When a Prospect Says, 'I Have No Money'

1. Prequalification

One of the first approaches to consider is prequalification.

Let's assume you are talking about an investment that requires a lump sum.

You'd rather not start with, "Do you have any money?" Instead, you could say, "People who invest in bonds can do it in one of several ways. Some hire a professional money manager.

"They usually need at least $100,000. Others buy individual bonds. Those come in face values of $5,000 increments.

"They might buy $25,000 or more. Other people invest smaller amounts through mutual funds, starting with amounts around $1,000.

"Which category do you fit into?"

If clients do not fit into the category you have in mind, they may tell you when they make a choice.

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2. Not Now, But Later...

Let's assume you're talking about annuities, and $25,000 is the amount under discussion.

When you ask for the order, the clients explain that they don't have money available.

They might actually be saying, "I don't have money available now."

You could point out that it would be incredibly unlikely that someone might happen to have cash on hand waiting for a call like yours.

"Let's look at this from a different perspective," you could say. "When will you have money coming available?"

You might mention an annual bonus.

You could ask about the bank CDs or Treasury bills they own. When is the next maturity date?

You agree to talk again a couple of weeks before the time money might be available.

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3. Raise Cash Elsewhere

Another possibility is that the client's money is invested in something else.

Selling one investment to raise cash for another investment might be appropriate.

The clients might have money invested in stocks that haven't gone anywhere for the last few years.

If the clients have life insurance or annuities, there could be reasons why a 1035 exchange from one insurance product to another is appropriate.

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4. "I don't have money, but I know someone who does."

Clients without cash might like your investment ideas.

This could be the result of a "Here's what I do for a living" conversation with close friends.

Your friends like the product and wish they could buy it, but they have not saved enough to pay for it.

You might ask if they know anyone who would be a good fit for the product.

Your college friend might like the concept of an annuity and its accumulation phase, yet think the product would be ideal for their grandparents because the distribution phase would be attractive to the grandparents.

A good way to get them thinking is to ask, "Who else do you know that might like to learn about this?"

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5. "This requires only a little, not a lot."

Many investments are made with lump sums of cash.

One of the advantages insurance agents has over many other types of financial professionals is the ability to take on a new client who will fund new investments or insurance protection through cash flow.

The clients make their initial investment and continue to add money on a monthly basis through a strategy called dollar cost averaging.

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Bryce Sanders