I got a great PM that asked about my BAB's pitch to prospects or clients that only have a few assets and not a great relationship yet. I've refined my pitch over the years. Let's see if you like it......
I've got a beautiful city of Miami, Florida rate paying 7%. Right now taxable municipal rates are paying significantly higher yields than corporates, even though history has shown that corporates are around 10 times more likely to default. Because of their relative safety and higher yields, let's take a portion of your safe money making 1-2% at the bank and give you a huge pay raise. If I can show you 7%, and that's your worst investment over the next 5-10 years, what would stop you from sampling me out on 50-100k?
Client: I'm too old.
Response: How old is too old for a pay raise?
Client: How long are these?
Response: You can sell these any business day at their current price, but the city of Miami can't take these away from you for 5 years. Hopefully you'll be able to hang on to them up to 20 years, but there is a good possibility this money may come back sooner.
Client: How safe are these?
Response: Good question. Municipals rated A have around 15 times less defaults risk than comparable A-rated corporates. If you look back in history, only 0.3% of A-rated municipals have defaulted over the last 50 years. And for those that did default, your average recovery has been 70% of your money back, that's why I'm recommending you sample me out with around 50 thousand.
Client: What about inflation on these long rates?
Response: always keep a nice portion of your money short term. However, 1-2% isn't going to help you achieve your retirement goals. Inflation is a risk, but one we are not too concerned about right now. Another risk you really need to think about is purchasing power risk. How much do you think a candy bar is going to cost in 10 years? That's why with a portion of your money you need to ladder longer term.
Client: I'm too busy.
Response: That's okay, write the check and I'll take care of it.
Client: I'm not interested.
Response: Is it my timing, or are you not looking for rates right now? What is it about a pay raise that concerns you? You work at Pepsi don't you? When was the last time you turned down a pay raise there? Why turn one down from me?
I'd be curious if anyone had some good responses to these objections that you like better.