Costa Mesa: "My income has taken a hit and I just don't feel I can afford to put on some of these intimate rainmaking events you described," said Mike during a break in one of my practice management workshops.
Every advisor with a fee-based business has felt the sting of this financial crisis. It's okay to identify with the first half of Mike's statement, but the rest of what he's attempting to articulate is, well, complete rubbish.
Contrary to conventional wisdom, now is arguably the best time to invest in serious, well-crafted high-impact rainmaking activities. Due to the transitional state of the economy and the fluid nature of people's finances, the amount of money in motion is unprecedented. Unfortunately, too many advisors are either thinking like Mike or simply don't know what to do. Therefore, by default, big pools of assets are being parked at the large custodians.
Rainmaking is a mindset. Period! Make no mistake about it. And people with money are desperate for advice and guidance; our research continues to tell us that they aren't happy with the kind of service they're getting. The two most important criteria for today's affluent in selecting a financial professional are:
· First impression of professionalism and competence
Mike, like too many advisors, was simply throwing in the towel. Yet we have witnessed many examples of advisors who make "summer rain on the cheap." The importance of this cannot be overstated. Why? Because affluent prospects must be introduced to you, get to know you and determine whether they like you before they will hire you. This introduction and interaction can then serve as a platform upon which you can win the trust of your affluent client (referral alliance partner, COI, etc). This in turn creates a window of opportunity within which your mission is to earn the prospect's respect on a professional level.
Just last week, Kevin, one of our outstanding performance coaches, was sharing a case in which one of his coaching clients held a wine-tasting event that landed her two new affluent prospects. The advisor's total investment was less than $120. Being a wine lover myself, I wanted the details.
The event was held at the advisor's house on the back deck. As for the food, the advisor prepared it all herself and matched it to the wine. There was no sit-down dinner, but well-prepared finger food did the trick as the wine was the focus. As for the wine, the FA had a friend in the wine business and was able to get a selection of good, interesting and inexpensive wines from South America at cost.
You can do the math. If Kevin's coaching client lands one of these two prospects, both with at least $1 million in assets (ever the optimist, she thinks both are coming onboard) at 1 percent, that's $10,000 gross, which at her 45 percent payout sends $4500 to her bottom line. Once you deduct the $120 for the wine event, $4380 has been netted. And that's not even taking into consideration the $4500 that will recur annually.
However, making "summer rain on the cheap" requires both creativity and courage. Not many advisors invite affluent clients and prospects to inexpensive events at their homes. Yet, planned and executed properly, these events can be very successful. As a result of the financial crisis, many societal norms have shifted; among them has been a move toward thriftiness and away from extravagance.
I am going to list a handful of inexpensive intimate client events that our rainmaker coaching clients have used, with great success I might add:
Inexpensive Intimate Events (<$150)
· A Women-Only Informational Tea Party. Widow clients and friends, female clients and friends, spouses of clients and friends.
· Backyard BBQ. Two clients with families, two friends of clients with their families, and CPA with family.
· Local Theatre Events. Three couples, client, prospect and a center-of-influence, with coffee and dessert following the show.
· Outdoor Concerts. Advisor brought box lunch and beverages. Group consisted of three clients, two prospects, and a CPA.
· Fly-Fishing Classes. Back room of a high-end outdoor sporting goods store, advisor provided pizza and beer. Group consisted of four clients and six prospects.
· Gardening Classes. Local nursery, no food or beverages, group consisted of five clients and three prospects.
· Pontoon Boat Outings. Picnic lunch, wine and beer, two clients and two prospects.
· Local Art Gallery Tour. Advisor provided wine and snacks, seven clients and four prospects
With the proper mindset, Mike, like every other financial advisor, could afford to hold an event similar to those I've listed above. But they require creativity and a solid dose of courage. That's work. Here are some simple guidelines to follow that should help:
1. Identify clients with whom you want to schmooze.
2. Select the appropriate event, something both you and your clients will enjoy.
3. Source a name from each client's center-of-influence.
4. Organize the event logistics; tickets, location, food, etc.
5. If possible, have two tentative dates.
6. Personally contact each client and enthusiastically invite them and a friend to this FUN event.
7. Follow-up within a week to get a head count. Granted, none of this seems complicated, and it's not. Yet it does require you to know your clients, take a small leap of faith, make a personal commitment, and have an active rainmaking antenna.
Mike may not have been ready for a performance driven coach like Kevin. However, if you would like to determine whether you're prepared to take your business to a new level and make some "summer rain" take a FREE Coaching Readiness Assessment. You don't want to waste your time and money if you're not ready.
Once again, we want to thank all of you who have emailed comments and questions to us. We will continue to do our best to answer each one.
If you have any topic suggestions or special requests, please contact Rich Santos, publisher of Registered Rep. and Trust & Estates magazines, at [email protected].