5 Ways to Ask for the Order

How do you close? Let us look at five ways to close the business and ask for the order. Selling does not need to involve a "battle of wills." You can bring the prospect around to your way of thinking with logic.

1. Walking through the process.

This is the familiar model you learned about in training. You gather information during the financial planning process. You resist the urge to go after "low hanging fruit" to get the easy order. You meet again to review the financial plan and deliver the investment proposal you prepared.

As you present your proposal, you include trial closes to confirm your prospect is following along. "Does this make sense to you?" is a closed-end question. The comfortable answer is "yes."

You demonstrate your proposal addresses your client's objectives. You do this by referring back to the financial plan, matching points raised with elements of the plan. Implementation is the next step in the process.

Advantage: This approach is process-driven.

Details: This strategy best with new relationships. You are establishing the rules of engagement. It demonstrates professionalism.

2. Gaining approval in advance.

The problem with the first approach is you are expecting the prospect to fall into line with the multi-step process.

When you say, "The next step is implementation," they might reply, "Let me think about it. I'll get back to you."

You cannot avoid that problem completely, but you can set expectations.

During the financial planning process, you explain you have a reason for not making any recommendations until the plan review meeting.

That reason: "We will review the plan and at that meeting decide to implement or not implement the entire plan."

Advantage: You have set the expectation the plan review meeting will also be the decision making meeting.

Details: This is also best with new relationships because it is a variation on the first strategy. Both the advisor and the prospect have the expectation that the next meeting is the decision-making meeting. The advisor is making their best recommendation, putting the prospect's interests first.

There is the risk the prospect never agrees to the second meeting. This saves the advisor time following up for a decision that will never come.

3. Identifying a need, presenting a solution.

The prospect has a need or a goal. It might be a comfortable retirement at a certain age. The prospect has investments already in place. Will they reach their objective doing what they are currently doing? What's the probability?

You are using Monte Carlo simulation tools, which your firm should have on your desktop computer. You see that under their current approach, they will not reach their goal.

You ask more questions. This involves compromise. Are they willing to work longer? Take less income in retirement? Save more every year? Often, the answer to all three questions is "No!"

You have a proposal. Are they interested in another solution offering a greater probability of reaching their goal?

Advantage: You have identified a problem (need). The prospect might not want to take action, but the problem does not go away until they find and apply a solution.

Details: This is good for both new and established relationships. The prospect's stated goal is part of the closing process. It shows the advisor understands what is important to the prospect.

4. Buying into each other's ideas.

A problem some advisors face is the desire to start with as clean slate. The prospect has a portfolio of investments. They are proud of what they have achieved in life so far. The advisor wants to sell everything and start over with new investments.

The unspoken message is "Everything you did before is wrong. Thank goodness you met me." The prospect pushes back.

Buying into each other's ideas involves identifying one or more investments the prospect currently owns that fit into the advisor's recommended portfolio. Compliment the prospect on choosing them. "Not only should be keep them," you say, "we should add to the position."

This serves as a "security blanket" — an element of the new portfolio that is familiar from their previous portfolio. The expectation is the prospect will agree with your other suggestions because you are retaining investments they made previously.

Advantage: You have introduced a security blanket.

Details: This is good for both new and established relationships. It shows the advisor is listening to the client and understands why they bought the securities they already own. You should get "buy in" from the prospect.

5. Dollar cost averaging.

How do you approach swimming when you don't know the temperature of the water? Do you leap in from the diving board or do you proceed down the steps into the pool, acclimating to the temperature as you go? Many people use the second, gradual approach.

Your prospect might see agreeing to your proposal and committing all their money at once as similar to the diving board analogy. They want to enter the investing waters gradually. You suggest dollar cost averaging. You explain the logic: If prices rise, the early investments were made at a lower cost. If prices decline, future investments bring the average cost down.

A West Coast advisor I know would say: "Consider mutual funds. They don't buy thousands of shares of a new stock all in one trade. They gradually build their position over time." He suggests clients implement a strategy used by large institutional investors.

Advantage: Clients often work with a large firm to gain access to information and techniques used by large investors.

Details: This is good with established relationships, especially if there is a strategy change. It introduces the negotiation process. The prospect is adopting a strategy used by professional investors.