy spent 4 years getting into med school and another 6 eyars to complete that. Are you ****ing telling me now your clients are obligated to treat you with the same respect as a doctor? Seriously.
 
Reality check: you are a salesman. And in reality you do not walk into a jewelry store,a  department store or any place where you pay the cashier money up front and then look around.
 
For the record, I did not attack anonymous' statement about ACATing in money first. I attacked him for stealing ideas. It was nice of you Morpius to take one proposal I missed out on and completely disregard my story of the client who gave me his account from his brother in law (a $640,000 account). I do not have any problems, for the most part (there's always room for improvement), hitting production.
 
Anon and Ice you are right in what I was referring to. My belief regarding your statement anon: The point is that if someone is with me primarily because of my investment ideas, someone with "better" ideas (probably using hindsite) will be able to steal my clients. 
 
...is that they should steal your client. Again if you did not take the time to come up with the better idea in the first place to betetr thsier situation, why should they honor you instead of wanting more money in their pocket. Are you telling me that if you were in the client's position and you knew you were getting the shaft you would not want to leave?
 
Morphius and others think they're "doctors". That's really cute. There's a huge difference between being a professional and fooling yorself into thinking your practice of selling mutuals funds is as complex as a doctor's diagnosis

anabuhabkuss's picture
Offline
Joined: 2005-05-02

Anon, I will give your post above some thought. Thanks for the clarification. Good luck with production today all.

Trapper SS's picture
Offline
Joined: 2007-01-23

anabuhabkuss wrote:Morphius,
 
Reality check: you are a salesman. And in reality you do not walk into a jewelry store,a  department store or any place where you pay the cashier money up front and then look around.
 
 
I'd say that's the difference between a service sale vs product sale.  Service sales are based off of upfront trust (doctor/lawyer) rather than a product sale, where the sale is based on trust on the specific product after it's seen.  What it boils down to is if an FA is selling products or selling his service

BondGuy's picture
Offline
Joined: 2006-09-21

stokwiz wrote:Couple of points-
 
I use a tactic from the Sandler institute of giving an upfront disclosure at the first meeting.
"Mr prospect, through the course of our discussion you may find that what you need and what I do are two different things. However turnabout is fair play and I may find  that I can't help you. In any event, I will tell you, and I need you to tell me if that's the case. I can accept a yes or no, but not a maybe. Does that sound fair?"
 
On your current case if you can contact them again and they say they need more time, I would say "You know Mr. Prospect, we both know it takes information, not time, to make a decision. What other information were you looking for? Nows the time to ask while you have an expert on the phone."
 
 
If they say they aren't interested I would say" can you give me a reason or two why so I don't waste time calling with inappropriate ideas in the future?" This will tell you what he wants to buy.
 
Or Hell, maybe it's just you.
 
Stok
 
Stok, best post on this thread.

Morphius's picture
Offline
Joined: 2007-07-21

Wow, apparently I touched a raw nerve based on your reaction, anabuhabkuss.  As I'm sure you realize, my comments about attorneys, doctors and architects not giving away their expertise for free were analogies, as was your analogy about buying diamonds.   I also know you are smart enough to see the obvious differences between  buying services and products in these different analogies.I was not trying to insult you, anabuhabkuss.  I was simply trying to share a lesson from my own experience relevant to the disappointment you described.  I decided to change my process precisely BECAUSE I was sick of working hard and still losing prospects who couldn't make up their mind about my specific recommendations - not because I thought I was a doctor.   And since that change I have never had that problem again. Not once. If you don't choose to use the process I described and use that's fine with me.  Really.  I don't mind a bit.  But I'm proof you don't have to be a doctor to avoid this type of situation.  You just have to change your mindset and your process.

anonymous's picture
Offline
Joined: 2005-09-29

Anon and Ice you are right in what I was referring to. My belief regarding your statement anon: The point is that if someone is with me primarily because of my investment ideas, someone with "better" ideas (probably using hindsite) will be able to steal my clients. 
 
...is that they should steal your client. Again if you did not take the time to come up with the better idea in the first place to betetr thsier situation, why should they honor you instead of wanting more money in their pocket. Are you telling me that if you were in the client's position and you knew you were getting the shaft you would not want to leave?
 
Anabuhabkuss, you are making some big jumps with this.  First of all, having a good idea won't allow them to steal my client.   My claws are in too deep.  We are working together to accomplish their financial goals.  Their life insurance is with me.  Their disability insurance is with me.  They rolled over their 401(k) to me.  Their 529 plan is with me.  I'm advising them on paying their debt, etc. etc.   They aren't jumping ship for an investment idea. 
 
I want to do what is best for my client.  If someone else has a better idea, I'd be a terrible advisor if I didn't admit that it was a better idea and use it.   My clients want to work with me.  If someone has a better idea, the client doesn't want to leave to implement the better idea if they can do it with me.   Besides, most "better ideas" are only "better ideas" in hindsite.   If this better idea isn't better in the future, why do it?
 
With most ideas, we don't know if they are going to be better or worse.  A typical example might be a client who is invested 70% in the U.S. and 30% foreign.  He talks to someone else who says he should be 70% foreign and 30% U.S.  Is that better for this client?  Beats me.  Ask me in the future.  If the client wants to go more foreign, it's fine with me, and we'll make the change.  The point is that the other advisor telling my client to make this change will never get him the client. 
 
If I was a client and felt that I was getting the shaft, I would want to leave immediately.  However, I would not equate "a better idea" with "getting the shaft". 
 
When we lose business, it is almost always over relationship issues and not investment issues.  The reality is that none of us have much of a clue as to what the market will be doing, because if we did, we'd be on our yachts instead of calling prospects.   Our value is always going to be in helping clients achieve their financial goals and improving investor performance. 
 
 

anabuhabkuss's picture
Offline
Joined: 2005-05-02

Morphius, I was not insulted in the least by your post just a bit surprised by your thought process which I'm sure is making you a living.
 
Anon, I understand fully what you are saying and I myself am as deep as you put yourself in my client's lives. However, my view differ in that these people have come to me with hundred and thousands of dollars in checks not because I'm a nice guy, or I babble about my granny, or because I can tell them the difference between an IRA or 401k; reliastically any of our competitors can and DO! My point is they bring me their checks because of what I can do for their money that makes more sense to them than someone else's ideas for the same categories (insurance, 529s, etc).
 
I know this because I have taken accounts from other brokers who do what I do.
 
Dude, seriously, the guy who brought me his accounts from his brother in law recently did  so not for personal reasons. I told this client to put himself in his brother in law's situation and ask why he never continued to research better ways to improve thier investment lives. In this fast year, I have stolen 3 accounts from brokers who have been working with my clients for over 15 years! BTW, I'm 29 years old just for the record.
 
I would dread the day where this conversation occurs (and I've heard it to happen):
 
Client: "Dear broker, I recently had my portfolio looked over by another broker who explained to me the unnecessary risk and tax ramifications that eat out of my bottom line. I understand you can not control what the market does, but I would expect you could control the risk and tax factors in said protfolio. My question to you, Mr. Broker whom I have worked with for 20 years, is if I take my money that I have worked 60 hours for 30 years to earn so seriously, why did it not occur to you to take it as seriously and come to me with ideas like this? Is your bottom line more important than mine!?"
 
What are you going to tell the client anon? "Umm, you should trust me because you gave me money to sell you insurance 529 and a rollover IRA?"
 
In my opinion, you are looking at it from your standpoint. The fact that the client gave you their hard earned money is more important than the fact that they trusted you because you spoke about insurance, 529'ers and what have you.
 
Again, what would you tell a client that comes to you with that question? Here's my secret, I lost the UIT case because it was new money. When I deal with existing investors, I tell them to go to their current brokers and ask that question I typed above.
 
Result: $2.1MM in new money for me.

anabuhabkuss's picture
Offline
Joined: 2005-05-02

Of course, I did all this minus the booze in my system and grammar/spelling mistakes.

anabuhabkuss's picture
Offline
Joined: 2005-05-02

Ice, we're not arguing justifying fees etc. I'm not sure if I grasp your point bringing fees into this.
 
About how to respond when a broker has more game or knowledge than me; this is a vague question and I do not know how to interpret it but if he does have more knowledge than me and it was I who came up with the better proposition for the client long term what do you think the client will say?: "Mr Broker you have a CFP but couldn't come up with this?!". There's also the question about the brokerage firm the other broker works in. If he does not have a massive money management team or estate planning guru in his/her back office that they can use as a resource they're kinda at a disadvantag do you not agree?
 
To answer that question I go in giving it my best and not the lame duck "Here are 10 fantastic American Funds for you!" BS. If my proposition gets beat, it gets beat! I lose. But like I said I do not think for one second a client's is going to stay with a broker's piker model just because they have CFP plastered on their business card. No way.
 
With that said, are u sold on your lawyer because of the service he brought to you on that case from your previous career or did the relationship with him exist first? What made you have him on your team in the first place?
 
Sounds like he sold you on the good job he did: Product/service. Relationship (you hiring him thereafter) came second. No? Relationship is F-ed when client knows he could be paying the same high fees for someone who is going to do a BETTER job.

anonymous's picture
Offline
Joined: 2005-09-29

Anahubakuss, I was going to address your points, but let's try this another way.  Let's try to put this in action.  Maybe we can both learn.  You can show me how you would go about stealing this client and I'll show you how I can stop you from stealing the client.
ex.  I've been working with a client for 4 years.  We have a good relationship.  He is married with 2 kids.  Husband and wife are in their late 30's and the kids are young.  Both he and his wife have life insurance (WL/term combos).  He has a DI policy.  They have adequate savings.  They have 6 different 529 plans.  They have WL policies on their 2 kids.  They have about $400,000 in non-qualified money all of it in a BS portfolio of equity funds from American Funds.    There is also an IRA that we rolled over from a previous employer.  It is $50K and it is also in American Funds equity funds.  They are not Roth eligible.  They are both maxing out their work retirement plans.  They are just hitting the point that they can put another $1000/month away. 
We'll assume that you are great on the phone and you have a good relationship and work with some of my client's partners at work.  Because his colleagues speak highly of you and since you will already be in the building, my client agrees to meet with you.  He tells you that he is quite happy with me, but he understands your view that nobody has a lock on all of the great ideas, so he's willing to have a meeting with you.
 
Please tell me what you can possibly say to get him to consider moving any of his money to you.  I will then tell you how I will counter to make sure that he doesn't move anything.  Hopefully, we (and others) can  learn from this.

anabuhabkuss's picture
Offline
Joined: 2005-05-02

Anon, Ice,
 
I will get back to you as soon as I settle down from the travelling I am doing. I definitely think I can learn a thing or two here as well and will definitely respond back soon.

Spaceman Spiff's picture
Offline
Joined: 2006-08-08

joedabrkr wrote: Andre017 wrote:Thanks all. Sounds like I need to think about my process with prospects and focus on listening a little more. Although I do understand about creating trying to create an environment where they are buying ME and not whatever investment plan(s) I may propose, I still would like to get a better understanding of how any of you get out of the "show me your plan and I'll transfer the money" and into the "transfer the money and I'll show you the plan". I'm going to make a guess that the latter is a little easier to accomplish when you're out of the "starving artist" phase of your business and more established - of course, that could just be a head game too...Reading this thread I've realized that, even with more than a decade of experience in the business I still give away too much information before I get the signature on the ACATS papers.I think more than anything, Andre, you have it right: It is a matter of attitude.  The analogies regarding an attorney or an architect are very valid.
 
You and I are probably very similar.  At some level I want the client to agree that what I am proposing is a great idea for them, so I give them way too much detail.  I basically give them the plans to go to Vanguard or Fido and build it themselves.  Or I give them so much detail that they get confused and just decide it's more simple to leave things alone.  Whichever, it means I don't get the sale or the client. 
 
Anon will be more successful because he's not trying to sell the intangible - investment returns.  He's selling himself, his process, his handshake so to speak.  They can see that and come to terms with it.  The investments are almost an afterthought.  I have so much to learn. 

anabuhabkuss's picture
Offline
Joined: 2005-05-02

Anon,
 
Having giving this a lot of thought I have to concede on a few of your points and make some clarifications on my process (prior to our butting heads here).
 
Meeting one is about how I go about picking the right investments, gathering information and setting appointment two.
 
HEre is where I concede defeat. I would have the "solution" laid out in appointment two and put myself in a situation where the client then had to make a decision to work with me based on THAT appointment rather than reflect on my process in round 1.
 
I get it.
 
In the last week I have tried your technique. HEre is what happened on one occassion:
 
Mr/Mrs Client, now that you understand my process, do you have any questions?
 
"Ana, we are blown by what you are explaining to us. No one has ever given us this kind of indepth knowledge about what options are available to us (IRAS, distribution startegies, alternative strategies, etc) and what strategies would help us given our personal and tax situation. We like what you are saying. So after we sign the paperwork you'll tell us what specific investments will hit our goals based on your assessment?"
 
"Absolutely. I want you to understand Mr. Client, talking about the specific investments is the easy part. You are going to hear the same story elsewhere. There are plenty of people who can sell you a car. I do not want to sell you on product, I have product, I need you to udnerstand that I can come and educate you on what your options are. Once we decide out to invest in different taxable/tax deferred accounts, I can then come up with a portfolio that will, in my best judgment, be in your best interest given your circumstances. How would you like to proceed?"
 
I gathered assets without showing them my UIT/mutual proposal.
 
So, thank you.
 
Now, going back to your question anon, I would just show those folks my process, speak with their preferred tax professional/cpa and then let them judge which picture fits their needs.
 
That's all I got for you. Sorry for the late response.
 

anabuhabkuss's picture
Offline
Joined: 2005-05-02

Again, the pitch is going to be sdifferent when sitting with uneducated investors vs people already situated. If I were sitting with someone as in your hypothetical scenario, I would look at how their portfolios are structured (how much money in taxable, tradsitional Ira, roth ira, vuls) and then see if there's room for improvement and work that rouite. That is how I won past cases. So I would stick with that minus showing them my proposal in round 2 as I have in the past.

anonymous's picture
Offline
Joined: 2005-09-29

anahuabkuss, I guess that we aren't going to be able to have too much fun with this one.  Welcome back.
 
It's good to hear that my technique worked for you.
 
"If I were sitting with someone as in your hypothetical scenario, I would look at how their portfolios are structured (how much money in taxable, tradsitional Ira, roth ira, vuls) and then see if there's room for improvement and work that rouite. That is how I won past cases. So I would stick with that minus showing them my proposal in round 2 as I have in the past."
 
First of all, I can promise that they will have $0 in VULs.   I can also promise that you will be able to find something that you can do better for them.  You have hindsite on your side.  Ultimately, it won't matter that you have some great ideas.
 
The client will come back to me.  They will tell me that you said that some of my ideas weren't very good and they should be doing things differently.  I'll go over your ideas and explain why they aren't better.  However, you may come up with an idea that is better.  I will simply tell my client that the idea has some merit and if they want we can devote some money to giving it a try.  I will get paid to implement your idea.
 
It simply comes down to the fact that people switch or don't switch based upon trust.   My clients won't leave me for a better idea.  Neither will yours.   As long as we give good attentive service, most of our clients will be clients for life.  
 
One of the things that I always do is find out how strong of a relationship that they have with their current advisor.  If they don't have one or if the relationship isn't very strong, I go after all of the business at once.  If they do have a strong relationship, instead, what I try to do is to get the business that their current advisor is ignoring.  
 
Example:
Client: "I'm working with Jim Smith from ML."
Me: "How long have you been working with Jim?"
Client: "10 years.  He does a great job for me."
Me: "Fantastic.  ML has lots of great advisors who do a fantastic job for their clients with their investments.  I don't know Jim personally, but his office has a good reputation.  In fact, some of Jim's colleagues are actually clients of mine and they send business to me."
Client: "Don't you do the same thing that they do?"
Me: "Yes and no.  We do to some extent, but because ML is an investment house, their focus is overwhelmingly on investments.  For instance, I would bet my last dollar that Jim has never spent the time to go over the ins and outs of your disability policy or spent the time make sure that your buy-sell agreement is funded in the proper manner.
Client: That's true.
Me: It's not a knock on Jim.  He just doesn't get paid to do these things, thus it makes sense that he would never develop the necessary expertise.  
Client: It makes sense.
Me: I, on the other hand, work on these types of issues on a daily basis, thus they send business to me.  I do not want to get in the way of your relationship with Jim.  Let's spend our time focusing on the non-investment issues of your financial planning.
Client: That sounds fair. 
 
Obviously, I want all of the business, but I'm going after the low hanging fruit first.  Once I get him as a client, if I have a better investment idea, he will implement it with me because I'm not an outsider.  I'm one of his advisors.
 
The key to this technique is knowing the weakness of the other advisor.  Often, we'll know it simply due to their firm.  For example, if they work with someone from Ameriprise...
 
Me: "Let me guess, Mr. Prospect, your objective advisor had you paid money for a financial plan and the recommendation was to buy an Ameriprise VUL policy and Riversource Funds and a disability insurance policy from Ameriprise."
 
Client: "How did you know?"
 
Me: "In my experience, all Ameriprise advisors give the same recommendation. I'm not going to charge you a fee.  Let's take a look at your situation so you can get some objective advice."
 
Client: "Ok"

anabuhabkuss's picture
Offline
Joined: 2005-05-02

I whole heartedly disagree with you. People will leave you if they can get the same/better service AND better ideas. Are you telling me someone will stick with a banker or a state farm agent just because the agent's service is great despite the fact that his investment options are limited? Yeah right.
 
Come on now. It's plain as day that you do not work for a brokerage. People will leave you for better ideas/more resources. You are seriously naive if you think clients will choose loyalty to a nice agent/broker rather than their bottom line. (Oh my portfolio is down 17% when the market is down 12%, but he has all our money and calls us so he must be good! lol)
 
People do not buy cars from salesmen because of their customer service. They know what car they're buying. People aren't going to trust customer service to have spine, brain surgery, they're going to go to the person who can get the job done. You seem to insist you'll have clients for life just because you have quarterly reviews to go over proprietory products. Come on.
 
I'm going to say this once more. People go looking for financial advisors for results for their hard earned money. Service means crap without results. Results are based on investment ideas/strategies. I don't know what kind of clients you prospect but I know you're not going to get a check for 5 million by saying "I don';t know the answer to that, go ask another broker and let's hear what he/she has to say and implement a plan of action!"
 
You are wrong because, I repeat, I have stolen accounts from brokers who were working with clients for 10 plus yrs.
 
Don't assume you'll never lose clients. You won't fool us.
 
I hope you don;t seriously think people will go to a knowledgable doctor with a good reputation and take their plan for surgery to another one who is less experienced. Read what you're typing and think.

anabuhabkuss's picture
Offline
Joined: 2005-05-02

anonymous wrote:
 
 However, you may come up with an idea that is better.  I will simply tell my client that the idea has some merit and if they want we can devote some money to giving it a try.  I will get paid to implement your idea.
 
\
 
No they won't. They'll ask why you did not have the knowledge, resources and time to come up with the strategy first and question your ability to manage their hard earned money (especially when dealing with high net worth investors. )
 
Then just as you claim you do, they'll have started a new relationship with another broker by filling the void that you missed by cutting said new broker a check. And yet somehow you think the client will come to you so you can steal others' ideas (because, naturally, other brokers will risk giving their investment strategies away to come to your desk)? Do you not see what a hypocrite that makes you? It's alright for you to fill a void for cleints who have established relationships currently in place but there's no way that will happen to you? Instead, you think clients will come running right to you asking you to steal ideas ? lol Not a chance in hell.
 
Let me ask another question, what do you do if the other broker doesn't get specific about what mutual fund to buy and yet has the client's attention with a strategy that beats the pants off of yours? You think you'll be able to steal that too and keep the client while you turn around and try and establish a repoire with a prospect who has a broker that never talks to them about estate planning investments?

anonymous's picture
Offline
Joined: 2005-09-29

People will leave you if they can get the same/better service AND better ideas.
You are correct.  Now how will a prospect know that they will get better service and better ideas?  They are comparing new promises against years of trust.
 
Let's just turn this around.  We can safely assume that you don't have the market cornered on good ideas.  Do you personally lose clients with whom you have a good relationship and give good service?  I'm sure that the answer is "no".  You just think that the reason is your great ideas, but I'm telling you that it's because  the relationship and service that you have given trumps the ideas.  No matter how great your ideas have been, a new person can always show why your ideas haven't been very good.
 
Forget about your banker and State Farm question, I'm talking about advisors that have the ability to give the clients what they need.  The banker will lose business.  The State Farm agent will lose business.  The wirehouse rep will lose business.  The insurance company rep with limited investment resources will lose business.  Everyone will lose business if they don't have the capability to do what needs to be done. 
 
If I have an idea that has merit for one of your clients, do you think that would be enough to steal the business?  I doubt it...unless they aren't all that enthralled with you and that's the reason that they agreed to meet.
 
Virtually every time that you meet with someone, don't you find a way that you can be of help to them?  I'm sure that the answer is "yes", yet often you still can't get the business.  It's because a good idea is typically not a good enough reason to get someone to switch. 

Morphius's picture
Offline
Joined: 2007-07-21

anabuhabkuss wrote: And yet somehow you think the client will come to you so you can steal others' ideas (because, naturally, other brokers will risk giving their investment strategies away to come to your desk)? Do you not see what a hypocrite that makes you?
The irony here is that the whole discussion BEGAN because Andre did, in fact, give away his specific recommendations to a prospect, just as you said you did.  ("Same situation recently. Guy has a huge 401k sitting with former
employer. Took him to lunch and showed him my proposal which had a mix
of UITs in it. He had never heard of a UIT before so I made the
education process very short and simple. I called back and he wanted to take time to educate himself more
he said he'd call me IF he decided to take action. That was my que that
I dropped the ball.")Now you argue that the process anon advocates won't work because brokers won't give away their strategies?!  If that didn't happen, this post wouldn't exist, nor would you be trying to justify this practice.  Catch 22.

anabuhabkuss wrote:Let me ask another question, what do you do if the other broker doesn't get specific about what mutual fund to buy and yet has the client's attention with a strategy that beats the pants off of yours?Better question.  Now you're focusing in on the point.  If you do everything you do now EXCEPT give specific fund recommendations, the chances of this scenario happening are almost eliminated.  That is exactly the point.That being said, I'm getting a bit confused as to why seem fixated on the idea that someone might "steal" an idea that someone else is foolish enough to give away for free.  Understandably that could be frustrating, but it's a non-issue IF you don't give away any actionable idea.  In any event, re-reading your original post it seems to me there isn't really that much of a difference in practice between what you have apparently been doing and what anon and I have been trying to advocate OTHER THAN we don't give away specific, actionable recommendations UNTIL the prospect is a client.  What is clearly different is our perception of WHY we win clients: we believe it is because we have sold ourselves and our process, and thereby gained their trust and their business, while you believe it is because you have sold your ideas and thereby gained their trust and business.  My long experience - and countless surveys besides - convince me that people decide not on ideas but gut trust, mainly because most people really don't understand enough about the merits of the specific ideas to base a decision on that.  How can they decide on the merits of one investment idea versus another when they barely know what a mutual fund or UIT even IS?  But if you believe otherwise, so what?In the final analysis it is less important WHY clients decide to do business with us than the mere fact that they DO so decide.  

anabuhabkuss's picture
Offline
Joined: 2005-05-02

No, Morphius, you missed my point. I was pointing out what a hypocrite Anon is by asking new prospects to give him money for holes in their current broker's portfolio, for improvements if you will, while advocating his clients to bring other advisors ideas to him to fill the holes he himself left in their portfolios. Read it again. In real life if he can get clients to start off investing a little at a time with him, the same thing is bound to happen to his own clients where they will go elsewhere to get their imporvements instead of coming to him asking his opinion.
 
When clients decide to leave, they'll leave. They're not going to stand around waiting to hear "Yeah that's a good idea, I can do that too!"

anonymous's picture
Offline
Joined: 2005-09-29

"I was pointing out what a hypocrite Anon is by asking new prospects to give him money for holes in their current broker's portfolio, for improvements if you will, while advocating his clients to bring other advisors ideas to him to fill the holes he himself left in their portfolios. Read it again."

 
You need to read it again because you appear to be really off base with what you think that I do. 
 
 When a client has a good relationship with his broker, I don't find holes in the portfolio.  I could get some clients if I did it this way, but in general, it's a losing battle.  Look at it this way.  If I could get one of your happy clients to meet with me and I can poke a hole in one of your suggestions, you'll easily be able to sew up that hole (either by making a change or pointing out why I'm wrong)and keep the client.
 
Instead, I complement their broker and completely ignore the side of the business that the broker handles.  I go after the client by doing the work that the broker ignores.  If it is wirehouse rep, I solely do the insurance.  After the person is my client, I will then be on equal footing to get the investments.
 
When I'm asking for money on the investment side, it is not to fill holes.  I ask for ALL of the money to completely build their financial house and not to fill holes.   To me, it doesn't matter what they are doing right and what they are doing wrong.  My fact finding is all about finding the wants and desires of the client.   What they currently have is extremely secondary.  I'm not looking to fill holes.  I'll get the assets and then figure out what should stay the same and what should be changed.   In fact, I think that it is virtually impossible to know exactly what someone should be doing on the investment side before getting the insurance side completely squared away. 
 
Using the ideas of other advisors is not about filling holes in the portfolios of my clients.  It is simply recognizing that there are many ways to skin a cat.   I'll give you some typical examples to make this clear of how this works.
 
Ex. Client is told that I'm ripping him off by having him buy a VA in his IRA.  I take the time to re-explain to the client why we made the purchase and how the new guy either doesn't have the knowledge to understand the whole picture or is intentionally trying to mislead my client.  End result: I keep the client.
 
Ex. Client is told that UL is cheaper than WL and he should own term or UL.  I take the time to re-explain to the client why we made the purchase and how the new guy either doesn't have the knowledge to understand the whole picture or is intentionally trying to mislead my client.   End result: I keep the client.  End result: I keep the client.
 
Ex. Client is told that he could save money paying commissions instead of my fees.  I agree with the other broker.  I re-explain that we already discussed this issue and that it was my client's decision to go the fee route.  I let the client know the advantages and disadvantages of both.  If the client wants to go with commissions, we'll make the change.  End result: I keep the client.
 
Ex. Client is told that I'm not objective because I'm earning commissions instead of charging fees.  I agree with the other broker.  I re-explain that we already discussed this issue and that it was my client's decision to go the commission route.  I let the client know the advantages and disadvantages of both.  If the client wants to go with fees, we'll make the change.  End result: I keep the client.
 
Ex. Client is told about the advantages of UITs over mutual funds.  I agree with the other advisor that there are some advantages.  I also point out some disadvantages.  I honestly admit that I don't know what is going to do better for my client.   I point out that the other advisor is a clueless as I am unless he has a crystal ball.  If the client likes the idea of making the change, we immediately move some money over to the UIT.   The client isn't standing around waiting for anything.  End result: I keep the client. 
 
What happens in all of these situations is that the client trusts me.  I'm the home team and I get the last at bat.  I'll pull out the win every time.   It's always easy to show why the other guys suggestion isn't any good or if it is good, we just take 2 minutes and implement the idea.  It's not "His idea is good and mine stinks."   That would cost me clients.  It's, "Hey, that is also a good idea.  We can give that a try if you'd like.  It may or may not do better than what we are currently doing." 
 
The other side of the coin to all of this is that if the client is agreeing to meet with a new advisor because he's not happy with the old advisor, the new advisor stands a very good chance of getting the business.
 
My whole point is that it comes down to trust and service and overall comfort level and not specific recommendations.  

Hollywood's picture
Offline
Joined: 2007-02-23

This thread is quite valuable.  Thanks for all of the energy and insights!!!

Andre017's picture
Offline
Joined: 2006-08-22

Hi All,

Just tuned back in to this thread and realized a whole lot more has transpired. Very interesting and thank you to all. I have tweaked my approach a bit and with some success. As the "new guy in town" it's still hard for me not to present at least "something" before asking for a transfer. However, I have been more thoughtful and listened quite a bit more during 1st appointments. I still use Apt 1 to meet, greet, listen and explain more or less my process, and set expectation for deliverable(s). At that point usually I get a crack at a review of their current situation.

I have changed apt 2 to give them an analysis of the current situation, and a less detailed but still detailed enough proposal - with the caveat that "this is my thought process thus far - I believe it's the right direction and if you like the whole approach I've used (meaning my personal approach and the investment direction I'm going in), then it's relatively easy to get things started. Once your actual assets are in my care and before we fully initiate a change in investments, we may need to adjust this plan a bit for optimum results, but I think this is the direction we should go."

Then we Q&A. Usually I've give some investment ideas, but hint that the allocation might vary, or that we might include alternates or remove something once we know exactly what we're dealing with. I've now found that they appreciate the thoughtfulness, and I've been getting the business. This approach won't stop those who really want to take the ideas and run, but generally speaking, that hasn't happened all that much since I tweaked this overall approach.

Gotta say though, assuming you have "some" knowledge above today's hotty fund picks, if you treat 'em the way you'd want to be treated, put your best ideas up front and build a relationship as best you can, it'll either work, or it won't. They'll like you, or they won't. The end.

BukiRob's picture
Offline
Joined: 2008-06-23

Andre017 wrote:Ok, so you've had good meeting. No, a really good meeting with a couple - everyone seemed to make a connection, they were forthcoming about goals, concerns, assets. Agreed to second meeting for the "proposed solution" and showed up - on time. Proposal went well - still good "vibes" but they didn't move forward on the spot. "We want to think a little" they say. You probe a little, without becoming overly salesy and ultimately book a follow-up... the phone rings couple of days later - we're still thinking they say... then... nothing. No return calls. Voicemail at each phone attempt. For me this scenario has played out several times over the last several weeks. It's unusual for me so I'm tuned in to it. I'd like to hear from others about what types of things you do in this situation to attempt another move forward. We don't want to sit on these people and try to hatch them, but curious about the next few steps... Thanks...
 
Often there is nothing you can do to move forward in this situation.  First off, how long have they been with the current broker/relationship?   Why are they looking?  Is it just to get a second opinion?   Is this a large amount of money? (is the account well in excess of a million dollars?)
 
 
First off, IMO, the very first meeting should be about deciding if this is someone you want to do business with.   Is there a good fit?  Good long term relationships MUST be mutually beneficial.   I only want to work with people that want and are willing to pay me for my advice.  
 
There are a million reasons why they say no.  From they dont percieve value to they think they are too small... to one of the two of them doesnt have buy in to you and what you are presenting.
 
The presentation of how you would work with them (specificially) should only be done once you have determined that A) you want to work with them and B) they POTENTIALLY want to work with you.
 
Many times you will discover that the "prospect" is really just interested in "kicking the tires" and has no real serious interest in moving his business to you.
 
A lot of the stuff Ive read on here works great if you are going after smaller clients.  Most of what Ive read on here will NOT work with very high net worth people.   Like it or not, our business is changing.  That very high net worth client will come to you through social networking and professional refferals.  You aint getting them via cold calling, cold walking or seminars.  Those days are gone. 

Please or Register to post comments.

Industry Newsletters
Careers Category Sponsor Links

Sponsored Introduction Continue on to (or wait seconds) ×