Behavioral Economics & Prospecting
I've been on another fixation. The last was gaming theory but now It's 'behavioral economics'
Kahneman & Tversky - "People feel more strongly about the pain that comes with loss than the pleasure that comes with gain, about twice as much"
I guess that's why my hedge your account against loss vs. are you open to new ideas call seems far more effective.
The fear of loss is far more powerful than I thought.
Fear of taxes is pretty good prospecting bait, too.
LOL the trifecta!
I have been running my biz like an RIA, but have forced myself to take a fresh look at the new annuities and all insurance. Renew my attitude with the times.
Have seen a big difference in trying 2 types of prospecting...
1) I was quoting past returns...then asking people if they would be interested in these returns.
"we returned 29.41% YTD so far, with 4% being the lowest draw down. Would these returns be something you would be interested in?"
--people get very skeptical about a broker barking out return info at them...they prob think you can just make up any number you want and throw it at them.
2) Just using a simple calling script...
"are you an investor, and if so, are you open to diversification ideas? (yes)....ok, if I could show you how to hedge an account against further loss, and use 80%+ probability in your favor, would you be interested?"
#2 has worked a lot better.
#3 works pretty good too....
You're making zero percent at the bank. I've got a tax free bond from the university you graduated from paying 4%, it is investment grade, and the interest is free of state, local, and federal taxes. Oh, you can buy it without paying a commission. Does this appeal to you, or anyone you know?