Success Story

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Sep 8, 2006 3:03 pm

I find myself starting to plateau on my AUM so yesterday, I started simply sending one handwritten note per day to a prospect with my card enlosed.  The message is simple and tailored to the prospect.  Yesterday's card was to a former client, still at the bank in a $350K fee-based account.  My note said how much I enjoyed working with him at the bank, and asked him to call or drop by sometime so we could catch up on things.  I also indicated that I'm changing investment strategy for most of my clients to deal with the changes in the market over the past few months...no details...just enough to make him curious and give him a sense of urgency assuming my replacement hasn't changed anything recently.


End result is, this morning, literally less than 24 hours after I mailed the note...to a guy at the other end of my state almost five hours away, he calls and is on his way to see me this afternoon.  I think that deal will be an easy sell.  The only thing that's slowed him up is the fact that I moved him into the bank, and away from an LPL rep...


Today, I sent a card to a recently retired bank president that I used to work with.  He happened to ask a mutual friend where my new office was, and my guess is that he has a very large 401(K).  He will get a note in the mail tomorrow wishing him well in retirement and inviting him to call or stop by to catch up.  I told him if he came over, I'd buy him lunch.


This is certainly a more passive strategy than geting on the phone and calling these prospects, so I'm trying it with the thought that I can always ramp it up to phone calls if necessary.  Given the first result, I'm going to try it his way awhile and see where it goes.  I'll try to post some more samples as I send them, along with results as they happen.  I'm encouraged by the first result thus far, and that's enough to keep me dedicated to this passive strategy for awhile...or at least as long as the results are good.

Sep 8, 2006 3:22 pm

What possess an intelligent adult to feel compelled to stick that ridiculous icon into an otherwise interesting series of paragraphs?

Sep 8, 2006 3:47 pm

Great post Indy.  There are few things more effective than a simple, handwritten note.

Sep 8, 2006 3:52 pm

A soft approach done with good taste beats out aggressive marketing every time.

Excellent idea, Indy.  I may adapt it to my side of things.

Sep 8, 2006 5:12 pm

Well, Nasty, I just couldn't help myself...I found it comical as an LPL rep that one of my brethren reps was the cause of this account being slow to come across.  The emoticons are useful to describe my mood when I'm writing, and occasionally, they're just for fun...sorry you don't like them.


As a follow-up...had a very good meeting with my former client and I think they'll move over after they've had a chance to digest our discussion.  The most interesting thing is...they didn't actually receive my note...here I was all excited about the quick response to my new approach, and they'd actually been planning on coming in anyway.  I will say that I'd been dropping them things in the mail every few months, including a Christmas card with my business card enclosed, but the latest effort is apparently still in their mailbox (they didn't get the mail today.)


One thing they asked about, which is just one of the reasons that I have some heartburn about the Jones approach, is why Jones could handle his $350K IRA for a $35 annual fee when I wanted to charge them 1%.  Their friends had told them repeatedly that Jones didn't charge aything besides the annual IRA fee.


Sooooooooo...once again, I had to explain the higher expense ratios of B share mutual funds, the lack of availability of many high-performing managers on the Jones platform, the up-front commissions of A-shares, bond concessions, and 12b-1 fees (which LPL automatically nets against the fee-based charge in IRA accounts).  Sure, it's always possible that clients just don't understand what they're paying, but as often as I hear that from clients of one particular competing B/D, I think it is intentional and I believe that it is trained.  I've heard it too many times...and not just from their brokers in my home market.


...and some folks wonder why others don't like the firm and the approach.  OK...off the soapbox again.  An excellent meeting that will likely result in a nice transferred client is a great way to start another weekend...

Sep 8, 2006 6:12 pm

As any salesman knows, when you let the customer get away you lost the sale.  Those people drove five hours to talk to you, listened and then drove away.  There is no way to put a smile face on that.


I'm telling you, boys and girls, clients are not going to sit around while you rape them with 1% fees for what they see as doing nothing.


As they approach retirement they will become even more resentful--and that's if the market goes up.


If it doesn't they'll not only resent your middleman role--they'll sue you over it.

Sep 8, 2006 6:37 pm
NASD Newbie:

As any salesman knows, when you let the customer get away you lost the sale.  Those people drove five hours to talk to you, listened and then drove away.  There is no way to put a smile face on that.


Normaly, I'd be inclined to agree...make the sale now or don't make it.  However, these are not normal prospects...they are thoughtful and deliberate and I did not sell them on the first meeting at the bank either.  They had to go as they were meeting their son and did not have sufficiant time to complete the paperwork, although they appeared to be pleased when I told them that most of it could be done through the mail.  I can tell you that my instinct-o-meter (which has been very accurate in the past) tells me that it's just a matter of time.  I promise a follow-up here to give you the final result, but I think this client is mine. (there's my smile face)


As to the rest of your diatribe, you and I won't see eye to eye on the fee-based issue and that's fine...I only care what my clients and prospects think and given your geography and ideology, I don't think a client relationship is in the cards.  That's OK...I only have so much capacity to service accounts, so I'll just concentrate on those prospects who are OK with my compensation structure.

Sep 8, 2006 6:42 pm

Are you saying that your clients are suckers and that they will pay your fees because they're basically too stupid to do anything on their own--including calling 1-800-VANGUARD?

Sep 8, 2006 6:49 pm

No, I'm saying that there are plenty of folks out there, many certainly intelligent enough to manage their own investments, that simply (1) do not enjoy managing their own investments, (2) do not have the time necessary to handle their own investments, and (3) recognize that there is a lot more to investment management than Vanguard's lineup of funds and canned advice.


Have a good weekend...

Sep 8, 2006 6:56 pm
Indyone:

No, I'm saying that there are plenty of folks out there, many certainly intelligent enough to manage their own investments, that simply (1) do not enjoy managing their own investments, (2) do not have the time necessary to handle their own investments, and (3) recognize that there is a lot more to investment management than Vanguard's lineup of funds and canned advice.


Have a good weekend...



As they get older they will find that they "enjoy" controlling their own future--trust me, I know from my own situation and from conversations with many friends and acquaintances.


Additionally time becomes available--as you know it doesn't take much time, and your clients will come to realize that too.  My own father has managed a rather large portfolio of individual equities and funds since he turned sixty or so, twenty five years ago.  It's not rocket science.


I don't know how long you've been doing this--but suppose somebody had given you $100,000 on your first anniversary and also put $20,000 into five different Vanguard equity funds.


What do you think the result would show today?

Sep 8, 2006 6:58 pm
NASD Newbie:

As any salesman knows, when you let the customer get away you lost the sale.  Those people drove five hours to talk to you, listened and then drove away.  There is no way to put a smile face on that.


I'm telling you, boys and girls, clients are not going to sit around while you rape them with 1% fees for what they see as doing nothing.


As they approach retirement they will become even more resentful--and that's if the market goes up.


If it doesn't they'll not only resent your middleman role--they'll sue you over it.



Amen. For selfish reasons, I hope everybody keeps charging fees that clients see coming out every quarter. I've gotten more clients because of that stuff than anything. Clients love it when I make the extra fee go away.

Sep 9, 2006 12:48 am
NASD Newbie:
Indyone:

No, I'm saying that there are plenty of folks out there, many certainly intelligent enough to manage their own investments, that simply (1) do not enjoy managing their own investments, (2) do not have the time necessary to handle their own investments, and (3) recognize that there is a lot more to investment management than Vanguard's lineup of funds and canned advice.

Have a good weekend...


As they get older they will find that they "enjoy" controlling their own future--trust me, I know from my own situation and from conversations with many friends and acquaintances.


Additionally time becomes available--as you know it doesn't take much time, and your clients will come to realize that too.  My own father has managed a rather large portfolio of individual equities and funds since he turned sixty or so, twenty five years ago.  It's not rocket science.


I don't know how long you've been doing this--but suppose somebody had given you $100,000 on your first anniversary and also put $20,000 into five different Vanguard equity funds.


What do you think the result would show today?


The people who "enjoy" managing their portfolio are in a decided minority...the percentage who can effectively manage their portfolio comprise a much smaller minority.  You're seriously out of the mainstream if you think otherwise.  Most of my A clients are already retired and while they have the time, they don't have any inclination to manage their portfolios.  You sound like those who fretted in the late 90's that discount internet brokers would be the end of us.  In the end, the only people they weeded out of the advisor pool were those know-it-alls that made poor clients anyway.  You and your friends comprise a very, very small minority of the investing public.


...and assuming the five Vanguard funds were picked at random, they wouldn't be that hard to beat.  Vanguard has some fine funds, but they have some real dogs also.  I've been working in investment management in some form since 1989, and really, you give Vanguard way too much credit.

Sep 9, 2006 12:56 am
knucklehead:
NASD Newbie:

As any salesman knows, when you let the customer get away you lost the sale.  Those people drove five hours to talk to you, listened and then drove away.  There is no way to put a smile face on that.

I'm telling you, boys and girls, clients are not going to sit around while you rape them with 1% fees for what they see as doing nothing.


As they approach retirement they will become even more resentful--and that's if the market goes up.


If it doesn't they'll not only resent your middleman role--they'll sue you over it.


Amen. For selfish reasons, I hope everybody keeps charging fees that clients see coming out every quarter. I've gotten more clients because of that stuff than anything. Clients love it when I make the extra fee go away.


It's not an extra fee...just a more openly disclosed fee.  If you and I compete, I'll have no problem exposing you as the fraud that you are.  I'm well versed in explaining the hidden fees in your products and clients hate it when they think you've tried to pull a fast one over on them.  You'd best pray that I don't find your new clients during the free-look period...

Sep 9, 2006 8:41 am
Indyone:
knucklehead:
NASD Newbie:

As any salesman knows, when you let the customer get away you lost the sale.  Those people drove five hours to talk to you, listened and then drove away.  There is no way to put a smile face on that.

I'm telling you, boys and girls, clients are not going to sit around while you rape them with 1% fees for what they see as doing nothing.


As they approach retirement they will become even more resentful--and that's if the market goes up.


If it doesn't they'll not only resent your middleman role--they'll sue you over it.


Amen. For selfish reasons, I hope everybody keeps charging fees that clients see coming out every quarter. I've gotten more clients because of that stuff than anything. Clients love it when I make the extra fee go away.


It's not an extra fee...just a more openly disclosed fee.  If you and I compete, I'll have no problem exposing you as the fraud that you are.  I'm well versed in explaining the hidden fees in your products and clients hate it when they think you've tried to pull a fast one over on them.  You'd best pray that I don't find your new clients during the free-look period...



ARe you well versed in explaining the unusually high returns, net of fees? THAT is what you're up against. You'd best pray that I don't show how I've outperformed you without charging that pesky fee.

Sep 9, 2006 9:48 am

Indyone- Nice post and inspirational to boot.Thought it was a bit odd that the client would receive a letter less than 24 hours after you sent it.


Consider sending a SBUX gift card with the letter.  I had a wholesaler send me one (with a handwritten note) and it really stood out.

Sep 9, 2006 10:05 am
Indyone:

...and assuming the five Vanguard funds were picked at random, they wouldn't be that hard to beat.  Vanguard has some fine funds, but they have some real dogs also.  I've been working in investment management in some form since 1989, and really, you give Vanguard way too much credit.


Since 1989?  Wow, why you're a real veteran.  Ever seen a bear market?


The answer is nope--you've seen corrections in the magnitude, but bear markets last for years and years and years.


How many years in a row do you think your happy clients will stay with you if you're reporting, "Well, Mr. Jones last year wasn't good either.  Your portfolio lost another $25,000 or so--but I still think it's going to turn around one of these days and you have to be in to win."


There comes a time when Mr. Jones is going to tell you that you remind him of Alfred E Neuman and he's going to pull his account.


If you don't think it will happen sometime in your career you're a fool.


If you think that they won't leave you because you're a nice guy and they are not smart enough to manage their affairs anyway you're also a fool.


What you should be praying for is the ability to develop a relationship that prevents them from suing you after they leave you.


Since 1989--make me laugh.

Sep 9, 2006 10:48 am
The Judge:

Indyone- Nice post and inspirational to boot.Thought it was a bit odd that the client would receive a letter less than 24 hours after you sent it.

Consider sending a SBUX gift card with the letter.  I had a wholesaler send me one (with a handwritten note) and it really stood out.


Thanks, Judge.  It's amazing how the postal service works sometimes.  I've had things arrive next day hundreds of miles away, and then a thank-you card to a neighbor 1,000 feet away (I can literally see their mailbox from ours) takes two weeks and goes through another state...


The gift card is a nice touch and I've done a variation of that with some great feedback...$25 gift certificates to a favorite restaurant with a handwritten note of thanks for referrals and other kind acts.  It's a small price to pay for the goodwill created and I've received excellent feedback for it.

Sep 9, 2006 10:50 am

Pssssstttttt, NASDY, newsflash: We're in a bear market.


I'm sure Indyone is ashamed of his age, but it's not nearly as shameful as a grown man, with a nasty wife, who takes pictures of his dog. By the way....I've only been in this business since 1999.

Sep 9, 2006 11:08 am
knucklehead:
Indyone:
knucklehead:
NASD Newbie:

As any salesman knows, when you let the customer get away you lost the sale.  Those people drove five hours to talk to you, listened and then drove away.  There is no way to put a smile face on that.

I'm telling you, boys and girls, clients are not going to sit around while you rape them with 1% fees for what they see as doing nothing.


As they approach retirement they will become even more resentful--and that's if the market goes up.


If it doesn't they'll not only resent your middleman role--they'll sue you over it.


Amen. For selfish reasons, I hope everybody keeps charging fees that clients see coming out every quarter. I've gotten more clients because of that stuff than anything. Clients love it when I make the extra fee go away.


It's not an extra fee...just a more openly disclosed fee.  If you and I compete, I'll have no problem exposing you as the fraud that you are.  I'm well versed in explaining the hidden fees in your products and clients hate it when they think you've tried to pull a fast one over on them.  You'd best pray that I don't find your new clients during the free-look period...



ARe you well versed in explaining the unusually high returns, net of fees? THAT is what you're up against. You'd best pray that I don't show how I've outperformed you without charging that pesky fee.


Yes, I would say that I am well versed in explaining net of fees performance.  I'm also well prepared to go to your option if that's what the client wants.  I can explain the pros and cons of fee-based vs. brokerage vs. annuities and I can do all three.  That's the best way to obtain/maintain relationships...versatility.  If I explain all three upfront and the client chooses the fee-based platform, then at worst, if he/she has a change of heart later, I can roll them into a brokerage/annuity account and maintain the relationship.


...and assuming outperformance is a stretch.  I'm pretty sure that I know what you sell and while it's good, it's not unbeatable...

Sep 9, 2006 11:38 am
NASD Newbie:
Indyone:

...and assuming the five Vanguard funds were picked at random, they wouldn't be that hard to beat.  Vanguard has some fine funds, but they have some real dogs also.  I've been working in investment management in some form since 1989, and really, you give Vanguard way too much credit.

Since 1989?  Wow, why you're a real veteran.  Ever seen a bear market?


The answer is nope--you've seen corrections in the magnitude, but bear markets last for years and years and years.


How many years in a row do you think your happy clients will stay with you if you're reporting, "Well, Mr. Jones last year wasn't good either.  Your portfolio lost another $25,000 or so--but I still think it's going to turn around one of these days and you have to be in to win."


There comes a time when Mr. Jones is going to tell you that you remind him of Alfred E Neuman and he's going to pull his account.


If you don't think it will happen sometime in your career you're a fool.


If you think that they won't leave you because you're a nice guy and they are not smart enough to manage their affairs anyway you're also a fool.


What you should be praying for is the ability to develop a relationship that prevents them from suing you after they leave you.


Since 1989--make me laugh.


...see, I'm laughing too!!!  You keep talking about all of us never seeing a bear market, and you'll never convince me that I haven't.  I'll allow that bear markets don't always look the same, but it's garbage to say that 00-02 wasn't a serious bear market.


Insult me and call me a fool...that's OK...I'm a big boy.  I think "Chicken Little" is a befitting lable for you...