The Annual Review: A Booster For Your Business
By
In any given year, as many as a third of us will experience a life change that impacts our financial situation. Getting a new job or a promotion, having a child, buying a house, moving, getting married, getting a divorce, or retiring can all create new financial needs.
These needs often translate into the purchase of life insurance, the rollover of a 401(k) plan, or the investment of new assets in mutual funds, annuities, and other financial instruments. More importantly, most people have these needs–including many of your existing clients.
Because your clients financial needs and circumstances change as the years pass, the only way to keep up is to review their financial situations each year. And yet, fewer than one in 10 financial planners schedule annual reviews with their clients. Most planners fail to capitalize on what is perhaps their best opportunity for new sales.
Conducting annual reviews is widely considered a benchmark for providing good customer service. But there are other upsides for your practice. Not only can the review process help you uncover new financial needs that your clients may have, it can help cement those relationships. And financial professionals who regularly review their clients financial plans and status say at least a third of these meetings result in referrals.
A 2001 survey conducted by my firm, Woodbury Financial Services, indicated that financial professionals who implemented management practices such as annual reviews and focusing on clients goals enjoyed significant increases in production. Their sales of variable universal life insurance jumped 55% and their sales of variable annuities rose 27%.
So how can you make annual reviews work for you and your clients? How can you get your clients to actually sit down with you without kidnapping them or offering a vacation sweepstakes?
One approach that has been successful for many practitioners is the "bandwagon" appeal or the "my-clients-made-me-do-it" pitch. You can schedule annual reviews with your clients throughout the year by sending letters inviting them to a meeting in your office. In the letter, explain that more of your clients each year ask you for help with financial issues such as planning for retirement, saving for college and transferring wealth. You have, therefore, decided to offer all of your clients an annual review of their financial planning status and will call them shortly to set up a meeting. Of course, if that doesnt work, you can always offer free food.
Dont forget to follow up your letter with a phone call. Financial professionals who use this technique report that their response rates increase from 7% to more than 60%. Your assistant can easily make these calls, leaving you more time to meet with clients and assess their financial needs during the reviews themselves.
Before sending the letters, schedule time with your assistant to go over your clients files. Teach your assistant to generate time-value-of-money calculations to better track the clients financial progress toward their goals.
Plan to invite all of your clients to an annual review, but start with your top or "A List" clients because many of them will actually want to meet with your more often than once a year. Mail annual review letters 10 weeks each quarter or to 1/40th of your clients each week. Your assistant can print and stuff 100 letters at a time so they can simply be dropped in the mail during most weeks.
Once your client is seated in your office, the meeting should start with the basics and build from there. First, ask about any significant changes in your clients financial situation. Has he or she changed jobs recently? Any births or adoptions of children to report? Has one or more children entered college? Is he or she contemplating an early retirement?
