Is your business down? It’s not about the market.
by bobrichards ~ January 21st, 2009. Filed under: financial advisor.In the last 12 months, the world has changed a lot. Has your business changed or has your approach remained the same even when your prospects have different concerns? This is the Achilles heel of most financial advisors—as the world changes and prospects have different concerns, advisors continue to:
- Sell the same things
- Say the same things
- Do the same things
Is it any wonder you can’t attract business when the variables of the game have changed but you haven’t? Do your prospects hear from you the same things that have not worked for them, advice like:
- Equities for the long run
- Be patient
- Diversification is key
These mantras are old, tired and as far as your prospect is concerned, is mindless droning they teach you in financial advisor school, repeated by mindless “financial advisors.”. These recommendations have caused them nothing but big losses in their portfolio.
The stock market fell 23% in 2 days in October of 1987. Like now, investors had no appetite for equities. Thousands of stockbrokers starved as they continued to talk up stocks to people who had no interest. This is a very foolish strategy. A better strategy is to sell what people want. (If you have some altruistic bent that you want to sell what people SHOULD buy, you will always be poor. If you want to educate people, then become a teacher and make $60,000 a year. If you want to make money as a financial sales professional, then sell what people want).
One clever advisor called through his prospect list in those dark days of 1987 and in three months opened 100 accounts selling bonds to his new clients. He called and asked if they shopped at Safeway (tip: sell something familiar to your prospects, not a fund or some arcane security). They all shopped at Safeway, the dominant supermarket in the area. He then proceeded as follows:
Advisor: How much money have you spent at Safeway over the last 20 years?
Prospect: I don’t know, but it’s thousands of dollars
Advisor: How would you like to get some of their money for a change?
Prospect: sure, how does that work?
Advisor: Safeway is offering bonds that pay 11.75% (interest rates were higher back in the 80s so this rate was not out of the norm) so on a $100,000 investment, you get two checks a year of $5,875. Would you like that?
Prospect: I only have $50,000 available. Can I still get these bonds?
Rather than pitching stocks, a financial plan, a mutual fund or something else for which prospects had no interest, this advisor pitched what prospects wanted:
- A familiar name that gave them a sense of security
- A fixed return
Are you selling what people want?
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February 17th, 2009 at 3:12 am
Having spent years trading the financial markets I have cultivated many relationships with various full service brokers brokers. In the last 18 months, their numbers have declined through attrition.
Only the ones that have learned to apply some critical thinking and move outside of their comfort zones have remained. I suspect they will still be standing when this economic meltdown ends because they are using the plan illustrated in your article….giving people what they want and not what the broker wants!!
Excellent article!
Jagger
April 28th, 2009 at 9:49 am
I think that you have to be able to follow the market as it changes in order to survive it. most people don’t know how to do that and fail… then blame the economy or market… they should be blaming themselves for not using it to their advantage…
you have to be able to change with the market , not work as you always have before. it just won’t do.
Kevin Jamess last blog post..Privacy Policy
May 3rd, 2009 at 12:21 am
The key to business success is being able to adapt to the times. In down times we must do more to get the results we need. Sometimes we must resist the pressure to spend less on marketing and promotion in bad times because we need to reach more people to get the same result.
June 19th, 2009 at 6:00 pm
Great post. This gets at the core of what a strong brand is. If you already had a wonderfully powerful brand you might not need to adjust because your audience is sticking with you. If you’re not doing well in this economy it is likely because the way in which you’re positioning your product or yourself is no longer relevant to the people you’re interacting with.
July 10th, 2009 at 1:28 pm
My business is actually up - I own a web development company and started targeting entrepreneurs trying to get ahead of the curve and have been doing very well.
September 23rd, 2009 at 2:57 am
Simple advice, but great advice. Also noteworthy is that there will still be plenty of opportunities to “educate” people when the market/overall economy isn’t so terrible, i.e. - when fear is at a minimum, and greed is the motivation that takes hold (after all, there are only two factors at play in investing - fear and greed). People are reactionary. It’s why they’ll sell real estate (and equities, for that matter) when they should probably hold. It’s why they’ll buy when the market is near the top, instead of selling. They’ll follow the trend. The advice herein is a good trend to follow too, as it turns out.
November 10th, 2009 at 11:46 am
Your article hit the mark. I was just discussing our companies diversification with my partner today. We had to change or go close the doors. Change is good, hard work and a little scary, but good.