Can someone else find your clients?

By Mark Noble | July 10, 2008 | Last updated on July 10, 2008
6 min read

(July 2008) There are no rules that say you need to do your own prospecting. In fact, if prospecting isn’t your thing — in truth, it can be a significant stumbling block for many advisors — there are ways to get someone else to do it for you.

U.K.-based advisor Bhupinder Anand, managing director of Anand and Associates, doesn’t see the point of prospecting himself. He says it’s not the best use of his time, so he pays another person to generate leads from a targeted client base.

Anand, twice named IFA of the Year by the U.K.’s Financial Adviser newspaper, runs a master class for advisors in Canada. He likens his business model and himself to Old Blue Eyes, the late Frank Sinatra. “Frank Sinatra didn’t move pianos,” he says.

Instead, he had the right people hired to move and tune the piano while a retinue of support staff sold tickets and booked venues. The draw was Sinatra. Anand says there is no reason someone else can’t do the prospecting if the draw is appealing enough.

The opportunity to explore this business model arose when Anand was contacted by a former financial advisor offering his services as a cold caller.

“My staff are very good at fielding all the sales calls that come my way. This guy got through to me though. He’s good,” Anand says. “He suggested he could make appointments on my behalf. He wanted $300 per appointment. I said to him it isn’t about seeing clients; it’s about seeing the right clients. This is the master class stuff.”

Anand offered to pay the person $400 per appointment if he could book appointments with specific prospects who verifiably met certain criteria. The appointment maker, for instance, had to ascertain that any prospects earned at least $200,000 a year before he booked a meeting.

If the appointment maker was successful in setting up a meeting where all criteria were met, he got paid, whether the prospect eventually became a client or not.

“He makes the call and he has online access to my diary through Outlook. How many calls he makes, I don’t care. It’s his time and his cost. I give him enough material to make it easy for him. It might be a particular time of year, or a particular product we’re offering. We talk about that and give him scripts. He can then use those in his way to talk about us,” he says. “The rest is up to me. We also give him feedback so he knows how to refine the conversation more and more so that his job gets easier and easier.”

Although Anand saves most of the marketing tactics and strategies he uses with his appointment maker for the advanced master classes he teaches, he does suggest some basic first steps and items an advisor needs to provide a prospector. Most important, he says, is getting the right database of potential clients.

“The first stage is acquiring a database. You need to target your clients. For example, I only deal with entrepreneurs and business owners,” Anand says. “You have to define your marketplace Otherwise, how do you know who’s right or wrong? You also need to know where these people are. There are a lot of database companies around that will sell you a thousand names.”

Anand says many advisors may think the databases with the names of “hot” professionals like doctors or lawyers are already well covered by financial advisors. He says this misconception is exactly why he tends to find many people on these lists who don’t actually have an advisor.

Although he warns against paying anybody a flat rate for lead generation, in the end, he says $400 for each qualified appointment has ended up being a bargain.

The right client, he says, “will be looking to pay $4,000 just for the advice. Plus, I make a sales commission on the products I sell. These usually end up being worth $50,000 or $60,000 per case. For a cost of $400, it’s a good investment.”

If you don’t have the right prospector, though, it can be a costly mistake, says Bernie Geiss, president of Cove Financial Planning in North Vancouver.

Geiss, an insurance specialist who focuses on high-net-worth planning, tried to hire someone else to do his prospecting, with disastrous results.

“I hired a woman who was very well known in the old-money community in Vancouver; I contracted her for a year. The idea was that she was supposed to generate a certain number of new appointments with individuals who ideally I wanted as clients. She did make some appointments, but she was not even close to performing,” he says. “I ended up terminating her employment because it wasn’t working out.”

Not only did the prospector fail to generate leads, Geiss says, but the meetings he did have with her prospects ended up being awkward.

“The woman got me meeting with people who were ideal from a financial perspective, but the circumstances were a little weird. They were very receptive, but they behaved like they were doing her a favour by giving me the meeting.” He says the process, which was quite expensive, reinforced his belief that referrals are the best way to generate new business.

“Put it this way. When I go to a meeting, my referrals are very hot. I often get referrals from other advisors [for insurance] that are like that,” he says. “I want that highly motivated ideal client. If I could get a prospector who could get those clients, of course I would pay for their services. But how do you figure that out?”

Art Schooley agrees, saying referrals remain the gold standard for those who want someone else to do the prospecting.

Schooley runs the Personal Coach, a one-on-one coaching service for financial advisors. He says the trick is to create a practice that is perfect for a specific audience. A cold caller or prospector isn’t needed to drive people to your business, but it is extremely important to identify who your ideal client is.

Personal Coach exercises help advisors document the characteristics of their 10 best clients. From this, he says, an advisor can create a template describing his or her ideal client and how the advisor’s business serves this client.

“An advisor must be very clear on what the ideal client is. We use some tools to help that.” Once this is clear, he says, advisors often find that “birds of a feather flock together. In other words, clients likely hang around with people just like themselves. If they are making $250,000 a year, they are mainly hanging around with other people who make $250,000 a year.”

Schooley says if you focus on doing the best job of serving that ideal client, you can create a centre of influence that will draw referrals.

He relates the experience to a recent encounter he had with a client who was having trouble finding odd-sized doors to fit his office. Schooley, who recently had a cottage constructed with odd-sized doors, explained that he knew somebody who specialized in that area and did good work. Naturally, he offered a referral.

“If your ideal client is retired, they are hanging around with other retirees. If an advisor is offering great value for their retiree clients, those clients will tell other retirees that they know someone [who can meet their needs].”

Of course, Schooley says rather than relying on chance conversations to drive referrals, advisors should also get in the habit of asking for them.

“Statistically, very few advisors have a referral talk or a presentation,” he says. “Yet, according to research, typically 70 to 80% of your clients will refer you if asked.”

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Mark Noble