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May 17, 2009 10:19 am

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May 17, 2009 11:43 am

Those people I usually let walk.  If they use that as an objection then they are DIY'ers who won't be very receptive to your advice.  They love their $7.99 trades, and will absolutely give you a hard time about the 5.75% A share fee.  You may be able to get your foot in the door with a managed account, but I know thats the newbies equivalent of kryptonite.  I've gotten many clients that have had accounts at E-trade and Ameritrade but they never used it as a reason to object being my client.  They had it there cause they didn't know what else to do with it.

May 17, 2009 12:14 pm

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May 17, 2009 12:21 pm
wind3574:
3rdyrp2:

They had it there cause they didn't know what else to do with it.





That's what I am asking. There are a few I have come across, who really just like to do it themselves, but what about those people who do just stick it there. They tend to have objections as to why they should work with an FA too.



Ask them if they believe they have adequate protection in case they die. Ask them if they know how much they need to save to retire early. Ask them if they understand that Roth conversion rules.
Keep asking until you find a weak spot where they need help and then add value that way. You can't compete for their business by showing them that your investments are better than what they've got. They most likely already understand investments better than you.
But I've never gotten a dedicated DYI unless he was just tired of doing it himself.



May 17, 2009 12:28 pm

Thats an easy objection to overcome.  "So in times like these, do you think you'll benefit more from the inevitable market recovery by parking your money in an online account, or by getting sound advice from a professional?"  If they say that they heard that the fees are lower in online accounts just say, "Thats great.  Basically you pay for what you get, which at E-trade or wherever is nothing.  Part of my job is to make sure I am finding not only the best performing investments for your situation, but also finding the ones that will be cost-efficient." 

May 17, 2009 12:54 pm

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May 17, 2009 12:58 pm
buyandhold:
wind3574:
3rdyrp2:

They had it there cause they didn't know what else to do with it.



That's what I am asking. There are a few I have come across, who really just like to do it themselves, but what about those people who do just stick it there. They tend to have objections as to why they should work with an FA too.



Ask them if they believe they have adequate protection in case they die. Ask them if they know how much they need to save to retire early. Ask them if they understand that Roth conversion rules.
Keep asking until you find a weak spot where they need help and then add value that way. You can't compete for their business by showing them that your investments are better than what they've got. They most likely already understand investments better than you.
But I've never gotten a dedicated DYI unless he was just tired of doing it himself.

 
Truer words haven't been said.  You're not going to beat a DIY'er w/investment ideas.  You'll beat them with ideas that are outside the box.   Taxes, estate planning, etc.
May 17, 2009 1:25 pm

Wind, you need a different value proposition.  There's absolutely no reason to think that you can do a better job of picking investments than they can.  It's irrelevant whether you can or can't because it can't be proved.


Prospect: "I'm not interested.  I do my own investing with E-trade."


Me: "That's great.   Some of my best clients have substantial accounts with E-trade.  It's something that I often encourage.  Like I said, I'll be in your office on Tuesday meeting with another partner.  Can I shake your hand in person at 9:50?"

May 17, 2009 1:44 pm
wind3574:
3rdyrp2:

They had it there cause they didn't know what else to do with it.



That's what I am asking. There are a few I have come across, who really just like to do it themselves, but what about those people who do just stick it there. They tend to have objections as to why they should work with an FA too.


 
This doesn't sound like their objection has anything to do w/having online accounts then.  It sounds like this would be someone who isn't sure they see the value in working w/an advisor and happens to have rolled their IRA to E-trade. 
May 17, 2009 2:02 pm

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May 17, 2009 2:26 pm

Man I don't know.  I haven't heard anyone who has any sense of how economics or the market works sit across from me and insist on having their investible dollars other than their cash reserves be in FDIC insured products in the past 18 months.  Back in September it was a big deal w/us because of the money market thing that went down w/Lehman, but most of our clients and prospects hadn't even gotten a full understanding of the repercussions, it was more of a panic for us than for them.

May 17, 2009 3:17 pm

I find most DIY'ers simply don't trust us. Not that I blame them. With all the negative sentiment towards our industry, you're going to have a great deal of that. I've seen very few DIY portfolios that were any good. It's sad, because it could be done very easily, but most DIY'ers I've seen don't even take the advice from the fund companies (i.e. Vanguard). They usually scour Money magazine and the fund rankings and such, and pick the top performers. Or they have VFINX and then a bunch of oddball investments. If they would just use the tools that the online firms offer, they could do just fine.



I also find most know nothing about risk, principle potection, and especially income planning. Most DIY'ers confuse overall returns with "income". They simply have no plan for generating income, and are either WAY to aggressive, or WAY to conservative. But it's very tough to convert them. I usually try to find the pain points, and if the pain points don't jive with what I can offer them, then I simply move on.

May 17, 2009 3:21 pm

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May 17, 2009 3:36 pm
wind3574:

or let their wife know how bad their portfolio has been doing in the hands of their husband!!!!!! lol...kidding



If it's an older guy, and you get a meeting with them both, ask if the wife understands the portfolio and the investment plan. Ask if she is ready to handle the investments after he's gone.






May 17, 2009 5:00 pm

Like someone said earlier, you have to show value that's different from every other joe out there.  I had this one prospect who told me he "manages" his own money.  I responded with, "Oh that's great that you manage your own.  What's the standard deviation in your portfolio right now"? I didn't say it condescendingly but I was really trying to be a p*ick.  He obviously had no answer b/c he had no clue what I was talking about.  When he said he didn't know, I just responded with a slight, "Wow" and left it at that.  He was of course, pissed off at this point but he was not worth my time anyway. 

 
There are millions of people in this country and as a fact, most of them are not going to be financially independent.  We just have to find the 200-300 decent ones who do take their finances seriously and value professional help and call it a day. 
 
On another note, whenever I hear objections like "I have an advisor" or "I just had a kid, I'm really busy", I respond with "That's even more why we should sit down".  Honestly, no matter what they say, "That's even more why we should sit down" is usually what I answer back with. 
May 17, 2009 5:19 pm

Also, you can use the "Feel, Felt, Found".   "I understand how you feel Mr. Client . . . my other clients felt the same way about using an Advisor (or whatever you're talking to them about) until they found out blah blah blah . . . Just another thought or an idea to use.