April 21, 2009
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Clients and prospects are more skeptical today than ever. They are worried about their financial institutions, their advisors, and the future of the economy.
Overcoming this skepticism is a critical challenge, and one of the toughest objections advisors face when attempting to get clients to move accounts is “I don’t want to lock in losses by selling my investments now.”
Other Articles by Dan Richards
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Talking to Prospects about Last Year’s Performance
The End of Prospecting
Becoming the Fall Back Advisor for High End Prospects
How to Consolidate Client Assets
The Pendulum Never Stops…
Lessons from the Loss of a Multi-Million Dollar Account
Sometimes this comes up when they first talk to a prospect on the phone, and on other occasions it arises during the initial meeting or when the advisor is presenting recommendations.
Here’s a step by step plan to use when a prospective client says “I don’t want to lock in losses.”
Start by validating the objection
Whenever a prospect raises an objection, they put their guard up because they expect that objection to be attacked.
Instead, respond by validating the objection, saying something like “I can absolutely relate to your concern. None of us likes the idea of locking in losses by selling when investments are beaten down.”
Responding in this way reduces tension and demonstrates that you share the investor’s concerns.
Get the prospect talking
Your primary objective in any conversation with a prospect is to get them talking, learning as much about them in the process as you can.
It’s especially important to unearth as much as you can about the concerns that investors have about moving. Selling investments at depressed levels may be only one of the barriers to making a change - and perhaps not even the largest obstacle.
Try to learn more by saying something like: “What other concerns do you have about the possibility of making a move?”
If you can’t get a response, you could try something along the lines of: “In talking to other investors, one concern about moving advisors relates to the paperwork entailed and the possibility of tax records being misplaced. To what extent is this something that worries you?”
Or if you want to be a bit more aggressive, you could say something like: “Some investors I’ve talked to tell me that they’re not sure they’ll really be better off working with someone new. Is this something that concerns you?”Display article as PDF for printing.
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