Financial Advisor Blog on Marketing, Lead Generation, Prospecting and Sales

The most widespread yet ignored problem shared by most financial advisors is the lack of focus. Interestingly, most advisors fail to see that this problem is at the root of all of their other problems.

For example, most advisors will tell you there are not enough hours in the day. They believe this time shortage is due to a deficiency in their time management skills or the nature of a business where there’s simply too much to do. In fact, the shortage of time has to do with lack of focus in their business, attempting to deal with too many products and services and attempting to deal with too many different types of clients.

Let’s take an example. Joe Advisor meets with Mrs. Jones, age 68. He constructs a portfolio of blue chip stocks and bonds. This is the same portfolio he has constructed for another 25 clients, so it was highly efficient for him to do the same thing for one more client. The other 25 clients are also in the same age range as Mrs. Jones—between ages 65 and 78. By having the homogeneous subgroup of clients, Joe is able to take the same approach, use the same products, provide the same service and is able to maintain the portfolios as if they were one portfolio.
At the end of the meeting, Mrs. Jones asked Joe if he can help her son Harry, age 49, who started a new construction business, set up a retirement plan. Hungry for a new client and eager to do more business, Joe agrees to call the son.

In a 30 minute phone conversation with the son, Joe answered a lot of minute questions regarding retirement plans and accommodated the son’s need to be educated about the difference between an IRA, profit sharing, a money purchase plan and a defined benefit plan. The son also mentioned that he was interested in the most aggressive growth funds available because he had a long investing time horizon.

Joe quickly went to work to find information on a profit sharing plan as he had not set one of these up for two years, given that many of his clients were retired. He also spent 55 minutes doing research using Morningstar in order to find two or three good aggressive growth funds since he was unfamiliar with those types of funds which he typically doesn’t use. Joe invested almost 90 minutes for what will be a $10,000 investment for the son to start his profit sharing plan.

Joe will earn gross commission of $400 from this transaction with a minimum investment of three hours. Compare this to the meeting had with Mrs. Jones. The first and second meetings were total of two hours and Mrs. Jones invested $250,000.00 from which Joe will earn $2,500 per year. Dealing with the son has caused Joe to take on business which is highly time inefficient, a digression from his normal business and has forced him to spend more time than he should with the new client.

Joe will also need to keep his eye on the performance of this aggressive growth fund for this one client, his only client that owns this fund. If this sounds familiar, here’s the immediate action you must take:

1. Decide on one niche of clients that you choose to prospect
2. Determine what products and services are most desired and most beneficial for this group of clients
3. Build all marketing and sales functions around this one niche of clients
4. Gain mastery in the few products and services that will serve these clients

Assume momentarily that the three products for this market are fixed annuities, bonds, and blue chip stocks. Pick, at most, your two favorite annuity companies to deal with, one blue chip stocks strategy such as the Dow dividend strategy, and find a newsletter that recommends fixed income instruments so that you know which bonds to select monthly without having to do research. Use the same building blocks with every client so you can finally have the life you dreamed.

Your job is not to cater to the desires of every prospect but rather find prospects that fit the model you use.

If you focus, you can leave the office at 4:00 P.M., you can train assistants to do much of your work for you, you can treat the portfolios of all your clients as though they were one portfolio to be watched. You have far less work to do when you have greater focus and you gain greater expertise in your client niche and in the products and services they desire.

This is the key to having a sane life as a financial advisor. The longer you continue to deal with everybody, give them whatever they like and spend more hours than you should at the office, the longer you delay having the life you want and investing time building a practice that will have no terminal value.

If you hesitate to turn business away so that you can focus on a target niche, consider this recommendation that the marriage counselor gave to an unhappy husband: your marriage will improve when you stop dating.