The Disappearing Prospect
People will leave you if they can get the same/better service AND better ideas.You are correct. Now how will a prospect know that they will get better service and better ideas? They are comparing new promises against years of trust. Let's just turn this around. We can safely assume that you don't have the market cornered on good ideas. Do you personally lose clients with whom you have a good relationship and give good service? I'm sure that the answer is "no". You just think that the reason is your great ideas, but I'm telling you that it's because the relationship and service that you have given trumps the ideas. No matter how great your ideas have been, a new person can always show why your ideas haven't been very good. Forget about your banker and State Farm question, I'm talking about advisors that have the ability to give the clients what they need. The banker will lose business. The State Farm agent will lose business. The wirehouse rep will lose business. The insurance company rep with limited investment resources will lose business. Everyone will lose business if they don't have the capability to do what needs to be done. If I have an idea that has merit for one of your clients, do you think that would be enough to steal the business? I doubt it...unless they aren't all that enthralled with you and that's the reason that they agreed to meet. Virtually every time that you meet with someone, don't you find a way that you can be of help to them? I'm sure that the answer is "yes", yet often you still can't get the business. It's because a good idea is typically not a good enough reason to get someone to switch.
The irony here is that the whole discussion BEGAN because Andre did, in fact, give away his specific recommendations to a prospect, just as you said you did. ("Same situation recently. Guy has a huge 401k sitting with former employer. Took him to lunch and showed him my proposal which had a mix of UITs in it. He had never heard of a UIT before so I made the education process very short and simple. I called back and he wanted to take time to educate himself more he said he'd call me IF he decided to take action. That was my que that I dropped the ball.")
And yet somehow you think the client will come to you so you can steal others’ ideas (because, naturally, other brokers will risk giving their investment strategies away to come to your desk)? Do you not see what a hypocrite that makes you?
Now you argue that the process anon advocates won't work because brokers won't give away their strategies?! If that didn't happen, this post wouldn't exist, nor would you be trying to justify this practice. Catch 22.
[quote=anabuhabkuss]Let me ask another question, what do you do if the other broker doesn't get specific about what mutual fund to buy and yet has the client's attention with a strategy that beats the pants off of yours?[/quote]
Better question. Now you're focusing in on the point. If you do everything you do now EXCEPT give specific fund recommendations, the chances of this scenario happening are almost eliminated. That is exactly the point.
That being said, I'm getting a bit confused as to why seem fixated on the idea that someone might "steal" an idea that someone else is foolish enough to give away for free. Understandably that could be frustrating, but it's a non-issue IF you don't give away any actionable idea.
In any event, re-reading your original post it seems to me there isn't really that much of a difference in practice between what you have apparently been doing and what anon and I have been trying to advocate OTHER THAN we don't give away specific, actionable recommendations UNTIL the prospect is a client.
What is clearly different is our perception of WHY we win clients: we believe it is because we have sold ourselves and our process, and thereby gained their trust and their business, while you believe it is because you have sold your ideas and thereby gained their trust and business. My long experience - and countless surveys besides - convince me that people decide not on ideas but gut trust, mainly because most people really don't understand enough about the merits of the specific ideas to base a decision on that. How can they decide on the merits of one investment idea versus another when they barely know what a mutual fund or UIT even IS? But if you believe otherwise, so what?
In the final analysis it is less important WHY clients decide to do business with us than the mere fact that they DO so decide.
No, Morphius, you missed my point. I was pointing out what a hypocrite Anon is by asking new prospects to give him money for holes in their current broker’s portfolio, for improvements if you will, while advocating his clients to bring other advisors ideas to him to fill the holes he himself left in their portfolios. Read it again. In real life if he can get clients to start off investing a little at a time with him, the same thing is bound to happen to his own clients where they will go elsewhere to get their imporvements instead of coming to him asking his opinion.When clients decide to leave, they'll leave. They're not going to stand around waiting to hear "Yeah that's a good idea, I can do that too!"
“I was pointing out what a hypocrite Anon is by asking new prospects to give him money for holes in their current broker’s portfolio, for improvements if you will, while advocating his clients to bring other advisors ideas to him to fill the holes he himself left in their portfolios. Read it again.”You need to read it again because you appear to be really off base with what you think that I do. When a client has a good relationship with his broker, I don't find holes in the portfolio. I could get some clients if I did it this way, but in general, it's a losing battle. Look at it this way. If I could get one of your happy clients to meet with me and I can poke a hole in one of your suggestions, you'll easily be able to sew up that hole (either by making a change or pointing out why I'm wrong)and keep the client. Instead, I complement their broker and completely ignore the side of the business that the broker handles. I go after the client by doing the work that the broker ignores. If it is wirehouse rep, I solely do the insurance. After the person is my client, I will then be on equal footing to get the investments. When I'm asking for money on the investment side, it is not to fill holes. I ask for ALL of the money to completely build their financial house and not to fill holes. To me, it doesn't matter what they are doing right and what they are doing wrong. My fact finding is all about finding the wants and desires of the client. What they currently have is extremely secondary. I'm not looking to fill holes. I'll get the assets and then figure out what should stay the same and what should be changed. In fact, I think that it is virtually impossible to know exactly what someone should be doing on the investment side before getting the insurance side completely squared away. Using the ideas of other advisors is not about filling holes in the portfolios of my clients. It is simply recognizing that there are many ways to skin a cat. I'll give you some typical examples to make this clear of how this works. Ex. Client is told that I'm ripping him off by having him buy a VA in his IRA. I take the time to re-explain to the client why we made the purchase and how the new guy either doesn't have the knowledge to understand the whole picture or is intentionally trying to mislead my client. End result: I keep the client. Ex. Client is told that UL is cheaper than WL and he should own term or UL. I take the time to re-explain to the client why we made the purchase and how the new guy either doesn't have the knowledge to understand the whole picture or is intentionally trying to mislead my client. End result: I keep the client. End result: I keep the client. Ex. Client is told that he could save money paying commissions instead of my fees. I agree with the other broker. I re-explain that we already discussed this issue and that it was my client's decision to go the fee route. I let the client know the advantages and disadvantages of both. If the client wants to go with commissions, we'll make the change. End result: I keep the client. Ex. Client is told that I'm not objective because I'm earning commissions instead of charging fees. I agree with the other broker. I re-explain that we already discussed this issue and that it was my client's decision to go the commission route. I let the client know the advantages and disadvantages of both. If the client wants to go with fees, we'll make the change. End result: I keep the client. Ex. Client is told about the advantages of UITs over mutual funds. I agree with the other advisor that there are some advantages. I also point out some disadvantages. I honestly admit that I don't know what is going to do better for my client. I point out that the other advisor is a clueless as I am unless he has a crystal ball. If the client likes the idea of making the change, we immediately move some money over to the UIT. The client isn't standing around waiting for anything. End result: I keep the client. What happens in all of these situations is that the client trusts me. I'm the home team and I get the last at bat. I'll pull out the win every time. It's always easy to show why the other guys suggestion isn't any good or if it is good, we just take 2 minutes and implement the idea. It's not "His idea is good and mine stinks." That would cost me clients. It's, "Hey, that is also a good idea. We can give that a try if you'd like. It may or may not do better than what we are currently doing." The other side of the coin to all of this is that if the client is agreeing to meet with a new advisor because he's not happy with the old advisor, the new advisor stands a very good chance of getting the business. My whole point is that it comes down to trust and service and overall comfort level and not specific recommendations.
Just tuned back in to this thread and realized a whole lot more has transpired. Very interesting and thank you to all. I have tweaked my approach a bit and with some success. As the “new guy in town” it’s still hard for me not to present at least “something” before asking for a transfer. However, I have been more thoughtful and listened quite a bit more during 1st appointments. I still use Apt 1 to meet, greet, listen and explain more or less my process, and set expectation for deliverable(s). At that point usually I get a crack at a review of their current situation.
I have changed apt 2 to give them an analysis of the current situation, and a less detailed but still detailed enough proposal - with the caveat that "this is my thought process thus far - I believe it’s the right direction and if you like the whole approach I’ve used (meaning my personal approach and the investment direction I’m going in), then it’s relatively easy to get things started. Once your actual assets are in my care and before we fully initiate a change in investments, we may need to adjust this plan a bit for optimum results, but I think this is the direction we should go."
Then we Q&A. Usually I’ve give some investment ideas, but hint that the allocation might vary, or that we might include alternates or remove something once we know exactly what we’re dealing with. I’ve now found that they appreciate the thoughtfulness, and I’ve been getting the business. This approach won’t stop those who really want to take the ideas and run, but generally speaking, that hasn’t happened all that much since I tweaked this overall approach.
Gotta say though, assuming you have “some” knowledge above today’s hotty fund picks, if you treat 'em the way you’d want to be treated, put your best ideas up front and build a relationship as best you can, it’ll either work, or it won’t. They’ll like you, or they won’t. The end.
Often there is nothing you can do to move forward in this situation. First off, how long have they been with the current broker/relationship? Why are they looking? Is it just to get a second opinion? Is this a large amount of money? (is the account well in excess of a million dollars?) First off, IMO, the very first meeting should be about deciding if this is someone you want to do business with. Is there a good fit? Good long term relationships MUST be mutually beneficial. I only want to work with people that want and are willing to pay me for my advice. There are a million reasons why they say no. From they dont percieve value to they think they are too small... to one of the two of them doesnt have buy in to you and what you are presenting. The presentation of how you would work with them (specificially) should only be done once you have determined that A) you want to work with them and B) they POTENTIALLY want to work with you. Many times you will discover that the "prospect" is really just interested in "kicking the tires" and has no real serious interest in moving his business to you. A lot of the stuff Ive read on here works great if you are going after smaller clients. Most of what Ive read on here will NOT work with very high net worth people. Like it or not, our business is changing. That very high net worth client will come to you through social networking and professional refferals. You aint getting them via cold calling, cold walking or seminars. Those days are gone.
Ok, so you’ve had good meeting. No, a really good meeting with a couple - everyone seemed to make a connection, they were forthcoming about goals, concerns, assets. Agreed to second meeting for the “proposed solution” and showed up - on time. Proposal went well - still good “vibes” but they didn’t move forward on the spot. “We want to think a little” they say. You probe a little, without becoming overly salesy and ultimately book a follow-up…
the phone rings couple of days later - we’re still thinking they say… then… nothing. No return calls. Voicemail at each phone attempt.
For me this scenario has played out several times over the last several weeks. It’s unusual for me so I’m tuned in to it. I’d like to hear from others about what types of things you do in this situation to attempt another move forward. We don’t want to sit on these people and try to hatch them, but curious about the next few steps…