How many times have you met with a client and then not asked for a referral, or held off from calling a high-net-worth prospect in your pipeline? What stopped you from taking action? If you’re honest with yourself, you know the probable answer—fear; fear that whatever action you might take could result in some type of negative outcome. However, have you ever really calculated the true cost of giving into that fear?
To answer that, let’s first define fear using an analysis of it.
Fear can be defined as both a noun and a verb: (noun) an unpleasant emotion caused by the belief that someone or something is dangerous, likely to cause pain, or a threat; or (verb) to be afraid of (someone or something) as likely to be dangerous, painful or threatening.
One of the best definitions I found for the word uses the acronym F.E.A.R—False, Evidence, Appearing, Real.
It’s very possible that much of the fear we experience is perceived, and over time, past experiences can cause undue stress to you (and in turn, to your clients) because you might be holding onto fears that hold you back from exploring potential opportunities.
Calculating the Cost of Fear
We rarely calculate the cost of a failure. Sure, we might know what the revenue implications could have been had we onboarded a certain prospect, but adding up failures again and again is not a common practice. It is important to discuss the possible financial, emotional and physical costs of fear and its plausible consequences for you and your advisory practice.
The Financial Cost
One way to look at the financial cost of fear is to consider the cost of not asking for a referral. When asking a client for a referral, a number of negative outcomes exist: You simply may not get the referral, the referred individual might not meet your ideal client profile, or he or she might not desire to meet with you. Regardless, it would be safe to say that if you were to hone your skills at routinely asking for referrals, eventually you would receive additional business.
Referrals are just one example of the possible activities many advisers hesitate to consistently work on for fear of failure. Networking and cold calling are others.
If you are honest with yourself, you will see that many of your fears could be costing you potential income.
The Emotional Cost
If you are operating your business with a constant state of fear as your reaction to most of what you do, it is nearly impossible to enjoy what you do. Of course it is not uncommon for financial advisers to feel the effects of particular fears during uncertain markets, but the bottom line is that you should find yourself seeking ways to always find the silver lining.
The Physical Cost
Often times, living in a constant state of anxiety or fear can take a toll on the body as well. The body is naturally designed to react to fear by sending out the necessary hormones to give you the energy for “flight” or the strength to “fight.” If every 100-point swing of the Dow makes you break out into a cold sweat, sooner rather than later it will lead to various physical or psychological maladies.
Living Beyond Fear
Now that you hopefully understand the impact fear can have, it’s important to ask yourself, “Why would I want to run my business this way”? Face your fears, find a realistic way to conquer them, implement those methods and evaluate the outcomes often.
Daniel C. Finley
St. Paul, Minn.