Acquisition Archives - Page 2 of 8 - Supernova Consulting

Giving your clients permission to spend more money is one of the greatest gifts you can give them!

Most successful people grew up working hard and saving money. That, probably, is why they are rich now. When you do a cash flow analysis as part of this client’s financial plan, you quickly realize that they are never going to outlive their money. In fact, their nest egg is growing. They grew up believing, like their parents, that “debt is bad” and “it isn’t how much you make that counts, it is how much you save.” They are uncomfortable spending money and are living a simpler life than they deserve.

You have an obligation to give them permission and teach them how to enjoy the money they have saved. The familiar quip, “If you don’t fly first class, your children will,” applies here.

Here are some ideas on how they might use their money to further enjoy their life:

Update the family home.
This can be a good investment as well as a way of bringing pleasure to your everyday life. Most folks spend money to fix up their home in order to sell it. Why not do it now and enjoy it?

Buy that second home. Depending on your priorities, buy in a destination that will be attractive to the grandchildren. Renting a vacation home is great but owning is better.
Take the entire family on a vacation. This will build great memories for years. Friends of ours took their whole family (15 people) to Ireland for two weeks. They said it was the best money they’d ever spent.

Set up a Family Foundation.
Include all adult family members to serve on the board. Encourage them to present to the board charitable causes they are passionate about. Allocate funds based on well-researched ideas and the passion of the presenters. This will teach the family the value of giving back, leadership, roles and responsibilities on the board, teamwork and cooperation. Benefits also can include a small stipend and improved standing in the community.

Set up a Dynasty Trust. This can be set up as an incentive trust to encourage values and behaviors that the client wants to pass on to their children. This trust typically lives on for generations but isn’t funded until the death of the client. It is typically funded with a Second-to-Die life insurance policy. Once activated, it typically pays the blood relatives a small salary based on different achievements as directed by the client. For example, they might pay $10,000/year if the child graduates from college. If they get a Master’s degree, it might rise to $15,000 and a Doctorate to $20,000. You can add special payments for the birth of a child, becoming an eagle scout and weddings. Papa and Nana can be remembered on special occasions for generations to come.

Make a difference. Feel the joy of making a real impact by giving appreciated securities to your alma mater or favorite charity. Making money is fun; giving it away brings real meaning to your achievements.

Treat yourself. Whether it’s special occasions or exotic trips, fly first class, rent a private plane, and generally be kind to yourself. You are only going to be 65 once. You have earned it. My wife rented a seaplane for my 65th birthday and flew us to Key West for lunch, followed by a boat ride and a lobster dinner on Useppa Island. We have talked about it ever since.

Remember, clients are either spending too much or too little. They are rarely spending just right. Your job as their advisor is to make them aware of what they are doing and to help them to make better choices. Supernova’s 12/4/2 program keeps you in regular contact with your clients to make sure they are spending appropriately.

Suggested to read next: What to Say to Clients that Overspend

This webinar presents the five reasons clients fire advisors and a worksheet on how to create a growth business plan.

Does your client acquisition strategy need some legs? Are you lacking a consistent process to bring in new clients? Many advisors are very good at creating the networks in order to generate new business but they may lack consistent strategies necessary to bring prospects across the finish line to becoming a client.

One of the most important tenents of growing your practice is treating a prospect “as if they were a client already on the books”, especially with your communication strategy. You do this by offering them a 90-day Free Look. During this time you will use the scheduling tool and schedule the prospect just as if he/she were a client including creating a plan (optional to charge them for this) a cash flow analysis, and in-person meetings.

Here are some steps we use in our coaching program:

Every prospect receives a client folder which contains important information about the practice as well as other important information.
All prospect communication is scheduled in advance.
Each meeting is preceded by an emailed agenda complete with discussion topics and appointment reminder to the client.
Agendas enable the prospect to prepare for the calls and help keep communication relevant and focused. This extra step says a lot about the importance placed on client relationships. They should be no more than a paragraph with a few bullets and a reminder as to the time and date of the next call. This will move you closer to solidifying the relationship.
Immediately following each meeting send out a summary, a detailed follow-up email no more than two paragraphs in length summarizing your conversation, what you both agreed to, concerns and priorities.

After initiating several contacts with a prospect and developing a budding relationship that seems to be positive, how do you bring the prospect over the finish line? You must first learn what is important to them. Consider asking, “Mr. Prospect, when you consider your wealth management needs and concerns, what are the top two or three priorities?” Listen very carefully because their answers become part of an overall agenda. The prospect’s agenda should be your focus as an advisor.

Sometimes you have to help the prospect establish priorities by providing suggestions. Prospects who are unable to identify their priorities will need your help. They may have avoided doing financial planning or paid attention to their personal financial affairs. They may be embarrassed to tell you about their inadequacies and reluctant to talk openly with you. Let them know that you are there to help and will listen and assist them in finding solutions to their concerns. At the end of each meeting, help the prospect formulate some key priorities for the next meeting. Make a few suggestions to move the process along.

When you send out your summary of the meeting identify the next steps. This is taking a step towards the presumptive close. Bring the account opening documents to the next meeting and say, “I would like to get started working with you right away.” Implying why should they procrastinate any further?

A detailed, presumptive follow up is important because it gives your conversations focus and creates a sense of urgency on the part of the prospects to take action. It’s the beginning of demonstrating your value and professionalism for the new client and the client experience. Use this as a tool to bring more prospects across the finish line and increase or add to the number of your client relationships.

Exercise: Create a detailed presumptive follow up of your meeting with a prospect and email/mail it to them. Follow up with a phone call to ask if there are any questions. Offer them a 90-day Free Look.

Supernova has three primary goals:

Increase the focus on the practice.
Bring balance to the FAs/CSAs life.
Significantly grow the practice.

In order to accomplish those goals, the FA must segment their practice. What that means is they have to reduce the number of clients. When an FA segments, everyone wins.

The clients who are staying win because they get more proactive time from their FA. Whether FAs want to accept it or not, clients want to hear from their advisor. The number one driver of client satisfaction is proactive FA contact.
The FA wins because they are in control of their day, just like an attorney or physician. The FA has more time to think. The FA doesn’t go home after work feeling they “didn’t get it all done”.

The third group who should win is the clients who should be reassigned. When I work with FAs in getting their practice down to a manageable core, I continually hear this comment when referring to the smaller relationships – “Aw, they don’t take any time”. Think about that statement. You are saying you don’t spend any time with these people. You are saying that some clients in your practice get your best but others don’t! That isn’t how FAs feel but that in essence is what is happening.

When a client, no matter what size, is a part of your practice do they have the right to think you are managing their financial future on a proactive basis? I think so.

So, when you are struggling with decisions around reassigning smaller relationships, always keep in mind that every client deserves to be in someone’s “A” book.

Supernova recommends FAs serve on two community or non-profit boards. This can be your alma mater, a medical-based, social services, political, arts, church or sports focused group. Besides the personal reward you will get for your efforts, your “giving back” demonstrates your character and philanthrophic and leadership qualities.

You can join an organization that is near and dear to a client’s heart if you don’t have one of your own. And you can take the organization’s theme and turn it into a niche for your business. At a recent conference one of the FAs asked me, “How do I develop this opportunity into a resource for prospects?”

The other members of the board will want to know more about you socially but may not know a lot about what you do. Approach them with this simple statement, “We have gotten to know each other socially. Let’s get together and get to know each other professionally.” They will immediately know what you mean and be grateful you initiated the conversation.

Trying to be all things to all people is a strategy that is proven to fail. Financial service firms have finally realized that truth and decided to go after specific niches in the market. Advisors should do the same. Deepening your role in your niche market can be a rewarding way to not only expand your business expertise and knowledge but also to significantly grow your revenue within that niche.

If you had a career before becoming an FA your natural niche would be in that field you worked. It makes you invaluable to clients and prospects because you know more about them than someone who hasn’t worked there. You can also develop a niche by emerging yourself in the culture of the company. Go to their convention, talk to clients who are in that field, talk to receptionists, human resources, bid on their retirement plan, hold seminars in subjects they would be interested, sponsor special events they are involved with. There are a hundred ways you can add value by deepening your role.

Not only do you want to find and develop your niche but you also want to work with everyone in your practice as if they were unique—which in truth, they are. That’s why financial planning is the heart of a Supernova practice.

When you describe our Concierge practice to your clients and your prospects, make it clear that your investment process is planning-based. Also emphasize that your planning is multigenerational. You are saying to clients and prospects that one size does not fit all.

The ability to tailor your offerings and your service to meet your clients’ needs is an important distinction that you bring to your practice. Everything you do for your clients ought to be discussed as custom-tailored, designed specifically them. We know that what worked yesterday for clients may not work today. Younger clients are in an accumulation phase while our older clients are in preservation or distribution phase. Clients need to know they are distinctive in how you service and manage the relationship.

The Supernova process allows you to get to know each client over time through your 12-4-2 process. It is that knowledge which allows you to custom-tailor the process rather than offer a one-size-fits-all approach that may actually fit no one.

“The difference between a pipeline and a sewer is what flows through it.”
Stephen Shapiro, Best Practices Are Stupid.

That brings to mind all of the financial advisors who have pipelines designed to bring them new accounts. I realized that for many financial advisors what comes out the end of their pipelines is not exactly what they were expecting. That’s why a Supernova Advisor approaches prospecting in an entirely different manner. The Supernova Advisor is continually looking to duplicate best clients. No one else should be considered. You want that pipeline to produce more clients like your best clients. Supernova teaches how to make that happen. Our five strategies for prospecting are all based upon duplicating your best clients.

Too often financial advisors have waited for referrals, spent time with a prospect, worked with a group, only to find out that the resulting accounts were huge disappointments. What a waste of time.

Having a big pipeline and having a pipeline that produces the right kinds of accounts are two very different things. Supernova encourages and assists our advisors in building a pipeline that produces the best of new accounts, new accounts that meet your minimum, understand your service model and want your expertise.

What kind of pipeline do you have? What is flowing through it? What kind of accounts are coming from it? Supernova Advisors understand the 5 methods of growing their business and look forward to adding new accounts that are like their best accounts. The 90 prospect folders are designed to help you find and open accounts with the most meaningful and satisfying relationships possible.

The Supernova Advisor grows business not by continually adding new accounts, but by continually adding the right kinds of accounts that meet their minimum and have the qualities that make them ideal for the practice.

Opening new accounts also means reassigning current accounts. Developing Supernova relationships within your office is key to handing your clients off to a Supernova team or individual who will give your client the same Supernova service they have become accustomed to.

It is important to keep your pipeline flowing with the right kind of prospects. Do not let it plug up by holding onto accounts that need to be reassigned.

The right kind of pipeline will continue to grow your business and it will continue to do so for years to come.

FA Magazine (www.fa-mag.com) had a great article on why FAs think they are fired by clients. The article was driven by a survey of 1,375 advisors. The advisors were asked to select the top three reasons that clients fire advisors. The top three answers:

Failure to communicate on a timely basis was in the top three responses by 72% of advisors.
Failure to understand the client’s goals and objectives with 51% came in second.
Failure to promptly return phone calls received was third with 44%.
Poor investment performance was selected by 34% of the advisors.
In fifth place was “making claims they can’t keep”.

I have several thoughts on these findings.

1. The way you build a practice is to keep what you have and acquire more relationships that fit your Ideal Client Model. The Supernova Service Model will insure you don’t lose clients because of lack of communication, understand goals and objective and failure to promptly return phone calls. The Supernova Service Model is:

Monthly scheduled meetings. It is hard not to communicate when you are talking with clients monthly.
Rapid response to any questions/problems/inquiries with a 24 hour resolution standard. With this part of the Supernova Service Model you will get an “A” from your clients.
Multi-generational and fully implemented planning. It is almost impossible to not understand a client’s goals and objectives when you have a planning driven practice.

2. The top three answers are 100% under your control.

3. Investment performance isn’t entirely under your control but:

Performance ranks forth in this survey.
Most financial plans use a Monte Carlo simulation. The Monte Carlo simulation will give your client a probability of reaching their financial goals. For most clients reaching their goals is more important than a rate of return.

Exercise:

The article in FA Magazine tells us why clients leave – poor communication, failure to understand the client and not returning call promptly. It make good business sense for advisors to consistently deliver these things within your practice? Refine your practice to meet these standards.
Remind clients and prospective clients that you are delivering these three things

Watch these videos for more on acquisition techniques

I was recently talking with a very good Financial Advisor. I asked him what he asked COIs (Centers of Influence) to say to potential clients. He gave me two answers:

1. Could I give you a second opinion on your portfolio?

2. Are you happy with your present advisor?

I don’t believe either of these are effective questions. Why?

How do you review a portfolio without knowing what how much risk a prospective is willing to assume and what that prospect wants to accomplish with his/her money. A much better way would be complete a plan for the prospect to determine if they are on track to reach their goals. That is a differentiator.

Happy is a nebulous term. If you ask a prospective client if they are happy, they might be happy because they don’t know what else is available. The prospect may become unhappy with their present advisor knows that you offer:

monthly schedule contact with quarterly reviews including two face to face meetings
rapid response to client questions or problems with a 24 hour resolution standard
multi-generational and fully implemented planning
a concierge practice for a limited number of clients

Exercise: Discuss your service model with your COI’S and ask them to describe their service model.

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