Close Close
Popular Financial Topics Discover relevant content from across the suite of ALM legal publications From the Industry More content from ThinkAdvisor and select sponsors Investment Advisor Issue Gallery Read digital editions of Investment Advisor Magazine Tax Facts Get clear, current, and reliable answers to pressing tax questions
Luminaries Awards

Portfolio > Asset Managers

How To Qualify a Prospect

Your article was successfully shared with the contacts you provided.

“Qualification” is the process of determining whether a person, family unit, or business unit is someone with whom you would like to do business.

Quite obviously, someone can have all of the money in your town, but be so unpleasant to deal with that you decide to walk away.

So very broadly, what are we looking for?

We’re looking for interest, assets, personality and demographic. These all come together in your definition of an “ideal client.”

The act of finding “qualified prospects” is called prospecting. Of course it would be silly to go on a gold panning trip without some notion of what gold looks like and how you will know when you find it. It would be equally absurd to go prospecting for your business without a well-defined notion of what you’re looking for so you, too, will know when you find it. What you are looking for, then, is your ideal client.

To find that client, most importantly we are first looking for…


Whether someone has interest or not is almost always apparent on the first contact. It normally takes less than a minute or two to make this determination. If they don’t have it, you might as well give up. And if they do have it, you can kill it. A prospect could have a very high interest in resolving a financial matter but no interest in you because of a rough, sour, boring presentation style. But since you are reading this column, and have survived at least a few months in the business, I’m going to assume that’s not an issue.

Assuming you are not the culprit, you must understand that interest cannot be created today. You can find it. But create it? Sorry, not today. Over time, through a series of light, interesting letters, faxes, e-mails, voicemail messages and low-key phone calls, you can create it. But if you don’t find it today, move on.

So how do you know if they’ve got the interest?

First, they’re talking. And they’re talking in a tone that’s open and friendly.

Second, and even better, they’re requesting information. The old-time salesman trained in life insurance methods chanted the mantra “You mail, you fail.” But we know better today. Someone who says “Send me some information,” just told you he or she has at least some degree of interest.

Third, if in doubt about degree of interest, offer to send information.

If all three tests fail, utter the cry of the cherry picker, “Thankyouverymuch,” and move on to the next.

But if your prospect passes the “interest test,” now let’s look a little bit deeper for …


Your “ideal client,” is usually defined as a combination of assets, personality and demographic.

So let’s nail down the “asset component.” I have repeatedly seen people spend their time with prospects qualified primarily on the basis of interest, who after investing many hours, discovered they have someone who cannot do anything because they don’t have any money, at least not now. Best bet is always to find out if the person to whom you have been referred, introduced, found through seminars, cold calling or whatever has sufficient assets to play the game.

As an aside, I think it is extremely unfortunate that so many firms have mandated minimum account sizes. This makes it almost impossible for rookies to develop a “farm team.” Only the financial professional should determine what’s profitable for him or her.

That said, how do you determine asset qualification? Obviously, the prospect can volunteer how much they are looking to invest. Or it can come out in conversation, most often through questions combined with your knowledge of a situation.

For instance you might ask someone, “How long have you been employed at XYZ?” She says, “22 years.” You respond, “Have you always maximized your 401(k) contributions?” She responds, “Yes.” Based on your knowledge of the XYZ matching contribution, you know she has between $600,000 and $800,000 in the account. If your minimum is $1,000,000, you probably don’t pursue it any further.

And if you are in doubt, you need to ask point blank.

We accept accounts with investable assets in the range of $_________.

If you like us and our strategies, would we have a basis for doing business?


At this point, we are only able to accept accounts with established investors with a liquid net worth of at least $1 million. If you like us and our strategies, would that amount pose a problem at this particular time?

Now we come to the easiest or toughest of all …


It’s easy if you are a good judge of people. If you have blind spots, it’s unbelievably difficult.

My recommendation is that you talk to people long enough to get a feeling if you like and can work with them. Mostly you can, but one of the worst business mistakes you can make is to bring on a client when there is no fit.

One way to define what you are looking for is to look closely at the best you have already found. Who do you most enjoy working with? What’s special about them? Write it down.


“Demographics” is a set of factors that define a certain group.

The demographic could be:

o Retired senior executives from major corporations.

o Owners of small businesses in their 50s who need to convert the equity in their company to equity in retirement accounts.

o Doctors who work in private practice in Park City, Utah.

You see the point, of course. For you to know when you find gold, you have to know what you are looking for. This means you need to define what you are looking for.

The Ideal Client Statement

I did a Google search for “ideal client.” I was surprised that more advisors had not added an “ideal client” statement to their website. If a prospect knows what you’re looking for, they may just raise their hands … or stay away.

Here is one excellent example. Note how it combines the four elements of qualification:

We specialize in working with a person who:

o Is a North San Diego County retiree or pre-retiree who enjoys open, honest and genuine personal relationships

o Can handle the truth regarding their current financial situation and asset structure

o Is committed to implementing a written financial strategy in order to pursue important goals in life

o Wants the freedom and simplicity of having all their financial assets under the watchful eye of one trusted Financial Advisor

o Is a true financial “delegator” who seeks, respects and follows our professional advice

o Takes action based on disciplined financial planning objectives instead of reacting to changing world events and outside opinions

o Is comfortable with our fee structure based on investment assets in excess of $500,000 under management with our selected team of institutional portfolio managers and investment firms

–Joel A Beyer, CSA


Columnist Bill Good is chairman of Bill Good Marketing; see


© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.