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Eliminate Headaches and Build Your Reputation by Being Picky in Choosing Prospects

Advisors in growth mode need to be careful about being blindsided by prospects who look good on Zoom but turn into difficult clients.

I can remember, as if it were yesterday, at the beginning of my consulting practice some 40-plus years ago, saddled with nearly $10,000 of debt, my primary concern was keeping the lights on (being able to pay my bills). So when it came to prospects, my sole objective was to turn every one of them into clients.

Can you relate? I’d wager that you can. You know the old saying—if they could fog a mirror, they qualified. Ouch! It hurts just writing that phrase. However, I did everything in my power to sell my services; I wanted them to like me, respect my knowledge, see me as a viable solution and hire me. I had clients write testimonials, took pictures for the testimonials, had brochures and articles that I’d written to hand out—everything and anything that I thought might help make the sale.

It didn’t take me long to learn the flaws of that approach. Although I was usually able to create a healthy client-consultant relationship, a handful of clients were always a problem. Whether they were overly needy, had unrealistic expectations, were a time waster, a fee whiner, a jerk ... the list goes on—but all it takes is a few of these clients to play havoc with our emotions, which if left unchecked can create “speed bumps” to both growth and productivity. 

COVID-19 Opportunities and Challenges

In today’s upside-down world, one of the common conversations within affluent circles is about finances. Whether it’s about market volatility, the overall economy, the political impact of the upcoming election, the post-coronavirus future or—what they’re hearing from their financial advisor. Right or wrong, these conversations have created an extremely fertile prospecting environment. Financial advisors who recognize this opportunity and are able to approach it with an art form that oozes pandemic empathy are bringing in new affluent clients at a higher level of assets faster than at any time in their career.

This is good. What is not and what financial advisors need to be careful about is getting blindsided: “This couple was recommended by a good client, I was introduced to them on Zoom, and after only one additional Zoom meeting they became a client,” Neil recounted, then continued, “It’s been two months and they’re a disaster, constant phone calls, complaining about fees—I should have known, as they’re now complaining about the same things they were trashing their previous advisor about.”

Neil is a financial advisor who’s in serious growth mode. He’s brought in $13 million YTD and, according to his coach, has really mastered both the art of selling his services to affluent prospects and the technology to do so virtually. The lesson he learned, expressed in his frustration quoted above, was “Just because they had $1.4 million and were willing to become a client, I needed to further qualify them. I got seduced by the $1.4 million.”

This happens. The key is not to let it occur very often. Just a handful of actions will not only prevent you taking on the “wrong” client but also make you more desirable within affluent circles. You increase your appeal when word gets around, and it will, that you don’t work with everyone.

First and foremost, you must “flip that mental switch in your brain” and make the decision that you’re not going to accept any prospect, regardless of assets, if they don’t meet your qualifications. As much as you might want the assets in the short term, in the long run your reputation that spreads through affluent word-of-mouth-influence for being discriminating on who you work with will bring in far more assets.

Second, you need to establish qualifications. This will vary from advisor to advisor. Some will insist upon working from a financial plan, and or a certain asset number, and or insist on managing all the assets, and or agreeing to your service model, and or how you get paid—whatever it might be—it all needs to be clear. However one thing should be a constant—you need to have a good working relationship—and here’s verbiage that uses reverse psychology and is money in the bank: Before moving forward, we need to feel comfortable that we can have a good working relationship with you and your family, and you need to feel the same about working with usas we work closely with all of our clients.”

Third, you need to make your clients and referral alliances aware of your qualifications. This doesn’t need to be in a written document, but rather a simple narrative that reinforces the value you’re delivering, prepares them for the chance that someone they refer doesn’t qualify and will become part of their word-of-mouth-influence. Bill’s really an outstanding financial advisor, but he doesn’t work with everybodyhe is very discriminating.

Fourth, always circle back to your client or referral alliance partner when a prospect whom they referred doesn’t fit—I really appreciate you referring the Smiths, but they’re not going to be a good fit because ...

Be gentle in your explanation—but if the Smiths are difficult to deal with, the odds are that the client who referred them is well aware.

There are many ways to approach this—but the reality is that when you don’t take everyone you have a double win: eliminating headaches and attracting more affluent prospects.

Matt Oechsli is author of How to Build a 21st Century Financial Practice: Attracting, Servicing, and Retaining Affluent

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