Does this scenario sound familiar? You are a financial advisor of solid standing with plenty of visibility in the community. For several years you have belonged to major organizations in the community, and have come to know the movers and shakers in those organizations and the community at large: local business and political leaders, and the heads of civic and cultural organizations. Those people may know what you do for a living, but have never approached you for business. You are hesitant to approach them because you don’t want to risk your existing friendships, or you fear getting a reputation within that community of being a “pushy” broker type.
Transforming friends into clients is one of the greatest challenges investment advisors and financial planners face, but it’s not impossible. Here are three strategies for overcoming that challenge, allowing you to approach friends for business without crossing the invisible but clearly defined line that separates trusted advisors from pushy stockbrokers.
Strategy #1: Educate Them
People have a tendency to make assumptions about certain professionals, to pigeonhole them based on vague and often incorrect preconceptions. For example, many people think accountants could never be financial planners, since they’re only beancounters who wear green eyeshades and never write outside the margins. To counteract such misleading preconceptions, here’s a strategy to improve how you are perceived by potential prospects with whom you are already friendly.
First, make a list of the friends, acquaintances, or family members you would like as clients or who could be good sources of referrals. Would you prefer not to approach family members? Fine. Only list people you would be comfortable approaching.
Next, meet them in a spontaneous way. For example, let’s say you are entering the clubhouse after playing a round of golf. You see a couple having a drink, and you ask to join them.
Begin the conversation by addressing one of your acquaintances: “Bill, we’ve known each other for about five years. I know you work at that big pharmaceutical firm outside town and you do something in research. I’ve always been curious. What exactly do you do?” Then stop talking.
When you take this approach, three things happen. First, Bill will explain what he does and will usually highlight those parts of his job that he likes best. Second, you learn new things about Bill, such as that your information may be incorrect or dated–he may have started in research but is now in marketing. Third, since people enjoy talking about themselves, you put Bill in a good mood.
You may think that now it’s your turn to explain what you do, but you’d be wrong. Years ago I heard a person use a great line in a similar situation: “Bill, you know I work at ABC Securities. When you tell your friends about me, what do you say I do?”
The question puts Bill in a box. He can’t say, “John, I’ve never told anyone about you so I’ve never needed to know what you do,” since that would be incredibly rude. Instead, Bill will give a short response such as “You’re a broker who sells stocks and bonds. Right”
This gives you the opportunity to briefly expand on the answer and correct Bill’s misperceptions. “Bill, that’s part of what I do, but today I also….” or “Years ago that was what we did, but these days….” The crucial part of the interaction comes next: asking for Bill’s business. To properly formulate that question, let’s set the stage. We assume you have a planning-based business and use professional money management. Your target market is investors who have more than $500,000 in investable assets.
Start formulating your question by making another assumption. If Bill’s friends use professional money management at a competitor and have size and style diversification, those friends probably have $500,000 on the table. “Bill,” you might say, “now that you know what I do, if you know anyone who uses professional money management and is dissatisfied with the relationship, I would be interested in talking with him.” A variation can be based around the phrase, “and is dissatisfied with their returns relative to the market,” since most investor complaints revolve around fees or performance.
Notice you didn’t say you could do any better. You just said you would be interested in talking with them. It’s a very low-key approach.
Bill might then reply that he’s not satisfied, and may ask what you could do for him. It’s more likely, however, that Bill will be reminded of friends of his who complain that their advisor left the firm or that their portfolios’ performance with their current advisor is poor. Maybe their advisor doesn’t return calls. Psychologically, people who complain are already shopping around for alternatives, so it’s a small step for a friend to suggest you might provide better service than their old advisor.
Strategy #2: Win Them Over
Bill now knows who you are and what you do, but now you need to take the time for him to understand why you are better than your competitors.