Behavioral Economics & Prospecting

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Sep 22, 2010 5:41 pm

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.

Sep 22, 2010 7:21 pm

Fear of taxes is pretty good prospecting bait, too.

Sep 22, 2010 7:24 pm

[quote=tenthtee]

Fear of taxes is pretty good prospecting bait, too.

[/quote]

LOL the trifecta!

Sep 22, 2010 9:56 pm

It's why annuities sell so damn well in any market!  Fear sells...

Sep 22, 2010 11:10 pm

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.

Sep 29, 2010 12:09 pm

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.

Sep 29, 2010 12:15 pm

#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?  

Sep 29, 2010 12:30 pm

EIAs...