When Financial Advisors Miss the Big Picture
by bobrichards ~ March 20th, 2009. Filed under: business growth.It’s important to understand the big picture and how to make money as a financial advisor.
Your goal is to have face to face meetings with prospects who meet two criteria:
1. The prospect has money in their control (i.e. not tied up in a 401k)
2. The prospect is interested in opportunities to do better with their money
If you have any additional criteria, you will lose money as an advisor. For example, if you have a third criteria that the prospect have interest in annuities because you sell annuities, this will cost you a lot of sales because there is NO PROSPECT who cares about annuities. Prospects care about their objectives such as
1. Safety of principal
2. Tax relief
3. Liquidity
IT’S YOUR JOB TO SHOW PROSPECTS HOW THEIR OBJECTIVES ARE CONSISTENT WITH YOUR PRODUCTS AND SERVICES. THEY DON’T COME TO YOU INTERESTED IN ANNUITIES OR MANAGED ACCOUNTS OR ANYTHING ELSE OTHER THAN THEIR OBJECTIVES.
Most advisors miss this concept and rather than focusing on the maximum number of appointments with prospects who meet the two criteria above, the advisor will call the prospect to determine their interest in annuities, managed money, life insurance , etc. But such a call makes it obvious to the prospect that your interest is in YOUR PRODUCTS AND SERVICE and not their objectives. That’s why you don’t get the number of appointments you should.
Let’s provide an example. We run a lot of ads on the Internet to find consumers interested in financial topics. The ad which got the all time best response was for a booklet about ways to increase social security income. This is a HOT TOPIC for seniors. But every advisor told us “I don’t want those leads. I can’t make any money talking to people about social security.”
This is unfortunately a near sighted view that keeps most advisors poor. Many of these prospects meet the two criteria above but because the advisor is SO FOCUSED ON THEIR OWN AGENDA, THEIR OWN PRODUCTS AND SERVICES, they will never have an appointment with viable prospects who could become good clients.
Focus on the big picture–meet with people you can help and don’t focus on your products and services. They are merely tools to help people accomplish their objectives, tools that don’t need to be discussed until the last 10% of your conversation.
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July 29th, 2009 at 11:14 pm
Financial advisors have a tendency to forget who stands at the base of the economy - common people in need of social security, people who need to know how to plan their economies. That’s why this crisis blew up. People can’t plan their future anymore and nobody seems to care.
September 17th, 2009 at 9:35 pm
You are right! So many miss the big picture and waste precious time and resources. The objective-focused model is what we use in our internet marketing plans. Managing a marketing campaign by objectives is the only way to go. Always remember that customers are focused on What’s In It For Me (WIIFM). Answer that, and you are in the door. Otherwise, you get shut out.
Thanks for the nice article!
October 30th, 2009 at 12:45 pm
I think people tend to stick to what they know and are most comfortable doing when they are makerting. We are working with a company that have always gone after only very high net worth clients. That has made them a success and they have done very well, but they really don’t know how to woo a different type of client.
When the recession kicked in their funds under management dropped, taking them further away from their goals and meaning they had reached a plateaux.
Marketing to new types of clients often needs new processes and new thought patterns. The company in question have partnered with another company more experienced in marketing to the masses. They really didn’t need a partnership, but I think this illustrates the mentality of some financial advisers and how they can get focused on their niche.
Thanks for the article. Really interesting!
October 31st, 2009 at 3:53 am
Very interesting post. Social Security is a hot topic and has been that way for several years. There is a definite market for entrepreneurs to hit in that area.
November 13th, 2009 at 12:34 am
Working with customers on an ongoing basis, giving support and advice even when it doesn’t lead to a sale, is the best way a financial advisor can do well in the long term.
Spend time to build that rapore and trust factor with them and they will beat a path to your door rather than you going to find them.
Don’t just concentrate on the sales. Concentrate on the service and the sales will follow - for years to come too!
November 24th, 2009 at 4:56 am
It depends on weather those leads are near retirement and concerned about social security or people without any money trying to learn how to scam the system. Your advertising wasn’t the all time best if it didn’t produce valuable leads.
December 2nd, 2009 at 12:09 am
Great points but it is important to be seen as an Investment Adviser that is held to a fiduciary standard. A Financial Adviser held to a Fiduciary Standard occupies a position of special trust and confidence when working with a client. As a fiduciary, we are required to act with undivided loyalty to our clients. This includes disclosure of how we are to be compensated and any corresponding conflicts of interest.
Great post thanks!
December 6th, 2009 at 7:06 pm
I never encountered a financial advisor before but after reading your post, it seems like I’m more of the financial advisor myself.
December 16th, 2009 at 7:02 pm
When evaluating your financial situation, if you focus on your invested assets you may be missing the bigger and more meaningful picture. A financial advisor should be known for something. Create a reputation by being known for a specialty area and tie this into your target client. Your referral sources, clients, and friends need something to wrap their minds around. This strategy not only draws business to you, it boosts your income.
December 20th, 2009 at 7:02 pm
Its not surprising to find financial advisors whose focus is not retail investors rather than on their fellow fund managers
January 12th, 2010 at 10:53 pm
Financial advisors are very helpful when you really don’t have time for your business anymore.! They are professional in what they do, so you can have 100% positive results.!
January 17th, 2010 at 12:51 am
You are spot-on! I have experienced this exact situation in my NY Divorce practice when being the liaison between my clients and their financial advisers. Knowing a thing or two about investment strategy I often catch financial advisers making decisions that are in their best interest rather than my divorce clients’ best interest. I am their advocate so I am under a duty to confront such incongruities. Thank you for pointing out some of these issues! People can certainly benefit from this information.
February 1st, 2010 at 9:20 am
i do not work as a financial advisor, but I think what you said here is informative as well as reasonable. I highly agree one sentence in your post: SO FOCUSED ON THEIR OWN AGENDA, THEIR OWN PRODUCTS AND SERVICES. I think it is right to do that.
February 5th, 2010 at 12:19 pm
Good and excellent financial advisor should remember :
1.Learn new things and stratages all the same,always be a professional one.
2.Remember the source of your money,try your best to help others professionally.
February 10th, 2010 at 2:24 pm
Your blog is very impressive and this is an excellent article. As you have pointed out wisely the main things that are missed out by financial advisors, I think if the entrepreneurs are taught to think out of the box and coming up with new ideas in utilizing the resources and marketing plans properly, there is a weak point to get lost of track
February 23rd, 2010 at 4:44 pm
Most advisors miss this concept and rather than focusing on the maximum number of appointments with prospects who meet the two criteria above, the advisor will call the prospect to determine their interest in annuities, managed money, life insurance , etc
March 4th, 2010 at 6:37 pm
Unfortunately most financial advisors make such a mistake. The time has come to change a standard approach that became obsolete. And main principles you pointed in the article are just the beginning.
March 9th, 2010 at 7:20 am
My first experience with a financial planner was a poor one. All he did was look over what we have planned. (IRA, Life insurance, 401k etc) and just say Yep you are on track, follow your budget and put this money in a savings account/CD and you will have $X by time you are 40 years old. As a Actuary student, I found the information kinda useless. All he did was give the time value of money of monthly deposits. He didn’t even suggest a plan for the money short of the already existing IRA/401K.
He missed the big target (which was told to him a couple times) that we were there for a reason, to figure out where to plan and invest our money that was sitting in a bank account, but even when we asked what the average return on their products he couldn’t even ball park it.
I know all financial planners are like this, and hope to some day have a good one when I go back, but it did leave a bad taste in my mouth.
March 11th, 2010 at 10:20 pm
It’s hard to find a good financial planner that has your goals and objectives in mind instead of his or her own objectives and goals. I found the key to finding a good financial planner is how they conduct the meeting on your first visit. If they don’t push something on you and instead ask what you’d like them to help you with, you know you’ve got someone you can continue working with.
March 15th, 2010 at 5:04 pm
Nice article and well written. I think the key point here is that too many people out there go for quantity not quality and to achieve this everyone they adie gets a one size fits all solution.
March 18th, 2010 at 6:16 pm
Thats often the problem. People feel it if you want to sell them something. As a financial advisor you have to choose quality over quantity (less appointments but you give more value).
This way you will also build a “name” over time and people will come to you.
Thanks for the article!
March 23rd, 2010 at 3:54 pm
The crisis was caused by the lack of planning, meaning that the financial advisors don’t care about the common people, which area the foundation of the economic stability.
March 30th, 2010 at 10:50 pm
I have never met a financial advisor who “got” the big picture.
April 18th, 2010 at 8:39 am
Focus on the customer needs first, rather than your own and your satisfied customers will produce more business. Quantity of satisfied, trusting customers creates a quality income for you.
April 20th, 2010 at 11:17 pm
Many financial experts believe you will see the big picture. However, what often prevents sees the big picture others want to..
April 29th, 2010 at 2:32 pm
That is a great idea. You can also do the same when transfering iras and other retirement accounts from one broker to another.
May 5th, 2010 at 10:29 pm
I had bad experiences with financial advisers , and lot ( for my wallet) big. If they are so clever about the market, why are they working as financial advisers in the first place?
It is like all the analists you hear on television. If their predictions are so wonderfull, why are they still working?They just cover themselves
May 26th, 2010 at 9:07 pm
There are honest financial advisors out there.. it just takes time to find them.
May 28th, 2010 at 10:11 pm
I found this blog informative. The way you describe each and every point step by step is great and easy to understand .Now-a-days everybody needs financial advisor who helps them in taking financial decesion.Thanks for sharing.
May 31st, 2010 at 9:25 am
Excellent point about what investors care about - “safety of principle”. I bet this is top of the list with what so many have lost in the last two years. Excellent “straight to the point” post I wish financial advisors overall could ahere to.
June 4th, 2010 at 5:36 am
Finding the right financial adviser is difficult because so many people are allowed to become one. Even ones without experience, just pass a test and you are certified.
June 6th, 2010 at 12:21 am
As with any profession, there are good financial advisors and there are not such great advisors. Therefore, the investor should have some background and basic understanding in the financial arena and not trust solely on the advisor’s guidance.
June 14th, 2010 at 10:01 am
Yes, advisors often become pre-occupied with the products or systems they are selling. Advisors need to become more sensitive to the needs of the client.
June 17th, 2010 at 2:57 pm
Great post financial adviser, investors would love to read your post.
June 26th, 2010 at 8:48 pm
Totally true. You have to wonder why a lot of these advisors are giving advice on how to invest instead of doing it professionally for themselves. I’ve met a few good ones, but most of them are just looking to churn trades for commissions.
July 1st, 2010 at 2:00 pm
The company in question have partnered with another company more experienced in marketing to the masses. They really didn’t need a partnership, but I think this illustrates the mentality of some financial advisers and how they can get focused on their niche.
July 2nd, 2010 at 3:10 am
Financial advisers do the best they can. But the market can be volatile. There’s always going to be risk.
July 10th, 2010 at 4:06 am
So true! I have dealt with quite a few advisors who did the same mistake….I would like to see them lasting in this business for a long time with this sort of approach! Probably not for too long…
July 10th, 2010 at 6:15 am
This is an excellent idea. You can also do the same when you transfer and other retirement accounts from one agent to another.
July 12th, 2010 at 9:04 pm
I completely agree - financial advisers could be great for you - but if you dont change you habits - no financial adviser will help you out of you debt.
July 16th, 2010 at 5:12 pm
There are all sorts of reasons why you might choose to do this: lack of interest in personal finance, lack of time to study it or circumstances requiring urgent action, to name a few. No matter the reason, a financial advisor is a must if you cannot or will not manage your own money.