A few years ago, the bestselling marketing book Blue Ocean Strategy made waves in the business community. The basic premise of the book was that businesspeople have two options: 1) to swim and bite for market share in a blood-red ocean, a market filled with competitors all selling the same basic product in a similar way or 2) to create a new market or market niche – heading off into an uncrowded, blue ocean.
In the late 1990s, I discovered my own blue ocean strategy – a niche I believe can work for any financial advisor who is willing to embrace it. It’s a strategy that will help you do the right thing for your clients while simultaneously revolutionizing your business.
As I’ve studied market history, I’ve become familiar with the major underlying market cycles – in particular, the bull and bear market trends. In 1998, I anticipated that the market was headed into a bear trend that would likely last for 15-20 years. I realized that when the market turned, investments tied directly to the stock market would no longer be in the best interest of my clients.
Here’s your opportunity. There is an alternative to the stock market, what I call the universe of conservative-interest and dividend-generating strategies – the financial nuts and bolts. In 1998, no financial advisor in my geographic region was focusing on these options. In fact, I’m still the only advisor in my geographic area with this specialty.
…and history screams opportunity
I offer brokerage CDs, fixed and indexed annuities, government and municipal bonds, corporate bonds, preferreds and, in some instances, REITs. There are several attractive aspects to this business model for advisors to consider.
We’ve already discussed the first: The opportunity to offer options that fit the financial times we’re likely to experience for some years to come. A close second is the fact that these conservative investment options lend themselves to an educational sales approach one which is extremely compliance-friendly.
With this model, my initial sales presentation consists of providing information to potential clients about market history and trends. As they come to understand where we stand in history, most prospects decide on their own that they need to reduce their market exposure. At that point, I get a written commitment for an ACAT transfer and they become my client. That, generally, is our first meeting.
The clients still make the decision
The next time we get together, I go through all eight of the income-generating options I offer. After listing the pros and cons of each, my clients make the decision as to which options they like and in which percentages. Therein lies the third benefit. Since the clients themselves choose the investment strategies, you avoid objections.
So what’s in all this for you? If history repeats itself, we’re only about halfway through this bear cycle. That means you have several years to take on this market model, capture a niche, and create your own blue ocean opportunity. It’s time to set sail.