A few years ago I researched how to overcome objections — frankly I couldn't find any decent strategies so I came up with my own. My system is simplicity itself: We design our entire client experience to not have any objections.
In fact, if we do get an objection, I feel like I haven't done a good job.
Generally, about 90 percent of our clients follow our recommendations. Here are some of the ways we avoid objections and have such a high success rate.
1. We take our time getting to know the client.
It is not possible to build trust instantly — it takes time. Our client experience can take six to eight meetings for us to really understand our clients and for them to have confidence in our recommendations and us. It can take two meetings just to get a financial plan that will meet their goals. It might take another meeting to review our investment philosophy.
By the end of those meetings we will have a plan they like and they will have started implementing it. Holding this many meetings before the client ever pulls the trigger has the added advantage of the clients not feeling pressured. They feel comfortable with their decision and want to move ahead.
2. We remind clients that decisions are in their hands.
I will tell clients our job is to educate them and run through the pros and the cons of every recommendation. We empower clients by saying: "I know that once you have the information about this investment, you will be able to make a good decision that fits your needs." Once again this takes the pressure off until they have the data they need to implement a recommendation.
3. We carefully match clients and investments.
This is yet another lesson I learned the hard way. About 18 months into opening our office in Rhode Island, I noticed we had five clients out of 50 or so who decided not to move ahead on one of our recommendations. Treating this like a business, I realized not everyone was going to like our recommendations, but I felt I was missing something in helping these people. It really helped me to put each one down on paper, look for a common theme and evaluate what was going on.
This is what part of the list looked like:
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Professional couple in their early 40s earning about $500,000 per year. Monthly savings over the last few years: nil. Had a hard time paying for term life insurance to provide for new baby.
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Professional couple with four children at home. Together they earned about $1.7 million annually. Total investments: less than $200,000, all in qualified plans. They also owned 5 homes, each with a mortgage and all underwater. They started saving $20,000 per month for their children's college and stopped the payments after the third month because it pinched their lifestyle too much.
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Professional couple with stay-at-home mom and working dad who made about $250,000 per year. They had two high school students, a summer house not far from where the Clintons vacation and zero savings for college. Although they had inherited about $80,000 in securities, they could not save anything on a monthly basis.
If you, too, are constantly analyzing your business, you will easily see what had initially eluded me: Each of these families made a lot of money, but they couldn't save. They may be affluent, but they would never be wealthy. This little exercise was quite eye-opening for me, and I had a few takeaways that helped improve our process:
For one thing, I couldn't recommend any investment strategies that had penalties if they walked away early. At some level this kind of client knows they won't save so they would say "no" to anything that required them to stick with a savings plan.
Similarly, I needed to get this kind of client in the habit of saving on a monthly basis before I recommended more complicated investments.
Also, the clients needed to have a clearer picture of their monthly expenses to see what they could realistically save. Now we frequently run through their monthly budget in a separate meeting, so they can see how our saving strategies will fit into what they are doing.
