When it comes to communicating with your clients and prospects, it’s important to make sure you steer clear of certain things to make sure you start and maintain a good relationship. Below we’ve listed off a few topics and phrases that you should be careful of when talking to your clients, old or new.
“I just assumed you were not interested…”
If an advisor starts out with such a phrase, it can bring a quick end to the client-advisor relationship. One of the biggest blunders an advisor can do is to make the wrong assumptions about what a client is thinking about. Instead of making the wrong assumptions about a client’s take on any financial matter, it is better to ask something like “On a scale of one (lowest) to five (highest), how interested are you in learning more about various investment vehicles?”
With this approach you poise yourself as being open to discuss various options and open up an opportunity to explore what your client is really interested in. This will also enable you to single out concerns or needs they may have but have slipped under your radar. Remember to be open to discuss different opportunities and do not make any assumptions without asking first.
“I know exactly what you need, because your situation is simple /too common…”
Many financial situations might look similar, but there are not identical. No matter how similar they may seem, even the basic situations at a glimpse can mean plenty of opportunities for investors and financial planners. One of the reasons that may cause an investor to feel hesitant to work with you as a financial advisor is an overly simplistic view of their current financial situation.
Make sure you are not hung up on the following perception: ‘I-know-it-all because you are not different from others’. You cannot know everything nor access everything 100%. It isn’t always clear what financial decisions were made up to this point, what changes to consider now, and what preventative planning should be done. Follow up with questions that would begin to help clarify what potential planning opportunities exist and what aspects of a financial situation may have been overlooked in the past.
“Hi, Can I speak to the CFO or the person responsible for managing the 401k plan?”
Do not take it personally if you are hung up on after saying this. Unimaginative advisors who are going by quantity, not quality, have ruined any chance of getting past the gatekeeper easily. Even if you are in a position to offer value to the plan, your pitch will never be heard unless you can get through to key personnel.
Only marginally better than asking to speak to the CFO or Plan Sponsor, is asking to speak to the person listed on the 5500 as the signator. This person is publicly listed and available for free on 5500 databases across the internet. The 5500 signator can receive 100 calls a week or even worse the signator may be a TPA and may not even work at the company.
The advisors we work with here at RiXtrema who use either the Larkspur Executive or the 401kFiduciaryOptimizer will be well aware of our Executives report which is included with those products. The Executive Report provides a list of Key Executives who work at the company. The reoport can also include their Linkedin profile and email. This report allows an advisor to know about alternate contact options one can to try to reach out to at the target company before actually making the call.
“I am ‘like’ a Fiduciary”
When someone talks with an advisor, this one phrase can really be a big deal-breaker nowadays. Fiduciary relationships between an advisor and their clients are becoming more and more important. Especially in 2019, if you advisor to your plan does not have a fiduciary relationship, they may start to lose trust.
Being assured that your advisor is going to always be looking out for your best interest and has a duty to be on your side is a huge boost of confidence for any client. When things get fuzzy and someone that is your “advisor” says they are “like” a fiduciary can spell a lot of doubt for a client. In our current “fiduciary era,” being direct and straightforward with your client about what your relationship is to them can make all the difference in how they trust you and give you their business.
“I’m not 100% sure, but…”
A plan sponsor is a decision maker who takes responsibility for the employees in his company and their future wealth, that’s why he should be confident in the pension plan his company provides. Therefore, he creates trustful relations with his financial advisor. If you, as a fiduciary and financial advisor, are looking to expand your business, you want to be a kind of person to be trusted. Your voice should be convincing and your words should express confidence.
No uncertainty should be displayed, and your actions should prove that. Herewith, such wordings should be avoided to make it work in the best benefit for you and your client.
Whether it’s trying to get new business or keeping your current clients at ease, be sure to not fall into some of these mistakes. Keeping a trustful relationship with your clients is extremely important, and avoiding some of the things they don’t want to hear or just communicating effectively is pivotal.
And finally, on the relationship between risk and return
You keep telling me about those gains your brother-in-law made in small cap biotech stocks. You must know that in order to make the same returns, you have to have the risk appetite of a NASCAR driver combined with the chin of an MMA fighter. Then you must watch this video three times:
If you still want to do it, let’s come up with a strategy.