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Financial Planning > College Planning

Do What I Want, Not What I Ask For

By Staff Writer

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Recently, in one of my workshops, a participant named Jerry related an interesting story about the difficulties of selling with information. He had done a research interview with an old college buddy who had done extremely well for himself financially, and he was delighted when the friend told him, “Jerry, I think I’m at the point in my life where I could really use your help.”

Jerry gathered his friend’s financial information and developed a very professional and detailed financial plan. He worked hard, because this was likely to be the biggest account he had ever opened. When he went back to present the plan, the two men went over everything in great detail. Jerry had listened carefully and was now offering him exactly what he had asked for. At the end, Jerry asked, “How does this all sound to you?” His friend said, “Wow, this is an overwhelming amount of information. I need to take this home and think about it.”

Immediately Jerry knew he had blown his big chance. What went wrong?

Too Much Information

As Jerry was telling his story, I thought back to the late 1980′s when I ran marketing for a financial planning firm in Phoenix. The principal in the office had invested a substantial amount of money in a computer network and Leonard Financial Planning Software. The basic attitude in the office was, “Darn it, we’ve invested a lot of money in this technology and you are going to have a comprehensive financial plan whether you want one or not!”

Our plans were literally an inch and a half thick, took weeks of intensive labor to develop, and completely bored clients out of their minds. In many cases, the plans simply overwhelmed them with data so that they became confused and were unable to make any decision at all. Rather than helping to open accounts, the plans became yet another obstacle.

There seems to be a debate in our industry between doing a comprehensive financial plan or doing little or no planning at all. I am a firm believer in the financial and investment planning process. I believe the question is not “To plan or not to plan?” but “What level of planning is appropriate?” When it comes to presenting the plan to clients, the answer is: “Less is more.”

The best way is to start with a clear explanation of how you help your clients. It’s not about data at all. Here’s how you might explain to your clients and prospects what business you are really in: “Mr. Client, I see my job as much more than just analyzing investments, writing plans, and providing investment and insurance products to people. Really, my job is to help my clients clarify their vision of the ideal life. Then, I develop written strategies that have the highest probability of making their goals and dreams come true. Finally, I help them implement the plan over time and take corrective measures as needed. I do all of this using a proven investment process that will help my clients achieve their goals with the lowest risk possible.”

This repositions your role. It’s not about getting the highest returns, it’s about clarifying their vision, developing a written plan, and then helping them implement the plan with the lowest risk possible. That translates to the highest probability of actually achieving success.

This process lets your prospects’ and clients’ visions, dreams, and goals drive your planning process–not your software, background, or current hot product. This is what I call visionary selling, as opposed to traditional information-oriented selling.

The bottom line is this: If you have an elegant process for helping your clients clarify what they really want in their life, and you develop a written strategy that makes sense to your prospects, you get almost no objections and there will be no need for them to “think about it.” In other words, if you listen to them and give them what they truly want and need, there is there is no resistance and they will want to start working with you right now.

Five Levels of Cognizance

In working with prospects and clients, it’s important to understand that the human mind works on five levels. These are called levels of cognizance. The five levels are data, information, knowledge, wisdom, and insight.

Data is “just the facts, ma’am.” For instance, the Dow Jones Industrial Average Index is at 10,521. Without any context, this information is meaningless.

The next level of cognizance is information. This is data with context. So if you know where the index is now and you realize that in 1982, it was around 1,000, that gives you some sense of comparison.

The third level is knowledge. This is information enhanced by practical experience. So if you had invested money, say, back in 1981, and your money has grown substantially, you would have a better understanding of how financial indexes work and how you might use them to compare different asset classes and make informed decisions.

The fourth level is wisdom. Wisdom is practical application of knowledge with predictable outcomes. Wisdom is something that can only be gained by working for many years in a specific field. This is why experienced investors are much more conservative than new investors. New investors have a lot of data, but no wisdom.

Insight is the highest level of cognizance. Insight is a personal understanding of what you should do with the wisdom, knowledge, information, and data that you have. It’s a clear vision of what actions to take to get what you want.

Insight moves people to action. Data stops them from acting. If you think about it, what Jerry did was provide his client with a lot of data and information, but almost no wisdom or insight.

I’ve found that clients and prospects typically engage financial advisors at the level of data and information. They ask questions like “What is the best investment?” They typically don’t know enough to ask for what they really want–insights.

In our society we seem to think if we provide enough information, people will figure out what to do. But what really happens is people get too much information, become overloaded, and do nothing.

Three Things

You Need to Know

In any initial interview process, client-centered advisors need to know three key things about their prospects.

Number one is your prospect’s primary interest. This is almost always a product. People will commonly come to you saying they want an estate plan or an investment plan, a variable annuity or life insurance. Or they may want to know how much money they need to retire. The primary interest is almost always a low-level smokescreen. It is a product or service that they have fixated on because they believe it will help them to achieve their goals.

The second element you need to know is the prospect’s dominant buying motive. This is the actual feature or benefit they hope to achieve from their primary interest.

The final issue, which is the most important, is the emotional payoff. This is the emotional state or feeling they hope to achieve when they get the benefits they expect from their primary interest, such as feeling secure, simplifying their finances, feeling in control, and so forth.

What’s interesting that most financial advisors don’t even recognize these three levels, and don’t realize that the primary interest or product is usually a red herring–the emotional payoff is what really matters.

To determine a prospect’s primary interest, simply ask, “How can I help you?”

In one of my sales situations, the client told me he wanted to buy bonds. “Well, we can certainly do that,” I said. “But first, what do you hope to accomplish or achieve with your bonds?” (This question flushes out the dominant buying motive.) He told me that he wanted to have more income.

I said, “Well, we certainly we can provide you with more income, but if we were more able to provide more income to you, what would that mean to you personally?” (This question starts to get to the emotional payoffs.) He said that he was concerned about inflation. I asked him what about inflation was he concerned about most. He said it was the high cost of long-term care.

“Bob, you’ve got three children,” I said. “Wouldn’t they take care of you if you ever became disabled?” He turned bright red, slammed his hand down on the table, and said, “Steve, I don’t EVER want to become dependent on my children.”

I had finally gotten to his desired emotional payoff. “If we came up with a written strategy that would ensure that you never became dependent upon your children, no matter what happens to you or the economy, but it didn’t involve bonds,” I said, “would you be open to it?” He said, “Sure–that’s why I came to see you.”

Ultimately, we ended up selling Bob balanced mutual funds and long-term care insurance. I could have given him all the information and data he wanted about bonds, and all he would have done was say, “Great–let me go home and think about this.” But by getting to the core issues that were important to him, what he truly wanted to accomplish, I was able to recommend a solution that more appropriately met his needs. And he didn’t hesitate to take action immediately.

By being a client-centered advisor who coaches your clients to help them get what they want, you will never have to sell your clients with mountains of information again. And you will never hear those painful words, “This sounds great; I just have to go home and think about it.”

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