When Gilberto F. Gra-a, CFP, left the health care industry some 18 years ago to start his own financial advisory practice, he needed a name for his new venture, one that captured the essence of the approach he intended to use with clients and resonated with the people he hoped to serve.
The name he chose for the company was Wealth Solutions Group, with “solutions” being the operative word to describe a practice that under his leadership has prioritized problem-solving over product sales. There’s more to it than just a name, says Gra-a, whose practice is based in Coral Gables, Fla. As an advisor, he preaches a solutions-based approach to serving clients because, he says, when it comes to life insurance and other financial products, people want someone who’s first and foremost a problem-solver, not a salesperson.
For many advisors, the ability to develop and sell personalized solutions, not just peddle products, is an acquired skill, he contends. “This isn’t just ready-fire-aim. There’s a process involved, like there is with any discipline. The idea is to be an objective observer and through a series of inquiries, to learn enough about a person, his situation, goals and aspirations. That means taking a step back from the actuarial tables and the sales hype to focus on the complete financial picture. It’s not about trying to fit an individual to the suit; it’s about fitting the suit to the individual.”
Building trust, credibility
Before creating a solution, the advisor first must uncover a problem. That’s a process that, according to advisors who use it, entails developing a relationship of trust with clients – a collegial, conversational working relationship in which the advisor develops a dialogue for the purpose of fact-finding and getting a feel for the client as a person.
Rarely does a straightforward sales approach produce such a relationship of trust. Rather, product-focused, sales-first tactics are apt to turn off clients.
“Solution-based marketing is effective,” says financial planner Rich Schuette, a partner at MJL Advisors in Santa Barbara, Calif., “simply because people don’t feel like they are being sold.”
Before a problem can be identified and a solution offered, trust between client and advisor has to be established. “This is an industry based on trust first and foremost,” Schuette says. “It all starts with getting to know the client and actually taking the time to understand what the person needs and wants. ‘Tell me about yourself, your kids, your grandkids.’”
According to advisor Ben Baldwin of Baldwin Financial Services in Arlington Heights, Ill., people will be reluctant to answer those kinds of personal questions if they sense the line of inquiry is merely building to a sales pitch. The client has to trust the advisor is genuinely interested in his best interests. That sense of trust “is not something that happens instantly.”
To foster trust, Gra-a steers away from one-sided grill sessions and instead turns initial meetings with clients into give-and-take educational discussions where the client is welcome to fire questions at the advisor.
“A prudent advisor should make an effort to educate the individual because the individual can give you much better input if they are more cognizant of the big picture, what their potential needs are and what resources are available to meet those needs,” he says.
Educating clients also is a powerful way for the advisor to demonstrate expertise. And in the eyes of clients, expertise tends to translate directly into credibility, a key factor in building trust. According to Baldwin, posing broad, seemingly non-probing questions is another way to build credibility. It’s also an effective, non-threatening way to get clients to open up. “Usually the first thing I’ll ask is, ‘Why [did you come to] a financial planner, and why [did you come to] me?’”
Identifying the problem
Once prospects begin opening up, and with trust and credibility now established, it’s time to start delving deeper to uncover a problem that needs solving. Here, asking questions serves a dual purpose, Baldwin notes. It’s a means of fact-finding, but it also shows the advisor cares about the client as a person, a sure way to build trust.
It often takes some sleuthing by the advisor to uncover a problem, so asking the right questions – in a non-salesy tenor – is crucial. Here’s where the advisor’s efforts to educate the client bear fruit, Gra-a says. By filling in [a client's] educational gaps, you’ve developed a common vocabulary. The client now can use that vocabulary to better communicate his goals and situation, so the advisor can better ascertain the real needs of the individual.”
Once everyone is speaking the same language, the advisor can begin a more detailed line of questioning to develop a complete profile of the client. It is during this process that the cues to a problem really start emerging. “Your goal,” Baldwin says, “is to know about all they own and all they owe, where their income comes from, where it’s going, but it’s also to learn about the things they really want and the things they perceive as inhibiting them from achieving their goals.”
In identifying problems that need solving, says Gra-a, it’s best not to bring a preconceived product agenda to the table during fact-finding discussions. An open mind leaves the advisor better equipped to spot cues from the client that there’s a problem that requires a solution. Some cues are more obvious than others. Schuette watches for issues that evoke the strongest emotional response from clients. “The more emotional someone is about a particular issue,” he says, “the more likely there is a problem that needs to be solved in that area.”
One cue Gra-a says he watches for is a situation in which a client’s approach to assets and income are “monolithic” – that is, their holdings and cash flow rely heavily on a single asset such as a family business. “When that’s the case, and if they don’t have adequate life insurance, this is a clear sign their family could be put in a difficult position.”
When the goal is uncovering need, Schuette suggests steering the discussion to issues related to financial legacy: “What kind of legacy do you want to leave behind? How do you want to be remembered? Tell me about the things you have a passion for? Is it the theatre? Animals? Flowers? Your grandkids?”
A senior client who dwells on issues related to financial legacy essentially is telling the advisor to offer a solution that involves life insurance. Indeed, Schuette says, concerns about leaving a financial legacy, whether to family, charity or both, are especially acute among seniors. To understand those cues and respond with relevant solutions, advisors thus should have a strong grasp of estate planning and how life insurance fits in the context of an individual’s wealth preservation, wealth transfer and tax-avoidance priorities.
…And the solution
Context is in fact what distinguishes the solution-based approach from the sales-based approach. Clients are more apt to purchase a product that is introduced in the context of a solution than one that is touted without reference to the big-picture issues it addresses. “People are saying, ‘Don’t just sell me a policy, show me where it fits,’” Baldwin says.
Possessing the knowledge to put a life insurance solution in the proper context within a client’s portfolio is a major challenge for advisors who are more focused on production than the big picture.
“It requires the advisor to look past the easy solutions, the nicely wrapped, easy-to-market solutions. That’s where a lot of advisors come up short,” Baldwin says.
When the context has been established, – “when we’ve done the diagnostic work, now we’re in position to make specific products part of the discussion,” according to Baldwin.
Many clients come into appointments believing they know what their issues are and what’s needed to address them. The most adept problem-solving advisors, says Schuette, are those who can uncover and resolve problems the client perhaps could not articulate or never envisioned.
Don’t be overly hasty in steering the discussion to specific life insurance products, cautions Gra-a. “The selling of a product should naturally flow from the fact-finding analysis.”
When talk turns from the general to the specific and the advisor begins putting solutions on the table, it’s still incumbent on the advisor to remember to fight his instinct to be too salesy, too focused on pushing a product. Baldwin says he tries to frame the discussion such that it’s a joint problem-solving effort between the advisor and client, with the client serving as ultimate decision-maker so he always feels in control of the situation.
“I insist on it being a team effort,” he explains. “You’re all down that line of saying to them, ‘We’re going to do what you want to do, but we’re going to do it more efficiently than maybe you were doing it before. You say you want to leave a legacy. These are the options you have for leaving that legacy.’”