Setting a minimum

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Jan 19, 2010 9:54 am

For those of you who have an account minimum how do you introduce that during a cold call to qualify a prospect?

 
For example, I was calling and came across a person who had an account with another firm whom they claimed to be satisfied with. They, however, wanted to open a college account for their grandkids and introduce their adult kids to me to open an account. I have very little interest in opening 6 529 plans and adding yet another $5k account to my books, though I did not want to alienate a potential client (I would like to win the parents business).
Jan 19, 2010 9:56 am

SN,

One of the things you can do, if you KNOW there is potential money there, is open the accounts and service the heck out of them.  If after a certain period of time, there is no intention of moving the real money, you just put them on your Red list, and eventually you give them away. 
Jan 20, 2010 11:27 pm

You service them like crazy, and the parents stay on your radar, and you theirs. They hear how you are so attentive to the adult children's "small" accounts, you are next in line when they want to make a move themselves.

Jan 23, 2010 5:08 pm

just ask, are you working with more or less than $______, 90% of prospects will answer

Jan 24, 2010 1:57 am
iceco1d:

I think Bondguy uses something like this..."Terrific Mr. Prospect. We have 2 different programs available. 1 is for clients with under $100,000 to invest, and the other is for clients with more than $100,000. Which one should I send you information on?"That may not be exact, but it's close, I think.



I can't tell if you are being facetious or not, but that sounds like a respectful way to qualify. I'm not sure what a <$100,000 program would look like, but I suppose you could come up with one.

Jan 24, 2010 8:02 am

If they say less than $100,000, then does he just not send anything?

Jan 24, 2010 1:43 pm

Setting a minimum does more than help you qualify clients...it will help you learn to park non qualified people on the back burner, square where they belong. Be  nice and move them along. Make friends with an advisor who is good in that space and refer them over to them.    Someone with 5k and potential means "they got nothing".  Even if you do a great job with their 5k, the likelihood of their parent, partner, friend, whatever coming to you because you did well with 5k is slim to none. People want to know you can do a good job with the amount of money they have. Focus on the parents and then if you HAVE to AFTER you have the parents business, household in the little family member accounts. Don't do it bass ackwards. You don't call HR to get to the CEO. Call the CEO.

 
1m clients don't want to deal with an advisor who is skilled at the 50k set, and advisors who are strong in the 50k set don't usually have the chops to handle the 1m and multim M's.
 
Why consider building a book with small clients and up when you can build a book with big clients and if you hate it, go to smaller account mins?
 
It will keep your pipeline free of bullsh*t, keep your book free of accounts you don't want, keep your assistant happy, and allow you to become good at what level of clients you want to be working with.
 
Jan 24, 2010 1:48 pm

Sorry, didn't give you the qualifers, hit post to fast.


 
I work with clients who have at least 100k in investable assets, does that describe you?
 
My average clients is a 55 year old attorney with at least 500k in investable assets with me.
 
My services are cost effective for clients who have at least 1 m invested with me. Would you like to learn more about my services?
 
Jan 24, 2010 4:55 pm
iceco1d:
rsinvestor:
iceco1d:

I think Bondguy uses something like this..."Terrific Mr. Prospect.  We have 2 different programs available.  1 is for clients with under $100,000 to invest, and the other is for clients with more than $100,000.  Which one should I send you information on?"That may not be exact, but it's close, I think.


I can't tell if you are being facetious or not, but that sounds like a respectful way to qualify. I'm not sure what a <$100,000 program would look like, but I suppose you could come up with one.


















 
Well, you can use whatever number you like.  Use $1,000,000.  Use $250,000.  Tailor it to your practice.
 
WB - Yes, I would send something to people with under $100,000.  If I were at a wirehouse, I wouldn't.



Of course a guy selling investments to teachers would take someone under 100k. It would be your biggest account.  Ice you are not qualified to post in the prospecting thread.

Jan 24, 2010 5:10 pm
DD:
iceco1d:
rsinvestor:
iceco1d:

I think Bondguy uses something like this..."Terrific Mr. Prospect.  We have 2 different programs available.  1 is for clients with under $100,000 to invest, and the other is for clients with more than $100,000.  Which one should I send you information on?"That may not be exact, but it's close, I think.


I can't tell if you are being facetious or not, but that sounds like a respectful way to qualify. I'm not sure what a <$100,000 program would look like, but I suppose you could come up with one.


















 
Well, you can use whatever number you like.  Use $1,000,000.  Use $250,000.  Tailor it to your practice.
 
WB - Yes, I would send something to people with under $100,000.  If I were at a wirehouse, I wouldn't.



Of course a guy selling investments to teachers would take someone under 100k. It would be your biggest account.  Ice you are not qualified to post in the prospecting thread.



Managed to get to the library again today mel?  I didn't know the buses ran to the poor neighborhoods on the weekend.

Jan 26, 2010 11:49 pm

I would suggest not taking the 6 small accounts.  Perception is often reality, so those who suggested setting a number and sticking to it are on the right track. 

I know it's hard to do that when just starting out, but the perception you give someone when you take small accounts is that is what you are good for.  So when the client has some serious money or knows someone looking for an advisor with some serious money - that goes to the other advisor.  You get the referrals for every broke investor who wants someone to hold their hand and wipe their a$s.

Not the clients you want or the services you want to do.

FWIW - all of my marketing collateral for my practice pretty clearly tells people we only work with investors with a minimum of $250,000.  Everything you hear about doing this is true - you will get bigger clients that respect your services and time more when you are perceived as someone who should.  So whether you're cold calling/mailing/whatever, I'd be pretty sure to qualify people right out of the gates.  I think you're message will be listened to more intently by those who actually qualify and you won't wast precious time chasing those who don't.

Best of luck.

Jan 28, 2010 8:47 pm
AdvisorControl.com:


FWIW - all of my marketing collateral for my practice pretty clearly tells people we only work with investors with a minimum of $250,000.  Everything you hear about doing this is true - you will get bigger clients that respect your services and time more when you are perceived as someone who should.  So whether you're cold calling/mailing/whatever, I'd be pretty sure to qualify people right out of the gates.  I think you're message will be listened to more intently by those who actually qualify and you won't wast precious time chasing those who don't.

I agree with the concept. Here's my question - what do you do to get in front of enough investors with 250k minimum to invest?
I will probably take a lot of heat on the forum for saying this, but i dont think your answer is cold calling. I'm not saying calling doesnt work, it does, i;m living proof. But I think its rare that you will open up accounts from a cold call with 250 or more. They may become million dollar clients, but over time.
Curious to hear what you do to get this done.
Jan 29, 2010 10:01 am

I send the same info regardless of how much money they have to invest. However, the qualification guides my future product selection. For example On the two programs qualifier, that's usually done in conjuction with a UIT or fund call. I send the info. On the second call, if qualified for over 100k, i usually move them to individual securites. Under stays with the fund/UIT idea.

 
Esssentially the qualifier is an indicator of work/reward. If the investor has little to invest it's not worth killing yourself over a three month period to land them. And, in the new new world of wires and super regionals with inactivity fees approaching $200/year for accts with less than 250k in assets it's a waste of time. If someone has 100k for a single idea, i'm going to at least take a shot with that prospect on the chance that they've got over 250k to invest or already invested in the market.
 
That doesn't mean let the small acct go. At least not every time. I opened a 25k acct this month on a "trail" for a guy who told me if it goes well he'll acat over his 300k Fidelity acct. So, exception to the rule. I  opened the acct and now we'll find out if he's for real. If not, i got paid on the 25k He sent me.
 
Lastly, on qualifying. Simply say something to the effect of: We work with clients with at least 100k to invest. If you like what we offer would this be a problem for you?
 
Qualifying is not hard and is necessary. That said, use your judgement to vet exceptions. For example, a grand parent that wants to open 529s for his grankids might be a way to earn a seat at the table.
Jan 29, 2010 10:08 am
BondGuy:

I send the same info regardless of how much money they have to invest. However, the qualifcation guides my future product selection. For example On the two programs qualifier, that's usually done in conjuction with a UIT or fund call. I send the info. On the second call, if qualified for over 100k, i usually move them to individual securites. Under stays with the fund/UIT idea.

 
Esssentially the qualifier is an indicator of work/reward. If the investor has little to invest it's not worth killing yourself over a three month period to land them. And, in the new new world of wires and super regionals with inactivity fees approaching $200/year for accts with less than 250k in assets it's a waste of time. If someone has 100k for a single idea, i'm going to at least take a shot with that prospect on the chance that they've got over 250k to invest or already invested in the market.
 
That doesn't mean let the small acct go. At least not every time. I opened a 25k acct this month on a "trail" for a guy who told me if it goes well he'll acat over his 300k Fidelity acct. So, exception to the rule. I  opened the acct and now we'll find out if he's for real. If not, i got paid on the 25k He sent me.
 
Lastly, on qualifying. Simply say something to the effect of: We work with clients with at least 100k to invest. If you like what we offer would this be a problem for you?
 
Qualiying is not hard and is necessary. That said, use your judgement to vet exceptions. For example, a grand parent that wants to open 529s for his grankids might be a way to earn a seat at the table.



Awesome advice BG. 

Jan 29, 2010 12:49 pm

I refuse to work with any one that has less then $100k.  Stop wasting your time on these people.  As a matter of fact I general dislike $100k accounts but will take them. 

 
Qualifing on the phone is easy.  How long have you been working at ABC corp?  If they say 10 years they should have some money.  If they say less then 10 years ask them what they did before.  If they say I was in college tell them to piss off. 
 
Be famililiar with the company stock.  For example if someone has worked AAPL for 5 years they should be qualified, but if someone worked at Yahoo for 5 years or even 10 years they are probably broke.
 
 
Jan 29, 2010 1:55 pm

I think $250K is sort of the amount, above which the money is "serious" and the people want help.  Below that, they're watching every nickel of it and are a pain in the a$$.  It's not a hard and fast rule, but I find the 250-750K clients are best to work with.

Of course, if I had a lot of $2mm clients, I'm sure I would like them just fine.
Jan 29, 2010 3:37 pm

It's still a numbers game. I turn away alot of 25K accounts. My goal is to try to open 20 new clients at 250k or above annually . Usually it is rollover money. I put my minimum on all the material I send out. When I follow up usually I get "I don't have enough to invest with you".

Since I am selling them my discretionary model, I will take smaller accounts on a trail basis, but I set the terms. I discuss a time frame for the "trial" and I always verify that they do have the assets to move over later. I find that if I am more of a dic$ to them in the beginning they respect my time and what I am doing.

I agree with B24, 250 -750K seems to be the sweet spot in terms of "nice" clients. Under 100k -too many young, stay at home moms who have nothing better to do then tell me what Suzy Orman said on Oprah.

Jan 29, 2010 5:43 pm
CALI123:

Under 100k -too many young, stay at home moms who have nothing better to do then tell me what Suzy Orman said on Oprah.

 
I totally agree with you man.  But until I have a book producing at least $500k in revenue I will take 100k accounts. 
 
I have my fair share of $1mill+ accounts and they no more or less work then those that have $500k - $750k.  Some one with $5mill is going to have a more sophisticated prodcuct mix but they all still want the same high level of customer service. 
Feb 1, 2010 2:44 pm

I only will make exceptions on the minimum under a few certain circumstances:  One the individual is a COI.  Example  I opened a 50K account couple years ago for a CPA that had sent me about six of his clients.  I did well for him and have gotten up to 15 of his clients now.  Second while the account might be small they can hit a decent Client Revenue Amount.  Example of this this week I have a early thirties real estate broker coming in.  I manage a six figure account for his good friend a business owner he learned I was managing his money at the clients birthday dinner and he wants to transfer over a small account after he ran 80K down 60% investing on his own.  He is recently married and has no Life Insurance.  Thus I can team with the partner in our firm who specialzies in Life Insurance and Estate Planning and design a decent permanent policy for him which will be equivalent to three or four years of 100K wrapped at 1.5%. 


Generally though I agree the account minimum needs to be whatever fits the individual advisors practice.  According Building a Million Dollar Financial Services Practice that needs to be 250 K and that is a really good book especially when one looks at the numbers needed to hit the revenue goals.
Feb 1, 2010 3:08 pm

DDP,

 
You hit on something there.  I think when looking at minimums, you really have to think more about contributions to your business, and not just about pure revenue.  COI's were a perfect example.  But I would expand that to say anyone that is likely to give you quality referrals/introductions on a regular basis is possibly more valuable than someone with $500K.  I have a handful of people like that.  If they were deadbeats, I would just as soon drop them completely.  But because of the influence they have in the community, or the people they associate with, it is VERY valuable to have them as clients.