You are my friends and clients. I have great respect for the work you do and appreciate the value you add to the lives of your clients. That’s why it’s painful for me to see so many of you headed for trouble by denying the obvious trend in fee compression.
You may think of yourself as an advisor, but I have a different take. You’re really in the business of persuading prospects to retain you. To compound that misconception, advisors make a fundamental mistake about their core business: ignoring the science and the data on effective persuasion.
The most pernicious, hidden bias advisors face is that prospects don’t believe they have biases. Like everyone else, they are wired to believe that their “worldview” is correct – and everyone else is wrong and biased.
There are many variables involved in meeting with a new prospect, but there’s one constant. You’re asking the prospect to change their behavior. Many advisors believe this is a relatively straightforward process. All that’s involved is a cogent explanation of why your services are superior. The reality is quite different.
A recently released report assessed the value of an advisor to be approximately 4.08% a year. This should have been encouraging news to beleaguered advisors coping with a rapidly changing competitive environment. It had the opposite effect on me.
Many advisors feel the need to project an image of total confidence. They answer questions about investing and financial planning with no hint of doubt. But they overlook the virtues of humility, especially when it comes to questions outside their areas of expertise.
It’s time to re-think how conferences for financial advisors are conducted.
We learn from our successes and failures, except in the latter case it can be very painful. But that’s why I will never forget what I could have done to land a $50 million account.
The X factor is intangible. I can’t describe it in concrete terms. But I recognize it when I see it. I recently found it in an unlikely source: the commissioner of the National Basketball Association, Adam Silver.
The combination of high anxiety and a subconscious bias against taking affirmative action means you need to harness all the tools at your disposal to have a successful outcome with a prospect. The use of empathy is critical.