Something is wrong with this picture. Consider the following: When talking about the state of the financial advisory industry with many veteran advisors today, you often hear one of following three things:
I don't want my kids getting into the business;
I'm glad I don't have to build a business today; and
Everything has gotten so much tougher: Competition has increased, fees and commissions are getting squeezed and the consumer is more skeptical.
Meanwhile, the U.S. Department of Labor, the Bureau of Labor Statistics and the Occupational Outlook Handbook, tell an entirely different story. Using projections data from the National Employment Matrix, they predict, “Growth will be especially strong for personal financial advisors, which are projected to be among the 10 fastest growing occupations.” That said, they concede, “Keen competition will continue for the well-paid jobs, especially for new entrants.”
Recently, one of our coaches placed a Yahoo Finance article on my desk ranking desirable occupations over the next 10 years, and, you guessed it, financial advisor ranked first. CNN Money also ranked it among the top 10 fastest growing occupations (No. 5) through 2016.
So what gives? The U.S. Department of Labor has identified the demand — boomers are reaching their peak years of earnings and retirement savings, which is expected to increase the demand for experts — and they have documented the earnings of the average financial advisor. Thus they can accurately project a future decade of opportunities. But these institutions haven't considered the skill set required to become a successful financial advisor. They've neglected to factor in the importance of sales skills to the financial advisory-job market. (The irony is that so have many financial institutions.)
Your challenge is to take full advantage of that. For many financial advisors, this will require what I've begun referring to as a “Ph.D. in sales.”
Let's be candid: To reach your income potential as a financial advisor you must master the art of selling to the affluent. In fact, I have yet to meet a successful financial advisor who has taken a casual attitude toward the craft of selling. Earning a Ph.D. in sales isn't easy. You must be brutally honest about your strengths and weaknesses. Maybe you have earned your CFP designation and are extremely knowledgeable about retirement planning, but have neglected your marketing and sales skills. It is important that you correct these performance-specific weaknesses.
Easier said than done, I know. First, you have to realign your priorities. Here are a couple of the skills a Ph.D. in sales must master:
The fee question: The affluent want quality advice; they don't like to be sold to based on price alone. Ph.D.s in sales know to, “Never quote a price to an unsold prospect.” When a prospect inquires about the cost of their services, they express confidence in the value of the services they can provide. The typical advisor is uncomfortable, blurts out his going rate and transforms himself into a commodity.
The “What do you do?” question: This is a common question that calls for less jargon and more straight talk to enhance your credibility. The response of the sales Ph.D. is natural and believable because it is well rehearsed! The unschooled advisor makes one of two mistakes: He defaults to the standard “I'm a financial advisor with XYZ firm,” or he recites some convoluted value statement. Neither positions him properly.
In order to master these skills, you will need to eliminate “busy work” ($15-per-hour tasks) from your routine, and spend 70 percent of your time working on your sales skills. That means, first of all, meeting with your top clients, their centers-of-influence, your centers-of-influence, strategic alliances and qualified prospects. Second, do your homework. For instance, when was the last time you role-played a casual affluent encounter? Do you know how to handle the fee question? And the list goes on. Commit to getting your Ph.D. in sales. It's a small price to pay for excelling in such a desirable profession.
Writer's BIO: Matt Oechsli is author of Building a Successful 21st Century Financial Practice: Attracting, Servicing & Retaining Affluent Clients. oechsli.com