A financial calculator can be one of the best investments an advisor can make. I purchased an HP 12c financial calculator when I opened my practice in 1985. Now, I have an app on my iPhone that functions the same way. It’s called HP 12c lite.
This little calculator has closed many sales for me and it is an excellent prospecting tool. Try this: Ask a prospect what average returns they have been getting for the last 10 years. Their first answer will almost always be, “I don’t know.” Shocking!
It is beyond my comprehension that anyone would not know, to the decimal point, what his or her earnings are. Can you imagine someone not knowing their salary for their job? Preposterous! However, many seem to be unaware of their actual returns and their potential returns elsewhere. If they are averaging 10 percent and you may be able to improve that by 5 percent per year, the difference is staggering.
My investment advisor has averaged over 19 percent net of fees and expenses, so I am confident that he can beat most competitors by at least 5 percent. On $100,000 over a 20-year period, the difference would be $265,000. I’m sure any prospect could use an extra $265,000. With a financial calculator, you can show them what they are missing in real dollars.
Here’s the discussion you could have with a prospect: “How much has your current advisor earned each year for the last 10 years?” If they don’t have an advisor, ask how much they have earned each year on their own. After they give you a number, ask, “Would you like to explore how you may be able to increase your earnings by 5 percent per year? Five percent doubles the total value of your account in just 15 years. Does that interest you?”
If it doesn’t interest them, they aren’t a prospect.