Four Steps to Get in Front of Million-Dollar Prospects

Thursday, January 31st, 2013

by Dan Richards, Cli​entIn​sights​.ca

For most advi­sors, once you’re face to face with a prospect, you have an excel­lent chance of sign­ing them up – not the slam dunk that it might have been fif­teen or twenty years ago, but good odds nevertheless.

The big chal­lenge is get­ting that face to face meet­ing. That’s why I was inter­ested in an email from an inde­pen­dent advi­sor in a mid-sized com­mu­nity in the U.S. mid­west, ask­ing for my advice on fol­low­ing up with a prospect who’d opened the door to sit­ting down.

The ben­e­fits of stay­ing top of mind

This advi­sor, let’s call him Andrew, has been send­ing his newslet­ter to a prospect named Phil for sev­eral years. Andrew knows that Phil has at least $2 mil­lion in invest­ments and from his ini­tial take would be a pleas­ant client to deal with.

In Decem­ber, Andrew sent Phil an email men­tion­ing that it had been some time since they had spo­ken. He sug­gested sched­ul­ing a meet­ing for some point in Jan­u­ary and also sug­gested that it would make the meet­ing more pro­duc­tive if Phil could email him his cur­rent state­ment beforehand.

Phil responded by email quickly, mak­ing four points:

1.     He’d be happy to sit down and has good avail­abil­ity to meet –he always finds that he learns from sit­ting down with pro­fes­sion­als such as Andrew.

2.     How­ever, he wants to make it clear that he’s not look­ing to make a change and is not sure it would be a good use of Andrew’s time.

3.     Email­ing the rel­e­vant com­po­nent of his invest­ment state­ment is prob­lem­atic, given that the last state­ment for his Mer­rill Lynch uni­fied account was over 120 pages.

4.     Finally, he thanked Andrew for his newslet­ter, which he reads and enjoys

So Andrew’s ques­tion to me: How would I respond in his sit­u­a­tion?  Before read­ing on, con­sider what you would tell Andrew and what this exchange tells us about attract­ing new clients today.

The value of get­ting face to face

This inter­ac­tion demon­strates four prin­ci­ples when it comes to get­ting in front of prospects:

1.     Widen your net

Suc­cess­ful advi­sors rec­og­nize that prospect­ing is a num­bers game. Cer­tainly you can do some things to increase the odds of suc­cess, but if you com­mu­ni­cate with 50 qual­i­fied prospects, your chances of land­ing new clients are always bet­ter than if you’re com­mu­ni­cat­ing with  5 or 10. Andrew’s focus on expand­ing the base of prospects with whom he’s com­mu­ni­cat­ing was the crit­i­cal first step.

2.     Pro­vide clear value

Once a prospect has agreed to receive infor­ma­tion, you have to have the right qual­ity at the right fre­quency. If Phil hadn’t been impressed by the con­tents of Andrew’s newslet­ter, chances are that he wouldn’t have been open to meet­ing. And odds are that if Andrew’s newslet­ter had been two or three times a year rather than monthly, it wouldn’t have made the same impact.

3.     Be patient

Note that Phil had heard from Andrew for a num­ber of years before being pre­sented with the chance to meet – for­tu­nately, email allows you to com­mu­ni­cate much more eas­ily with greater fre­quency at lower cost than would have been pos­si­ble even ten years ago.

4.     Take the initiative

Even if prospects are impressed by the infor­ma­tion they get from you, you can’t wait for them to call – you still have to take the ini­tia­tive to get in front of them. If Andrew hadn’t sent Phil that email, then the chance to meet wouldn’t have pre­sented itself.

Fol­low­ing up when the door is open

With regard to my advice to Andrew, in my view his para­mount goal should be to get face to face with Phil in a fash­ion that accom­plishes four things:

1.     It helps him gain a bet­ter under­stand­ing of Phil’s situation

2.     It  rein­forces  Andrew’s pro­fes­sion­al­ism and the value that he pro­vides to clients

3.     It builds a deeper bond and increases Phil’s com­fort with him

4.     It con­veys Andrew’s con­fi­dence in the value of his time – if he appears too anx­ious to meet, then his chances of suc­cess in mov­ing for­ward go down dramatically.

Given that, in Andrew’s sit­u­a­tion I would call Phil and say:

1. I’m delighted that you find my newslet­ter helpful

2. I appre­ci­ate your being upfront about not mak­ing a change at this time, but am happy to invest the time to sit down and get to know you bet­ter with no expec­ta­tions of any­thing com­ing from that in the imme­di­ate period ahead

3.  With regard to your state­ment, I sug­gest that we sched­ule a con­ve­nient time for you to meet at my office and that you bring your state­ment along. While we’re meet­ing, I can have the rel­e­vant parts copied … depend­ing on how our con­ver­sa­tion goes, I would be happy to review it and get back to you with any thoughts and suggestions

This also has the advan­tage of putting the meet­ing on Andrew’s turf – some­times ask­ing prospects to come to you can be a test of seri­ous­ness on their part.

One final note: While I rec­og­nize that we’d all like to see state­ments of prospects’ invest­ment accounts in advance of our first meet­ing, it’s rarely a good idea to ask prospects to share their invest­ment details with you in advance of your ini­tial meet­ing (and cer­tainly before even agree­ing to a meet­ing, as Andrew did.)

Rec­og­niz­ing that it nor­mally takes at least a cou­ple of meet­ings to bring a prospect on board, ask for one com­mit­ment at a time. Focus first on get­ting the ini­tial meet­ing; once a meet­ing has been sched­uled you can ask prospects to bring their invest­ment state­ments with them, should they want to refer to them dur­ing the meet­ing.  If it feels right, towards the end of the meet­ing you can sug­gest sched­ul­ing a time to talk fur­ther, in advance of which you would review their invest­ment sit­u­a­tion in light of the con­ver­sa­tion you’ve just had.

As you think about your own prospect­ing plans for 2013, con­sider whether any of the lessons from Andrew’s suc­cess in get­ting in front of a two-million dol­lar prospect apply to your busi­ness. If the answer is yes, iden­tify when you’re going to dis­cuss this with your team with a view to build­ing this into your routine.

Copy­right © Cli​entIn​sights​.ca

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Tags: Dollar, Email, Face To Face, Four Points, Four Steps, Independent Advisor, Interaction, Investment Statement, Investments, Merrill Lynch, Midwest, Newsletter, Odds, Prospects, Sit, Slam Dunk, Time 3, Twenty Years
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Strategic Problem Solving or What’s The Cost of Losing a Client?

Wednesday, March 28th, 2012

by Bob Simp­son, Syn­chronic­ity Per­for­mance Consulting

Every sin­gle day, we are faced with problems:

• Per­sonal Problems
• Client Prob­lems
• Busi­ness Problems
• Rela­tion­ship Problems
• Finan­cial Problems

to name a few.

In fact, as a finan­cial advi­sor, you are in the busi­ness of solv­ing problems.

What is your process for solv­ing problems?

Strate­gic Prob­lem Solv­ing is a process that you can refine to pro­duce your sys­tem for solv­ing prob­lems for your­self and your clients.

Step 1 – Quan­tify the problem

One of my goals in work­ing with advi­sors is to “sim­plify every­thing” and focus on doing work that has the great­est impact on suc­cess, or focus on the 20% of activ­i­ties that pro­duce 80% of results.

Rather than fol­low­ing a tra­di­tional approach of “find a problem/fix a prob­lem”, you will achieve grater results by pri­or­i­tiz­ing the prob­lems and work­ing on the most impor­tant ones.  This is achieved by putting a finan­cial value on a problem.

Here’s an exam­ple.  You get a call from a client in which you are informed that this client is trans­fer­ring his account to another advi­sor or more likely, you get a transfer-out notice and no call.  In your dis­cus­sion, you try to iden­tify why your client made this deci­sion and find out that he is not sat­is­fied with fre­quency and qual­ity of contact.

Fol­low­ing the call, you sit at your desk and try to put a num­ber on how much rev­enue you lost as a result of this defec­tion.  This client had $750,000 in a 1% fee-based account.  So you have lost rev­enue of $7,500.  Not so fast.  If you had bet­ter sat­is­fied the client’s needs, this client who is in his early 50’s may have stayed with you for another ten years, for exam­ple.  So the num­ber is $75,000.  Think again.  This client plans to con­tribute $25,000 per year and will, in all like­li­hood, receive an inher­i­tance of $500,000 over the next ten years AND the account should grow, based on a con­ser­v­a­tive asset allo­ca­tion model of 6% per year.  Then, as you plan to retire and sell your busi­ness in ten years at 1.5 times rev­enue, you will lose this as well.

Based on this sce­nario, the loss of this one client will cost you approx­i­mately $86,000 with­out the inher­i­tance and over $113,000 in pre-tax income, if the inher­i­tance was received in the fifth year.

This num­ber gets crazy if you con­sider how many other clients you may lose if you don’t fix this prob­lem and poten­tial refer­rals, if you did a good job.

By quan­ti­fy­ing prob­lems, you are bet­ter able to pri­or­i­tize them and get them resolved before it costs you a small fortune.

How impor­tant do you think it is to solve a prob­lem like this?  How many clients have you lost in the last three years?  Sorry, it was not my inten­tion to make you feel nau­seous.  Maybe, you should get in touch with us?

Step 2 – Iden­tify the root of the problem

Some prob­lems are sim­ple and some are very com­plex.  Com­plex prob­lems can be very dif­fi­cult to solve and require a spe­cial­ized approach.

The first step, in work­ing on a com­plex prob­lem, is to break it down into smaller, more man­age­able prob­lems.  A com­plex prob­lem may be made up of ten or more sim­ple prob­lems.  Some may be sur­face issues that are easy to assess and some may be deeper and more dif­fi­cult to identify.

Your goal should be to drill down and find the root of the prob­lem.  The root may be com­plex but more often than not, it is rel­a­tively sim­ple to solve.  By fix­ing the root, many of the prob­lems you have iden­ti­fied may be resolved quite simply.

Step 3 – Plan to resolve the problem

Some prob­lems can be resolved sim­ply and it may make sense to knock them off quickly but it is impor­tant to give the high value prob­lems the proper pri­or­ity and atten­tion.  Any­thing that may result in the loss of a client is auto­mat­i­cally near the top of the list.

The best way to accom­plish this is to take a project man­age­ment approach to run­ning your busi­ness.  Our blog enti­tled The Project Man­age­ment Approach to Build­ing a Bet­ter Busi­ness will help you to wrap your mind around this concept.

Bob Simp­son is Pres­i­dent of Syn­chronic­ity Per­for­mance Con­sul­tants.  Bob can be reached on his direct line at 905−502−0100, toll free at 866−646−6002 or by e-mail at bob.simpson@synchronicity.ca.

About Bob Simpson

Syn­chronic­ity Per­for­mance Con­sult­ing has been coach­ing finan­cial advi­sors since 1998.

Bob Simp­son, pres­i­dent and founder of Syn­chronic­ity has been involved, directly or indi­rectly in the finan­cial ser­vices indus­try since 1981. He has been a very suc­cess­ful finan­cial advi­sor with Nes­bitt Thom­son Inc., a major Cana­dian finan­cial insti­tu­tion. Between 1981 and 1989, he built a busi­ness with more than $120 mil­lion in assets under man­age­ment, was branch man­ager and SVP National Sales for Mid­land Wal­wyn and has been coach­ing finan­cial advi­sors since 1998.

You can fol­low Bob Simp­son via:

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Tags: Asset Allocation Model, Busin, Business Problems, Defection, Desk, Financial Advisor, Focus, Frequency Contact, Goals, Inheritance, Likelihood, Personal Problems, Problem Solving, Relationship Problems, Single Day, Sit, Solving Problems, Step 1, Success, Traditional Approach
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Why Your Sales Process No Longer Works—And What to Do About It

Wednesday, February 8th, 2012

by Katharine Vessenes, of Vest­ment Advi­sors, via Cli​entIn​sights​.ca

I have a reg­u­lar col­umn in Hors­es­mouth, the lead­ing online prac­tice man­age­ment resource for US finan­cial advisors.

Recently, I read an arti­cle that impressed me. Writ­ten by Kather­ine Vessenes, a lawyer and well known con­sul­tant to suc­cess­ful advi­sors, she has given per­mis­sion to repro­duce her arti­cle. To see more about her work or to sign up for her newslet­ter, go to www​.vest​men​tad​vi​sors​.com.

By Kather­ine Vessenes

As a stu­dent of great finan­cial advi­sors and their sales processes, I have been for­tu­nate to actu­ally sit in on client meet­ings with some of the top finan­cial advi­sors in the coun­try. Who wouldn’t want to be a fly on the wall when an $8 mil­lion dol­lar advi­sor closes the sale? It has been my priv­i­lege, as a prac­tice man­age­ment coach, to not only watch the great finan­cial advi­sors in action, but to even offer a few sug­ges­tions on how they might close more business.

Here is what I have learned, just this last sum­mer, as we coached two of the top advi­sors in the coun­try on man­ag­ing their prac­tice and improv­ing their sales practice:

A short­ened, quick sales process that was very effec­tive 10 years ago, is much less effec­tive today.

In 2000, it was not unusual for our firm, Vest­ment Advi­sors, to con­sult with $3 mil­lion finan­cial advi­sors who worked with the mid­dle mar­ket. Our goal was to use our prac­tice man­age­ment process to increase these advi­sors’ sales and build the value of their busi­ness. Every one of them got their sales process down to two meet­ings of an hour and a half each; three meet­ings were needed only in the rare case for higher-end or more com­pli­cated clients.

That kind of com­pressed, quick sales process was very effec­tive 10 years ago, but it is much less effec­tive in today’s wary eco­nomic cli­mate. Ten years ago, it was com­mon prac­tice. Not so today.

Today, many clients are not pre­pared to make a deci­sion at the sec­ond meeting.

Most clients haven’t yet built up a trust fac­tor with their finan­cial advi­sor by the sec­ond meet­ing. They are still skep­ti­cal. The rea­son: clients are fear­ful about chang­ing money man­agers, invest­ment styles, and advi­sors, even though they are in a lot of emo­tional pain.

Fur­ther­more, clients don’t like sit­ting for long meet­ings. They are busy, much busier than 10 years ago. They don’t have the time, energy, or atten­tion span to meet for two hours. Today, the shorter the meet­ings, the bet­ter for most clients.

Two of the advi­sors we coached this sum­mer had both length­ened their sales process to four shorter meet­ings. It was work­ing so well for them that their clos­ing ratios were far higher than we cur­rently are see­ing with other firms. In fact, they were prob­a­bly clos­ing 80% to 95%. These ratios are quite high, given the cur­rent market.

Here’s what’s cov­ered in each of the four meetings:

First meet­ing: Ori­en­ta­tion or “getting-to-know-you”

Time: 45 min­utes to an hour

The whole pur­pose in this meet­ing is to get a bet­ter feel for prospects, how they tick, and what they are look­ing for in a rela­tion­ship. As New Jer­sey advi­sor Paul Hart­line (not his real name) said to me, “When you have been in the busi­ness for 30 years, you can tell in that ini­tial meet­ing if you want them for a client or not.”

Most advi­sors who use a “get-to-know-you” meet­ing ask the client not to bring in any per­sonal finan­cial data. They feel it helps build trust and makes the client feel more comfortable.

Hart­line does this meet­ing in his office because he also wants new clients to get a feel for him. Hart­line is in a class-A space, and his office and staff show very well. The whole setup makes a great first impres­sion on prospects.

On the other hand, George Jack­son (also not his real name), from Seat­tle, does a first meet­ing that is all about the new client. Jack­son usu­ally con­ducts this meet­ing at a prospect’s office or even at his or her home. This lets them feel com­fort­able, lets him get to know them bet­ter, and he says the client then feels oblig­ated to come to George’s office for the next meet­ing as a social courtesy.

Sec­ond meet­ing: Data gathering

Time: 1 to 1½ hours

Dur­ing this meet­ing, the advi­sor gath­ers the data nec­es­sary to com­plete a finan­cial plan. Advi­sors are review­ing all the invest­ments, insur­ance, and other data that will be needed to make recommendations.

Paul does this meet­ing in the client’s home. He says he likes to see how the clients live. It lets him know if they are big spenders or savers, and he gets a bet­ter feel for them as peo­ple. It also makes it eas­ier to gather the infor­ma­tion Paul needs for the planning.

George does just the oppo­site. Since he has already met with the prospects in their home or office, they come to George’s office for the data gathering.

Third meet­ing: Plan pre­sen­ta­tion and gap analysis

Time: Up to 2 hours

We have seen advi­sors call this meet­ing many things. Most of them are pre­sent­ing what we call the “plan,” but it’s really a sit­u­a­tional analy­sis of the new client’s num­bers, where that per­son stands, and the like­li­hood he or she will run out of money in retirement.

Advi­sors also look at the gaps between the clients’ goals and where they are likely to end up.

Uni­ver­sally, these meet­ings are held in the advisor’s office.

Typ­i­cally, the client leaves the third meet­ing with answers to these questions:

• Will I run out of money in retirement?
• How much do I need to save to reach my goals?
• What can I do to save taxes now and in the future?

Some advi­sors may present a few prod­ucts here. Many will talk about the prod­ucts only gener­i­cally. They might dis­cuss REITs in gen­eral, and why it would be a good choice, but stop short of nam­ing a spe­cific one.

Fourth meet­ing: Implementation

Time: 1½ to 2 hours.

At this meet­ing, the advi­sor is talk­ing about spe­cific prod­ucts, money man­agers, sign­ing paper­work, and mov­ing the invest­ments over to the new firm.

For par­tic­u­larly fear­ful clients, or for those with com­pli­cated sit­u­a­tions, this meet­ing could stretch into two meetings.

Key take­aways

Prac­tice man­age­ment lessons and adap­tive strate­gies learned from flexible—and there­fore successful—advisors and planners:

• What worked really well 10 years ago may not work so well now. We all have to change with the times and be sen­si­tive to where clients are emo­tion­ally these days.
• The over­all amount of time you spend with clients is likely to be more than it was 10 years ago. Even though each meet­ing is shorter, chances are you will be hold­ing more meet­ings, and there­fore spend­ing more time, with poten­tial clients before they are ready to commit.
• Just as I like to remind advi­sors that all mar­ket­ing is trial and error, the same is true with your sales process. Test out dif­fer­ent strate­gies and orders to see what works for you and what doesn’t.
• Noth­ing, no mat­ter how great the sys­tem, works 100% of the time.
• Prospects and clients sim­ply are more fear­ful now, so it will take longer to build up sub­stan­tial trust with new people.

Kather­ine Vessenes, JD, CFP, a nation­ally known author and speaker, has the best job in the world.

She turns aver­age pro­duc­ers into stars by focus­ing on sales, mar­ket­ing, com­pli­ance, and prac­tice man­age­ment issues for broker-dealers and advi­sors. You can con­tact Kather­ine at (952) 401‑1045 or at katherine@vestmentadvisors.com. Or visit her web­site: www​.vest​men​tad​vi​sors​.com.

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Tags: 10 Years, Client Meetings, Coach Watch, Economic Climate, Few Suggestions, Financial Advisors, Fly, Fly On The Wall, Hour And A Half, Katherine Vessenes, Lawyer, Management Coach, Management Resource, Newsletter, Practice Management, Privilege, Rare Case, Sales Processes, Sit, Vestment
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Why Your Sales Process No Longer Works—And What to Do About It

Wednesday, December 21st, 2011

I have a reg­u­lar col­umn in Hors­es­mouth, the lead­ing online prac­tice man­age­ment resource for US finan­cial advisors.

Recently, I read an arti­cle that impressed me. Writ­ten by Kather­ine Vessenes, a lawyer and well known con­sul­tant to suc­cess­ful advi­sors, she has given per­mis­sion to repro­duce her arti­cle. To see more about her work or to sign up for her newslet­ter, go to www​.vest​men​tad​vi​sors​.com.

By Kather­ine Vessenes:

As a stu­dent of great finan­cial advi­sors and their sales processes, I have been for­tu­nate to actu­ally sit in on client meet­ings with some of the top finan­cial advi­sors in the coun­try. Who wouldn’t want to be a fly on the wall when an $8 mil­lion dol­lar advi­sor closes the sale? It has been my priv­i­lege, as a prac­tice man­age­ment coach, to not only watch the great finan­cial advi­sors in action, but to even offer a few sug­ges­tions on how they might close more business.

Here is what I have learned, just this last sum­mer, as we coached two of the top advi­sors in the coun­try on man­ag­ing their prac­tice and improv­ing their sales practice:

A short­ened, quick sales process that was very effec­tive 10 years ago, is much less effec­tive today.

In 2000, it was not unusual for our firm, Vest­ment Advi­sors, to con­sult with $3 mil­lion finan­cial advi­sors who worked with the mid­dle mar­ket. Our goal was to use our prac­tice man­age­ment process to increase these advi­sors’ sales and build the value of their busi­ness. Every one of them got their sales process down to two meet­ings of an hour and a half each; three meet­ings were needed only in the rare case for higher-end or more com­pli­cated clients.

That kind of com­pressed, quick sales process was very effec­tive 10 years ago, but it is much less effec­tive in today’s wary eco­nomic cli­mate. Ten years ago, it was com­mon prac­tice. Not so today. Today, many clients are not pre­pared to make a deci­sion at the sec­ond meet­ing. Most clients haven’t yet built up a trust fac­tor with their finan­cial advi­sor by the sec­ond meet­ing. They are still skep­ti­cal. The rea­son: clients are fear­ful about chang­ing money man­agers, invest­ment styles, and advi­sors, even though they are in a lot of emo­tional pain.

Fur­ther­more, clients don’t like sit­ting for long meet­ings. They are busy, much busier than 10 years ago. They don’t have the time, energy, or atten­tion span to meet for two hours. Today, the shorter the meet­ings, the bet­ter for most clients. Two of the advi­sors we coached this sum­mer had both length­ened their sales process to four shorter meet­ings. It was work­ing so well for them that their clos­ing ratios were far higher than we cur­rently are see­ing with other firms. In fact, they were prob­a­bly clos­ing 80% to 95%. These ratios are quite high, given the cur­rent market.

Here’s what’s cov­ered in each of the four meetings:

First meet­ing: Ori­en­ta­tion or “getting-to-know-you”

Time: 45 min­utes to an hour

The whole pur­pose in this meet­ing is to get a bet­ter feel for prospects, how they tick, and what they are look­ing for in a rela­tion­ship. As New Jer­sey advi­sor Paul Hart­line (not his real name) said to me, “When you have been in the busi­ness for 30 years, you can tell in that ini­tial meet­ing if you want them for a client or not.”

Most advi­sors who use a “get-to-know-you” meet­ing ask the client not to bring in any per­sonal finan­cial data. They feel it helps build trust and makes the client feel more comfortable.

Hart­line does this meet­ing in his office because he also wants new clients to get a feel for him. Hart­line is in a class-A space, and his office and staff show very well. The whole setup makes a great first impres­sion on prospects.

On the other hand, George Jack­son (also not his real name), from Seat­tle, does a first meet­ing that is all about the new client. Jack­son usu­ally con­ducts this meet­ing at a prospect’s office or even at his or her home. This lets them feel com­fort­able, lets him get to know them bet­ter, and he says the client then feels oblig­ated to come to George’s office for the next meet­ing as a social courtesy.

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Tags: 10 Years, Advi, Client Meetings, Coach Watch, Economic Climate, Few Suggestions, Financial Advisors, Fly, Fly On The Wall, Hour And A Half, Katherine Vessenes, Lawyer, Management Coach, Management Resource, Newsletter, Practice Management, Privilege, Rare Case, Sales Processes, Sit
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Working Smart vs Working Hard: Your Most Important Resolution for 2012

Wednesday, November 30th, 2011

There are lots of res­o­lu­tions advi­sors could make in 2012. But here’s the one that for many advi­sors could have the high­est pay­off – and that’s to work smarter this year, by build­ing reg­u­lar think­ing time into your business.<br>

We’ve all become incred­i­bly busy with more demand­ing clients and an always-on world of email and black­berry. As a result, most advi­sors are work­ing hard but they aren’t nec­es­sar­ily work­ing smart. And the only way to ensure you’re work­ing smart is to con­sis­tently step back and take a bit of time to think hard about your business.

Quar­terly think­ing time

This process starts by hav­ing writ­ten goals in place for the next three to five years and a writ­ten plan of action for the year ahead on how you’re going to achieve those goals. That writ­ten 12 month plan is a good start­ing point but that’s all it is unless you sched­ule reg­u­lar time into your rou­tine to review, update and mod­ify that plan.

This should hap­pen at four lev­els – quar­terly, monthly, weekly and daily.

For your quar­terly think­ing time, you should sit down for half a day with your team or two or three other advi­sors that you respect and trust.

And in that half a day, you ask your­self a num­ber of key ques­tions:

What were my goals for the last quar­ter and how did I do against those goals?

What worked in the last quar­ter, what didn’t and what can I learn from the last quar­ter? In other words what I am I going to do dif­fer­ently in the next three months based on what hap­pened in the last three months?

And finally, what are my goals for the next quarter?

Monthly, weekly … and daily

For your monthly think­ing time, you go through exactly the same review process … except you do it more briefly, tak­ing an hour or so rather than half a day. But you ask your­self the same fun­da­men­tal ques­tions, how am I doing against my goals, what’s worked and what hasn’t , what am I going to do dif­fer­ently next month as a result.

For your weekly think­ing time, you’re look­ing at ten min­utes to review with your team what hap­pened last week, again what worked, what didn’t , what can we learn from this.

A few years back I talked to a very suc­cess­ful advi­sor who for thirty years had taken ten min­utes every Sun­day night at 9 o’clock to review all his meet­ings in the week that had just passed and asked him­self what he needed to do dif­fer­ently based on that – and attrib­uted much of his suc­cess to that process.

Finally, for your daily think­ing time I sug­gest advi­sors either end each day or start each day by tak­ing two or three min­utes and ask­ing one key ques­tion – what can I learn from the day that just passed.

And then write down the answer.

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Tags: Blackberry, Br, Email, Fundamental Questions, Goals, Good Starting Point, Half A Day, Last Quarter, Lt, Plan Ahead, Resolutions, Sit, Smart, Thinking Time, Three Months
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The Best Way to Start Client Meetings Today

Wednesday, August 31st, 2011

Last week’s arti­cle set out some guide­lines for effec­tive client meet­ings; among them the sug­ges­tion to adopt Stephen Covey’s pre­cept “Seek to under­stand before seek­ing to be understood.”

Meet­ings today have a num­ber of objec­tives; to calm nerves, reas­sure them about their port­fo­lio and instil con­fi­dence that they’re work­ing with the right advi­sor. To help achieve that, ensure that clients see meet­ings as address­ing their unique sit­u­a­tion and as dri­ven squarely by their agenda, not yours.

Here’s a three step process to help make that happen:

Step One: Start with an agenda

One way for clients to see meet­ings as deal­ing with their spe­cific con­cerns is by estab­lish­ing an agenda dur­ing the call to set up the review.

Dur­ing that call, you could say:

“I have a cou­ple of things I’d like to cover when we get together, but first, what are the key ques­tions you’d like to get answered and things you’d like to deal with when we meet?”

Sit back and lis­ten. The answer will be the core of the meet­ing agenda, to which you’ll add any addi­tional items.

Step Two: Set the client’s key goal for the meeting

When you sit down, start with some­thing along the lines of:

“Here’s the agenda that we dis­cussed on the phone. Tell me, what’s the sin­gle most impor­tant thing you want to achieve today, whether it’s on the agenda or not?”

Again, sit back and lis­ten. What you hear will set the direc­tion for the next while.

Step Three: Get clients talking

Once clients have iden­ti­fied their top goal, respond by saying:

“Let’s make that the first thing we focus on. Just before we do that, many clients tell me that they’ve been a bit shaken by recent mar­kets. Tell me, how have you found mar­kets affect­ing you?”

One last time, sit back and lis­ten. The more clients feel truly lis­tened to, the more effec­tive your meet­ings will be.

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Tags: Client Meetings, Confidence, Direction, Effective Meetings, Key Goal, Last Time, Meeting Agenda, Nerves, Precept, Single Most Important Thing, Sit, Stephen Covey, Suggestion
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Working smart vs working hard: Your most important resolution for 2011

Wednesday, January 12th, 2011

There are lots of res­o­lu­tions advi­sors could make in 2011. But here’s the one that for many advi­sors could have the high­est pay­off – and that’s to work smarter this year, by build­ing reg­u­lar think­ing time into your business.<br>

We’ve all become incred­i­bly busy with more demand­ing clients and an always-on world of email and black­berry.  As a result, most advi­sors are work­ing hard but they aren’t nec­es­sar­ily work­ing smart. And the only way to ensure you’re work­ing smart is to con­sis­tently step back and take a bit of time to think hard about your business.

Quar­terly think­ing time

This process starts by hav­ing writ­ten goals in place for the next three to five years and a writ­ten plan of action for the year ahead on how you’re going to achieve those goals. That writ­ten 12 month plan is a good start­ing point but that’s all it is unless you sched­ule reg­u­lar time into your rou­tine to review, update and mod­ify that plan.

This should hap­pen at four lev­els – quar­terly, monthly, weekly and daily.

For your quar­terly think­ing time, you should sit down for half a day with your team or two or three other advi­sors that you respect and trust.

And in that half a day, you ask your­self a num­ber of key ques­tions:

What were my goals for the last quar­ter and how did I do against those goals?

What worked in the last quar­ter, what didn’t and what can I learn from the last quar­ter?  In other words what I am I going to do dif­fer­ently in the next three months based on what hap­pened in the last three months?

And finally, what are my goals for the next quarter?

Monthly, weekly … and daily

For your monthly think­ing time, you go through exactly the same review process … except you do it more briefly, tak­ing  an hour or so rather than half a day. But you ask your­self the same fun­da­men­tal ques­tions, how am I doing against my goals, what’s worked and what hasn’t , what am I going to do dif­fer­ently next month as  a result.

For your weekly think­ing time, you’re look­ing at ten  min­utes to review with your team what hap­pened last week, again what worked, what didn’t , what can we learn from this.

A few years back I talked to a very suc­cess­ful advi­sor who for thirty years had taken ten min­utes every Sun­day night at 9 o’clock to review all his meet­ings in the week that had just passed and asked him­self what he needed to do dif­fer­ently based on that – and attrib­uted much of his suc­cess to that process.

Finally, for your daily think­ing time I sug­gest advi­sors either end each day or start each day by tak­ing two or three min­utes and ask­ing one key ques­tion – what can I learn from the day that just passed.

And then write down the answer.

There’s indis­putable evi­dence on the power of writ­ten goals — just by writ­ing things down, things seem to stick. And if you write down your key take­aways in one con­sis­tent place, say the same file on your com­puter, chances are that over time you’ll see a pat­tern emerge.

Mak­ing think­ing time happen

Some advi­sors may look at this and ask if you can afford to spend this much time reflect­ing on your busi­ness. I’m going to sug­gest that’s the wrong ques­tion – the ques­tion isn’t whether  you can afford to spend this much time think­ing about your busi­ness.  If your goal is to work smart rather than hard in 2011, the ques­tion is whether you can afford NOT to invest this kind of time on a reg­u­lar basis think­ing hard about your business.

We’ve talked about spend­ing half a day a quar­ter, an hour a month, ten min­utes a week and two min­utes a day. Add that all up and it works out to about five days of think­ing time over the course of a year – add another day for annual plan­ning and that’s six days.

That’s six out of let’s say 200 work days, when you fac­tor in hol­i­days and vaca­tions.  What that means is that advi­sors would be spend­ing 3% of their time think­ing and 97% of their time doing. And spend­ing that 3% of your time reflect­ing on your busi­ness will pay huge div­i­dends in mak­ing the other 97% of your time more productive.

If you like this idea, here are two final steps.

First, go to your cal­en­dar and iden­tify when you’re going to do those three minute daily reviews and ten minute weekly reviews.

And while you’re at it block off the first one hour monthly review for Feb­ru­ary 1.

And sec­ond, iden­tify who you’re going to invite to par­tic­i­pate in these monthly and quar­terly review s. You could do it with other mem­bers of your team, or if you’re work­ing on your own invite between one and three other advi­sors in your office to par­tic­i­pate. Send them a copy of this arti­cle and invite them to join you at that first monthly review.

Resolv­ing to build more think­ing time into your busi­ness may not be as obvi­ous as resolv­ing to lose weight or get in shape – but as impor­tant as those may be for your phys­i­cal health, increas­ing the qual­ity of think­ing time is just as crit­i­cal for  the health of your busi­ness … and may well be a res­o­lu­tion that pays big div­i­dends long after vow­ing to lose weight or make it to the gym have been left in the dust.

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Tags: Blackberry, Br, Email, Fundamental Questions, Goals, Good Starting Point, Half A Day, Last Quarter, Lt, Plan Ahead, Resolutions, Sit, Smart, Thinking Time, Three Months
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Guidelines for investors selecting a new advisor

Sunday, September 19th, 2010

Recently, we’ve seen lots of media cov­er­age about the num­ber of investors who are rethink­ing the rela­tion­ship with their advi­sor. Research stud­ies indi­cate that some­where in the vicin­ity of 10% of investors say they’re likely to switch advi­sors or firms in the next twelve month, up from 6% a year ago.

In early June, I wrote a col­umn in the Globe and Mail titled “Tak­ing the time to find an advi­sor may be your best invest­ment”.  While directed towards investors, it’s also impor­tant read­ing for advi­sors talk­ing to clients think­ing about a move — the arti­cle out­lined four key points that investors con­sid­er­ing a change in advi­sors should bear in mind. Don’t rush the process

Given its impor­tance, choos­ing the right finan­cial advi­sor is a deci­sion that shouldn’t be rushed. Some­times in the past, investors have selected the first advi­sor they spoke to or made a deci­sion based on an advisor’s glitzy office and appar­ent suc­cess — and then regret­ted this deci­sion afterwards.

When look­ing for an advi­sor, most investors begin by ask­ing peo­ple they know for sug­ges­tions. And while a refer­ral from some­one they trust cer­tainly increases the odds things will work out, just because an advi­sor is a good fit for a friend doesn’t mean they’ll be right for them.

Just as in any impor­tant deci­sion such as buy­ing a house or switch­ing jobs, to increase the odds of get­ting this right, investors need to gather lots of infor­ma­tion and dig deep before deciding.

Given the poten­tial impact of this deci­sion, it’s essen­tial for investors to take their time. In the col­umn, I sug­gested investors tell an advi­sor they’re talk­ing to that they’d like to sit down for a cou­ple of in depth dis­cus­sions before decid­ing if they want to work together.

Gath­er­ing information

Dur­ing these meet­ings, the first objec­tive for investors and advi­sors is to gather facts that will allow them both to get a sense of whether this a good fit.

It helps if investors are clear on the infor­ma­tion they’re look­ing for — based on recent con­ver­sa­tions with investors and advi­sors, I’ve devel­oped a list of 25 ques­tions that investors can draw from, in nine dif­fer­ent cat­e­gories such as under­stand­ing your invest­ment phi­los­o­phy, the role of finan­cial plan­ning in your prac­tice, the team that you have sup­port­ing you, how you’re com­pen­sated and what you’ve advised clients over the past twelve months.

Some­thing for both investors and advi­sors to con­sider in this fact find­ing process is to write down a list of things you’re look­ing for before­hand. After an ini­tial meet­ing, you can com­pare the answers you got to this list.

A full list of the ques­tions investors can draw from in a con­ver­sa­tion with a poten­tial advi­sor can be found at the bot­tom of this arti­cle, or go to the bot­tom of the arti­cle at: http://​www​.the​globe​and​mail​.com/​g​l​o​b​e​-​i​n​v​e​s​t​o​r​/​i​n​v​e​s​t​m​e​n​t​-​i​d​e​a​s​/​f​e​a​t​u​r​e​s​/​e​x​p​e​r​t​s​-​p​o​d​i​u​m​/​t​a​k​i​n​g​-​t​i​m​e​-​t​o​-​f​i​n​d​-​a​n​-​a​d​v​i​s​e​r​-​m​a​y​-​b​e​-​y​o​u​r​-​b​e​s​t​-​i​n​v​e​s​t​m​e​n​t​/​a​r​t​i​c​l​e​1​1​6​9​3​84/

Get­ting a read­ing on chemistry

Once you’ve got a han­dle on basic facts, the sec­ond issue for investors and advi­sors alike is get­ting a read­ing on chemistry.

For investors, are they com­fort­able talk­ing to you? Do you ask good ques­tions? Do you really lis­ten to their answers and appear truly inter­ested in their sit­u­a­tion?  Do you talk in plain Eng­lish and use terms that are easy to under­stand?  Do they like you as a per­son and feel they could be absolutely open with you? Finally, do they get pos­i­tive vibes and feel that they could be con­fi­dent in the advice that you provide?

Under­stand that the deci­sion to work together is a mutual one

It’s not just investors who are mak­ing judge­ments  — advi­sors should also be get­ting a read­ing on investors and whether they’ll fit into their prac­tice. A point I made in the col­umn was that the best advi­sors can pick and choose and are dis­cern­ing about who they work with.

In the col­umn, I talked about a num­ber of ques­tions an advi­sor might be look­ing to answer:

Is the investor really seri­ous about enter­ing a rela­tion­ship with an advi­sor they can trust and about stick­ing to their plan?

What’s their his­tory of stay­ing the course when we hit bumps in the mar­ket? Are you look­ing at pan­icked calls about going to cash every time the mar­ket drops a few hun­dred points?

How real­is­tic is the investor about the level of risk required to achieve the returns they’re look­ing for? Do they have the emo­tional equi­lib­rium to deal with mar­ket volatil­ity? When things go wrong, is there a ten­dency to point fin­gers and look for some­one to blame?

Do they have a his­tory of switch­ing advi­sors every time there’s a down­turn? A trail of past advi­sors or his­tory of com­plaints is a huge red flag

Finally, are they pre­pared to pay a fair price for the advice they receive — or will you be fac­ing never end­ing bat­tles on com­mis­sion lev­els, with the cost of exe­cut­ing trades with dis­count bro­kers as the pri­mary point of comparison?

I’ve had great feed­back on this col­umn from both investors and advi­sors. At some point in the next few days, con­sider set­ting a few min­utes aside to review this list of ques­tions — and think about how you’d answer if a prospec­tive client put these to you.

If you’re inter­ested in read­ing the full arti­cle, click here:

http://​www​.the​globe​and​mail​.com/​g​l​o​b​e​-​i​n​v​e​s​t​o​r​/​i​n​v​e​s​t​m​e​n​t​-​i​d​e​a​s​/​f​e​a​t​u​r​e​s​/​e​x​p​e​r​t​s​-​p​o​d​i​u​m​/​t​a​k​i​n​g​-​t​i​m​e​-​t​o​-​f​i​n​d​-​a​n​-​a​d​v​i​s​e​r​-​m​a​y​-​b​e​-​y​o​u​r​-​b​e​s​t​-​i​n​v​e​s​t​m​e​n​t​/​a​r​t​i​c​l​e​1​1​6​9​3​84/

25 ques­tions for poten­tial advi­sors — This is the list of ques­tions for investors on the Globe website

To investors select­ing a new advisor

Below are 25 ques­tions you could ask a finan­cial advi­sor you’re con­sid­er­ing work­ing with, bro­ken down into nine broad cat­e­gories. These ques­tions were devel­oped based on in depth con­ver­sa­tions with investors who have recently selected a new advi­sor and with finan­cial advi­sors themselves.

This list may seem over­whelm­ing ini­tially but remem­ber, it is unlikely that you will use them all — pick the ones that are the most rel­e­vant for you.

These ques­tions should not be used as a laun­dry list to blast through — to get a good han­dle on whether you and an advi­sor will work well together, exploratory meet­ings have to con­sist of a con­ver­sa­tion, not an inter­ro­ga­tion.  That said, some of these ques­tions can be a start­ing point to learn more about an advi­sor you’re talk­ing to.

It’s impor­tant to note that there are some tough ques­tions on this list and some will require real thought by the advi­sor– seem­ingly sim­ple ques­tions may need com­plex answers. Rather than focus­ing on an advi­sor who pro­vides quick and glib responses, look for some­one who really thinks about your ques­tions and gives con­sid­ered responses.

Gen­eral background

1. Tell me about your­self?  How long have you been a finan­cial advisor?
2. What did you do before you became a finan­cial advi­sor? What made you decide to pur­sue this as a career?
3. What kind of qual­i­fi­ca­tions do you have? Tell me more about those qual­i­fi­ca­tions. What do you typ­i­cally do to each year to stay current?
4. Tell me about the firm you work with? What attracted you to this firm?

Fit and chemistry

1. We all have pref­er­ences in the peo­ple we work with. What’s the most impor­tant thing you look for in a new client? Describe the kind of client you find you work with best?
2. What’s the aver­age asset level of your clients? How many client house­holds do you work with — and where would my port­fo­lio fit in?
3. Tell me about the last cou­ple of clients who left you and took their account else­where. Have you had any client com­plaints to your firm in the past cou­ple of years?

Gen­eral approach

1. Do you typ­i­cally com­plete finan­cial plans for clients like me? What would be cov­ered in this plan? What would the process be to develop this plan?
2. I know that some advi­sors put their pri­mary focus on get­ting the invest­ment process right while some oth­ers also get into issues like insur­ance, tax plan­ning, estate plan­ning issues and retire­ment plan­ning. Where do you fall on this spectrum?

Invest­ment phi­los­o­phy and your portfolio

1. What’s your invest­ment phi­los­o­phy and process?  In your expe­ri­ence, how is this dif­fer­ent from other advisors?
2. What kind of changes would you rec­om­mend in my cur­rent port­fo­lio? Tell me more about about your rea­son­ing for these changes. Which of my cur­rent hold­ings would you sug­gest we retain?
3. I know that some finan­cial advi­sors build port­fo­lios of stocks and bonds for clients them­selves, some del­e­gate this to money man­agers and some do a com­bi­na­tion of the two. Tell me about your approach to this.
4. How do you go about build­ing port­fo­lios or choos­ing money man­agers? To what extent do you rely on research from your firm or out­side par­ties in select­ing stocks and money man­agers.? How do you go about mon­i­tor­ing port­fo­lios or money managers?
5. I under­stand that there are two schools of thought about try­ing to get in and out of the stock mar­ket. I know some advi­sors are fairly proac­tive about mov­ing parts of port­fo­lios to cash if they think the mar­ket is poised for a cor­rec­tion, while oth­ers believe you can’t effec­tively time when to get in and out and tend to be fully invested all the time. Where do you stand on this issue? As well, what’s your stance on mak­ing calls on get­ting in and out of indi­vid­ual sec­tors such as energy?

Com­mu­ni­ca­tion

1. How often do you typ­i­cally meet with clients like me?  How long do those meet­ings last? What do you cover in those meetings?
2. How have you been com­mu­ni­cat­ing with clients like me since last fall? What have you been doing dif­fer­ently as a result of the mar­ket events since September?
3. How fre­quently do you call clients like me between meet­ings? How long does it typ­i­cally take to return calls from your clients?

Com­pen­sa­tion

1. In ball­park terms, what would my annual fee be if we worked together, includ­ing fees charged by money managers?
2. How are you paid? What kind of money would you make on my account annu­ally? What would I get for that?

Sup­port

1. Tell me about the team that you have sup­port­ing you.
2. Would you be my pri­mary con­tact or would I be deal­ing with one of them day to day? What kinds of issues would I be talk­ing to them about as opposed to you?

The last 12 months

1. How did you posi­tion client port­fo­lios like mine going into the begin­ning of last year?
2. What kinds of changes have you rec­om­mended to clients since last fall? What kind of advice are you pro­vid­ing to clients like me today? What are you doing to man­age risk in client port­fo­lios in light of how uncer­tain things seem to be these days?
3. With­out get­ting into the actual dol­lar amounts, in gen­eral terms would you be will­ing to share what you held in your own port­fo­lio going into last fall and what your own port­fo­lio looks like today?
4. In your opin­ion, what are the most impor­tant lessons  you’ve learned as a result of the events of the past year?

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