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Mar 2, 2009 12:02 pm

I’m about a month in the business.  Trying to bring on clients and have four so far.  One common reply lately seems to resemble this:

"I talked with Mrs over the weekend, and we’re going to pass on the
consultation at the moment. We definitely need to talk about our
financial future with an adviser, but now is not the time. Our focus is
to pay off Mrs student loans and credit card debt. Once that’s
under control, we can chat.

Mr is turning 40 this year, mrs is a bit younger.  From previous conversations I am pretty sure Mr hasn’t really done much if anything other than a 401k toward retirement and mrs recently left the military and wasn’t in long enough to get any type of pension. 

Clearly they need to get off the pot start thinking about the future now rather than later.   Any insight for a reply to get them in?    The consultation is free but I do charge annually for planning services.  (very affordable)

Mar 2, 2009 12:18 pm

That doesn't sound like a good prospect. They are doing what they should be doing -- paying down debt, and they don't have any investable cash or transferable assets... Probably they need life insurance.  .... I would just check back with them in a year and meanwhile go find somebody else.

I've wasted a lot of time with people like this in my first couple of years. They have a NEED, but they have no money and no clue as to how much trouble they're in.      
Mar 2, 2009 12:27 pm

GGR, how do you make your money?  I ask because that will determine how to proceed.

Mar 2, 2009 12:30 pm

From annual fees, and of course commissions on investments and insurance products etc.

Mar 2, 2009 1:02 pm

I would probably move on to the next prospect unless this person is in jeopardy of being laid off, 401K rollover. You aren’t going to talk someone out of paying doen debt and invest right now. Paying down debt is really what we should all be doing. You are off to a great start to bring in 4 clients in your first month in this market. Keep it up!

Mar 2, 2009 6:39 pm

Buyandhold & Bank are exactly right. Not a great prospect, but doesn't cost anything to stay in touch with them every few months. I, too, have been a victim of holding on to prospects that really aren't likely to turn into much.

Mar 2, 2009 8:38 pm

In this type of market it is hard to get away from anyone who is willing to talk. You have to keep the idea of a qualified prospect at the forefront of your brain. Yes these propects could turn into something in the long run, but if you don’t make it to the long run then they don’t matter. Put them on your list to contact in the future and move on to the next.

Mar 3, 2009 7:49 am

Glengarry, you’re with Ameriprise, as am I, so let me give you a quick foreshadowing into how things would go if they ever became a client:

  PMM - They sign on with you and pay you your $600 annual fee.  You ask for referrals.   Strat call - You talk to them about their goals and they reiterate they want to go over a credit card and other debt pay-down strategy first and foremost.  You or your manager try to get buy-in on life insurance at some point during the call.  It may or may not work.  You ask for referrals.   Strat #1 - As promised, you and your manager come up with a great debt calculator that is sure to excite them.  After presenting it, you spend 20-25 more minutes explaining the nuances and how it will help them free up another $200-$300 per month.  You may or may not have considered VUL's for these people, depending on cash flow.  If they are hard-pressed for cash, and if they are busy worrying about credit cards then they probably are, then you'll be stuck recommending 2 term insurance policies that will generate you $1,000-$1,250 of GDC.  With the money they save by buying 2 cheap (ha!) Riversource term policies they can then open up a couple of Roth's at $200 a month.  In 5 months then they can finally invest that into a mutual fund once its at $1,000 in each account.  You ask for referrals.   Strat #2 - You present the financial plan to them.  You ask for referrals.   You are just starting out, so this type of relationship is to be expected, and would give you experience.  Moving forward though, you don't want to spend 4 meetings and roughly 8-9 hours of work (meetings + case work + tracking down information that they probably forgot to bring to the original meeting) for $1,500-$2,000 of GDC (assuming they buy the Terms, and I was kidding about Riversource's Term's being cheap.  Its among the most expensive in the industry) and a couple of ongoing bank authorizations.  It may be worth it if they're close to switching can show them value by doing the little things that won't pay you anything like the debt calculator, so they'll think of you when it comes time to roll over the 401(k).
Mar 3, 2009 8:47 am

GGGR, in general, as someone new in the business, you need to meet with as many people as possible.  Meeting with them is the only way to learn what you are doing.  It is also the only way to get referrals.  It is also the only way to learn who makes a decent prospect and who doesn't.  

When you meet with someone who is not a good prospect, make sure that the referrals that you are getting are not lateral.  This is just playing the odds.  If they aren't a good prospect, their friends probably won't be either.  Get referred to their attorney, their CPA, their boss, their parents, etc.    As for your original question, it sounds as if you have met with the husband and then he talked to his wife and then you called him back and he said that they don't want to proceed.  Is that correct? Since this is a common problem for you, the problem is somewhere with your approach.  Have you done some joint work so that someone can critique you?   You are getting lots of comments that these aren't good prospects.  That might be true, but it's also irrelevant at this point.  You absolutely don't know based upon what they are telling you.  Most people are simply too nice to say, "Sorry, but you sound like you don't have a clue, so we won't work with you."   Plenty of people won't want to work with you even if you are the greatest.  It doesn't matter.  It just means that you have to call on more people.  Ok, so what do you do with someone who won't meet with now?  Picture your ideal client.  If they don't come close to this picture, throw their file in the trash.  Only call on them again in the future if they are the type of person who you would like as a client.   Here's a common time line from early in my practice: Year 1; month 1: Call prospect: can't get appt Year 1; month 7; call prospect: can't get appt Year 2: month 1: call prospect; can't get appt Year 2: month 7: call prospect; get appt!; get blown off for appt; reschedule appt; he cancels and asks me to call back in three months. Year 2: month 11: call prospect; set appointment and take fact finder and set close; he cancels close and asks me to follow up in 3 months Year 3: month 2; call prospect; set close; meet with prospect; he can't make decision without his wife; need to schedule another appointment; busy time..tells me to call in 2 months. Year 3 : month 4; call prospect; set appointment with him and wife.  They like what I'm presenting, but "need to think about it" Year 3: month 5; decide to fund Roth IRA, but going to buy term life insurance from friend who just got into business.  I make $1/month for the next 24 months with hours of wasted time.   My point is that if anyone won't meet with you now, get rid of them if they aren't an ideal prospect.  Otherwise, you'll waste lots of time that could otherwise be used for generating real business.  Sure, some of them will turn into decent clients, but it's not worth it.   Do you remember the game show, "Let's Make a Deal"?  Our time is limited.  When you call on someone or meet with someone and nothing is going to happen now, ask yourself, "In the future, would I rather call on this prospect or would I rather take a chance with the unknown behind door #2?"  If the answer is "door #2", throw the prospect in the trash.  Time spent calling him would be time not spent calling on "door #2".    
Mar 3, 2009 7:58 pm

Dr. Phil, “How’s that workin’ for ya?”

Mar 3, 2009 10:20 pm

Thanks guys.  Some good input in the replies, I appreciate it.  Coming a long and I’ll let you know how I progess.  I need a total of ten “planning” clients in ten weeks…stay tuned.