March 3, 2009
Stage One - Laying the foundation
The first stage and most important stage concentrates on getting a better understanding of the prospective client’s motivations and situation and on getting them talking.
Set this up by saying something like: “Before we get into the approach that I take with my clients, do you mind if I ask you a few questions about your experience over the past while?”
You’re almost certain to get a positive answer. Here are twelve questions you could ask during this stage:
“Lots of people lost sleep as a result of last year’s markets. Tell me how last year’s market downturn affected you”
“Leading up to last year, had your advisor talked to you about the possibility of a significant decline in the stock market?”
“What advice did you get through the latter part of last year?”
“What kind of a written financial plan do you have in place for the future?”
“Has this plan been updated in light of last year’s downturn?”
“How frequently did you hear from your advisor last fall? What kind of contact did you receive?”
“What one thing made you decide to consider making a change? Anything else?”
“How long have you been working with your current advisor? Tell me about the advisor you worked with before this one.”
“What kind of a process are you going through to select a new advisor? How many advisors are you talking to?”
“What are the most important things you’re looking for in an advisor going forward?”
“What kind of timing do you have in mind to select a new advisor?”
“What are the key things you’d like to learn today about my approach and how I work?”
This is the most important part of your conversation with a prospective client and the foundation for everything that follows — in the perfect world, you’d spend 60% or more of an initial conversation with a prospect in this stage.
The key is to give it as much time as the prospect will allow. Keep asking questions as long as the person you’re talking to seems comfortable answering them. Dig deep by asking follow-up questions like “Tell me more” and “Can you elaborate on that?”
During this stage, you need to be sensitive to how comfortable the person you’re talking to is in opening up about their past experience. Some will be much more willing to do this than others. And don’t barrage people with your questions and have them feel that they’re being interrogated. You need to acknowledge and respond to each answer as you receive it, so that it truly feels like a conversation.
Stage Two - Responding to prospects’ concerns
At this point, you should have a good understanding of the goals of your prospective client.
Having done this, you need to set the stage for your response by saying: “Here’s what I’ve heard you said are the most important things you’d like to focus on today …. Is that right?” What else would you like me to touch on?”
If poor communication came up as a significant source of discontent, you have an opportunity to talk about what you did last year and what you’re doing today to keep your clients abreast of what’s happening in markets.
On the other hand, if the prospect’s key issue related to unhappiness with their performance, your response could be along the following lines:
“Just about everyone was hit hard by last year’s downturn … almost no one saw this coming or anticipated the magnitude of the bubble that had developed in the U.S.”
“Certainly, my clients suffered last year just like everyone else’s … the only saving grace is that most were sheltered from the full effects of the downturn. Especially for older clients, we generally had balanced portfolios in place that offset some of the downside.
“It’s important that you understand that I don’t have one standard portfolio for clients - we tailor a solution to each individual. In fact, before providing any advice at all to a new client, we spend a considerable amount of time building an in depth understanding of their current situation, long-term objectives and ability to deal with risk and volatility.
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