This blog has moved!

You should be automatically redirected in 5 seconds. If not, visit and update your bookmarks.

Monday, October 20, 2008

Why should new clients commit to you when you don’t commit to them?

What do you really provide clients—a hope that maybe the mutual funds you help them select will reach their retirement goals, that maybe the UL policy you sell them will earn enough to sustain itself, that maybe the LTC company wont raise its rate? When you think about it, you offer prospects nothing firm and you expect people to give you their money. Maybe it’s surprising that we have any clients at all as we guarantee them nothing and expect them to jump into the financial pool with us, with no life vest.

Of course, you cannot make guarantees. Only the product providers can make these when they apply. But you can make promises about your own actions—something that few financial advisors do. If you don’t make promises to clients, why should they make commitments to you?

You CAN make promises about your individual performance, such as:
• To provide an in-person bi-annual review of their portfolio or policies. Show them what this means. Pull out copies of a client’s biannual review report—the copies of the Morningstar reports, the Vital Signs report on the insurance company, the Value Line Reports on their stocks, etc. and the performance reports showing the change in portfolio value against relevant benchmarks (if this sounds like too much work, you need wealthier clients with bigger accounts to justify this quality level of service).

• To provide a telephone review between the bi-annual reviews

• To return all calls in one business day. Show them your written policy. That calls received before 11 am are returned the same day and if received after 11 am, are returned the next day before 9 am. If comfortable as your policy, give your home phone number to clients.

• To teach your new client how to read their statements. How many times have clients told you they cannot read their statements. So why not end this by providing a lesson or getting software like Advent or Captool that allows you to provide a statement in plain English that’s easy to read.

• To provide all explanations in plain English

• To never talk down to a client

• To quickly admit and correct any error. You might show them an example of how you purchased IBM twice in Mrs. Jones account. You corrected the error by selling the extra shares and paying $500 for the loss that was incurred. People know that everybody makes a mistake. What they really respect are those that admit, correct and take responsibility for their mistakes. It’s okay to show you are human--but a quality human.

Imagine the trust that you could build if you approached prospects with your list of promises. Few other advisors do this. Do you think you might segregate yourself as a superior advisor if at the end of a first meeting you said, “Mr. Smith, I am unable to guarantee the performance of any investment. However, I can make you several promises,” as you hand him your laminated typed list of promises and read them one by one.