Initial Meeting

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Sep 20, 2006 1:09 am

Can anyone give me ideas on how to structure an initial meeting, or how you get clients interested in becoming clients. I'm new and I'm trying to learn how to handle 1st meetings.

Sep 20, 2006 1:48 am

You've got 2 ears and 1 mouth.  Always always remember that and use them in proportion.  Ask lots of questions and listen carefully.


If they're meeting with you, they're halfway there (interested in becoming your client).  Find out what they want and see if you want to and are able to do it for them.  If you're new, you'll be more willing to make people happy without profit.  Make sure you recognize the point in your practice where you can stop doing that and tell people that you're not a good fit.


After you know where they are and where they need to be, set their expectations.  Let them know what's going to happen "we'll do a bunch of paperwork and you'll get a bunch of mail... your account will go up and down but hopefully more up than down...".  Try to underpromise and overdeliver.  Ask them if there's anything else they need to tell you.  If not, then let's get going on the paperwork... 


For some good perspective, learn about Storyselling (Mitch Anthony) and get an idea of where a guy like Nick Murray is coming from.  I don't like formulaic meetings (Bachrach style), but your mileage may vary. 


After they've done business with you, call 'em up every now and then to see how they're doing.  If they are big/profitable clients, treat them extra nice -- send a birthday card or be creative.  It's just that easy if you can get them to sit down with you.

Sep 20, 2006 7:41 am

Excellent advice....especially the "treat the best clients better."

Sep 20, 2006 7:58 am
PowPow:

After they've done business with you, call 'em up every now and then to see how they're doing.  If they are big/profitable clients, treat them extra nice -- send a birthday card or be creative.  It's just that easy if you can get them to sit down with you.



A birthday card is extra nice?


If it's, "Just that easy" why do so many fail?  Could it be that the industry's biggest problem can be solved with birthday cards?

Sep 20, 2006 8:02 am

Newbie,



They didn't work for you I guess?



Was it two small insurance companies or two large national wirhouses that you did your 3 year stints at?

Sep 20, 2006 8:50 am

Performance is what they want. You must beat the S&P 500 year after year after year net fees. Do that, and they come back for more as well as refer their friends.



Sep 20, 2006 9:37 am

ymh, I have to strongly disagree with your post.  My clients stick with me because I help them achieve their financial goals and give them great service.  We very rarely talk about rates of return. 


My conservative clients know that they will lag the S&P when the S&P does well.  My wealthy clients care more about maintaining what they have than trying to beath the S&P.


If an advisor makes it about beating a benchmark, they have to be prepared to lose clients.  Live by the sword, die by the sword.

Sep 20, 2006 9:48 am
anonymous:

ymh, I have to strongly disagree with your post.  My clients stick with me because I help them achieve their financial goals and give them great service.  We very rarely talk about rates of return. 


My conservative clients know that they will lag the S&P when the S&P does well.  My wealthy clients care more about maintaining what they have than trying to beath the S&P.


If an advisor makes it about beating a benchmark, they have to be prepared to lose clients.  Live by the sword, die by the sword.



What do you consider to be a sizeable account?


How about a sophisticated investor--what counts as sophisticated in your book of clients?


It sounds like you're setting your clients up to accept mediocrity as their goal.  "Mr. Jones you will lag behind the widely followed averages in good years" sure would not be attractive to me, or anybody I know.


You are being paid to make my portfolio grow, not prevent it from falling.


If my goal is to avoid losses I can accomplish that without your help--and your fees.


Are you guys aware of the fact that there have been a lot of cases over the years where the investor is awarded damages because it was alleged that the advisor was TOO CONSERVATIVE and as a result the client's portfolio underperformed?  They talk to a lawyer and the next thing you know you're raising you hand to say, "I promise to tell....."

Sep 20, 2006 10:32 am

If I don't beat the S&P 500 year after year after year and do so by a fairly wide margin, I don't get paid. I have mucho incentive to outperform. To me that's what all clients want---to make $$$. Why pay a money manager to lag the S&P 500? If that's what those clients want (S&P 500 like returns), there's an ETF for that which they can "invest" in without an advisor and paying fees for nothing.

Sep 20, 2006 10:54 am

I'm not a money manager.  I'm a financial advisor. 


The real goals of our clients are not to beat the S&P 500 every year.  The goals are to do things like "retire at age 60 with the same standard of living that I have now."  "Make sure that my family maintains their standard of living if I die or become disabled".  "Fund 100% of the college costs including grad school for my children" "Buy a bigger house next year"


Investments have to be in allignment with one's goals and risk tolerance.  If the goal is to beat the S&P 500 every year by a wide margin, wouldn't I just invest everyone's money in the same manner?


YMH, please explain how if the S&P 500 goes up 15% and your clients' investments go up 14%, you don't get paid. 


How does it make sense to have a very conservative person invest in such a way that maximizes their chance of beating the S&P 500?  If an aggressive investor loses 5% when the S&P loses 10%, they might be happy or at least not mad.  A conservative investor doing the same thing is going to take all of their money out and invest it conservatively.  They will put their money back in after the market goes back up.  Help someone to invest in a way that is inconsistent with their risk tolerance and you are setting them up to consistently buy high and sell low.


Investing to maximize the chance of hitting one's goals is very different than investing to maximize rate of return.


Let's face it.  If I could consistently beat the S&P by a wide margin, I would not need to work.  I would be my only client.

Sep 20, 2006 11:00 am

The dif is perhaps my clients are more risk tolerant than yours. I agree, for a retiree, his/her risk profile is much different and perhaps he or she is happy with 10% returns in a year when the S&P 500 posts a 15% return and -2% returns in a year when the S&P 500's in the red 10%.


Learn how to trade a little and maybe you can retire early and not have to worry about servicing any clients other than yourself.


There are quite a few money managers who work on the "performance bonus" plan which means unless returns exceed a certain benchmark, no fees are paid by the client. To me it's the purist form of capitalism that's out there.

Sep 20, 2006 11:09 am

Is that how you work?  It seems like it could make sense for a money manager, but not for a financial advisor.


My clients have all different risk profiles.  Also, time horizon is just as important.  The same client might have retirement money invested very aggressively and money being saved to open a new business relatively conservatively.

Sep 20, 2006 12:09 pm

Mine pretty much have the same risk profile (medium to high).


I don't use margin other than on short positions. I stick to primarily NYSE listed securities with market caps exceeding $2B. I am not a broker or an advisor per se. I don't have and probably never had the temperment/patience to deal with retail clients/investors.


On the learning how to trade a little, I was not being sarcastic. I know quite a few retired early brokers/advisors who make a nice living just trading their own accounts (not daytrading, either).

Sep 20, 2006 12:22 pm

Great information all.


This forum is 110% better nowadays.  :)

Sep 26, 2006 6:38 pm
anonymous:

ymh, I have to strongly disagree with your post.  My clients stick with me because I help them achieve their financial goals and give them great service.  We very rarely talk about rates of return. 


My conservative clients know that they will lag the S&P when the S&P does well.  My wealthy clients care more about maintaining what they have than trying to beath the S&P.


If an advisor makes it about beating a benchmark, they have to be prepared to lose clients.  Live by the sword, die by the sword.




Well said.

Sep 26, 2006 6:40 pm
ymh_ymh_ymh:

Mine pretty much have the same risk profile (medium to high).


I don't use margin other than on short positions. I stick to primarily NYSE listed securities with market caps exceeding $2B. I am not a broker or an advisor per se. I don't have and probably never had the temperment/patience to deal with retail clients/investors.


On the learning how to trade a little, I was not being sarcastic. I know quite a few retired early brokers/advisors who make a nice living just trading their own accounts (not daytrading, either).



You are not a financial advisor.  You are a broker.  Glued to your tube.  Guts in a knot.


A monkey with darts would have more success picking stocks than a newbie like you.

Sep 26, 2006 9:12 pm

YMH is a newbie?

Sep 27, 2006 4:37 pm

PowPow mentioned the book "Storyselling".


Are there any other quality books that will give a youngster some quality ideas? (besides Winner's Circle-read them)

Sep 27, 2006 5:04 pm
ymh_ymh_ymh:

 I am not a broker or an advisor per se. I don't have and probably never had the temperment/patience to deal with retail clients/investors.


My guess is you don't manage money, either. You seem far too focused on legal/compliance and not managing money. The people I know that run money for a living find those sorts of issues to be tedious clerk work and so long as they don’t run afoul of it, don’t ant to hear of it, much less discuss it. Furthermore, not one of them would give a rip who the head of the NASD was, much less how much better this one might be than that one. Any way, that's my hunch, no offense intended.<?:namespace prefix = o ns = "urn:schemas-microsoft-com:office:office" />


But, let's assume for a second that you do run money and are paid solely on a performance basis. I'd suggest that means you're so far removed from what clients want from an FA that your advice on the subject is meaningless. I don’t have a single client whose primary interest is beating some index every year. They simply wouldn’t take that kind of risk. They’re interested in meeting their financial goals and they gauge performance on a risk adjusted basis, not an absolute reading of an index.


Sep 27, 2006 11:23 pm

I liked the book The art of selling to the affluent