Introduction, cold calling help, DNC lists

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May 21, 2012 7:37 pm

I have been lurking on the forums here for some time and decided it was time to step up and join.  Wanted to introduce myself and ask a little about cold calling campaigns.  I'm a 28 year old RIA Rep, only been on this side of finance for about a year.  Spent 4 years as a prop trader (30mm buying power) before leaving to take a vacation from the financial world, returned and became re-registered with a small Independent BD/RIA last July.  Our business is mainly fee only asset management, and hourly financial planning/insurance.

So far, all my business has come from developing relationships through existing professional contacts.  I have completely avoided prospecting to friends and largely avoided cold calling.  I'm not about to start chasing after my friends (if they want help they can come to me).  But I am barely staying afloat, so I need to step it up and do some serious cold calling.

I have read many existing threads on cold calling and seen a lot of great stuff.  BondGuy, KingBobby, All the Way, and more have been a big help so far, thanks to all of you and more for sharing!  One thing I keep noticing, however, is that most posters (except All the Way) seem to be calling to offer a product, bond or a specific fund.  I understand the importance of talking about something interesting in order to grab the prospect's interest.  However, with the way we work it doesn't seem to make much sense for me to call offering a product only to switch tone at the appointment.

I have two goals when I call people (with what calling I have done):

Qualify/disqualify

Set an appointment

If I can only accomplish one of those, it's to set the appointment and I'm happy with that.  So far I have set one appointment this way with approx 100 calls, lfetime.  Yeah, I know, that's nothing.  That low number is reflective of my dislike of cold calling.  I should say HATE, actually.  But, I need to get over it and step it up severely if I'm going to reach my goals.

Scripts:

Are there any good threads I should see about how to do this for someone in my shoes?  I know that "fee-only asset management" isn't a phrase that makes a prospects ears perk up.  There has got to be a way to make this work though.

Here is what I was working with before:

Residential:

Me:  good afternoon, mr-----, this is ------ from ------ Financial Management here in -----.  We're a family investment management company and we've helped many ----- membes with their retirement planning and investment accounts.  The reason I'm calling you today specifically is to set an appointment to talk about how we have been able to help them manage risk in their investment accounts.  I'm sure that you, Mr. -------, like the other ------ members we work with, are concerned with how risk is being handled in your retirement portfolio.

Prospect:  Yes, I am.

Me:  that's a good concern to have, Mr. ------, we should get together.  How's Tuesday at 3:00?

Prospect:  No Thanks

Me:  Thank you for your time, Mr. ------.  Would you be interested in receiving periodic educational information by mail or email?  Anything your specifically interested in?

....end call after that.

Businesses:

Good afternoon mr.------, this is ------- with ------- Financial Management here in ------- and I'm calling today to set an appointment to come in and speak with you.  We've been visiting small and medium-sized businesses near you and giving a brief educational seminar for employees.  What we've found is that a short presentation and Q&A session can help employee morale and reflect positively on the employer, showing you're invested in them.  When was the last time your employees had a financial review like that?

Great, I would love to come talk to you and see if and when this might be helpful for your company.  How is next Tuesday at noon?

Lists:

I have a list, but no idea if it's any good.  It's a professional organization membership list, and all the numbers are business numbers.  So, no DNC troubles at least.

I have seen several of you say you build your own residential lists.  I can find all the numbers/addresses a number of ways for free, but I always get slowed down by DNC.  Running them through the DNC 10 at a time just isn't realistic it seems.  I can download them in excel format 250 records at a time, but havent figured out a way to clean the lists after that.  How are you guys doing it?

Sorry for the long first post, figured I'd just put it all out there.  Any tips/criticisms or threads will help, thanks!

May 22, 2012 2:15 am
prop2fee:

One thing I keep noticing, however, is that most posters (except All the Way) seem to be calling to offer a product, bond or a specific fund.; I understand the importance of talking about something interesting in order to grab the prospect's interest.  However, with the way we work it doesn't seem to make much sense for me to call offering a product only to switch tone at the appointment.

I understand why you don't want to switch tone at the appointment and throw the prospect a curve ball from what interested them in the first place, but why would you? You can place the product (that they wanted to talk to you with in the hypethetical) into a fee based account and then chip away with more until you have a full fledged client the way you envision. It just isn't all at once, upfront. The all-or-none can leave you with none as opposed to some survival money and a much better leverage for further penetration.

I'm not saying this is the absolute or only way to go, just making sure you're not disregarding your opportunities. Talking about risk and reviews has to be a brutal way to generate interest. All The Way can probably give you some pointers but I know he keeps it real simple and concise. Lots of trial and error, so try to enjoy it at least a little!

May 22, 2012 9:49 am

[quote=KingBobby][quote=prop2fee] You can place the product (that they wanted to talk to you with in the hypethetical) into a fee based account and then chip away with more until you have a full fledged client the way you envision. It just isn't all at once, upfront. The all-or-none can leave you with none as opposed to some survival money and a much better leverage for further penetration.[/quote]

Very true.  I did think about this yesterday as I was reading, and may save it for a backup script.  Mainly I'm concerned about selling a bond when premiums are so high, having the client watch their principal fall as soon as rates rise, and then not trusting me enough to bring the rest over.

May 23, 2012 8:44 pm

The bond is simply the tool, if you'd rather lead with a preferred stock or CD or UIT or whatever, that's fine too. The point is to lead with something that has a tendency to create action.

Also a tidbit about the bonds, clients know that interest rates will eventually rise and their principal will decrease in value, if they consider selling. They still buy the bonds. And they know they don't lose principal if they hold until maturity. They can buy more when rates increase, and they don't have to worry about their current interest payments declining. Most just buy for the income element.

May 24, 2012 11:23 am

Yeah, I definitely see how that can make it easier to open up a relationship.  What I have to do is figure out one or two things I want to lead with, figure out how I even process those orders (have not done anything but discretionary accounts yet), and learn them backwards and forwards.

I get that they're buying for the income element, but are those mainly retirees or pre-retirees?  Since it's much harder to dial residential I will mainly be focusing on current business owners.

One more question - I have a professional niche that I serve with my clients here in town.  I know a few other professionals that have helped me break into that niche.  It's not an easy place to gain respect, but I'm doing it slowly.  For a medium sized city, it's a pretty tightly knit community within that niche.  I'm a bit weary of also cold-calling those offices, for fear of harming what reputation I have been able to build.  I'm thinking I may have more to gain by focusing on another niche with my cold calling.  Thoughts on that?

May 24, 2012 12:23 pm

[quote=prop2fee]

[quote=KingBobby][quote=prop2fee] You can place the product (that they wanted to talk to you with in the hypethetical) into a fee based account and then chip away with more until you have a full fledged client the way you envision. It just isn't all at once, upfront. The all-or-none can leave you with none as opposed to some survival money and a much better leverage for further penetration.[/quote]

Very true.  I did think about this yesterday as I was reading, and may save it for a backup script.  Mainly I'm concerned about selling a bond when premiums are so high, having the client watch their principal fall as soon as rates rise, and then not trusting me enough to bring the rest over.

[/quote]

It doesn't matter if rates go to 500% and one day before maturity the bond is worth $.01, on maturity they get their last coupon and their $1,000 back. I have switched to specializing in muni bonds and being an expert in tax free income. I work safety and the fact that munis V. tresuries used to be at .80 and now it's around 1.20 and it's TAX FREE. There is so much money in M2 and it isn't doing anything. Call someone, ask them if they have CDs, cash, what are they earning? A, AA, AAA muni bonds can get them a better yield and the default on munis (even V corporate) so much in their favour right now. If they are holding bond funds they are going to get MURDERED when rates kick up because as rates drop they sell off their bonds at a profit and work their way down the V, when rates go back up, they have to start buying and the funds are going to get killed. There is so much with bonds you can do and your prospects cannot really do on their own. Once you have them as a client, you can work with them and say you do situational X and give them some ideas. Earn their business and then demonstrate you know what you're doing and your a good FA.

One of the problems I had is I spent 3 months trying to go for the whole asset pie and I didn't get very far. I'm having much better progress building my pipeline and getting money in the door. I did $100,000 this week. I'm shooting for $100,000 a week which is going to have me blow through my hurddles. I'll get some fee based as I go along but it's much easier and much more honest when you call about a GOOD product that HELPS them.

May 24, 2012 1:35 pm
prop2fee:

I get that they're buying for the income element, but are those mainly retirees or pre-retirees

Ideally they're already bond buyers. I'll second what Ulairi said, with so much money in M2, that's where you want to be positioning the bond offer against when dealing with non-buyers. I've never targeted retirees, may work fine though.

May 24, 2012 1:41 pm

[quote=Ulairi]

[quote=prop2fee]

[quote=KingBobby][quote=prop2fee] You can place the product (that they wanted to talk to you with in the hypethetical) into a fee based account and then chip away with more until you have a full fledged client the way you envision. It just isn't all at once, upfront. The all-or-none can leave you with none as opposed to some survival money and a much better leverage for further penetration.[/quote]

Very true.  I did think about this yesterday as I was reading, and may save it for a backup script.  Mainly I'm concerned about selling a bond when premiums are so high, having the client watch their principal fall as soon as rates rise, and then not trusting me enough to bring the rest over.

[/quote]

It doesn't matter if rates go to 500% and one day before maturity the bond is worth $.01, on maturity they get their last coupon and their $1,000 back. I have switched to specializing in muni bonds and being an expert in tax free income. I work safety and the fact that munis V. tresuries used to be at .80 and now it's around 1.20 and it's TAX FREE. There is so much money in M2 and it isn't doing anything. Call someone, ask them if they have CDs, cash, what are they earning? A, AA, AAA muni bonds can get them a better yield and the default on munis (even V corporate) so much in their favour right now. If they are holding bond funds they are going to get MURDERED when rates kick up because as rates drop they sell off their bonds at a profit and work their way down the V, when rates go back up, they have to start buying and the funds are going to get killed. There is so much with bonds you can do and your prospects cannot really do on their own. Once you have them as a client, you can work with them and say you do situational X and give them some ideas. Earn their business and then demonstrate you know what you're doing and your a good FA.

One of the problems I had is I spent 3 months trying to go for the whole asset pie and I didn't get very far. I'm having much better progress building my pipeline and getting money in the door. I did $100,000 this week. I'm shooting for $100,000 a week which is going to have me blow through my hurddles. I'll get some fee based as I go along but it's much easier and much more honest when you call about a GOOD product that HELPS them.

[/quote]

This is assuming you buy new issues only.  I have never done that, so clearly I have some learning to do.

May 24, 2012 2:19 pm

[quote=prop2fee]

[quote=Ulairi]

[quote=prop2fee]

[quote=KingBobby][quote=prop2fee] You can place the product (that they wanted to talk to you with in the hypethetical) into a fee based account and then chip away with more until you have a full fledged client the way you envision. It just isn't all at once, upfront. The all-or-none can leave you with none as opposed to some survival money and a much better leverage for further penetration.[/quote]

Very true.  I did think about this yesterday as I was reading, and may save it for a backup script.  Mainly I'm concerned about selling a bond when premiums are so high, having the client watch their principal fall as soon as rates rise, and then not trusting me enough to bring the rest over.

[/quote]

It doesn't matter if rates go to 500% and one day before maturity the bond is worth $.01, on maturity they get their last coupon and their $1,000 back. I have switched to specializing in muni bonds and being an expert in tax free income. I work safety and the fact that munis V. tresuries used to be at .80 and now it's around 1.20 and it's TAX FREE. There is so much money in M2 and it isn't doing anything. Call someone, ask them if they have CDs, cash, what are they earning? A, AA, AAA muni bonds can get them a better yield and the default on munis (even V corporate) so much in their favour right now. If they are holding bond funds they are going to get MURDERED when rates kick up because as rates drop they sell off their bonds at a profit and work their way down the V, when rates go back up, they have to start buying and the funds are going to get killed. There is so much with bonds you can do and your prospects cannot really do on their own. Once you have them as a client, you can work with them and say you do situational X and give them some ideas. Earn their business and then demonstrate you know what you're doing and your a good FA.

One of the problems I had is I spent 3 months trying to go for the whole asset pie and I didn't get very far. I'm having much better progress building my pipeline and getting money in the door. I did $100,000 this week. I'm shooting for $100,000 a week which is going to have me blow through my hurddles. I'll get some fee based as I go along but it's much easier and much more honest when you call about a GOOD product that HELPS them.

[/quote]

This is assuming you buy new issues only.  I have never done that, so clearly I have some learning to do.

[/quote]

I'm not pitching new issues only. Most of the bonds I'm pitching are priced at a premium but they know that they want the income. 

May 24, 2012 2:39 pm

Ok.  My point was that they'll lose that premium at maturity, so that has to be factored in.  Granted it is not a matter of risk, just has to be adjusted for when calculating the return.  YTM on most of the ones I'm looking at right now, for 2017-2018 maturities (considering a certain client) are all below 2%.

May 24, 2012 6:15 pm

I'm not questioning here, just wanting to learn.  I guess 4 or 5% income tax free is about as good as it gets right now, even with a reduction in principal.

May 24, 2012 6:31 pm
prop2fee:

Ok.  My point was that they'll lose that premium at maturity, so that has to be factored in.  Granted it is not a matter of risk, just has to be adjusted for when calculating the return.  YTM on most of the ones I'm looking at right now, for 2017-2018 maturities (considering a certain client) are all below 2%.

Yeah you're right, they lose the premium of course, but get the face value. The YTM factors that as you know. The shorter maturies don't pay much so it's difficult to prospect with those. If they want the shorter maturity, great, if not that's ok too. Most people will want 10% YTM with 5 year term.. than they come back down to earth and weigh their options.

May 24, 2012 8:39 pm

Pitch some taxable bonds right now. I don't know what your inventories look like, but we have an A rated corporate (financial) bond a little over 2 years with a yield of 4%. For the same return you would need a muni paying 2.5%. Good luck finding that.
Financials have been crushed the last few weeks (JPMorgan losing $3b, MS messing up FB IPO). Their bonds have been dumped. Are they in trouble? Maybe. Will they be out of business is 2 years? Highly doubt it.

May 24, 2012 9:38 pm

[quote=Hacksaw]Pitch some taxable bonds right now. I don't know what your inventories look like, but we have an A rated corporate (financial) bond a little over 2 years with a yield of 4%. For the same return you would need a muni paying 2.5%. Good luck finding that.
Financials have been crushed the last few weeks (JPMorgan losing $3b, MS messing up FB IPO). Their bonds have been dumped. Are they in trouble? Maybe. Will they be out of business is 2 years? Highly doubt it.[/quote]

Our inventory is pretty good and I'm able to find some good stuff. Plus, if I call our FI desk saying I have $100,000 they'll find stuff. 

May 24, 2012 10:24 pm

I emailed our bond desk today to ask how I would go about finding out what we have.  Didn't hear back.

I actually closed my NFS brokerage account a couple months back because I wasn't using it and didn't want to keep paying the monthly fee.  They're going to like me a lot when I call back asking them to re-open it.

Ulairi, do you mind if I ask what firm you're with?  No biggie if you don't want to say.  I'm with an independent but I imagine we have some inventory.  I get a lot of emails from our FI desk, but a lot of it isn't really suitable for most clients...rev-cons, subordinates, variable rate CD's, etc.

May 25, 2012 10:37 am

I'm with a wire house so one of the big benefits is our bond inventory. Plus, some of the senior FA's in my office built their book pitching bonds and they have been very helpful finding me good bonds to pitch. I'm pretty much going to position myself as a FI guy and try to win that business and then do situational equity work.

May 31, 2012 3:08 pm

[quote=Ulairi]

I'm with a wire house so one of the big benefits is our bond inventory. Plus, some of the senior FA's in my office built their book pitching bonds and they have been very helpful finding me good bonds to pitch. I'm pretty much going to position myself as a FI guy and try to win that business and then do situational equity work.

[/quote]

Got ya.  I don't have much help in that area.  I'm going to be trying a few different pitches with a few different audiences.  Throw a lot and see what sticks.

I should be starting either tomorrow or Saturday.  I have turned my home office into a "war room".  Cleared my desk, put up a markerboard for motivation/numbers tracking, bought a skype line to make sure my prospects can all hear me (I was using my cell phone before since I work remotely).  I have an extremely fast desktop computer I built for trading so the skype phone has no issues at all.

Building my lists, getting scripts ready to go, blocking off  1.5 days a week for meetings - most of my clients I already meet on Fridays anyways.  Minimizing the "networking" events I'm going to and instead setting aside a little more time each week to keep in touch with the good contacts I have already made.  That trade-off will save me a lot of time and $ while deepening those relationships.

I have no romantic notion that this is going to be easy, I personally hate cold calling.  But if I want to build this from the ground up, which I am as a new FA in an independent shop, I don't have a choice.  Gonna dial dial dial, keep reminding myself of some choice points I've pulled off of here and other sales articles, and keep grinding.  When I start, I'll start a progress thread as others have done.

Time to make things happen.