2013: The year of fear?
In light of the unpredictable environment in which we live, I believe it would be useful to dig a little deeper into the elements of fear and how to successfully work with it.
I believe 2013 will be the year of fear. Does that make our job as financial professionals easier or harder?
The first reaction of most agents I speak with is that it will make our job easier. People who are afraid, they say, are emotionally charged, and they are driven to make changes that promise to reduce that fear or eliminate it altogether.
Others feel the opposite: that the fear may be so dark and deep that it will paralyze people from making any decision whatsoever. They think that people would rather stay in the soup then get out and into a different soup which they know nothing about. In other words, the fear they have now is better than the fear of the unknown — especially in a world that is quite volatile and changing in a moment’s notice.
Recognizing, appreciating and helping clients manage their fear is the cornerstone of selling well. In light of the unpredictable environment in which we live, I believe it would be useful to dig a little deeper into the elements of fear and how to successfully work with it.
A recent article, "Investors Paralyzed By Fear, Study Says," features a study done by Natixis. The study identified specific areas of client fear:
• 83 percent fear they cannot meet retirement goals
• 77 percent are concerned about outliving their assets
• 70 percent have reduced expectations for future investment returns
• 71 percent fear volatility and have reduced investor confidence
• 80 percent worry about higher taxes, the European debt crises, political uncertainty
• 53 percent say that achieving stability in volatile times is their top priority
• 57 percent are keeping cash investments at the same level
• 72 percent are not highly confident their portfolio can handle volatility
• 52 percent are interested in non-market correlated investments
• 62 percent are now interested in discussing risk
• 59 percent are revealing expectations to advisors
Fear is a vital response to physical and emotional danger. If we didn't feel it, we couldn't protect ourselves from legitimate threats. The reduction or elimination of fear is a core driving force for change, but only up to a point. If the anxiety caused by fear elevates high enough, the intellectual functions of cognition recognition and understanding erode to the point where people become frozen in time, so to speak, and cannot make any changes at all. This is the paralysis that fear can cause. Managing client fear
Fear is a landmine that could undermine the sale. As with the other landmines I have identified in previous articles, if fear is not unearthed and diffused, then it is likely that it will infiltrate the sales process and cause the client to procrastinate in their decision making, typically offering an "I need to think about it" instead of a clear yes or no. This ambiguity will cause you to chase your client after he or she has received the best of your wisdom and plans.
To manage you client’s fears in this very fearful time, here are the questions that I ask in different situations to get the conversation going and begin the process of diffusing this very lethal landmine:
1. What is your biggest fear?
2. On a scale of 0 to 10, with zero being low and 10 being high, how would you rank your fear about choosing?
3. Could you tell me more about your fear? Could you be more specific? How long have you had that fear? Sounds to me like it might be a showstopper?
4. Can you live with the fear and just keep doing what you’re doing, staying with the status quo?
5. What would it be like if you kept doing what you are doing?
6. You know that a lot of fear can be paralyzing, rendering people unable to make changes, even if those changes are good for them. I don’t suppose that you are in that position, are you?
7. It seems to me that our meeting might be premature and that you would be better served waiting to deal with this in the future when you are not quite as fearful as you are today. What do you think?
8. Suppose you could create a financial structure that was rock solid and virtually immune to the volatility and unpredictability that surrounds us today. What would you do?
9. You know, while you were talking, I could feel the fear too; it was palpable in the office here. How do you get around that?
10. Suppose you had a magic wand and could wave it and make the fear go away. What would have to happen to make you feel safe instead of fearful?
Relate your plan back to your client’s fear
Now that you’ve opened the doors to the fear discussion, the next step is to relate virtually all of your recommendations to their fear.
1. If you decided to use fixed index annuities in your plan, how would that reduce the fear that we’ve been talking about?
2. Do you see how the method we use of managing money can make you less fearful about your market-based investments?
3. Does knowing that your income will last as long as you live — that you will never be in a position of losing your independence — make you feel more confident in the future and reduce your fear about it?
4. Does this plan give you a solid foundation that makes you feel safer than you feel now?
5. Do you see how using this strategy or product insulates you from the economic and financial turmoil in which we live and reduces your fear about it?
6. If this plan doesn’t reduce your fear, then don’t do it.
The elimination of fear is a major emotional drive that causes people to change. Fear is so powerful that people will do almost anything to get rid of it. However, fear is also powerful enough to paralyze people into an action coma where they can’t make any decision at all.
By opening the doors to a fear discussion and showing people how they can reduce or eliminate their fear through the recommendations that you suggest, they will experience a virtually unstoppable force to buy and close the sales themselves.
In the coming days, weeks and months, make sure you address fear in your sales calls and work your plans to eliminate fear rather than to close the sale. Then watch as the sale closes itself.