Boost Leads, Reputation with Seminars and Content

Wednesday, November 14th, 2012

by Shauna Trainor, The Covenant Group

When it comes to inter­act­ing with com­pa­nies, it appears that con­sumers are start­ing to evolve their pref­er­ences and their processes for decid­ing which orga­ni­za­tions to do busi­ness with. No longer do they wish to be engaged only when it is time to close the sales process. They seek out com­pa­nies that offer them value beyond the prod­uct or ser­vice they pur­chase. This trend has lead to a rise in con­tent mar­ket­ing (pub­lish­ing free and rel­e­vant infor­ma­tion for the con­sumers’ ben­e­fit) and the ongo­ing pop­u­lar­ity of host­ing infor­ma­tional sem­i­nars and webi­nars, as well as writ­ing print columns, online doc­u­ments, white papers, blog posts and other forms of con­tent to pro­vide added value.

If you are par­tic­u­larly knowl­edge­able about a cer­tain issue, it may be worth­while to design a pre­sen­ta­tion and orga­nize an event to share that infor­ma­tion with peo­ple who could even­tu­ally become prospec­tive clients. Invite your cur­rent clients, and encour­age them to invite friends and busi­ness asso­ciates (as their acquain­tances likely fit your ideal client pro­file as well). Host it in an area where many of your ideal clien­tele spend their time and require pre­reg­is­tra­tion. There is a rea­son that you will often have to reg­is­ter to down­load a research paper online or become a mem­ber to receive newslet­ters from some ana­lyst firms. It is a way for those orga­ni­za­tions to enter your name into their prospect pipelines.

Have you been on the receiv­ing end of con­tent mar­ket­ing? Have you signed up for a free webi­nar or filled out an online form? Although you may not be look­ing for a spe­cific prod­uct or ser­vice when you want to learn more about a research topic, those com­pa­nies are hop­ing that you are on the first step to buy­ing. With your con­tact infor­ma­tion, they can work to stay top of mind by send­ing you related research papers, grad­u­ally mov­ing you down the pipeline toward becom­ing a cus­tomer or client.

This is a great tac­tic that you can eas­ily employ your­self. In order to build up a rep­u­ta­tion as an expert in your field, you may have to give away some advice for free with sem­i­nars and dig­i­tal con­tent, but you can be com­pen­sated with more prospec­tive leads. How­ever, there is some con­tention about whether putting con­tent behind a reg­is­tra­tion wall helps or hin­ders com­pa­nies’ mar­ket­ing efforts. So try to strike a bal­ance between what is and is not behind a reg­is­tra­tion wall.

Host­ing a free sem­i­nar may require a lot of work up front, but the even­tual pay­off could be dozens or even hun­dreds of prospects who have already become involved in the process by wit­ness­ing your exper­tise first­hand. This can be used as cap­i­tal months or years later, when you finally secure a sales meet­ing with a prospect and he or she is already famil­iar with your brand’s strengths and value proposition.

Shauna Trainor is The Covenant Group’s Mar­ket­ing Man­ager. She focuses on The Covenant Group’s own mar­ket­ing strat­egy and also helps entre­pre­neurs through finan­cial advi­sor train­ing to lever­age social media and other tech­nol­ogy to spread the word about their ser­vices and prac­tices and build relationships.

Fol­low The Covenant Group

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Tags: Analyst Firms, Business Associates, Client Profile, Clientele, Covenant Group, Free Webinar, Informational Seminars, Pipeline, Pipelines, Popularity, Prospective Clients, Related Research, Reputation, Research Paper, Research Papers, Research Topic, Shauna, Tactic, Webinars, White Papers
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Learn to Prioritize Your Clients

Wednesday, June 6th, 2012

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Tags: Client Relationships, Clientele, Covenant Group, Disservice, Earning Potential, Entrepreneurial Journey, Financial Advisors, Ideal, Losing The Battle, Many People, Mature, Norm Trainor, Outset, Profits, Relationship, Segment, Shed, Waste Of Time
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Play the Infinite Game

Wednesday, January 18th, 2012

Spe­cial thanks to our client, Eric J. Miller, for pro­vid­ing the inspir­ing story included in this case study.

When we first met Stan Sum­mers he had just blown two sig­nif­i­cant busi­ness cases and was con­cerned about mak­ing the same mis­take with his other high-net worth prospects.

Stan had been an advi­sor for three years. Prior to that he had been a con­sul­tant at a large firm. Though suc­cess­ful as a con­sul­tant, he was attracted to the idea of being his own boss and set­ting his own income ceil­ing. Fur­ther­more, he knew he could bring an envi­able asset to his advi­sory busi­ness — a large net­work of busi­ness con­tacts. After two years, with ded­i­cated study and hard work, he had man­aged to grow a size­able clien­tele. But he knew that he’d only scratched the sur­face of his poten­tial. He had always known that through his net­work he could access some extremely afflu­ent indi­vid­u­als, but had decided not to approach them until he felt he was ready. A year ago, he felt the time had come.

He arranged an appoint­ment with the owner of a large import com­pany, a prospect worth over $30 mil­lion. He pro­gressed through a series of appoint­ments and even­tu­ally put together an insur­ance pack­age for $5 mil­lion, but then the case started to unravel. The client raised objec­tions Stan couldn’t respond to and the deal fiz­zled out. He found the loss dev­as­tat­ing, but soon opened another large case, only to find that fall through as well.

When we sat down, I asked Stan why he thought he’d lost the big cases. He admit­ted he’d felt a lit­tle out of his depth, didn’t know how to respond to the objec­tions, and lacked exper­tise.
“What’s your strat­egy for get­ting that exper­tise?” I asked.

“That’s why I called you.”

“Okay, with our help then, when do you think you could expect to develop the exper­tise you’ll need to close big cases?”

“Months, maybe years,” he answered.

“Can you afford to go years with­out approach­ing big clients?”

“No, but I can’t afford to go on blow­ing my chances. You only get one chance with these prospects.”

“You spent your first cou­ple of years ignor­ing large prospects because you weren’t ready,” I said. “In that time, some of those prospects were picked up as clients by other advi­sors. Prospects that are on your radar screen today might not be there tomor­row. You have a win­dow of oppor­tu­nity with some of these prospects, but you don’t know how large that win­dow is.”

“So it’s a catch-22,” Stan said, “What do you recommend?”

“I rec­om­mend you get the exper­tise to go on those big cases.”

“But when would I be ready?”

“Today, if you’re willing.”

“Will­ing to do what?”

“Play the Infi­nite Game.”

He looked perplexed.

“Most advi­sors play the Finite Game,” I said, “they work by them­selves, serv­ing their clients as soli­tary advisors.”

Stan said he didn’t like the idea of work­ing with other advi­sors and shar­ing com­mis­sions. Since he had the con­nec­tions, he felt the prospects were his alone.

“You’ve just expressed the mind­set of the Finite Game player. Peo­ple who play the Finite Game think that the oppor­tu­nity with cer­tain mar­kets or prospects is lim­ited, and that their best strat­egy is to ensure they get the ‘whole pie’. How­ever, the real­ity is far dif­fer­ent – the lim­its advi­sors per­ceive are often based on their own lim­i­ta­tions, not the lim­i­ta­tions of the mar­ket or the client. To get beyond your lim­i­ta­tions, you need to play the Infi­nite Game — you need to expand what you bring to your clients by work­ing with others.

“Let me give you the exam­ple from a client of mine, Eric J. Miller of the Miller Con­sult­ing Group. Eric is a large-case expert based out of New York. Another agent, Henry, had come to Eric for help on a case he was hav­ing trou­ble with. Henry had sold a $3-million insur­ance pol­icy with a $33,000 pre­mium to Vic­tor Win­ters, a wealthy entre­pre­neur. Henry had called Eric for help on the case when the sec­ond pre­mium was due, say­ing that Vic­tor was ‘chok­ing on the pre­mium.’ Henry had drafted a pro­posal to rewrite the insur­ance for a pre­mium of $18,000, almost half the orig­i­nal cost, think­ing that that would save the deal. When Eric and Henry went to see Vic­tor, Henry opened the meet­ing by refer­ring to Victor’s feel­ing the pain of the pre­mium costs. Vic­tor hotly denied that and clar­i­fied that he didn’t feel he was get­ting value for his money. Eric felt that Henry was about to bun­gle the whole deal and waded in. Eric began to talk about the value of the cov­er­age and said he had a pol­icy that rep­re­sented tremen­dous value with a pre­mium of $60,000. By now Henry had the where­withal to keep quiet and let Eric run the meet­ing. Victor’s estate was worth $15 mil­lion, and grow­ing. The poten­tial tax lia­bil­ity was in the $6-million range. Eric relayed the ben­e­fits of hav­ing the insur­ance com­pany pay the tax, rather than sell­ing assets to do so. Eric stated that the orig­i­nal pre­mium wasn’t too high — it was too low. Vic­tor agreed. By the time the appoint­ment was through Eric was propos­ing a solu­tion with a $100,000 premium.

“Prior to the appoint­ment, Henry had laid out his strat­egy to walk away with an $18,000 pre­mium. We can clearly see that Eric moved the case from $18,000 to $100,000, but more impor­tantly, Eric solved Victor’s tax lia­bil­ity prob­lem. Henry’s strat­egy to lower the pre­mium because of a per­ceived objec­tion was a dis­ser­vice to the client. Henry was out of his ele­ment here. Eric brought the nec­es­sary expe­ri­ence and exper­tise and was able to pro­vide the advice Vic­tor needed.

“It’s inter­est­ing to note that Henry’s per­cep­tion of the size of the pie stemmed not at all from the real­ity of the client’s need but from his own per­sonal feel­ing that a $33,000 pre­mium was too much. It’s very dif­fi­cult for inex­pe­ri­enced advi­sors to sep­a­rate their emo­tions from a large case. They’re not used to deal­ing with large, com­plex client needs and let their own per­sonal biases get in the way of serv­ing the client. An expe­ri­enced expert like Eric brings the nec­es­sary objec­tiv­ity and cool-headedness to the table. Eric knows to ask the ques­tions that an inex­pe­ri­enced advi­sor is too fright­ened to ask. In the end, the case with Vic­tor even­tu­ally grew well beyond the $100,000-premium mark, and Henry shared half the case. That’s the value of play­ing the Infi­nite Game.”

Stan was blown away by the story. I could see his mind shift from a Finite-Game to an Infinite-Game men­tal­ity. I sug­gested Stan put together a plan for how he would approach his busi­ness from this point for­ward. A week later we reviewed Stan’s plan in which he mapped out a strat­egy for approach­ing his big-case prospects, but this time jointly with a business-case expert from his firm. At the time of writ­ing, Stan and his part­ner have already closed one sig­nif­i­cant case, and are work­ing on others.

Lessons Learned

Stan learned that his best strat­egy for tack­ling his high-net worth prospects was to play the Infi­nite Game — to team up with other pro­fes­sion­als. He learned that in the big-case mar­ket it’s dif­fi­cult for one advi­sor to have all the nec­es­sary ingre­di­ents for serv­ing the client. While he had access to big prospects through his net­work, he lacked exper­tise. And it works the other way around. There are many advi­sors with exper­tise who lack access, so it’s essen­tial for them to team with advi­sors who have valu­able net­works. Even though pool­ing resources means shar­ing com­mis­sions, each advi­sor ben­e­fits, because it’s bet­ter to have a smaller piece of a larger pie than a larger piece of a smaller pie — or, as is more often the case, no piece at all. And it’s infi­nitely bet­ter for your client if you bring in the needed exper­tise, oth­er­wise you risk leav­ing your client exposed to the risks you were intend­ing to min­i­mize. Most advi­sors have heard the advice about shar­ing the pie, but few heed it. Per­haps the largest bar­rier to adopt­ing the prac­tice of play­ing the Infi­nite Game, as Stan learned, is the per­cep­tion of the size of the pie. For many advi­sors, their per­ceived lim­i­ta­tions of a case are based on their own feel­ings, and not on real­ity. As Eric’s story above has shown, the lim­its of the Vic­tor deal far exceeded what Henry had ever enter­tained. And as Stan learned, the best way to push through your own lim­its is to start play­ing the Infi­nite Game.

Fol­low The Covenant Group at:

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Tags: 30 Million, 5 Million, Advisory Business, Affluent Individuals, Appointments, Boss, Business Cases, Business Contacts, Case Study, Clientele, Import Company, Infinite Game, Inspiring Story, Insurance Package, J Miller, Mistake, Objections, Prospects, Special Thanks, Stan
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Building your Business also Means Building your Credentials

Wednesday, December 7th, 2011

Build­ing your busi­ness also means build­ing your credentials

In today’s mar­ket envi­ron­ment, clients want an Advi­sor that is a true pro­fes­sional, some one who they can have con­fi­dence in and above all — trust!  Your level of edu­ca­tion directly con­veys that mes­sage of con­fi­dence and trust.

Noth­ing says that you are a ded­i­cated pro­fes­sional like a com­mit­ment to con­tin­u­ing self improve­ment through education.

So, which des­ig­na­tion is right for you?

I am often asked by Advi­sors which des­ig­na­tion they should pur­sue and I always answer the same way — get a game plan.  Don’t think about just tak­ing a course here or there, think about what would make the most sense for you and your clien­tele and set out a 2 or 3 year plan.

If you are at an IIROC Mem­ber firm, I would rec­om­mend that you map out a route to work towards achiev­ing the FCSI des­ig­na­tion.  CSI Global (for­merly the Cana­dian Secu­ri­ties Insti­tute) is the go to place for many indus­try des­ig­na­tions.  It is well respected and its des­ig­na­tions are rec­og­nized by both indus­try and investors, so earn­ing a des­ig­na­tion from this place,  will help you get a job and get clients.

If you have already com­pleted courses and des­ig­na­tions from CSI Global, then I’d rec­om­mend you map out a route towards earn­ing the CFP des­ig­na­tion offered by the Finan­cial Plan­ners Stan­dards Coun­cil.  The CFP cer­ti­fi­ca­tion process has under­gone a com­plete trans­for­ma­tion this past year, (I have a 1 page sum­mary, please email me if you would like to receive it), mak­ing it a bit more dif­fi­cult to achieve CFP certification.

The des­ig­na­tions men­tioned so far are the ones that are most directly pointed towards retail Invest­ment Advi­sors.  Of course there is always the Char­tered Finan­cial Ana­lyst des­ig­na­tion or CFA Char­ter as it is com­monly known.  In my opin­ion, the CFA pro­gram is more suited towards would be Invest­ment Ana­lysts and aspir­ing Port­fo­lio Man­agers.  How­ever, many retail Invest­ment Advi­sors earn the CFA Char­ter because it does bring instant cred­i­bil­ity and is rec­og­nized as a pre­mier finan­cial indus­try credential.

OK, so what do you do if you do not have an MBA, CFA or other indus­try credential?

To pro­pel your­self right to the head of the pack and really dif­fer­en­ti­ate your­self,  I’d rec­om­mend look­ing into earn­ing a CMA or CGA Pro­fes­sional Account­ing des­ig­na­tion.  Both are well respected and bring cred­i­bil­ity on the same level or even higher than MBA, CFA or CFP.

So just like any other aspect of build­ing your busi­ness, build­ing your cre­den­tials requires a well thought out plan.

Com­ments and ques­tions are always welcome.

In my next arti­cle, I will dive into tech­niques you need to know to pass stan­dard­ized finan­cial indus­try examinations.

Best of luck with your studies!

Brian Y. Gor­don, CFA, CFP, CIM, MBA, FCSI, is the Direc­tor of Learn­ing at Exam Suc­cess (www​.exam​suc​cess​.ca), a lead­ing provider of finan­cial indus­try exam­i­na­tion prepa­ra­tion and invest­ment sales train­ing.  He can be reached at info@examsuccess.ca

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Tags: Canadian Securities Institute, Cfa Program, Cfp Certification, Cfp Designation, Charter, Chartered Financial Analyst, Clientele, Confidence, Credentials, Designations, Financial Planners Standards Council, Game Plan, Investment Advisors, Investment Analysts, Market Environment, Member Firm, Portfolio Managers, Retail Investment, S Market, Self Improvement
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The Art of Obtaining Introductions

Wednesday, November 2nd, 2011

Simon’s back­ground and cul­tural expe­ri­ence gave him a great advan­tage in his cho­sen career as a finan­cial advi­sor. Unfor­tu­nately, he was not aware of it. When we first started work­ing together, it was clear that one of Simon’s strengths was his network.

Born and raised in Lebanon, he spoke Eng­lish, French and Ara­bic. His clien­tele con­sisted pri­mar­ily of peo­ple from his native coun­try. Unfor­tu­nately, it was a small com­mu­nity that he had vir­tu­ally tapped out. He did not real­ize that the char­ac­ter­is­tics of the peo­ple in his nat­ural mar­ket cre­ated the great­est oppor­tu­nity to grow his business.

We teach advi­sors that the first step in mar­ket­ing is to define your ideal client. Your ideal client pro­file con­sists of demo­graphic and psy­cho­graphic characteristics.

Demo­graph­ics involve the sta­tis­ti­cal analy­sis of a pop­u­la­tion e.g. age, income, net worth, type of employ­ment, mar­i­tal sta­tus etc. Psy­cho­graph­ics is com­prised of the atti­tudes, attrib­utes and val­ues of the group e. g. solu­tion seek­ers, value rela­tion­ships, strong fam­ily val­ues, opin­ion lead­ers, givers etc.

The key to Simon’s suc­cess in grow­ing his busi­ness was to lever­age the psy­cho­graphic char­ac­ter­is­tics of the peo­ple in his nat­ural mar­ket. The peo­ple of Lebanon and the Mid­dle East in gen­eral, place a high value on rela­tion­ships and trust. In build­ing his busi­ness, Simon spent count­less hours drink­ing cof­fee with prospects and clients. Cof­fee is a sta­ple of rela­tion­ship build­ing in the Mid­dle East. Before the peo­ple in his com­mu­nity would buy from him, he earned their trust over cof­fee, games of backgam­mon and chess. His invest­ment in build­ing rela­tion­ships and estab­lish­ing cred­i­bil­ity paid off in spades. A sig­nif­i­cant num­ber of friends and rel­a­tives became clients. His large net­work of friends and fam­ily enabled him to increase his rev­enue to $250,000.00 in his fourth year as a finan­cial advi­sor. Then, his income stopped growing.

The most impor­tant mea­sure of the degree of trust or cred­i­bil­ity in a rela­tion­ship is the extent to which peo­ple will­ingly intro­duce, rec­om­mend or refer you to the peo­ple that are most impor­tant to them.

There is an art and a sci­ence to obtain­ing intro­duc­tions, rec­om­men­da­tions and refer­rals. Intro­duc­tions are far more effec­tive than refer­rals. With an intro­duc­tion, your client or cen­ter of influ­ence pro­vides the lever­age. They are the ones who arrange the meet­ing with the prospect. In the case of a refer­ral, you have to employ the lever­age. The art of obtain­ing intro­duc­tions is quite sim­ple. We teach a five step process.

The first step is to con­firm your rela­tion­ship with the nom­i­na­tor. It goes some­thing like this: “Sam, now that you have had a chance to see the type of work we do, how do you feel about it?” When the client responds pos­i­tively, you affirm their con­fi­dence in you by feed­ing back what you have heard and encour­ag­ing them to expand upon how you have made a dif­fer­ence in their lives.

The sec­ond step is to describe your ideal client. You might say the fol­low­ing: “That is good to hear, because you are the type of client that I want to work with. Let me be more spe­cific…”  Then, you sum­ma­rize the demo­graphic and psy­cho­graphic char­ac­ter­is­tics of your ideal client.

The third step is to ask your client: “Who do you know who fits these char­ac­ter­is­tics? If they have dif­fi­culty com­ing up with a num­ber of names, you can feed cat­e­gories such as, “Who is the most suc­cess­ful per­son you know?” “Which of your col­leagues fit the client pro­file I just described?”

Once you have been given a num­ber of names, the next step is to qual­ify the prospects and enlist the nominator’s help in meet­ing them. It is impor­tant to get six to ten names from your client or cen­ter of influ­ence before you ask ques­tions about each per­son in order to deter­mine whom you will pur­sue. The key is to iden­tify the peo­ple who most closely approx­i­mate your ideal client pro­file and then deter­mine with your client the best way to obtain an intro­duc­tion. Ide­ally, your client will arrange an intro­duc­tion to two or three of the best prospects and pro­vide rec­om­men­da­tions and refer­rals to the rest.

The fifth step is to keep your client informed with regard to your expe­ri­ence in fol­low­ing up with these peo­ple. Keep in mind that you always respect the con­fi­den­tial nature of each rela­tion­ship. How­ever, your client will want to know about peo­ple whom they intro­duce, rec­om­mend and refer who become clients. Your suc­cess with their net­work expands the equity in the rela­tion­ship for them and for you. When Simon learned to ask his clients and cen­ters of influ­ence for intro­duc­tions, rec­om­men­da­tions and refer­rals, his rev­enue dou­bled in the next year

Norm Trainor is the founder of The Covenant Group, a com­pany spe­cial­iz­ing in prac­tice devel­op­ment for advi­sors. For fur­ther infor­ma­tion, visit his Web site at www​.covenant​group​.com.

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Tags: Backgammon, Building Relationships, Client Profile, Clientele, Coffee Games, Countless Hours, Demographics, English French, Establishing Credibility, Family Values, Fourth Year, Games Chess, Introductions, Network Of Friends, Norm Trainor, People Of Lebanon, Solution Seekers, Spades, Staple, Statistical Analysis, Strong Family, Value Relationships
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From the Finite to the Infinite Game

Wednesday, September 7th, 2011

The fol­low­ing is based on one of Norm’s clients, Stan Sum­mers. All of the names and telling details have been changed to pre­serve client pri­vacy. Spe­cial thanks to our client, Eric J. Miller, for pro­vid­ing the inspir­ing story included in this case study.

I first met Stan Sum­mers six months ago. Stan had just blown two sig­nif­i­cant busi­ness cases and was con­cerned about mak­ing the same mis­take with his other high-net worth prospects.

Stan had been an advi­sor for three years. Prior to that he’d been a con­sul­tant at a large firm. Though suc­cess­ful as a con­sul­tant, he was attracted to the idea of being his own boss and set­ting his own income ceil­ing. Fur­ther­more, he knew he could bring an envi­able asset to his advi­sory busi­ness — a large net­work of busi­ness con­tacts. After two years, with ded­i­cated study and hard work, he had man­aged to grow a size­able clien­tele. But he knew that he’d only scratched the sur­face of his poten­tial. He had always known that through his net­work he could access some extremely afflu­ent indi­vid­u­als, but had decided not to approach them until he felt he was ready. A year ago, he felt the time had come.

He arranged an appoint­ment with the owner of a large import com­pany, a prospect worth over $30 mil­lion. He pro­gressed through a series of appoint­ments and even­tu­ally put together an insur­ance pack­age for $5 mil­lion, but then the case started to unravel. The client raised objec­tions Stan couldn’t respond to and the deal fiz­zled out. He found the loss dev­as­tat­ing, but soon opened another large case, only to find that fall through as well.

When we sat down, I asked Stan why he thought he’d lost the big cases. He admit­ted he’d felt a lit­tle out of his depth, didn’t know how to respond to the objec­tions, and lacked expertise.

“What’s your strat­egy for get­ting that exper­tise?” I asked.

“That’s why I called you.”

“Okay, with our help then, when do you think you could expect to develop the exper­tise you’ll need to close big cases?”

“Months, maybe years,” he answered.

“Can you afford to go years with­out approach­ing big clients?”

“No, but I can’t afford to go on blow­ing my chances. You only get one chance with these prospects.”

“You spent your first cou­ple of years ignor­ing large prospects because you weren’t ready,” I said. “In that time, some of those prospects were picked up as clients by other advi­sors. Prospects that are on your radar screen today might not be there tomor­row. You have a win­dow of oppor­tu­nity with some of these prospects, but you don’t know how large that win­dow is.”

“So it’s a catch-22,” Stan said, “What do you rec­om­mend?”
“I rec­om­mend you get the exper­tise to go on those big cases.”
“But when would I be ready?”

“Today, if you’re willing.”

“Will­ing to do what?”

“Play the Infi­nite Game.”

He looked perplexed.

“Most advi­sors play the Finite Game,” I said, “they work by them­selves, serv­ing their clients as soli­tary advisors.”

Stan said he didn’t like the idea of work­ing with other advi­sors and shar­ing com­mis­sions. Since he had the con­nec­tions, he felt the prospects were his alone.

“You’ve just expressed the mind­set of the Finite Game player. Peo­ple who play the Finite Game think that the oppor­tu­nity with cer­tain mar­kets or prospects is lim­ited, and that their best strat­egy is to ensure they get the ‘whole pie’. How­ever, the real­ity is far dif­fer­ent – the lim­its advi­sors per­ceive are often based on their own lim­i­ta­tions, not the lim­i­ta­tions of the mar­ket or the client. To get beyond your lim­i­ta­tions, you need to play the Infi­nite Game — you need to expand what you bring to your clients by work­ing with others.

“Let me give you the exam­ple from a client of mine, Eric J. Miller of the Miller Con­sult­ing Group. Eric is a large-case expert based out of New York. Another agent, Henry, had come to Eric for help on a case he was hav­ing trou­ble with. Henry had sold a $3-million insur­ance pol­icy with a $33,000 pre­mium to Vic­tor Win­ters, a wealthy entre­pre­neur. Henry had called Eric for help on the case when the sec­ond pre­mium was due, say­ing that Vic­tor was ‘chok­ing on the pre­mium.’ Henry had drafted a pro­posal to rewrite the insur­ance for a pre­mium of $18,000, almost half the orig­i­nal cost, think­ing that that would save the deal. When Eric and Henry went to see Vic­tor, Henry opened the meet­ing by refer­ring to Victor’s feel­ing the pain of the pre­mium costs. Vic­tor hotly denied that and clar­i­fied that he didn’t feel he was get­ting value for his money. Eric felt that Henry was about to bun­gle the whole deal and waded in. Eric began to talk about the value of the cov­er­age and said he had a pol­icy that rep­re­sented tremen­dous value with a pre­mium of $60,000. By now Henry had the where­withal to keep quiet and let Eric run the meet­ing. Victor’s estate was worth $15 mil­lion, and grow­ing. The poten­tial tax lia­bil­ity was in the $6-million range. Eric relayed the ben­e­fits of hav­ing the insur­ance com­pany pay the tax, rather than sell­ing assets to do so. Eric stated that the orig­i­nal pre­mium wasn’t too high — it was too low. Vic­tor agreed. By the time the appoint­ment was through Eric was propos­ing a solu­tion with a $100,000 premium.

“Prior to the appoint­ment, Henry had laid out his strat­egy to walk away with an $18,000 pre­mium. We can clearly see that Eric moved the case from $18,000 to $100,000, but more impor­tantly, Eric solved Victor’s tax lia­bil­ity prob­lem. Henry’s strat­egy to lower the pre­mium because of a per­ceived objec­tion was a dis­ser­vice to the client. Henry was out of his ele­ment here. Eric brought the nec­es­sary expe­ri­ence and exper­tise and was able to pro­vide the advice Vic­tor needed.

“It’s inter­est­ing to note that Henry’s per­cep­tion of the size of the pie stemmed not at all from the real­ity of the client’s need but from his own per­sonal feel­ing that a $33,000 pre­mium was too much. It’s very dif­fi­cult for inex­pe­ri­enced advi­sors to sep­a­rate their emo­tions from a large case. They’re not used to deal­ing with large, com­plex client needs and let their own per­sonal biases get in the way of serv­ing the client. An expe­ri­enced expert like Eric brings the nec­es­sary objec­tiv­ity and cool-headedness to the table. Eric knows to ask the ques­tions that an inex­pe­ri­enced advi­sor is too fright­ened to ask. In the end, the case with Vic­tor even­tu­ally grew well beyond the $100,000-premium mark, and Henry shared half the case. That’s the value of play­ing the Infi­nite Game.”

Stan was blown away by the story. I could see his mind shift from a Finite-Game to an Infinite-Game men­tal­ity. I sug­gested Stan put together a plan for how he would approach his busi­ness from this point for­ward. A week later we reviewed Stan’s plan in which he mapped out a strat­egy for approach­ing his big-case prospects, but this time jointly with a business-case expert from his firm. At the time of writ­ing, Stan and his part­ner have already closed one sig­nif­i­cant case, and are work­ing on others.

Lessons learned

Stan learned that his best strat­egy for tack­ling his high-net worth prospects was to play the Infi­nite Game — to team up with other pro­fes­sion­als. He learned that in the big-case mar­ket it’s dif­fi­cult for one advi­sor to have all the nec­es­sary ingre­di­ents for serv­ing the client. While he had access to big prospects through his net­work, he lacked exper­tise. And it works the other way around. There are many advi­sors with exper­tise who lack access, so it’s essen­tial for them to team with advi­sors who have valu­able net­works. Even though pool­ing resources means shar­ing com­mis­sions, each advi­sor ben­e­fits, because it’s bet­ter to have a smaller piece of a larger pie than a larger piece of a smaller pie — or, as is more often the case, no piece at all. And it’s infi­nitely bet­ter for your client if you bring in the needed exper­tise, oth­er­wise you risk leav­ing your client exposed to the risks you were intend­ing to min­i­mize. Most advi­sors have heard the advice about shar­ing the pie, but few heed it. Per­haps the largest bar­rier to adopt­ing the prac­tice of play­ing the Infi­nite Game, as Stan learned, is the per­cep­tion of the size of the pie. For many advi­sors, their per­ceived lim­i­ta­tions of a case are based on their own feel­ings, and not on real­ity. As Eric’s story above has shown, the lim­its of the Vic­tor deal far exceeded what Henry had ever enter­tained. And as Stan learned, the best way to push through your own lim­its is to start play­ing the Infi­nite Game.

Norm Trainor is the founder of The Covenant Group, a com­pany spe­cial­iz­ing in prac­tice devel­op­ment for advi­sors. For fur­ther infor­ma­tion, visit his Web site at www​.covenant​group​.com.

Fol­low The Covenant Group at:

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Tags: 30 Million, 5 Million, Advisory Business, Affluent Individuals, Appointments, Business Cases, Business Contacts, Case Study, Client Privacy, Clientele, Import Company, Infinite Game, Inspiring Story, Insurance Package, J Miller, Norm, Norm Trainor, Objections, Prospects, Special Thanks, Stan
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Is Your Focus Narrow or Broad?

Wednesday, August 24th, 2011

In defin­ing your busi­ness, there are a num­ber of deci­sions you have to make in order to appro­pri­ately posi­tion what you offer. You can choose to have a nar­row or broad focus to your busi­ness. By choos­ing a nar­row focus, you have opted to spe­cial­ize. A finan­cial advi­sor may choose to focus on a spe­cialty such as invest­ment advice, life insur­ance plan­ning or estate plan­ning and, con­se­quently, offer a par­tic­u­lar set of prod­ucts and ser­vices. Another way to nar­row your focus is to spe­cial­ize in defined mar­ket seg­ments such as retirees or pre-retirees. If you spe­cial­ize in the retire­ment mar­ket, your clien­tele would pri­mar­ily con­sist of peo­ple in their 50s, 60s and beyond.

A case in point is a suc­cess­ful finan­cial advi­sor with whom I work. He is 60 and has been in finan­cial ser­vices for 39 years. Through­out his career, he has been a gen­eral prac­ti­tioner and a spe­cial­ist. Today, he spe­cial­izes in estate plan­ning. He works with ultra high net worth clients. His aver­age case size is $150,000 of annual life insur­ance pre­mium and he earns about $3,500,000 per year. He aver­ages about one new client per month, usu­ally acquir­ing them through intro­duc­tions from sat­is­fied clients and col­lat­eral pro­fes­sion­als. The rest of his busi­ness comes from exist­ing clients.

The deci­sion to have a broad focus in your busi­ness implies that you pro­vide a broad range of finan­cial prod­ucts and ser­vices. In effect, you seek to become a gen­eral prac­ti­tioner for your clients and assist them in real­iz­ing finan­cial health and well being. Typ­i­cally, this involves a finan­cial plan­ning process that takes into account the var­i­ous life stages your clients will expe­ri­ence and the strate­gies and tac­tics required to real­ize finan­cial secu­rity and inde­pen­dence through­out each stage. The intent is to pro­vide access to a broad array of finan­cial prod­ucts and ser­vices to address the needs, wants and val­ues of clients through­out their lives.

One of the finan­cial advi­sors whom I coach entered the busi­ness in his 40s and wanted to work with more mature and afflu­ent clients. His ideal client is 50+, a mil­lion­aire who is retired or approach­ing retire­ment and con­cerned about the growth and preser­va­tion of wealth. Ini­tially, the finan­cial advi­sor focused on man­aged money and annu­ities. Recently, he added life insur­ance and liv­ing ben­e­fits to his prod­uct mix and began to offer fee-based finan­cial plan­ning. He works closely with other col­lat­eral pro­fes­sion­als such as lawyers and accoun­tants to pro­vide a com­plete range of finan­cial man­age­ment, tax and estate plan­ning ser­vices to address the myr­iad finan­cial and life plan­ning needs of his clients. He encour­ages his clients to turn to him for advice on any mat­ters related to their finan­cial health and well being. He views him­self as a gen­eral prac­ti­tioner who is able to serve a large clien­tele and draw upon a strong pool of spe­cial­ists to assist his clients in main­tain­ing finan­cial health and prosperity.

The deci­sion to be nar­row or broad reflects your pref­er­ences with regard to the work you enjoy and your com­pe­ten­cies. The core com­pe­tence for advi­sors who choose a broad focus is rela­tion­ship man­age­ment. A nar­row focus puts more empha­sis on the core com­pe­tence of knowl­edge and exper­tise related to the advisor’s specialty.

Norm Trainor is the founder of The Covenant Group, a com­pany spe­cial­iz­ing in prac­tice devel­op­ment for advi­sors. For fur­ther infor­ma­tion, visit his Web site at www​.covenant​group​.com.

Fol­low The Covenant Group at:

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Tags: 50s 60s, Array, Case In Point, Case Size, Clientele, Collateral, Financial Advisors, Financial Health, Financial Planning, Financial Security, Financial Services, General Practitioner, High Net Worth Clients, Insurance Premium, Introductions, Investment Advice, Life Insurance, Market Segments, Narrow Focus, Norm Trainor, Retirement Market
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The Advisor’s Success Measure – A Profitable Client Relationship

Wednesday, August 10th, 2011

I con­tinue to be sur­prised when finan­cial advi­sors mea­sure their suc­cess based upon the trans­ac­tion value of a sale or client assets under man­age­ment (AUM). Today, the mea­sure of an advisor’s suc­cess is the prof­itabil­ity of the client relationship.

Let me give you an exam­ple. Neil had been an advi­sor for 21 years, but had reached his peak rev­enue five years ago. He was tired of work­ing harder and harder for the same return. That was his moti­va­tion to get involved in our Prac­tice Devel­op­ment Program.

Most advi­sors don’t under­stand the rela­tion­ship between profit and their clien­tele and how best to har­ness the value of each client rela­tion­ship to gen­er­ate a profit. I asked Neil how many clients he had.

“Roughly 300 fam­ily units,” he answered. A typ­i­cal advi­sor works at a deep level with 40 or 50 clients.

“Neil,” I said, “I don’t think you can tell me with con­vic­tion that you have rela­tion­ships of any depth with clients out­side your top tier. Do you know each client’s finan­cial and life goals, the issues and prob­lems they face, their deep­est needs, wants and val­ues?  Do you know if you are their pri­mary advi­sor?  Who their other advi­sors are? What their total net worth is?  How many prod­ucts or ser­vices they have with you com­pared to their other advi­sors? How much wallet-share you have?”

Neil admit­ted he couldn’t answer many of these ques­tions for the bulk of his clien­tele. I then went on to explain to Neil that If a typ­i­cal advi­sor were to graph his or her profit against their clien­tele, they would most likely find that 150% or more of their profit comes from their top 40 clients. The rest of their clients take them back to 100%. So, the profit they make on their key rela­tion­ships is lost on the mass of their other lower-level relationships.

But this doesn’t need to be the case. With the right strate­gies in place, an advi­sor can extend the profit poten­tial well beyond the 40-client mark.  Fur­ther­more, the remain­der of their clien­tele can add to their profit rather than detract from it, albeit at a decreased rate.

Neil asked if I was sug­gest­ing he seg­ment his client base.

“Yes,” I said, “but I want you to have a clear under­stand­ing of the effect of seg­men­ta­tion on profit, and how exactly to seg­ment your client base. I don’t believe a lot of advi­sors go about it the right way. You need to have sound cri­te­ria for seg­ment­ing your clien­tele and the dis­ci­pline to apply the appro­pri­ate ser­vice lev­els for each seg­ment. Too many advi­sors aren’t rig­or­ous enough. They tend to pro­vide either too much or too lit­tle ser­vice to dif­fer­ent seg­ments and this drags down their profit.”

Neil asked what cri­te­ria he should use to seg­ment his client base.

“We use three cri­te­ria: 1. Value; 2. Propen­sity to buy; and 3. Will­ing­ness to intro­duce, rec­om­mend and refer you to peo­ple who fit your Ideal Client Pro­file. You need to exam­ine the poten­tial of each client based upon these three fac­tors. Value is based on things such as the client’s net worth, the assets you man­age and the pre­mi­ums they pay. Propen­sity to buy con­sid­ers the num­ber of prod­ucts and ser­vices they could buy from you in the future. The third mea­sure is their abil­ity and will­ing­ness to lead you to other high-value prospects.

“Some clients might have high value, but a low propen­sity to buy.  You can graph the value poten­tial of your clients against their propen­sity to buy. Ide­ally, you want to find as many clients with high value who also have a high propen­sity to buy. Those, of course, are going to be A clients. But if a client is not likely to do addi­tional busi­ness with you, you’re prob­a­bly bet­ter off cat­e­go­riz­ing them as B or C clients.

Your next chal­lenge is to come up with a strat­egy for real­iz­ing the poten­tial profit each client rep­re­sents. For finan­cial advi­sors there are essen­tially four key strate­gies to focus on: 1) grow your client’s assets under man­age­ment; 2) cross-sell, 3) con­sol­i­date; and 4) make your­self refer­able. If you apply these strate­gies to your high-value clients who have a high propen­sity to buy, and a will­ing­ness to help, you will increase the prof­itabil­ity of your business.”

“But I won’t have time to ser­vice all of my clients,” Neil said.

“For each seg­ment of your clien­tele, you require a Ser­vice Level Agree­ment (SLA). It is impor­tant that the ser­vice you pro­vide fits your profit for­mula. That’s what becom­ing prof­itable in each client seg­ment is about. The imple­men­ta­tion of your SLAs involves var­i­ous options. You can del­e­gate ser­vice func­tions to staff, share the ser­vic­ing with another advi­sor or mar­ket­ing ser­vice, or hire a junior advisor.”

Neil agreed. He had reser­va­tions about tak­ing time away from his busi­ness to seg­ment his clien­tele and develop a mar­ket­ing, sales and ser­vice strat­egy, but he forced him­self.  He booked three days out of the office and worked on his busi­ness plan.  He was sur­prised at the results.

His meth­ods for mar­ket­ing, sell­ing and ser­vic­ing his clien­tele were more messed up than he thought. There were lots of high-value clients with a propen­sity to buy whom he treated like C or D clients and too many C and D clients with whom he spent way too much time and energy for them to be prof­itable. It was no won­der he hadn’t been able to grow his busi­ness over the past few years.

Within a few months, Neil imple­mented his SLAs for each client seg­ment. He focused more of his time on those clients who were of high value, have a propen­sity to buy and were will­ing to refer. In addi­tion, he brought in a junior asso­ciate to whom he del­e­gated the C & D clients. Before long, he was already see­ing great results. His rev­enue increased over 50% in the next year and his profit by over 70%.

Norm Trainor is the founder of The Covenant Group, a com­pany spe­cial­iz­ing in prac­tice devel­op­ment for advi­sors. For fur­ther infor­ma­tion, visit his Web site at www​.covenant​group​.com.

Fol­low The Covenant Group at:

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Tags: Assets Management, Assets Under Management, Client Assets, Client Management, Client Relationship, Clientele, Conviction, Financial Advisors, Financial Success, Graph, Life Goals, Lost, Motivation, Net Worth, Norm Trainor, Profitability, Relationships, Sale Management, Success Measure, Transaction Value, Wallet Share
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