Tuesday, September 22, 2009
New Good (Bad) Ideas
We’re coaching a team that’s comprised of a very successful senior advisor, a new advisor and two support staff. Shortly into one of our initial coaching calls, Jim, the new advisor spoke up, “After coming back from a conference last weekend, I've come to the realization that there are plenty of ways to become successful in this business".
He’d been to a conference put on by a fund company and couldn’t wait to share the “new” ideas he gathered from other participants. Before we dissect these three ideas, let me forewarn you that none were “new”, none were right for him, and all three gave us a window into how easily he could be pulled off track.
Here's what he shared with us:
* I found this company that sells high net worth lists in our area. I'm thinking I should buy one, send them mailers, and hold a few seminars. It's simple math; if I buy 5000 mailers, I'll end up with a handful of qualified prospects.
This sounds good and worked for plenty of advisors in the old days. It's not effective nowadays because the affluent are more cynical and skeptical than ever. They’re not selecting a person to oversee their family’s finances based on a postcard and a nice dinner. Not to mention, if this method does bring in new accounts, they’re typically small and not worth the time, money and energy spent attracting them.
* There was an advisor at the conference who was telling me how he worked with community banks to manage their trust assets. I know a banker and he knows bankers. This could be a huge new initiative.
We've heard numerous success stories built around this exact concept. The problem was that this new advisor had almost no connection to this market and no idea how to provide the service he was trying to sell.
* I heard about this firm that helps you buy financial practices. Do you think it's a good idea?
For a new advisor, absolutely not. In the long run, no matter how great a practice you buy, you've got to know how to sell and service the affluent. At this juncture, it was apparent that Jim was losing his focus and running the risk of getting caught-up in low-impact activities – and he was not selling his teams services to affluent families in his community at all.
It took about three minutes for Jim to share his new strategies and then the balance of our coaching call was spent guiding him back on track. From early on, the senior advisor and mentor was doing his best to equip him with the marketing activities and verbiage he needed to go after the affluent (introductions, networking, strategic alliances, etc).
Whether it was an attempt to impress his mentor or basic impatience (the affluent make decisions on their time line), Jim was allowing himself to get frustrated. It usually took the tone of complaining that the senior partner wasn’t not giving him enough smaller clients and using the economy as an excuse for not being able to get any affluent prospects in front of the team.
The real issues for this advisor were two-fold:
1. He had lost his focus. As a result, he was about to deviate from his “critical path” - engaging in low-impact activities that would be a waste of time and money. He was allowing results, not activity, to determine his confidence. And because he had yet to bring in any new affluent clients, his confidence was shaken. This compounded his problem because any activity that put him front and center with affluent prospects pulled him out of his comfort zone and he was avoiding them. He was even intimidated by his social contacts because he knew he should be approaching them about business.
2. He was looking for that magic bullet that would catapult his career. Rarely does this happen. It’s far more likely that a series of “singles” will occur rather than a “homerun”. The singles come from getting personally introduced to new people, building relationships with potential strategic partners (CPAs and attorneys), networking in affluent circles, holding small client/COI events, and so on.
There are only so many ways to build a financial practice. This isn’t a new .com business model that’s changing its marketing plan every other week. This is a business that’s built on word-of-mouth influence. It always has been. The key is to master the activities, early in your career, that help you meet affluent people, develop rapport, and put them into your pipeline.
He’d been to a conference put on by a fund company and couldn’t wait to share the “new” ideas he gathered from other participants. Before we dissect these three ideas, let me forewarn you that none were “new”, none were right for him, and all three gave us a window into how easily he could be pulled off track.
Here's what he shared with us:
* I found this company that sells high net worth lists in our area. I'm thinking I should buy one, send them mailers, and hold a few seminars. It's simple math; if I buy 5000 mailers, I'll end up with a handful of qualified prospects.
This sounds good and worked for plenty of advisors in the old days. It's not effective nowadays because the affluent are more cynical and skeptical than ever. They’re not selecting a person to oversee their family’s finances based on a postcard and a nice dinner. Not to mention, if this method does bring in new accounts, they’re typically small and not worth the time, money and energy spent attracting them.
* There was an advisor at the conference who was telling me how he worked with community banks to manage their trust assets. I know a banker and he knows bankers. This could be a huge new initiative.
We've heard numerous success stories built around this exact concept. The problem was that this new advisor had almost no connection to this market and no idea how to provide the service he was trying to sell.
* I heard about this firm that helps you buy financial practices. Do you think it's a good idea?
For a new advisor, absolutely not. In the long run, no matter how great a practice you buy, you've got to know how to sell and service the affluent. At this juncture, it was apparent that Jim was losing his focus and running the risk of getting caught-up in low-impact activities – and he was not selling his teams services to affluent families in his community at all.
It took about three minutes for Jim to share his new strategies and then the balance of our coaching call was spent guiding him back on track. From early on, the senior advisor and mentor was doing his best to equip him with the marketing activities and verbiage he needed to go after the affluent (introductions, networking, strategic alliances, etc).
Whether it was an attempt to impress his mentor or basic impatience (the affluent make decisions on their time line), Jim was allowing himself to get frustrated. It usually took the tone of complaining that the senior partner wasn’t not giving him enough smaller clients and using the economy as an excuse for not being able to get any affluent prospects in front of the team.
The real issues for this advisor were two-fold:
1. He had lost his focus. As a result, he was about to deviate from his “critical path” - engaging in low-impact activities that would be a waste of time and money. He was allowing results, not activity, to determine his confidence. And because he had yet to bring in any new affluent clients, his confidence was shaken. This compounded his problem because any activity that put him front and center with affluent prospects pulled him out of his comfort zone and he was avoiding them. He was even intimidated by his social contacts because he knew he should be approaching them about business.
2. He was looking for that magic bullet that would catapult his career. Rarely does this happen. It’s far more likely that a series of “singles” will occur rather than a “homerun”. The singles come from getting personally introduced to new people, building relationships with potential strategic partners (CPAs and attorneys), networking in affluent circles, holding small client/COI events, and so on.
There are only so many ways to build a financial practice. This isn’t a new .com business model that’s changing its marketing plan every other week. This is a business that’s built on word-of-mouth influence. It always has been. The key is to master the activities, early in your career, that help you meet affluent people, develop rapport, and put them into your pipeline.
# posted by Stephen Boswell @ 4:02 AM 
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