1) Calling yourself a ‘wealth manager.’ Why? Because even wealthy people don’t think of themselves that way. If you tell the world, in your marketing and on your website, that you are a wealth manager, you’re positioning yourself as somebody who works with people other than whoever is finding you on the web.
A good way to stand out is to put, somewhere on your website, that you provide financial advice and expertise to regular people. That’s how even the wealthiest people see themselves.
2) Surprising prospects with a greatly expanded scope of the requested engagement. A prospect knocks on your door (figuratively) and confesses that she’s experiencing a particular financial challenge. She needs help. You respond that when she signs on to work with you, you’ll provide her with ‘comprehensive financial planning’ that includes many things that have little to do with (in her mind) her particular challenge. She decides to go home and think about it, and you never hear from her again.
This abrupt shift from solving a prospect’s particular problem to an expansive engagement creates an instant mis-match between the two sides. Much better to tell the prospect that her challenge is entirely within the scope of your services, and you’ll be collecting some supporting information that will give you context and ensure that the proposed solution is the right one for her situation.
3) Requiring every prospect to turn over his/her assets for you to manage as part of the engagement. See above; this isn’t the challenge that the prospect wanted solved. I’ve always thought it was interesting that every single prospect that many advisory firms encounter all need, in every case, to have the firm manage their assets as part of the engagement.
4) Trying to ‘close’ prospects in the initial meetings. People instantly sense when they’re being persuaded toward a certain decision, and the instinct is to resist it. The best way that I’ve seen to put the client at ease is to start by saying something like: ‘My goal is to determine if we’re the right firm to help you with your challenge. If I don’t feel that I can help you, I’ll tell you, and look for someone who is more qualified to deliver the advice you need.”
Or: “I don’t have an agenda; I just want to explore whether or not I can help you.”
The motivation to shift to persuasion mode and try to ‘close’ a prospect stems from fear of hearing the word ‘no.’ If your ‘agenda’ is simply to look for whether or not you can help this person, you take control of the ‘no,’ and both sides can relax and explore together.
5) Having every advisor at your firm meet with prospects in the initial ‘get acquainted’ meetings–instead of the most skilled communicator.
In a recent presentation at the T3 conference, Andres Garcia of Zoe Financial presented statistics on how Zoe’s referral program was utilized by advisory firms, and then broadened the picture with statistics from other firms. He found that a small percentage of advisors are successfully onboarding prospects to clients in 70% of those initial meetings (with followup), while roughly 50% of advisors are, shall we say, not effectively communicating the value of the firm.
A growing number of multi-advisor firms are designating one advisor to meet with prospects, because that one advisor is far better at helping people envision a beneficial future working with the firm that he or she represents.
6) Showing indifference as to whether the prospect becomes a client—or not.
I get it; you don’t want to come across as a pushy salesperson, so you act as if you don’t care if the person you’re meeting with becomes a client. But if you genuinely want to help this person, and believe you can, does it hurt to show some enthusiasm? Does it make you a pushy sales person if you let the prospect see that you’d be excited to work with him, now that you’ve discovered that you can?
If you come across as indifferent, and particularly if you fail to follow up on that first meeting, then the prospect will logically wonder: ‘When I become a client, will my advisor provide me with indifferent service and attention?’
7) Going too deep too fast. The whole life planning movement awakened the profession to the importance of understanding and facilitating client goals as the key part of the engagement. Nothing is more valuable than that.
But consider how off-putting it is when you meet someone socially and they suddenly start asking about your deepest goals, dreams and desires. Now consider a prospect who is already anxious about talking about such a personal topic as money, who has made financial mistakes that he might be ashamed of. And then suddenly he finds himself in a deeply uncomfortable interrogatory about the sort of things that people only talk about with their most intimate friends.
Is this an intimate friend on the Zoom screen? Is this veering dangerously away from a professional relationship or engagement?
You have to earn trust before you can probe that deeply. The best question I’ve heard for the initial meeting is: “Tell me your story.” Clients will reveal what they want you to know, and maybe a little more, in their response.
8) Delivering long, complicated plans with lots of charts and graphs and boilerplate explanations.
Is your goal to impress the client with your vast subject expertise, or move the client forward toward his/her goals?
9) Delivering quarterly performance statements. These can be uploaded to the client portal, and clients can view them as often, or as seldom as they wish. When clients receive a PDF by email or (worse) a mailed performance statement, it leads them to start contemplating what happened this past quarter in the markets—and maybe think about some changes that need to be made here and there based on whatever went down or up.
The performance statements encourage a short-term focus. Will that be helpful to their decision-making?
10) Hiring for need rather than opportunistically.
I hope this isn’t the first time you’re learning that there’s a talent shortage in the planning profession. And I hope you have a structured process for recruiting advisors and key staff members similar to your structured process for getting the attention of prospective clients. And (I keep hoping) you’ve probably learned that the odds of a favored job candidate accepting your offer has declined almost to the odds of a prospect becoming a client—somewhere in the 40%-50% range if you’re really good at both.
Meaning? I see firms wait until the team is stressed before reaching into the job market, and other firms that, when a potentially great hire comes along, will pounce even if there’s no immediate need to add capacity. The dance between adding clients and adding capacity is admittedly complex, but just about everybody ultimately regrets passing on somebody who could become a great contributor to the team.
11) Hiring based only on experience. If the candidate has professional experience, chances are he or she can get up to speed faster, and require less training, than a new advisor or career changer. Point taken.
But which is more important: having worked in the field for 10 years, or having an innate talent for connecting, an instinct to serve others and a willingness to go the extra mile to get the job done? It’s a lot easier to teach financial planning or how to navigate the back office technology than it is to change someone’s core personality.