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Five Affluent Sales Mistakes

A lot of veteran advisors in today's volatile environment - don't understand today's affluent investor. Here are some sales mistakes to watch out for.

St. Louis: "We were all teed-up for success," explained Bill. "We were introduced to a $15 million prospect by a CPA, we had an official meeting in our office - and what happened? We hear from the referring CPA that this prospect didn't feel comfortable with us - it's upsetting."

Bill should be upset. However, he's the junior partner on the team with only four years of service under his belt and reluctant to offer advice to his senior partner. He felt no such reservation in speaking to me.

After asking a few questions I got to the heart of the problem. It seems that Bill's senior partner Jack, a $1.4 million, 17-year veteran, is like a lot of veteran advisors in today's volatile environment - he doesn't understand today's affluent investor. As a result, he has poor affluent sales skills.

Jack is a CPA and a CFP who prides himself in being smart, credentialed and successful. In his mind, this is what sets him apart from other financial advisors. Yet, now his confidence is being shaken. Apparently this $15 million prospect was the most recent of four opportunities where he misfired. All it took was a brief chat on the phone to break through his defensiveness and find a confused veteran who was making classic mistakes with today's affluent.

The following are the five most common mistakes we see advisors making when they are face-to-face with opportunity. Approach these in the spirit of Berkshire Hathaway Vice Chairman Charlie Munger; invert each and you'll improve your business development talents.

Five Common Affluent Selling Mistakes

1. Lack of understanding of today's affluent investor. By all accounts, Jack is an excellent financial advisor. No detail was too small for his attention, he put hours into his proposals, outlined his investment process, discussed his philosophy on planning in detail, and took pride in communicating his thoroughness and smarts.

Problem - Information overload. Jack simply overwhelmed his affluent prospects with information. This paralyzed their decision-making, leaving them uncomfortable and not prepared to become his client.

Solution - Less is more. Less detail and more time developing an emotional bond. Today's affluent investors make their decisions on emotions and then support them with logic. Jack is providing too much supporting logic before an emotional connection is established.

2. Poor first impression. Today's affluent investor must be able to relate to a prospective financial advisor on a personal level. This is where a bond of trust develops on an emotional level and a relationship begins. Because Jack regarded his competency and integrity to be of the highest order, he assumed this was enough to make a strong first impression on his prospects. Alas, he spent little time developing rapport. He jumped directly into presenting his proposal and created a bad first impression.

Problem - Focusing too much on the proposal. Today's affluent place little significance on the quality of an advisor's proposal. However, creating a strong first impression is tied with "reputation" as the most statistically significant factor in the selection process. Because Jack entered into his presentation too quickly, he made a negative first impression and he didn't even realize what he was doing.

Solution - Focus on making a good first impression. This requires you to spend time to connect on a personal level. Once this connection has been secured, you can simply ask permission to put on your "professional hat" and explain how you conduct business. Never assume rapport or rely on the quality of your proposal!

3. Poor listening skills. It's hard to listen when you talk too much. According to his junior partner, Jack spent 90 percent of the time talking whenever he met with a prospect. Of course, he was taking great care to go through every detail of his proposal and showcase his competencies. As Bill describes the scene, "It's painful to witness."

Problem - No affluent prospect cares how much you know until they know how much you care -- about them. Jack cares about his clients, but whenever he meets a prospect his actions indicate that he cares more about presenting his wares.

Solution - Remember the 80/20 rule of good conversation; 80 percent of your time should be spent in an active listening mode and 20 percent asking pre-planned questions. These questions should be designed to get your affluent prospects to talk about their favorite subject - themselves.

4. False bravado. Advisor arrogance is long gone. Those are the days of yesteryear and, in the eyes of today's affluent investor, send up a warning signal. This financial crisis has infused investors with a self-protective layer of skepticism and distrust. Nothing activates affluent warning mechanisms faster than a financial advisor positioning himself as a know-it-all.

Problem - Often when financial advisors are insecure they tend to compensate by posturing too strongly. Whether or not this was Jack's issue, this behavior tends to remind prospects of their dissatisfaction with past advisors. Hence, you run the risk of coming across like a stockbroker.

Solution - Humility. Talented advisors know they are very professional, are confident in their abilities, and don't feel the need to be boastful. They also recognize that this financial crisis has been humbling to everyone involved in the financial services industry, and to posture otherwise is disingenuous. Which is probably what Jack's prospects are left thinking.

5. Not enough activity. Like so many advisors today, Jack didn't have enough activity going on. He was relying on an occasional referral from a CPA friend rather than actively executing high-impact rainmaking activities. This gave him too much time to work on his proposals and too much focus on one prospect, all at the expense of working on his affluent sales skills.

Problem - Relying too heavily on any one given prospect is not healthy. It creates the impression of an advisor who is trying too hard. This has always sent up a red flag to an affluent prospect.

Solution - Execute at least one high-impact rainmaking activity every day; sourcing a name, offering a second opinion, asking for an introduction, etc. Get out of the office and rub shoulders with the affluent and create windows of opportunity. Also, practice your sales skills.

Too many financial advisors have yet to learn how to sell their services to today's affluent investor. And because talented advisors have worked hard to master these skills, they are experiencing serious growth in these challenging times.

If you want to learn more about business development that is essential to becoming a New World Advisor, register for our FREE teleconference 5 Red-Hot Affluent Marketing Tactics (limited capacity).

Once again, we want to thank all of you who have emailed comments and questions to us. We will continue to do our best to answer each one.

If you have any topic suggestions or special requests, please contact Rich Santos, publisher of Registered Rep. and Trust & Estates magazines, at [email protected].

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