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Practice Management > Building Your Business

A Formal Affair

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Right after an advisor friend of mine packed up and moved his firm to a new state, I called him up to see how things were going. There were still boxes in the hallways and the dust had barely settled, but he was pleased to report that nearly all of his processes were set up. Once they were in place, he said, his staff would run everything, and he would just show up and do presentations, build relationships, and meet one-on-one with prospects and clients.

How was he able to cede so much work to his employees? By formalizing everything into processes, complete with flow charts, written procedures, forms, checklists, and step-by-step instructions, the place could easily hum along without him for weeks at a time. And when he was in the office, he could focus all of his energies on building relationships and planning the future of his firm.

Let’s look at the steps of the process of creating a business that runs itself.

Target Your Marketing Efforts

Marketing your services is all about delivering the right message to the right people at the right time–a message such as: You are a knowledgeable, caring expert who understands your prospects’ goals and has strategies, services, and products that will help them solve a compelling financial problem. If you’re working in the retirement rollover market, for example, you would want to communicate that you have the expertise and knowledge to help people avoid taxes and develop efficient portfolios that will support them throughout retirement.

Target your message to a specific group, and the people who have the problem and want to solve it will come to you.

Pre-Qualify Prospects

Today there are more wealthy people than ever who need the help of a competent, caring, client-centered financial advisor. Once you define a profile of your ideal prospect, make sure prospects fit the profile before they come to your office. Develop a script for your receptionist. A basic script would go something like this: “I appreciate your calling and I need to let you know that we only do fee-based money management for a select group of successful families. We can’t help everyone, but the person who can benefit most from our services normally has at least $250,000 (or whatever your ideal minimum account size is). We don’t play the market or gamble with our client’s money. We do prudent, long-term investing for people who have a lot of things they would rather do than worry about their money. How well does this profile describe you?”

Then let the prospect tell you how well they fit what you are looking for. When you pre-qualify people like this, a couple of amazing things happen. Number one, those people who fit your qualifications feel that they qualify for a very special club. They want to work with you even more when they find out not everyone gets to work with you. Creating this mindset of limited availability is one of the most powerful things you can do to position yourself as a desirable financial advisor.

Number two, this process will screen out people who are not a good fit for your services. The best time to fire bad clients is before you ever take them on.

If they say, “You sound like exactly the kind of firm I’d like to work with but I don’t have the minimum account size,” ask them how they heard about your firm. If they are a close relative of one of your best clients, take that into consideration before you turn them away. If they were highly referred to you by a center of influence, you may want to relax your requirements.

Send a “How To Get the Most

From Our Meeting” Package

Compile a standard pre-meeting mailing, including a letter telling the client a bit about your firm, a map to help him get there, and a checklist of what to bring to the first meeting. Send the package as soon as your office has set up an appointment, and have your receptionist call them the day before the meeting to make sure they are coming and bringing the required information.

Know What You

Want to Find Out

This initial interview is one of the most critical steps in the relationship-building process. Your primary goals are to build rapport, determine what they want and need, determine if you can and want to help them, and, if appropriate, gather data on their current situation. Print up written questionnaires in advance to make sure you collect all the information you’ll need, or make a list of all the questions you plan to ask.

This entire meeting shouldn’t take longer than two hours–don’t go longer than that because they will get burned out. At the end of the meeting, agree on the next step, typically a simple analysis and recommendation provided by you. If you charge for this service, get a deposit. Always set up the next meeting before they leave. Give yourself ample time to do the planning process.

Generate a Written Plan

A written plan demonstrates that you listen with your head and your heart. It documents an intelligent strategy for helping them get what they want.

The most important part of this plan is a one-page document on your letterhead, documenting your prospects’ values, dreams, concerns, and specific goals for the future. This tells them that you truly understand them. The rest of the plan details how you will implement a strategy to help them achieve their goals. The plan should connect your prospects’ hopes, dreams, and values, their goals, and their current assets, with the realities of the securities markets.

There are many good software programs on the market to assist you in developing your plan. Ideally you would design a template, and someone on your team would help you with the data input and number-crunching. My suggestion is to keep the plan as simple and as visual as possible to help your client make the best decisions for themselves. Most people “buy with their eyes.” Include an implementation schedule and checklist.

Present Your Plan

During your next meeting, go over the one-page document listing their values and their vision for their ideal future. Make sure that you have everything correct. Next, go over the highlights of the plan. Make this quick and simple. Show how your plan will help them get what they truly want in life. After you have explained the plan, show them an implementation schedule.

Then ask, “How does this sound to you so far? What questions do you have?” If you’ve done your discovery process correctly, documented everything effectively, and developed a plan that fits their needs, they are not likely to have objections. Objections generally come when you’re trying to sell things people don’t need. When you’re helping people achieve their dreams and goals, they usually do what you recommend.

Once you both decide to move forward, have the clients complete the paperwork, write the checks, and open their account.


Outsource, or Use Fewer Funds

It’s now time to move the money into specific investments based on the asset allocations spelled out in your plan. If you want to streamline your business, consider outsourcing this part of the process through a turnkey asset management provider or a third-party money manager.

I highly recommend that you set up discretionary accounts so you don’t have to sit down with every client each quarter, or twice a year, to make decisions. To simplify your business as your client base grows, make sure everyone has the same underlying asset classes or managers. The only difference should be in equity exposure.

Send a “Welcome Aboard” Mailing

When a client opens an account with you, they’re nervous. Even though they like you, they like the process, and you’ve been highly recommended, most people will have second thoughts when they make a major financial decision.

To relieve their anxiety, compile and send a standard “Welcome Aboard” package, including a warm letter welcoming them to your firm and telling them you’re happy to have them as part of your extended family. Include more detailed information about how your firm works, when you want to meet, who to talk to in your company for different services, and what special events are coming up.

Get Plenty of “Face Time”

It’s important to meet with your clients at least once every quarter for the first year of the relationship. After that, you can ask them how often they want to meet. Usually they will want to meet less than four times a year. Don’t call the meetings performance reviews; call them service meetings. Remember, you’ve told the clients you want to manage their money for three generations, so don’t focus on quarterly ups and downs.

I recommend these meetings last about one hour to 90 minutes. Your goal is to build rapport, educate your clients on the realities of the market, and manage expectations.

At the end of each meeting, show the clients a profile of a person who can benefit most from your services. Ask them to be alert for folks who meet that profile, and to consider introducing you to them. Then set up the next quarterly meeting.

Keep In Touch

In their excellent book Cultivating the Affluent, Russ Prince and Karen Maru File surveyed almost 900 individuals with a million dollars or more with fee-based money managers and found that these individuals wanted to hear from their investment advisors 18 times a year. This might shock advisors, but remember: The people who work with fee-based advisors want a relationship.

I highly recommend you do special events for your top clients, like Valentine’s Day parties, cruises, wine and cheese parties, theater openings, etc. All these things communicate to your clients that you care. And if they know you care about them, they will care about you. We are moving towards a partnership business model where you help your clients achieve their goals and they help you achieve your goals. People want to work with investment professionals that they know care about them.

In order to take your business to the next level of success, consider formalizing your processes with scripts, checklists, forms, and step-by-step procedures. You’ll find your firm providing top-notch service more consistently–and you’ll find yourself with more time to do the things you do best.