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March 30, 2005 at 07:00 PM
A successful brokerage operation has to provide individual solutions
by Stephen M. Grice
Its no secret that over the past decade, the financial services industry has changed dramatically. In the past, stockbrokers sold stocks and bonds, CPAs provided tax services, and attorneys drafted wills and trusts. Today, those lines have blurred to create a marketplace in which advisors offer varied financial advice and products to consumers looking to consolidate their financial choices.
Navigating through the ever-evolving financial services industry is like charting a course through a reef-filled ocean. One can take numerous channels to the destination. Each is filled with different currents, sandbars and unknown hazards, but with knowledge, skill and determination, a captain can plot a course that will bring the ship successfully to port.
Establishing strong relationships with advisors in various channels is critical to a successful brokerage operation. To do this, one must understand the complexities of each channel and provide individual solutions.
Preparing to Set Sail
One of the first steps to growing your business in new channels is to educate yourself. Invest in the certification, licenses and training to establish your professional credentials.
Eliminate the “sales” stories from your conversations and meetings. Talk about how you solved problems and helped a client realize a dream, not about the variable annuity or managed fund that you set up.
Affiliate yourself with companies that offer a broad range of solutions and will partner with you. Identify which companies develop products for specific markets and niches. The broker-dealer also should have effective compliance processes and technology platforms.
Learn the language. Depending on your experience, you may understand the insurance channel but might stumble over terms commonly used by stockbrokers or CPAs. By overcoming the language barrier, you can build a relationship in a new channel more quickly.
Once youve begun to plot your course in a new channel, share information freely, follow up consistently and be patient. Position yourself as a problem solver and ask probing questions to ascertain the clients need before making recommendations. Stop “selling” products and be prepared to spend the time to educate the broker, advisor, CPA or attorney about why your recommendation is right for the client.
Dont assume that the advisor or the client understands how investments and life insurance work. Educating advisors and clients can be difficult if they position themselves as experts. Often this requires a delicate touch.
Address this issue up front by asking probing questions about goals and needs. By gently educating them on the strategy, the plan and the solution, you can sidestep the pitfalls of pride more easily and strengthen the relationship.
While creating the trust necessary to build a strong relationship, expect disagreements to occur. Be flexible and offer broad-based plans and solutions that can be modified without wandering from the clients goal.
Your value lies in being trustworthy, making recommendations that meet the clients goals, and creating a relationship with the advisor and the client that can flourish over time.
Independent Financial Planners
Recently, I was asked to review a plan for a retired couple. Upon consultation, I discovered the husband and wife had been sold policies that were not appropriate for their needs.
