Choose your clients

So, you’ve got your qualifications, secured a licence, even sold a few policies or investments. What next?

Chat with some of the old school and they’ll say success as an advisor is all about activity—“see the people; see the people; see the people,” they chant. Well, that’s true, but it sounds like a lot of hard work to me. The 21st Century mantra should be more like: “see the right people; see the right people; see the right people.”

And in this context, the right people are those worth dealing with because they can afford to pay us (fee or commission), and with whom we can, in turn, forge fantastic relationships.

I’ve learned over the years that there’s a rule of thumb for financial services success: You’ll only ever earn just over the average earnings of all your clients. Which means, if you’re dealing with clients earning an average of $50,000 yearly, you stand to earn a similar sum. If you work with clients whose average incomes hover around $100,000, you too will earn thereabouts. By this logic, if you aspire to earn a quarter, half, or even a million dollars, then guess what—you need to be speaking with clients who earn that kind of money.

Say No So, by definition, successful advisors should nurture relationships only with people earning six- to seven-figure incomes. But to do so, they need to get familiar with a new, almost foreign word in the advisor lexicon. That word is no.

Don’t get me wrong. Saying no doesn’t in the least entail being blunt or crude. It can be subtly implied, by specifying what your client base is, and in a manner that automatically excludes an undesirable prospect. You simply price your services above the reach of the segment you wish to avoid. Or, if you’re already charging fees, by increasing them to a level that’s prohibitive for a client you don’t wish to deal with.

Don’t waste valuable time with prospects simply in the hope that they might just buy something that could generate a commission. Some will, but those who don’t are like energy vampires.

Time really is money and in the advisor world we need to supplement that with “wisdom is money.” We don’t freely part with our money (apart from charitable donations), so why should we so easily dole out our expertise? Advisors who behave like charities are likely to need the services of one, someday.

In addition, advisors who generally compete on products, the basic commodities of our trade, risk being commoditized themselves, because the client will focus on price and ease of purchase, rather than the value we create.

Positioning with the high net worth requires you to clearly define certain parameters, such as minimum earnings, minimum net disposable income, and investable assets, by location, occupation or some other criteria.

Get in Position In addition to eliminating prospects who fail to fit your model, the act of clearly defining your preferred client lets you create a sense of belonging, as if to an exclusive club, for those who do fit your bill. Such clients appreciate the novelty of being treated to tailor-made advice, as opposed to services that cater to the masses.

Wealthier clients are not looking for cheap products or even convenience. They seek a lifetime relationship with an advisor who appreciates their needs, understands their aspirations, and genuinely adds value to their lives. They pay for the experience; and the higher the net worth, the higher the expectations.

Play With Words Financial planning is not an event; it’s a process. Think carefully about the words you use to describe your proposition. When an advisor says, “I offer a longterm relationship,” he or she means lifetime. But many clients’ previous experience with other financial advisors, who promised the same thing and then vanished, leads them to believe long-term means two or three years. So, substitute the words “long term” with “the next twenty to thirty years” or “lifetime” and observe prospects dropping their jaded demeanour.

The next step, understand how your prospects perceive your brand and most importantly, what they’re looking for. Ask yourself these questions: How do I describe or introduce myself that differentiates me? What questioning technique do I employ to demonstrate my holistic approach? What does my process look like? Does my new client know upfront what to expect at every stage of the process and future relationship?

And once you determine what your clients expect, get to work clarifying what you expect of them. And here again, you need to be crafty with the words you use. For example, when making a first appointment with a prospect, how much value do you create around that first meeting? Do you say: “the first meeting is free?”

While dangling the “free” tag might relieve a lot of clients, it also removes value from the time you are putting into the first meeting. You’re effectively implying it isn’t worth much, and that’s not a good start to a lifetime relationship. Here’s how I’d articulate the same thing: “The first meeting is at my expense.”

This effortless re-wording can have a dramatic effect. First, you’ve laid down a basic premise: there is a value to the service you provide, and you’re prepared to share it. Second, by stating the first meeting is at your expense, you’re implying that the next one is at theirs, and that there’s an expectation that if you give them something (your time), they will respect that and not waste your time if they aren’t sincere.

Positioning is the key to courting moneyed clients. And for that we need to attach value to our services. After all, if we’re unsure or lack the confi- dence to articulate our position, why should our prospects have any confi- dence in us?