For many advisors, the part of the business they hate the most is following up with prospects, asking for meetings to talk about their financial situation and discuss working together. I was reminded of this in a recent conversation with a veteran advisor – let’s call him Phil – who has done a great job of building visibility and relationships among an affluent community of prospects, but is struggling to turn those relationships into clients.
At the end of our chat, I made three suggestions to help Phil move forward with the people in his target community.
Operating in an affluent circle
Phil is in his late 50s and has worked in the investment industry his entire career. For the past decade, he’s been an active participant in an exclusive, invitation-only wine club in his community. And he’s done much more than just show up. For the past five years, Phil’s been on the executive committee and a key organizer of a number of charity events. As a result, he’s become good friends with a number of affluent professionals, business owners, corporate executives and retirees who make up the typical members of the club.
Despite that, last year Phil realized that not a single one of the people he’d met through the club had become clients.
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Among the possible reasons: They might not know that he’s a financial advisor. (Phil had historically avoiding talking about the markets at club events.) They might not be aware he’s taking on new clients. They might be unsure of his interest in working with them.
As a first step, last summer Phil began informally reaching out to people he’d met at the club, either in person or by email, offering to add them to the monthly emails he sends clients highlighting articles from a list of third-party publications such as Forbes and the Economist. Phil had a good response to this offer and more than 50 club members now get his monthly emails.
Despite this, still no new clients.
Make it easy to say yes
I asked Phil if he’d done anything to follow up the initial conversations about his emails and he admitted he hadn’t. “I hate harassing people and I don’t want to jeopardize my reputation at the wine club,” he said. “And I really don’t understand why it’s necessary. These are all successful guys. They should know the drill – if they want to talk to me, they can just pick up the phone.”
In the perfect world, Phil would be right. But in the real world, you can’t rely on prospects to take the initiative. I told Phil about an accountant who came into the industry and built up a large list of prospects in two years by seeking out speaking engagements on tax and financial-planning topics — initially to any group that would have him, although over time he became more selective. At the end of his talks, he’d give away a book through a raffle. To enter, attendees filled out a ballot, where there was a box they could check to get his quarterly newsletter.
At the end of two years, he had 2,000 prospects receiving that newsletter. Each time it went out, there was a brief flurry of calls, but the volume was never all that substantial. Then this advisor hired a summer student to call the people on the list and ask two questions: Did they want to keep receiving the newsletter? And were they interested in scheduling a time to sit down with this advisor to talk about their financial situation? A big spike in appointments followed as a result – simply by having this student ask prospects if they’d like to meet.
The hard truth is that everyone is so busy that it’s easy to get distracted. If you want to get in front of prospects, you have to make it easy to say yes.
Here are my three suggestions for Phil:
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Remind prospects that you’re open for business
In your regular emails, tailor a message to prospects along the lines of, “Should you wish to sit down to discuss your financial situation or get a second opinion on your investments, I am always happy to do so.”
You’re not saying this because you expect prospects to respond, because in the vast majority of cases they won’t. But what you’ve done is planted the seed in a low stress, unobtrusive fashion.
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Be opportunistic
I asked Phil if he’d got any positive comments on the monthly articles that he’s been sending since last fall, and he said that he had. I suggested that when someone thanks him for the articles, he say something along the lines: “I’m glad you find them interesting. Should you want to sit down in the next two or three months to talk about what’s happening in markets and about how your investments are positioned, I’d be delighted to do so.”
Now the guy Phil’s talking to might thank him for the offer and say that he’ll keep it in mind, which is generally a polite way of saying thanks but no thanks. But at least he’s made the person he’s talking to give this a moment of thought. After enough of those emails, some meetings will follow. I did caution Phil to keep a record of who he’d reached out to, because he doesn’t want to repeat this offer a second time.
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Create a value catalyst
All advisors who’ve been in the business for any length of time have been told at some point that they should focus on a niche. My past articles advocating a niche focus include “How specialist advisors earn twice as much” and “Harvard’s #1 strategy guru on the key decision for your business.”
By narrowing your focus, you develop superior expertise, differentiate yourself and become one of the safe choices for financial advice within your target community. Over time, you build a critical mass of clients in that group and word of mouth kicks in. Ultimately, part of your prospecting strategy could be to pick up the phone when it rings.
For this to work to its full potential, a niche groups has to be united by common needs rather than simply common interests. While the niche of wine enthusiasts that Phil has chosen is composed of affluent individuals who may decide to work with Phil because they like and trust him, given their disparate needs, it won’t be because he’s got unique expertise relevant to members of the club. (Contrast this with the common needs among doctors and dentists, owners of auto dealerships or people planning for or in the early stages of retirement.)
Here’s what that means: Since most of his prospects are already in relationships with other advisors, Phil has to find another way to demonstrate that not only is he likeable and trustworthy, but he can also deliver superior advice. One idea that we discussed was hosting a “value catalyst” in the fall as an excuse to reach out to prospects. For example, he could host a small lunch in which one of his firm’s tax experts would deliver a talk on tax-savings tips for business owners.
In addition to inviting entrepreneurs he’s already working with, this would give Phil the opportunity to contact all the business owners and professionals in his wine club, especially those getting his monthly emails. Even if they can’t make the lunch, this gives Phil the chance to have a short conversation about their financial situation that reinforces his interest in working together.
Some advisors might criticize my advice as being too passive and not proactive enough – and would suggest instead that Phil simply pick up the phone and ask prospects for a meeting to talk about their investments. And while that might well work for some advisors, it wouldn’t work for Phil.
For any approach to be effective, it has to be consistent with your view of the world and how you work. While you might be able to depart from your comfort zone a bit, it’s unlikely that you’ll be effective if you stray too far. That’s why I suggested that Phil start with these three low-stress, low-pressure approaches – with a view to building momentum going forward.
For more on following up with prospects, read “How to follow up without being a pest.”
Dan Richards conducts programs to help advisors gain and retain clients and is an award winning faculty member in the MBA program at the University of Toronto. To see more of his written commentaries, go to www.danrichards.com or here for his videos.
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