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Be Flexible

Don't hesitate to fix what's broken.

By Karl Lueders

This month’s sales ideas focus on two key areas: Know what your client wants and be flexible so that you can change strategies that do not work.

Know what your client wants and stress a product’s benefits early in the sales process.
I’ve spent most of my 27-year career in marketing, and if there’s one thing that doesn’t change, it’s that relationships never go out of style. Getting to know what your clients want from their assets and the products they buy is the key to a good relationship.

Most consumers don’t really think about a relationship with a financial advisor at the start of their life insurance buying cycle, however. Most decisions are based on price. Getting to know the consumer at this stage in his life is important, despite his reluctance to pay for advice. Eventually, once he switches from saving money on products to protecting assets, he will see the value in your services.

A good example of this occurred about 12 years ago, when the internet made seemingly proprietary information accessible to the consumer. All of us thought that it was the beginning of the end for the insurance agent. Of course, that was not true, especially for advisors who offer complex asset-protection tools.

The reason many advisors fail to develop relationships is that they never get around to discussing the benefits of a plan or a product during a sales presentation. They talk about the product’s features and functions, but for some reason they aren’t able to overcome the prospect’s objections and discuss the benefits of the product.

A great way to avoid this is to explain the benefits early in a sales presentation and then tie those benefits to the product’s features and functions. For example, the Roth IRA might be one of the most underutilized financial products, especially since about half of our country’s taxpayers do not participate in a retirement plan. Many consumers believe that when they put money in an IRA, it’s locked in there for 40 years.

But that is not true. Roth IRAs allow consumers to withdraw the principal tax-free. That being the case, take a look at how a prospective client might be structuring his auto insurance policy. Chances are he will pay a high premium to avoid a large deductible in case he is involved in an accident or his car is stolen. A simple shift in assets will give him a high auto deductible, but he can put that money in a growth-focused Roth IRA. If he needs to pay the deductible, he can always take that money out.

The financial advisor who can think creatively and get beyond the product’s function and into the benefits of sound financial strategies will be the one with the most fruitful relationships.

Mark Peterson Farmers Financial Solutions Simi Valley, Calif.

Don’t Hesitate to Fix What’s Broken
My partner Mark Perkins and I launched our estate-planning law firm nearly six years ago. It’s pretty amazing that nearly three-quarters of our business now comes from financial planning, with actual estate planning accounting for the rest.

At first, after I earned my CFP designation, we felt it would be good for business to offer financial services after we had executed an expansive estate plan. But what actually happened is that by attempting to synergize estate planning with financial planning, we ended up leaving more money on the table than we were able to put under management.

We believed in our financial-planning expertise, but our clients didn’t appreciate the fact that we would be wearing our legal hats for most of the meeting and then switching hats near the end. After a year of trying this approach, I decided that Mark would shoulder most of the legal burden while I would stop soliciting new clients and focus primarily on the financial-planning aspect. We created a new brand, Prizm Financial, which I now head.

Our clients now feel confident that they can rely on one professional to handle their legal issues while the other can concentrate on financial planning. There’s a greater comfort level in this arrangement for us and our clients.

We also haven’t been afraid to adjust our prospecting strategies, either. From the outset, our goal was to attract clients through private and retail seminars. At a private seminar, you court businesses as the expert in your field, and they invite you to speak to their employees. That took us about a year to cultivate, but now we have relationships with some of the bigger corporations in Chicagoland, including several arms of the federal government.

We also hosted retail seminars, where you buy a list, rent out a restaurant and invite your target market. But we realized that the money we spent on retail seminars would be better served by providing our clients with better service and information.

We now hold client workshops, publish newsletters and distribute educational materials to our clients. Every December, we also send out a booklet that discusses the upcoming tax changes and new tax brackets. Our clients love the booklet because it’s extremely thorough and easy to understand.

We saw better results by eliminating our retail seminars and moving to more client-based marketing almost immediately. We received more referrals from our first holiday party than any other marketing effort up to that point.

Dean Zayed, J.D., LL.M., CFP
Prizm Financial Advisors Inc.
Wheaton, Ill.

Karl Lueders is a frequent contributor to
Advisor Today.


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