1 of the best seminars I've ever attended

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Apr 26, 2006 10:55 pm

I went to a seminar today that I thoroughly enjoyed.  The guy leading it personally did almost six million in gross revenue last year, and he takes the summer off!  He runs an indy business in Nebraska of all places, and just does an unbelievable job.  Although he's an indy, and some of the stuff was advice specific to indys (staff hiring and management, etc.), there was plenty of good stuff for just about any advisor.  While, I didn't necessarily buy into all of it, here's a few interesting things I came away with...


Small changes in how you operate have a profound effect over longer periods of time.


Absolutely set account minimums and remember that the $2,000 commission you earn today may be the bulk of your payment for servicing the account for the next 20 years ($50,000 example)


An hour spent with an A+ client is equal to at least 300 cold calls.  He's also very down on direct mail (everybody does it).


He's a believer in referrals over prospecting and says that clients will buy into this when they realize that if they don't refer others, their advisor will be spending time prospecting when he/she should be managing client investments.  He actually tells clients that he is compensated 50% from fees and 50% from referrals.


About 150 clients is the maximum number that an advisor can effectively work with.  This came from an unrelated industry study by a group that I can't recall at the moment, but the speaker seemed to feel that it applied to the investment management industry.  As busy as I feel with my client base, I think he might have a point here.


The average business never hears from 96% of it's unhappy customers.  For every complaint received, the average company has 26 customers with problems, 6 of which are "serious" problems.


A study of 50,000 businesses showed that the top 20% of clients generated a profit margin of +220%, while the remaining 80% of clients generated a profit (loss) margin of -120%.  You are paying for the right to do business with 80% of your clients. (source: Gallup)  That's the old 80/20 rule emphasized in a new way for me.


"D" clients have nothing to do with account size.  They are people you don't like and don't get along with and who should do business down the street.  They are not worth the negative energy and should be fired regardless of size.  The guy actually told us that he had a difficult client with five million under management that he fired...that had to take some **lls...


Don't fire "B" & "C" clients (dance with the ones that brought you), but it is OK to transition them to an associate for primary contact when you are too busy to adequately service them.


That's just a few of the many points he made and needless to say, he's got my wheels turning on how to build a better business.  Some of you may recognize this guy, and that's fine...for the purpose of this post, it's not important.  My advice is, if you ever get a chance to spend a day with a multi-million dollar producer and see what makes him/her tick, I'd say it would be well worth your time.

Apr 26, 2006 11:15 pm

1 of the best posts I've read on this board in a LONG time!


Thanks Indyone!

Apr 27, 2006 2:05 am

Sounds like Ron Carson. Good stuff.  I agree, best post in a long time.

Apr 27, 2006 8:54 am

I was just going to say that Guest.  As an Omaha resident, I know he's done a number of those seminars throughout the state, too.  Largest LPL producing office in the company.  Good guy, knows his stuff.

Apr 27, 2006 9:03 am

Barron's has him listed as one of the country's top 100 brokers.  I believe somewhere around #25.

Apr 27, 2006 10:04 am

I think they said #24 to be exact...

Apr 27, 2006 10:53 am

You take good notes.   Very good points. 

Apr 27, 2006 11:09 am

"An hour spent with an A+ client is equal to at least 300 cold calls".


As many of you may know, I have spent many hours in the past doing strategic cold calling to 2-3 different niche markets. I have built up a decent client base at this point. One of the initiatives for '06 was to spend more time speaking with my best clients. I have made it a point to at least speak with one of my best clients every day of the week. I have found that by reviewing their strategy, strengthening the lines of communication, etc. that that has been a very productive way of garnering referrals and other assets.


Sometimes we all can get lost in the daily grind of prospecting, etc (especially yours truly) but I feel that we may lose sight of our most valuable business assets at times- the current client.

Apr 27, 2006 11:36 am

It's totally the same with recruiting.  There are those that you will benefit greatly from by simply speaking to on a regular basis as opposed to consistently filling the pipeline.

Apr 27, 2006 11:40 am

Wow, what a great thread. Congrats, Indy 

Apr 27, 2006 11:42 am
Indyone:

"D" clients have nothing to do with account size. They are people you don't like and don't get along with and who should do business down the street. They are not worth the negative energy and should be fired regardless of size. The guy actually told us that he had a difficult client with five million under management that he fired...that had to take some **





Nice post.



One thing to expand on the D clients. Not only are they negative when you talk to them you have to remember they live and work in the communities in which you do business. Everytime the topic of investments comes up, there's a good chance they are being negative about you to their buddies and co-workers when in reality you are doing a great job. There is a good chance that those buddies and co-workers remember your name if you come up in another conversation, "Oh so and so works with him, and doesn't have anything good to say." Essentially creating negative referrals for your business throughout the community.



The sooner you get rid of the negative clients in your book the more efficient and productive you and your book will be.



Apr 27, 2006 1:33 pm
Moneytree:
Indyone:

"D" clients

have nothing to do with account size. They are

people you don't like and don't get along with and

who should do business down the street. They are

not worth the negative energy and should be fired

regardless of size. The guy actually told us that he

had a difficult client with five million under

management that he fired...that had to take some

**





Nice post.



One thing to expand on the D clients. Not only are

they negative when you talk to them you have to

remember they live and work in the communities in

which you do business. Everytime the topic of

investments comes up, there's a good chance they

are being negative about you to their buddies

and co-workers when in reality you are doing a great

job. There is a good chance that those buddies and

co-workers remember your name if you come up in

another conversation, "Oh so and so works with him,

and doesn't have anything good to say." Essentially

creating negative referrals for your business

throughout the community.



The sooner you get rid of the negative clients in your

book the more efficient and productive you and your

book will be.







First of all, great thread. Very interesting stuff. I agree

with you Tree, but I also want to point out that you

always have to salvage as much of the relationship

as possible. "Firing" a client does not stop him/her

from talking dirty about you behind your back. Even if

the relationship has to be let go, it should be done in

a manner that does not incite the former client to

offer negative remarks when a situation about

you/the industry is brought up.

Apr 27, 2006 2:38 pm

I'm pleased that several of you are getting value from this thread and I appreciate all the kind words and encouragement.  It is refreshing to be able to listen to a successful advisor who is not afraid to share some excellent "trade secrets".  As I said before, if you get the opportunity to hear a highly successful advisor share secrets of his/her success, take advantage of it...it may be the best investment you ever make in your career.


Great responses, BTW...what a love-fest...

Apr 27, 2006 3:36 pm

Warren Buffet is in Nebraska, of all places, too. 

Apr 27, 2006 7:13 pm

WOW! How inspiring Indy thank you!


MoneyTree, that's a great point too. We recently lost an account which doesn't happen often, but when it does you kind of stew on it. Looking back though we can see we were battling "well intentioned" family members and having to "prove" or argue investment theory. Had we clipped that lady a long time ago we would have been time ahead!

Apr 27, 2006 8:02 pm

Good posting, Indyone.