Practice management tip for financial advisers: Refine your sales processArticle added by Katherine Vessenes on November 5, 2010
Katherine Vessenes

Katherine Vessenes

Chanhassen, MN

Joined: August 21, 2010

My Company

Vestment Advisors

As a student of great financial advisers and their sales processes, I am fortunate to sit in on client meetings with some of the top financial advisers in the country. Who wouldn’t want to be a fly on the wall when an $8 million advisor closes the sale? It is my privilege as a practice management coach not only to watch the great financial advisers in action, but to even offer a few suggestions on how they might close more business.

Here is what I learned, just this last summer, as we coached two of the top advisers in the country on managing their practice and improving their sales practice:

A shortened, quick sales process that was very effective 10 years ago is much less effective today.

In 2000 it was not unusual for our firm, Vestment Advisors, to consult with $3 million financial advisers who worked with the middle market. Our goal was to use our practice management process to increase the advisers’ sales and build the value of their business. Every one of them had their sales process down to two meetings of an hour and a half each; three meetings were only needed on rare occasion for higher-end or more complicated clients.

Today, many clients are not prepared to make a decision at the second meeting. Ten years ago, this was common practice, but not so today. Most clients haven’t yet built up a trust factor with their financial planner or adviser by the second meeting. They are still skeptical. The reason: Clients are fearful about changing money managers, investment styles and advisers, even when they are in a lot of emotional pain.

Furthermore, clients don’t like sitting through one-and-a-half to two hour meetings. They are busy — much busier than 10 years ago — and they don’t have the time, the energy or the attention span to meet for two hours. Today, the shorter the meeting, the better for most clients.

Two of the advisers we coached this summer lengthened their sales process to four shorter meetings. It worked so well for them their closing ratios were far higher than in other firms. In fact, they probably closed 80 percent to 95 percent. These ratios are quite high, given the current market.
The meetings, and their order, look like this:

1. First meeting: An orientation or “get-to-know-you” meeting.

Time: This meeting will take 45 minutes to an hour, depending on the adviser.

The whole purpose is to get a better feel for the prospect, how they tick and what they are looking for in a relationship. As our New Jersey adviser Paul Hartline (not his real name) said to me: “Katherine, when you have been in the business for 30 years, you can tell in that initial meeting if you want them for a client or not!”

Most advisers who use a “get-to-know-you” meeting ask the client not to bring in any personal financial data. They feel it helps build trust and makes the client feel more comfortable.

Paul conducts this meeting in his office, because he wants the clients to get a feel for him. Paul is in class A space, and his office and staff show very well. It makes a great impression on the prospect.

George Jackson (also not his real name), from Seattle, does a first meeting that is all about the client. George usually conducts this meeting at the client’s office or at their home. He says the client then feels obligated to come to George’s office for the next meeting as a social courtesy.

2. Second meeting: data gathering.

Time: one to 1 1/2 hours.

It is during this meeting that the adviser gathers the data necessary to complete the financial plan. They review all the client’s investments, insurance and other data that will be needed to make recommendations.

Paul has this meeting in the client’s home. He says he likes to see how the clients live. It lets him know if they are big spenders or savers, and he gets a better feel for them as people. It also makes it easier to gather the information Paul needs for the planning.

George does just the opposite. Since he already met with the client in their home or office, they come to George’s office for the data gathering.
3. Plan presentation: gap analysis

Time: up to two hours

Advisers call this meeting many things. Most of them present what we call the “plan,” but is really an analysis of their numbers, where they stand and the likelihood they will run out of money in retirement. They also look at the gaps between the clients’ goals and where they are likely to end up.

Universally, these meetings are held in the adviser’s office.

Typically, this meet answer the questions:
  • Will the client run out of money in retirement?
  • How much do they need to save to reach their goals?
  • What can they do to save taxes now and in the future?
Some advisers may present a few products here. Many will only talk about the products generically. For example, they might discuss REITs in general, and why they would be a good choice, but not name a specific one.

4. Implementation

Time: 1 ½ to two hours.

At this meeting, the financial adviser talks about specific products, money managers, signing paperwork and moving the investments over to the new firm.

For particularly fearful clients or for those with complicated situations, this meeting could stretch into two meetings.

Practice management lessons learned from successful financial advisers and planners:

1. What worked really well 10 years ago may not work so well now. We all have to change with the times and be sensitive to our clients.

2. The overall time you spend with clients is likely to be longer than it was 10 years ago. Even though the meetings are shorter, chances are you will be attending more meetings, and therefore spending more time with clients before they are ready to pull the trigger.

3. Just as I say all marketing is trial and error, the same is true with the sales process. Test out different strategies and orders to see what works for you and what doesn’t.

4. Nothing — no matter how great the system — works 100 percent of the time.

5. Clients are more fearful now, so it will take longer to build up the trust factor.
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