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Practice Management > Building Your Business

Cyber Competition

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One of the good and bad things about being a product wholesaler is that you get to meet a lot of different financial advisors. Some become friends. Some you wouldn’t trust with a $2,000 IRA contribution. It takes all kinds.

As a former wholesaler, one statement I can remember hearing over and over again from advisors went something like, “I’m a great salesman. If you put a potential client in front of me, I know I can sell them!” When you read between the lines of this statement it says, “Why can’t I get prospects to meet with me?”

Those of you that are successful advisors know that, as in any sales position, the hardest part of the job is not selling a client … it’s getting them. No matter how gifted you are with your “features to benefits” talk, if you can’t get backsides in the seat, you’re toast.

So, if being a good salesman isn’t the most important part of being a successful advisor, what is? I would submit to you, it’s being a good marketer. Being able to get your message out to the masses, in a compelling enough way that they want to put their backside in your seat. That is the key.

Last month I wrote about how advisors should beware the Apple App Store. That eventually, someone will write a Mac app that will make advisors obsolete. No sooner had the ink dried on that article, than I met a neighbor who had actually made several Mac apps. When I told him about my prophetic article about ominous apps, he said, “Let me show you what I’m working on.”

His company was working on a subscription website for investors. For a mere $297 a month, subscribers can watch how a particular portfolio is invested for a particular strategy. The subscribers also learn how they can mimic these positions in their own portfolios. They’re not asking them to write a check (other than the subscription). They’re not asking them to execute anything. They’re selling information and a story. What the client does with his or her nest egg is irrelevant. (Blasphemy, I know.)

When I scoffed that I didn’t know how many people would want something like that he said, “I only need a thousand.” He made it sound like getting 1,000 customers would be like picking up a gallon of milk. He went on to explain that through various ways, he can build a list of hundreds of thousands of investors’ email addresses and then systematically start his email marketing campaign to these lucky people.

While he was chatting away, I was busy trying to do math in my head. “If this guy gets 1,000 people to buy into this….” Before my headache blossomed into an aneurysm, my iPhone calculator saved the day. If 1,000 people bought the program, my neighbor’s company (him and another guy) would bring in over $3,500,000.  That’s not gross, that’s net. After you factor in the broker-dealer cut, the ticket charges and all the confirm fees … it’s still $3,500,000!

Will my neighbor succeed? Could 1,000 investment consumers be cyber-sold on this? At first I thought no way, but then I thought about all the other things advisors have sold to clients … VAs with 8% commission, private placements and the $25 statement-mailing fee.  Yes, I think maybe there are 1,000 more out there.

Keep an eye on your inbox; I’m sure you’ll be hearing from him.


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