Flip your switch into growth mode, and get some practice.
I have been getting tired of the incessant chatter about practice management lately. It seems that everybody's become a “process” guru, espousing “revolutionary” concepts like client segmentation. Will, a wily veteran with production of $1.2 million, recently summed it up thus: “I don't need another coach talking to me about practice management, I need someone to tell me how to get more high-net-worth clients!”
While most advisors could benefit from increased attention to practice management issues, I can relate to his frustration. As the statisticians work through their complex computations, the preliminary findings from our first and second quarter, 2008 projects suggest that the rest of the advisory business may share Will's concerns.
For example, among advisors targeting $1-million-plus clients, over the last 12 months:
4.1 percent brought in 10 or more $1-million-plus clients.
5.5 percent brought in 10 or more with between $500,000 and $1 million.
8.8 percent brought in 10 or more with between $250,000 and $500,000.
In a perfect environment for rainmaking, too many advisors are paralyzed, lost in avoidance patterns. Our definition of a rainmaker is an advisor who brings in 10 or more $1-million-plus relationships a year. The number of advisors meeting this standard today is down 41 percent from 2005 to 2006, according to our data. Ouch. To excel in attracting, serving and developing loyal affluent clients, we recommend three parallel learning tracks: understanding the affluent, understanding rainmakers (elite advisors) and execution (learn by doing daily high-impact activities).
Helping advisors win more affluent clients serves as a high-octane stimulant for change. Why? Because when we're in a growth mode, change is a constant. When we stagnate, avoidance patterns become bad habits, and change becomes the threatening unknown. Little can occur until we “flip the switch” between our ears and get into a growth mode. This is true for advisors, wholesalers, consultants — you name it.
The vast majority of million dollar producers — some 84 percent, according to our research — manage over $100 million in assets, with almost half, or 53 percent, managing over $200 million. Will, for example, falls into the second category, fertile territory for stimulating word-of-mouth influence and “flipping the switch” into the client acquisition mode.
You might benefit from what I shared with Will. I explained that there are only three reasons why a veteran advisor is not excelling as a rainmaker in today's environment:
Top 3 Reasons Veteran FAs Are Not Rainmakers:
They don't want to be one.
They want to be one, but don't know what to do.
They want to be one, know what to do to become one, but don't know how to do it.
Our research suggests it's numbers two and three on that list that are the real problem. Most advisors — Will included — want to be rainmakers, but they either don't know what to do (lack of affluent knowledge and rainmaker best practices), or don't know how to do it (need for affluent sales training).
In Will's case, he wasn't quite sure what to do, much less how to do it. To help him, I first outlined the eight criteria our research shows the affluent are looking for in a financial relationship.
I then gave Will a homework assignment: Commit to an ideal affluent prospect profile and a specific number of client acquisitions. I recommended numbers with which we've had great success on our “rainmaker weekends”: an ideal prospect with between $1 million and $15 million in assets, and an acquisition target of 15 new ideal relationships. This was radical change for Will — you could see it in his eyes.
Next I steered Will toward some high-impact activities — proactively stimulating word-of-mouth influence among his top 25 clients, strategic alliances and personal centers-of-influence. My marching orders were no different from those I'd offer a coaching client: one high-impact activity a day within his control. I asked Will to email me his successes. To date, he has brought in $4 million in new assets. His last contact was another success story, which means he's “flipped his switch.” If you're serious about getting more affluent clients, flip your switch and join Will in the rainmaking game. You'll have competition from only 4.1 percent of your peers.
Writer's BIO: Matt Oechsli
is author of Building a Successful 21st Century Financial Practice: Attracting, Servicing & Retaining Affluent Clients. oechsli.com