Skin (Image: State of Hawaii)

The world of advising is not that big. When you run the conference circuit, you start to see a lot of the same people and get to know who the most active advisors around the nation are. For the advisors who have talked with me, they know that we provide appointment setting, and people decline the service for a number of reasons — many of which are good reasons from a business perspective.

But one advisor has told me the same story for three years running, and it illustrates a common trap for advisors: They fail to capitalize on opportunities because they don’t have skin in the game.

(Related: When One Idea Is Better Than a Dozen)

“John,” he says, “I don’t know why anyone would spend money on appointment-setting. I’ve been buying leads for me people for years, and many of them are just outright garbage.”

The first time he told me this story, I assumed it was because he was buying bad leads, but I did my research. The lead source was good. The problem was not in the quality of the prospects but rather in the mentality of the advisors, and it is a trend we see in appointment-setting as well. The trend is so powerful that we sometimes turn away potential clients because we can see from the outset that the program will be a failure.

When advisors are not personally invested in leads or appointments, they have a tendency to treat the leads with less respect. If the money for the program did not come out of their pockets, it is easier for them to cancel meetings at the last minute or to leave a stack of leads untouched. It’s a strange phenomenon that bites even veteran advisors. If they aren’t betting on themselves with their own dollars, their sales behavior reflects it. On the other hand, if they step up to the table with a stack of their own chips, they are suddenly more serious and more engaged.

This is what was happening to the advisor I see at conferences. He was the one making the investment in the leads, so he took them more seriously than his staff.

When we encounter this dynamic with a client, where the client or one of their partners wants to fully cover the cost of an appointment setting program for an advisor, we pushback. The ROI will be great for everyone involved if the advisor is a stakeholder in the program, and you can accomplish that in a number of ways.

Here are three approaches.

1. Set the expectation with your team that they should be pursuing their own lead sources.

If the commission and staff support structure is robust, it is not a big ask to make advisors responsible for finding new opportunities. Maybe they cold call themselves, or maybe they pay for leads or appointments.

2. Split the costs.

Instead of asking your advisors to fully cover their expenses, offer to cover a portion of the budget. This allows you to provide the advisor with a meaningful level of sales support while also making sure that they are still personally invested.

3. Provide reimbursement based on performance.

When we have a client who insists on covering the full costs of the program, this is often the best compromise because it builds in an incentive for the advisor to take the opportunities seriously while still providing a path to have all of the expenses covered.

The psychology at play here is strange, but it’s a dynamic you have likely seen play out in your own life and within your own team. Many of us are wired to take something more seriously when we personally have something to lose. If we recognize that and harness that power, we can actually open the door to a new stream of business.

— Read 6 Ways to Capture the Rewards Hiding in the Unknownon ThinkAdvisor.


John Pojeta

John Pojeta is vice president of business development at The PT Services Group. Before he joined PT, he owned and operated an Ameriprise Financial Services franchise for 16 years.