Advisors often hear the same questions and comments when prospecting or socializing. And we often give the same stock responses. Consider trying something new.
"How's the market?"
Standard answer: "The Dow closed up 115 points today."
Problem: No context and perspective. Was it down or up the last four days?
Better answer: "The Dow closed up 115 points today. Let me put that into perspective. Year-to-date the market is up 10%. If your stock portfolio is up 10% or more net of fees, you're doing fine. If it isn't, there may be room for improvement and we should talk."
"I don't do business with friends"
Standard answer: "I understand—I like having you as a friend too."
Problem: He may need help but doesn't want a showdown if things don't work out.
Better answer: "I value friendship too. I explain to clients, 'If you take my advice you should get a report card. If I'm not doing a good job you should be able to fire me.' "
Rationale: Saying "fire me" tactfully addresses the issue. If later he isn't happy with the relationship he has a roadmap for unwinding it – and it was your idea.
Questions to Ask
"What Was The Best Stock You Ever Owned?"
Scenario: You're trying to engage a prospect and make the case why he should do business with you.
Why ask the question: Investors love talking about their successes.
Follow-up questions: "What's it trading at now? Let's buy more."
Rationale: He made the case for the stock himself. You're suggesting he act on his belief.
"Can you see yourself benefiting from the strategy?"
Scenario: You've completed a financial plan and delivered your proposal. Time to close.
Why ask the question: You use trial closes to establish a chain of 'yes' answers, and string of yes answers is rarely followed by a no.
Follow-up statements: "The next step is to fund the account, either with a transfer of securities from another firm or by writing a check to deposit funds."
Rationale: The focus is on the prospect–it's about what's in it for him.
"We're in this together"
Scenario: The stock market is cyclical—sometimes it doesn't do well. You need to deliver bad news to clients, and often they look for someone to blame. You're handy.
Why use the statement: Sometimes clients think of brokers as "croupiers in the casino of Wall Street." They forget you're a retail investor, too.
Follow-up: "By that I mean I'm an individual investor too. We both take the same advice – mine. When the market goes up or down my portfolio is also affected."
Rationale: You're letting them know you're on the same side of the table. You may not own the same holdings as each client, but there is probably some overlap.
"You'll be an important client to me"
Scenario: You're competing for a prospect's business. If she makes a commitment to you by investing money, you'll be making an ongoing commitment to her.
Why use the statement: Often advisors are organized in teams. During the courtship phase the senior advisor may do the cultivating. Once the prospect becomes a client she may find the senior advisor hard to reach.
Follow-up statements: "If you become my client I will handle your account personally." You're letting her know once you've made money from fees you will not be reassigning the account.
Rationale: Everyone wants to be an important client.