There are numerous reasons for clients and prospects to say "no" to advisors these days. You can take your pick — the economy, distrust, fear, uncertainty — the list goes on and on, and all lead to a singular ending: a lost sale. Top advisor Chris Wright, of Prescott, Ariz.-based Wright Financial Group, will present his ideas on overcoming objections at this year's Senior Market Advisor Expo in Las Vegas. SMA spoke with Wright to gain insight into his presentation. The following is a sneak peek of key points that advisors can expect from Wright on Aug. 26 at Caesars Palace.
Objection 1
I can't get out of the market now, I've lost so much. I need to hang in there because I'll never gain back what I've lost.
Response: First of all, I tell them to listen to their gut feelings. I want them to explore their ideas on the market. I want them to walk through their objections. Instead of coming off to them as all-knowing and throwing all types of ideas at them, I find it better to initially let them figure out their real thoughts on the market and their investments.
Once we get through that initial exploration, I explain the "wash" theory to clients. I show them the losses they've already taken on and the recovery path they would need to take to stay in the market. For example, if their investments have lost 50 percent, they will need a 100 percent return just to get back to square one. And it compounds dramatically. If they have lost 60 percent of their investments, it would require 150 percent to bring them back even. And finally, I let them know if they have already lost or were to lose 70 percent of their investment, it would take a 230 percent gain to get back to their pre-market-crash level.
So when I show them those figures, most people say, "I wanted to get out of the market, but my advisor hasn't wanted me to." That's when I go into safe products and how we can formulate a plan to stop the bleeding.
Objection 2
How do I know you'll handle my money differently than my current advisor?
Response: I began my career with Bank of America. Working in that situation, I learned that those captive advisors work for the executive in the big tower. There was always a new product, a new marketing pitch that I had to sell to. As an independent advisor, I bring the ownership of the money back to the client. Being an independent advisor is being part of a team. It's important that you establish that kind of relationship with the client. At a wirehouse, the rep works for the company, not the client. It's different for me. I tell clients, "you're the CEO of your money." The client should have control and final say. Why pressure them to keep their money somewhere they feel uncomfortable having it? Give them the guidance and advise them, then let the ball fall in their court. It's their money, after all.
