West - Sounds like you're afraid of the "no." You call them up, interrupt their evening, and then they say "yes" to hearing about the bond... they're interested. Mailing, following up, etc is just prolonging the "no." Just say this "If you're truly interested, I suggest you reserve a portion today while we still have it." Then STFU. If they say yes, "Ok great. I'll open the account right now so we're sure we'll get this bond today. I need your full name, address, I have your phone number, birthdate and social security number.  Once the account is open, I'll buy the bond. All you need to do is drop by tomorrow to sign the new account form and drop off the check."

You're doing your appointments by the book, but the book don't work. Get them to open an account and buy something, then call them up a month later and suggest another appointment regarding their long term retirement goals. Like my regional used to say, a AAA 5% muni is suitable for a 5 year old, a 15 year old, a 50 year old, and a 90 year old. It's not some hot stock nonsense investment.

This has easily been one of the top 5 threads for me, the wannabe that I am.

You guys really dig in so people like me know what it's like on the front lines.  Keep it going!

bump

"Like my regional used to say, a AAA 5% muni is suitable for a 5 year old, a 15 year old, a 50 year old, and a 90 year old."
I completely and I mean COMPLETELY disagree with this. If you bought one in Nov. How’s the value of that bond doing now? Oh and when rates rise back to 6-7-8% and they still have 25 years left on the bond how will the value be? Hell what if their tax bracket is 15%? GHGR Jones taught you some things it will take a while to get out of your system. I have faith you can do it though.
The question is all about how you want to build your business. Do you want to “sell” them something or manage their finances? I steal Jones clients left and right because of this. I want to manage their money, not sell them a bond or a-share anything.
Find out why they want the muni. Is it truely because it is an alternative to a cd? Buy one that mature in a year and discount the commission (I just did an insured muni that matures in 5 months with .8% APY). Is it tax free income, well here’s a MF or CEF with a short duration to protect you then those interest rates rise.
There is no right or wrong, and GHGR seems to have done well doing business the way he wants to do it. You have to figure out how you want to do yours.
But it kills me when I hear people say a muni yield 5% today is suitable for everyone.

[quote=Hacksaw]"Like my regional used to say, a AAA 5% muni is suitable for a 5 year old, a 15 year old, a 50 year old, and a 90 year old." I completely and I mean COMPLETELY disagree with this. If you bought one in Nov. How's the value of that bond doing now? Oh and when rates rise back to 6-7-8% and they still have 25 years left on the bond how will the value be? Hell what if their tax bracket is 15%? GHGR Jones taught you some things it will take a while to get out of your system. I have faith you can do it though. The question is all about how you want to build your business. Do you want to "sell" them something or manage their finances? I steal Jones clients left and right because of this. I want to manage their money, not sell them a bond or a-share anything. Find out why they want the muni. Is it truely because it is an alternative to a cd? Buy one that mature in a year and discount the commission (I just did an insured muni that matures in 5 months with .8% APY). Is it tax free income, well here's a MF or CEF with a short duration to protect you then those interest rates rise. There is no right or wrong, and GHGR seems to have done well doing business the way he wants to do it. You have to figure out how you want to do yours. But it kills me when I hear people say a muni yield 5% today is suitable for everyone.[/quote]

Shut up!... How does your "managed money" pitch go over the phone?? THought so..

[quote=squash2]

[quote=Hacksaw]"Like my regional used to say, a AAA 5% muni is suitable for a 5 year old, a 15 year old, a 50 year old, and a 90 year old." I completely and I mean COMPLETELY disagree with this. If you bought one in Nov. How's the value of that bond doing now? Oh and when rates rise back to 6-7-8% and they still have 25 years left on the bond how will the value be? Hell what if their tax bracket is 15%? GHGR Jones taught you some things it will take a while to get out of your system. I have faith you can do it though. The question is all about how you want to build your business. Do you want to "sell" them something or manage their finances? I steal Jones clients left and right because of this. I want to manage their money, not sell them a bond or a-share anything. Find out why they want the muni. Is it truely because it is an alternative to a cd? Buy one that mature in a year and discount the commission (I just did an insured muni that matures in 5 months with .8% APY). Is it tax free income, well here's a MF or CEF with a short duration to protect you then those interest rates rise. There is no right or wrong, and GHGR seems to have done well doing business the way he wants to do it. You have to figure out how you want to do yours. But it kills me when I hear people say a muni yield 5% today is suitable for everyone.[/quote]

Shut up!... How does your "managed money" pitch go over the phone?? THought so..

[/quote]

hacksaw do you mind sharing your pitch and your process to sell managed money?  You can pm if you'd like or share it in this thread.  I personally do not like managed money so much but I feel it's essential to building a practice, and it's ideal for some clients.  But I have not found a great way to position it yet.

I use similar pitch as GHGR but I do not go out 30 years.  I usually ladder them with different maturities so we always have something coming due. 

I have a spelled out process:
Step 1 meet to learn about eachother. If we are both interested we move to step 2
Step 2 (within 7 days of step 1) meet to gather statements and confirm needs
Step 3 (within 7-14 days of step 2) meet to go over current holdings and how they accomplish goals/needs. Go over suggestions is any. If agree to work with me, sign paperwork then.
Step 4 (when account(s) transfer) meet to implement changes and new investments.
Step 5 (45 days after step 4) meet to review investments and talk about additional items that affect investments (life insurance, LTC, mortgage, etc).
Step 6 review meetings and ongoing communication.

For pitch on cold call I just lead by asking if they are working with an advisor already (if not, why not?). If so ask what they feel their advisor could be doing better. I ask if they have a higher balance than they did before the economy turned in '07. Then just ask questions until they either tell me no and hang up, or set a meeting with me. I then email them my process and a copy of the investment process that I do (Dorsey Wright).
It took me a while to create this but I have landed 2 decent clients ($250k+) out of it in the past 2 months that signed paperwork within 21 days of first meeting (28 days from cold call).

[quote=Hacksaw]I have a spelled out process: Step 1 meet to learn about eachother. If we are both interested we move to step 2 Step 2 (within 7 days of step 1) meet to gather statements and confirm needs Step 3 (within 7-14 days of step 2) meet to go over current holdings and how they accomplish goals/needs. Go over suggestions is any. If agree to work with me, sign paperwork then. Step 4 (when account(s) transfer) meet to implement changes and new investments. Step 5 (45 days after step 4) meet to review investments and talk about additional items that affect investments (life insurance, LTC, mortgage, etc). Step 6 review meetings and ongoing communication.

For pitch on cold call I just lead by asking if they are working with an advisor already (if not, why not?). If so ask what they feel their advisor could be doing better. I ask if they have a higher balance than they did before the economy turned in '07. Then just ask questions until they either tell me no and hang up, or set a meeting with me. I then email them my process and a copy of the investment process that I do (Dorsey Wright).
It took me a while to create this but I have landed 2 decent clients ($250k+) out of it in the past 2 months that signed paperwork within 21 days of first meeting (28 days from cold call).[/quote]

This helps me. Thanks.

Hack,

Very nice.  I will certainly incorporate that into my practice.

Step 1 meet to learn about eachother. If we are both interested we move to step 2
Step 2 (within 7 days of step 1) meet to gather statements and confirm needs
Step 3 (within 7-14 days of step 2) meet to go over current holdings and how they accomplish goals/needs. Go over suggestions is any. If agree to work with me, sign paperwork then.
Step 4 (when account( transfer) meet to implement changes and new investments.
Step 5 (45 days after step 4) meet to review investments and talk about additional items that affect investments (life insurance, LTC, mortgage, etc).
Step 6 review meetings and ongoing communication.

Step 1 - 1hr meeting, ask a crap load of questions

Step 2 - 45min meeting: Show them where they are screwed up and how you'll do better. CLOSE

Step 3 - 30mins - Show them how you're going to run their $$$$

Step 4 - 3mth scheduled meeting planned right then

KEEP IT SIMPLE. You are two steps too long. Schedule a follow up meeting everytime the clients are in your office.  Just like the dentist.

[quote=Hacksaw]I have a spelled out process: Step 1 meet to learn about eachother. If we are both interested we move to step 2 Step 2 (within 7 days of step 1) meet to gather statements and confirm needs Step 3 (within 7-14 days of step 2) meet to go over current holdings and how they accomplish goals/needs. Go over suggestions is any. If agree to work with me, sign paperwork then. Step 4 (when account(s) transfer) meet to implement changes and new investments. Step 5 (45 days after step 4) meet to review investments and talk about additional items that affect investments (life insurance, LTC, mortgage, etc). Step 6 review meetings and ongoing communication.

For pitch on cold call I just lead by asking if they are working with an advisor already (if not, why not?). If so ask what they feel their advisor could be doing better. I ask if they have a higher balance than they did before the economy turned in '07. Then just ask questions until they either tell me no and hang up, or set a meeting with me. I then email them my process and a copy of the investment process that I do (Dorsey Wright).
It took me a while to create this but I have landed 2 decent clients ($250k+) out of it in the past 2 months that signed paperwork within 21 days of first meeting (28 days from cold call).[/quote]

First of all… I didn’t mean you should pitch muni’s forever, though there are people that do and do very well. But it is a great qualifying product to start with.

Second… Looking at your past posts, it seems that you pitched muni’s before too, So let’s not cut off your nose to spite your face.

Third… How does 2 clients with $250k+ add up to $3M in fee?

Fourth… I understand your steps… but the pitch doesn’t make any sense? So you ask people if their statement balance was higher in 2007 than it is now(most will say yes) and you pitch what? You have the answer to avoid the bear markets and predict the future?

Squash-
1- you are correct. It can qualify, but most muni buyers I have found are only willing to do that. My fear is being looked at as a 1 trick pony. It might be a warrentless fear, but it is one now none-the-less.
2- you are correct again. As a newbie I’ve been trying a lot of different things to find what I am comfortable with. Unless you are comfortable, you cannot succeed.
3- those are just two in the past month+ since I changed approaches (process). 2m was brought in before. Everything I bring in, I do fee based.
4- I agree that people should be better off than they were before the downturn, but you would be amazed by how many are not. I only get to that question if they are happy/completely satisfied with their current advisor. I take a tactical offensive approach and that has done well. It lags in up markets and outperforms in down. After 08 that seems to resonate well with people.

Hacksaw...

Keep doing what you are doing...it will pay off longterm.

Don't let anyone tell you otherwise.

PM me if you have doubts.

OMO

Westwood, this is one of my favorite threads, I also like your muni bond cold calling lines. Would you be able to share some of the rebuttals you use. Thanks

Think about using your time more efficiently by understanding the potential clients prospective of you.  The client will invest their money with those who are most successful in their game.  The client wants to look at you and know you are successful.  If you are successful,  the client believes you can make him or her rich.  You must look successful in your appearance and drive a car that say you have made it.  Follow these guidelines.  First, go after the big ones.  This means doctors, dentists and big investors.  Dress the part.  Know that the big ones know brands and quality of clothes.  Invest in yourself, it can be done inexpensively.  Second, drive up in a prestigious sports car.  Successful people have sports car toys they like to drive occasionly.  Do not lease or rent a car, client can see through this quickly.  Acquiring a prestigious car is easily a doable.  The first day we used this approach, we made twelve cold calls on doctors and opened over a hundred new accounts through referrals.

Hey newbies, hope all is well. Just a couple general comments on some recent posts.

Be really careful to make your client acquisition plan too many steps. Each time you meet a person, there is a risk factor in losing them along the way. I'd be very opposed to any strategy that asks the client for more than 2 meetings to seal the deal. Remember folks, you can go back to the client for the REST OF YOUR CAREER. Don't be so intent on trying to get everything all at once, that doesn't happen as often as getting a meaningful amount.

Also, the BEST advice you really new guys can get, is from folks that have been in the business, and survived/succeeded, during the last 3-5 yrs. So, you want to really pick the ears of guys that got licensed in 2004-2008. The prospecting playing field is still the same for the most part. Then there are guys like me, long term veterans, that can't offer you the same, because sooo much has changed. For example, I never had to deal with the national do not call list. Where I can really help a guy, is the guy that has about 3-5 yrs experience, that now wants to maximize his client relations. 

When you are new, one thing that hasn't changed, is that you need to focus on opening quality households. Even if you only get 50-100k, if that money comes from a quality source, it will greatly assist you later.

GHGR's advice is solid. I think he's been in the biz the time period I've mentioned. He's tried all sorts of ideas no doubt, and has come to a universal conclusion. Sell people an instrument they have a high inclination to want/need. He's right, munis have a very, very broad appeal.

Clients need cash flow when they're retired. Don't get too caught up in the semantics of guessing about interest rates. If you sell a bond the RIGHT way, you'll not have to apologize about the price later. They bought it for the income, that is tax free. Remember too, that while interest rates may go up, muni rates are still unusually high compared to treasuries and where they've traded at for the last 20 yrs. More important, TAXES ARE GOING HIGHER, along with rates. Higher taxes will mean that the price of these bonds will go higher, or at least offset the detriments of rising rates. 

Make hay while the sun is shining. Right now you can sell munis without too much distraction, that might not be the case a year or two from now. Pound it, get the accounts open, then develop the relations for full asset management and asset allocation.

I'd rather hire a guy that could open 25k to 100k quality households like a mad man, than some guy that could pull in one or two 500k relations per 4-6 months. I can get all the money LATER...

[quote=BigFirepower]

GHGR's advice is solid. I think he's been in the biz the time period I've mentioned. He's tried all sorts of ideas no doubt, and has come to a universal conclusion. Sell people an instrument they have a high inclination to want/need. He's right, munis have a very, very broad appeal.

Clients need cash flow when they're retired. Don't get too caught up in the semantics of guessing about interest rates. If you sell a bond the RIGHT way, you'll not have to apologize about the price later. They bought it for the income, that is tax free. Remember too, that while interest rates may go up, muni rates are still unusually high compared to treasuries and where they've traded at for the last 20 yrs. More important, TAXES ARE GOING HIGHER, along with rates. Higher taxes will mean that the price of these bonds will go higher, or at least offset the detriments of rising rates. 

Make hay while the sun is shining. Right now you can sell munis without too much distraction, that might not be the case a year or two from now. Pound it, get the accounts open, then develop the relations for full asset management and asset allocation.

I'd rather hire a guy that could open 25k to 100k quality households like a mad man, than some guy that could pull in one or two 500k relations per 4-6 months. I can get all the money LATER...

[/quote]

True, you can get the money later, but in today's environment, most firms will fire your arse quickly for not meeting your goals because  most rookies simply can't open accounts fast enough (no matter what the size) to meet the hurdles without the benefit of "gifting" from an established team or family money.  I think your advice is on point, and you will naturally run into larger accounts by the simple fact that you have a large amount of activity, but I have a rookie working for me now and the clients he is bringing in for the most part are unsuitable for individual bonds (most are still in the accumulation stage).  So what would be your suggestion for a fresh out of the pack rookie to make it?  All management seems to talk about is fee based, fee based, fee based.  But even if a rook does hammer it on the fee based side, the fees won't accumulate fast enough for them to meet their year one goals because most need some ramp up time before they start closing accounts.  By that time, the first hurdle is coming up and momentum in this business either works for you or against you.  Crazy!!  Thoughts?

find a client that is willing to do syndicate business with you if you work with a major wire.  You won't be able to get any shares on your own if you are rookie so partner up with your syndicate coordinator.  Do enouch secondary & Ipo business for quick production and cold call on non deal days and build up your lead database to about 400.  Do a monthly email drip, mail drip, and phone drip to all those 400 people and you should have accoutns rolling in.  This is my exact process and I really hope it works.  I do not see how I can fail if I work it.

P.S. make sure all those 400 people have more than 100K of investable assets with the majority having over 250K