Some new clients see financial planning as an extension of the account opening process or a tool to get people to buy things they don’t want. How can you convince them of its importance?
Approach #1: Dreams for Sale
Ask what’s important to them. What would make a difference in their lives? Maybe it’s the dream car, house or vacation. Start by putting a price tag on the dream. Brainstorm on how they see themselves getting there. They might dream about a Mercedes. Should they go new or used, purchased or leased? What about sales tax and insurance?
Once you have them visualizing the car and a route that’s attainable, introduce financial planning as the roadmap they need. You design the plan with the Mercedes as the centerpiece. This includes saving, investing and tracking progress.
Approach # 2: Chase Away Monsters
Young parents want to provide the best education for their children. If the children are very young, college savings plans make great sense. They also provide a vehicle for those relatives who promised support to channel that cash now, a tremendous incentive for young parents. Making a goal approachable makes it less scary. It also makes the case for why a financial plan’s needed.
Keep Them Interested
Tracking progress to goals makes sense. An advisor from Boston I know calculates the rate of return needed to reach the goal and reintroduces it as the “Family Index.” Performance is measured against what you need to earn instead of competing to beat the market indices.
Help clients build in little rewards along the way. The client who wants the Mercedes needs to save a fair bit. When is the auto show in town? Does your client know about it? Suggest they go to check out the new cars and ask questions.
You can also do a little research on their behalf. Any mainstream rental car companies offer Mercedes as rentals? Do they have lower rates on weekends? They could give themselves an inexpensive treat for a sunny summer afternoon.