8 Ways to Get Prospects to Switch Advisors

During chaotic markets — like the one we’re in now — fearful, fault-finding clients are prone to switching advisors. But don’t push someone else’s client to leave their existing FA: That typically backfires. Instead, let prospects experience your talent by, for example, creating a “phantom portfolio” for them, Wharton marketing professor Jonah Berger tells ThinkAdvisor in an interview.

Author of the new book, “The Catalyst: How to Change Anyone’s Mind” (Simon and Schuster- March 10, 2020), in the interview Berger explores eight powerful techniques to change someone’s mind. End goal? The acquisition of new clients.

An expert on behavior change and why products and ideas catch on, he has consulted to firms and organizations including Apple (to improve its customer service), Facebook (to introduce new hardware products), the Gates Foundation (to sharpen its messaging), Google (to roll out new projects) and Vanguard (on marketing strategies and new products).

In our conversation, the bestselling author of “Contagious” and “Invisible Influence” reveals how reducing key roadblocks makes changing minds easier.

For instance, he explains how using “tactical empathy” — emotion as a negotiation tactic — helps gain trust and “lays the groundwork for influence.”

While “The Catalyst” — which has drawn kudos from leading experts and influencers like Robert Cialdini and Arianna Huffington — is a guide for changing anyone’s mind, from salespeople to corporate heads to parents of young children or teens, it is perhaps particularly relevant to FAs in exploring folks’ “ingrained anti-persuasion radar.”

ThinkAdvisor recently conducted a phone interview with the University of Pennsylvania professor. He urges: To identify barriers and change someone’s mind, rather than asking yourself, “What can I do to convince this person?”, think: “Why hasn’t this person changed already?”

Here are highlights of our conversation.

THINKADVISOR: What’s a good time for trying to acquire a new client who has a financial advisor?

JONAH BERGER: The longer someone has been with an advisor, the less likely they’ll be willing to switch unless there’s a very clear reason. Maybe their portfolio performance has been really bad lately — not due to the advisor but because of the market. That’s obviously an opportunity when people are more willing to consider switching.

But many clients don’t want to take a chance with a different advisor, correct?

Yes, but there can be a cost to sticking with their existing one. People often think that doing something new is very risky. I have an example in my book: a financial advisor who showed a  [conservative] client that he was losing money relative to what he could have been making had he moved money from his savings stockpile into the market.

Let’s discuss, in random order, eight of your techniques to change someone’s mind in order to acquire them as a client. First: “Determine the Barriers.” Start by identifying the barriers that are preventing someone from changing their mind, you write. Why is that important?

Advisors are really good about advising and the markets but less good thinking about the things going on in their customers’ minds that make them uncomfortable or upset: What are those barriers and how can I mitigate them? Until you think about and understand what they are, it’s going to be really hard to reduce them.

Two: “Overcoming Pushing Back.” The harder you push, the more the other side resists. Please elaborate.

If you’re trying to have a client switch to you from their existing advisor, you’re likely to say, “Let’s have a 30-minute phone call, and I’ll tell you what I can do for you. Then I’ll put together a PowerPoint presentation that will give you more facts and information about how I think I can perform well for you and your assets.”

What’s the matter with that?

If we give people more facts and figures, we think they’ll go in the direction we want them to go. But when we push, they often don’t go in that direction. Often, they push back.

Please expand on how that behavior — called reactance — manifests.

People have ingrained anti-persuasion radar: When they sense someone is trying to convince or persuade them, that radar goes off and their defense system goes up. They ignore — avoid — the message. An advisor might say their method of investing is great. But the prospect might think: “How do I know that’s actually right?”

What can the advisor do to try to overcome that?

Figure out a way to allow the prospect to participate more, have more of a role in the process — to get them to persuade themselves, instead of you doing the persuading.

You’ve suggested that offering a menu to pick a path — that is, providing options — is effective. Why so?

First of all, ask — don’t tell. Ask questions rather than make statements to get a better sense of what the prospect wants and needs in order to help them see how the paths you’re laying out are the best ways to reach [their goal].

What’s the advisor’s chief benefit of giving options?

Whenever we pitch, the person is thinking about all the reasons why we’re wrong. When we provide a menu, it subtly shifts their role from knocking down our argument to making comparisons. Rather than thinking about why they don’t believe what we’re suggesting, they think about which option they prefer. And in making a comparison, they’re much more likely to pick one of the things we’ve suggested.