Lack of Urgency

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Feb 24, 2010 10:28 am

I am coming across a severe lack of urgency from many prospects. It seems now that because they have heard so much over the years about "sitting tight" and "riding it out" that they are unwilling to even have a developed financial plan or a second opinion on whether or not they should sit tight with what they have. Even those in cash are just sitting there because they don't want equities or 1% CD's. Any help on how to drag people off the fence besides yelling moron at them from 3 inches away ?

Feb 24, 2010 10:53 am

There  are two emotions:  Fear and Greed.


I've taken those in equities and put them into VAs with a living benefit.  Those who are sitting in cash earning 1% have been moved to individual investment grade bonds where they are now earning 4-6%. 
 
Feb 24, 2010 12:57 pm
Ron 14:

I am coming across a severe lack of urgency from many prospects. It seems now that because they have heard so much over the years about "sitting tight" and "riding it out" that they are unwilling to even have a developed financial plan or a second opinion on whether or not they should sit tight with what they have. Even those in cash are just sitting there because they don't want equities or 1% CD's. Any help on how to drag people off the fence besides yelling moron at them from 3 inches away ?


 
 
Yes, that is exactly what I am seeing.  While I have some 401k rollovers on the smaller side in the works, the bigger ones are not moving for me right now.  One lady would rather keep hers in her plan earning a supposed 5% mmkt return (that's what she says), than moving into the annuity she originally wanted with a 10% bonus and 8% income growth.  Another guy, who is a client, claims to be "too busy with work and his family" to sit down for a 1/2 hour meeting to review his account already with me, and talk about the old, old 401k which he said he was going to move 6 months ago, and now the old 401k from the company he just left.  I have several more clients and prospects just like these two.
 
I need more prospects because this can't be typical of everyone.
Feb 24, 2010 2:09 pm

That is the exact same crap I am getting. Getting more prospects would help, but I see a ton of people being a bank boy and these type of responses are happening daily. And like you said, it is happening with current clients as well.

Feb 24, 2010 2:22 pm
Ron 14:

That is the exact same crap I am getting. Getting more prospects would help, but I see a ton of people being a bank boy and these type of responses are happening daily. And like you said, it is happening with current clients as well.


 
Yeah, it's tough out there right now.  I really think you have to position yourself in a way that says, "Look, the market is shaky at best, the economy is in a tug-of-war between jobs and growth, and yields are still not attractive in many areas.  Most investors haven't gotten anywhere in the last 10 years.  We have strategies that proved successful through 2008 that I can show you from real statements.  Also, we are protecting against higher interest rates, taxes, and inflation while potentially making money in the market through blah blah blah.  I know you this may not be at the top of your priority list, but let me show you what has been working, and when you are ready, you'll have that much more information to go on".
 
I don't know, not great, but whatever.
Feb 24, 2010 2:25 pm

Whose statements are you providing to the prospect?

Feb 24, 2010 2:39 pm
Wet_Blanket:

Whose statements are you providing to the prospect?


 
I have blanked out ones as examples.  Depends on the product.  Not sure of the legality of it, but if I happen to leave it on the desk........
Feb 24, 2010 2:44 pm
Ron 14:

I am coming across a severe lack of urgency from many prospects. It seems now that because they have heard so much over the years about "sitting tight" and "riding it out" that they are unwilling to even have a developed financial plan or a second opinion on whether or not they should sit tight with what they have. Even those in cash are just sitting there because they don't want equities or 1% CD's. Any help on how to drag people off the fence besides yelling moron at them from 3 inches away ?


Start with say 10-20% of their money, don't try to move it all at once. Use the notion that you have plans for any three things that can happen in the market. It can go up, it can go down, or it can go sideways. Make sure that their financial plan isn't contingent upon making money in only one of the directions (most likely it's positioned to make money if the market goes up only).
 
Do you market CMO's to them at all? It can be better than bonds (principle payback vs. interest only for duration of bond, unless called) and works great in an environment where interest rates may go up. If they are concerned about a sideways market, go back to dividend paying stocks. You aren't handcuffed by capital appreciation concerns.
 
Mostly, start with SOME of the money not ALL of the money. Otherwise they will be paralyzed by the idea.
Feb 24, 2010 4:06 pm

True. People being paralyzed is part of it. I was just in my car for 5 minutes and heard the following commercials on sportsradio: Fidelity, Farmers Insurance, Country and Townstone Financial. Unreal.

Feb 24, 2010 4:30 pm

People aren't responding because they don't believe you have the answer. They perceive you as part of the problem, not part of the solution. There is no trust. And, why should there be?

 
Are you offering real solutions? Don't answer that here, I'm not asking you to defend what you are doing or not doing. Only giving you a way to think about solving your problem.
 
Then again, maybe you aren't making enough calls.
Feb 24, 2010 4:50 pm

I see your point. The thing is a majority of these people don't even know they have a problem. What kind of questions to you guys ask to get them to realize, "Crap, maybe I should evaluate what I am doing" ?

Feb 24, 2010 4:50 pm
snaggletooth:
Wet_Blanket:

Whose statements are you providing to the prospect?


 
I have blanked out ones as examples.  Depends on the product.  Not sure of the legality of it, but if I happen to leave it on the desk........
 
Hahaha.  You would be surprised HOW MUCH this board has helped me with my Compliance Career.  People can't pull sh*t on me, because of all the "tricks of the trade" you guys have taught me.
 
I by far am no ball buster, but I constantly amaze sales, marketing, and my reps with the stuff I peg them for.
Feb 25, 2010 10:03 am

Ron, I' m taking your original question in the context of an opening prospecting call.  My prospecting pitch is a take it or leave it appeal to greed. I know that doesn't sound pretty, but it's works. Banks spend millions, if not billions running ads that advertise rate. I do the same thing, only i'm active versus passive. I go to them rather than sitting back and letting them come to me. That's what phone prospecting is all about.  If I even so much as get a whiff of "No" I'm gone and on to the next call. My job is to find people who are interested today. I'm finding prospects, not creating them.

 
That said, you could use disturbing questions, the kind you would use in a face to face meeting, on a first call. After you intro yourself, ask them a disturbing question or two. Examples would be "Are you happy with your portfolio's return? "Are you happy with your advisor?" 'Has your portfolio recovered from last year's drop?"
 
Etc, etc, etc...
 
If they say they're OK, move on. Believe me when i tell you this, there are millions of people who aren't happy.
 
Lastly, you could come at them with a product, an equity linked CD, a step up CD, or something a little more exotic then what they're going to get athe bank. Pitch it in one or two sentences and ask if they'd like info. Again, appeal to greed to gain a seat at the table. Once the account is opened you have an insiders seat to build trust, show them the wonder of Ron 14, and knock any other contenders out of the box. Sounds corny, it works!
Feb 25, 2010 10:09 am

Bondguy - Thanks. I guess I have struggled with ONLY getting a seat at the table when I know they have more out there. I feel I have been able to get a lot of small orders (25-50k in Short Term Muni Fund for example) but not their "MAIN" acccount.

Feb 25, 2010 10:33 am

Keep coming to them with good ideas. Smother them with service. Show them you are different. You may never get their main account. Let them know you are more than a one trick pony. Remember, they decide the level of the relationship, not you. You have to respect that while realizing that no doesn't mean never, it only means not now.

Feb 25, 2010 3:36 pm
BondGuy:

Keep coming to them with good ideas. Smother them with service. Show them you are different. You may never get their main account. Let them know you are more than a one trick pony. Remember, they decide the level of the relationship, not you. You have to respect that while realizing that no doesn't mean never, it only means not now.

One of my better accounts came that way.  I had about $70K with a couple that I knew made good money and had at least some money elsewhere.  I've talked about this before, so long story short, after a review about 18 months ago, he dropped off their Jones statement to get my opinion.  I spent significant time the next week researching all the individual positions (over 60) and wrote several pages of narrative that I reviewed with them at a meeting.  I didn't bash the guy.  I didn't have to.  The end result was that they moved almost a mil over because I took good care of them and acted prefessional about my competitor, after he had held a 15-minute meeting with them and said "I wouldn't change a thing" when the markets were collapsing all around them.
Feb 25, 2010 4:00 pm

Thanks for the help guys. Good stuff.

Feb 25, 2010 4:18 pm
Ron 14:

Thanks for the help guys. Good stuff.



Tagging on what BG has been saying, I have had some increasing success selling against the "advisor down the street" by telling a different story, an "anti equity bias" story. I tell them (in more client friendly language) that my goal is subdued growth without such great volatility. Lower the deviation, shoot for a comfortable goal, and tailor risk tolerance around it.

I then talk about my focus on a diverse fixed income portfolio with some targeted equity holdings. I've found that if I talk about the things they are already scared about and make it sound like I have already built those concerns into a portfolio ahead of time, I have far less resistance when presenting the actual investments.

In short, I try to highlight my philosophical difference between most other advisors, couple that with some service highlights I commit to in my practice, and I have opened some previously locked doors lately.

Feb 25, 2010 4:48 pm

sometimes - I like that and it is definitely something I can use with bank customers who are ultra conservative by nature

Feb 25, 2010 9:16 pm

I am starting to do small dinners, with clients and prospects. I am showing them that I'm different by talking about strategic vs tactical. My contention is that there is a good case to be made for a strategic asset allocation approach but that should be a part of the portfolio. The other part needs to be more tactical, especially in this type of environemnt, which i think will last for some time. Then i show them the meat of the presentation, which is the Dorsey Wright methodology using relative strenght, the 3 legged stool, sector and asset class exposure using etf's.

I explain to them that there is no perfect system, no black box, becasue investing is part science but part art. But at least i have a methodology, a framework that i use to make decisions. I make them understand that without such a framework, its not investing, its guessing.
 

I did my first one last night. One of the prospects that attended told me that he has been shopping and has been to two of these dinners prior to mine. He said this was the first time he had seen something that wasnt a corporate dog and pony show, saying the same ole same ole. I will get business from this dinner.
This one was almost a practice run, but my plan is to build a pipeline, with my networking and phone work, that is solid enough to support one of these dinners each month.
 
People want to know how you are different, and today more than ever, how you plan to make decisions that will protect them, at least to some extent. Especially the 55 year olds who just went thru a 401k crash.
This may seem off topic of the thread, but its not. Being different is how you get them off the fence.