The first couple of years of an advisor's career is like running a gantlet. You have numbers to hit. It's like swimming underwater in an Olympic-sized swimming pool. Your lungs are bursting, but you keep going. Two or three years later, you are successful! You have an established base of clients. Many of the advisors around you are gone. You are now an established producer. This is where mistakes like these start to happen:
1. Announcing what you won't do. You hear a presentation on client acquisition. After pondering the strategy you announce. "I'm not doing that. Too much work." You hear about an advisor who built their clientele talking with people on commuter trains. You determine "I would never do that." It's very hard to grow a business if you focus on what you will NOT do.
Instead: What will you do instead? Find a prospecting strategy that fits inside your comfort zone.
2. Assuming no news is good news. When markets are volatile, it's tempting not to call clients. Fee-based accounts and managed money means revenue is coming in regardless. You assume clients either don't open their statements or they are rolling with the punches. You forget they are being prospected by other advisors who ask: "When was the last time you heard from your advisor?"
Instead: Call each client (or get in touch) on a regular schedule. Suggest and deliver a portfolio review. It shows how you add value.
3. Thinking "I have all their money." You don't pay that much attention or call with suggestions because buying something new would mean selling something they own. In a fee-based account, no new revenue is generated. You assume they've handed over all their investable assets. "I'll just focus on other clients…" My first manager explained, "There's always more money." It might be some they didn't tell you about. It might be their parent's money, because they advise on its investment.
Instead: Suggest an idea. Tell them you like everything they already own. This will require new money. See what happens.
4. Leaving money on the table. You were raised not to be greedy. The financial plan listed several client needs. You handled the easy ones and skipped the complicated ones explaining: "You need to find a specialist for that part. It's not my area." They either do nothing or find an expert. Once again, they have the same licenses as you. They wonder why you couldn't help them. They start sending money to that nice man across the street.
Instead: You don't try to solve every issue at one meeting. (They would be overwhelmed.) Schedule another meeting and bring in the firm's specialist for the complicated issues.
Bryce Sanders is president of Perceptive Business Solutions Inc. He provides HNW client acquisition training for the financial services industry. His book, "Captivating the Wealthy Investor," can be found on Amazon.
