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How to Sell the Benefits of Financial Planning

Do you ever struggle to communicate the value of financial planning to prospective clients, such that they are willing to sign your planning agreement and write a check for the deposit, enabling you to move forward?

That was the question I was asked recently by a financial planning practice. They sent me sample copies of their proposal as well as examples of their executive summaries, action plans, fee schedule and even some success story descriptions.

I am confident that this is a practice that provides an excellent planning process and product—certainly well worth the fees they charge.

So what did I recommend? Here are the steps I suggested:

Before your Introductory Conversation:

  • Thank them for their interest in learning more about you and your practice.
  • Send a link to your website, pointing out any description or case studies you have there about your planning process and results.

During your Introductory Conversation:

  • Learn enough about them to determine whether they’re a good fit for your business model and how you can help them.
  • Explain your background and approach to help them understand whether you’re a good fit for what they need.
  • If you provide different “tracks” based on your clients’ situation (such as plan only, plan plus solutions or even solutions only), describe them. Tell them that the basis for determining which track is most appropriate generally becomes clear in discovery. Avoid discussing fees at this point; you want them to understand that you will recommend the track most suited to their needs.
  • At the end of the introductory conversation, if you believe they are a good fit for moving forward, say something like: “Based on what you told me about your situation, and how we generally serve our clients, I think we’d be a good fit to move forward to our discovery process.”

During your Discovery Meeting:

  • Your goal during discovery is to develop a list of the problems they need to have solved—the ones they’ve identified already and the ones they may not have realized they have.
  • At the end of discovery, you can talk through the list of issues to be addressed, particularly focusing on the ones you uncovered.
  • Then you can say something like: “Based on what we talked about today, and to help you address each of these concerns, I believe X is the most appropriate track for you.”
  • Then stop and listen. Test for agreement to move forward.
  • If they’re ready, provide your planning agreement and set an appointment and expectations for next steps.
  • If they’re not ready to sign your agreement today, go ahead and schedule a follow-up meeting and give them what they need to prepare for planning. Assume they will be moving forward, but need a bit more time.

In the case of the financial planners I spoke with, they were accustomed to sending a planning proposal that was mostly about how they would review, analyze and evaluate, but little about the specific benefits their clients would experience.

Instead, use your analytical skills during discovery to uncover issues that your prospective clients didn’t know they had and then help them see the benefits you can provide in solving each one of them.

susan-kornegaySusan Kornegay, CFP®
Consultant/Coach
Pathfinder Strategic Solutions 
Knoxville, Tenn.

 

Editor’s Note: This blog originally appeared on the Pathfinder Strategic Solutions “Perspectives” blog. 


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Pushing Past the Upper Limit Problem

Have you ever wondered why you are not consistently having record-setting years? Oftentimes while coaching financial advisers and insurance agents, I have noticed specific behavioral patterns that kick in soon after individuals have experienced success.

the-big-leapGay Hendricks, the author of the book The Big Leap: Conquer Your Hidden Fear and Take Life to the Next Level has coined a term for this that he refers to as “the upper limit problem”—which he defines as the amount of success that you are willing to allow yourself to have.

Here is how it works: We all have an “inner thermostat” that is set on just how much success we are willing to allow ourselves to have before we do something to self-sabotage and get back to our comfort zone. Unfortunately, most people don’t know their thermostat’s setting, much less a process for inching to a higher setting.

How to Reset Your Inner Thermostat and Resolve Your Upper Limit Problem
Hendricks said that in order to get to the next level, you cannot solve the problem that is holding you back; rather you need to resolve the problem by gaining a new level of awareness about it. Let’s take a look at the four main zones that he refers to that explains where people get stuck.

The Zone of Incompetence. One of the most common zones that I’ve seen advisers and agents revert to when they start to experience success is The Zone of Incompetence, which refers to spending time doing activities we are clearly not good at. Take for instance the last time you were having a record month: as the days went on did you find yourself doing activities that your assistant could be doing? If so, it was most likely because you were self-sabotaging your time by not doing activities that could have contributed to your continued level of success.

The Zone of Competence. Let’s say that you are great at doing what should be your assistant’s activities, you’ve done them for years and you find yourself saying things like, “Well, she’s got plenty to do so it’s just easier if I do this one thing for my client instead.” The challenge with this is that it’s never just one thing. If you are finding yourself doing these tasks, you are in The Zone of Competence. You both could be doing these activities but the truth is that if you are already having a successful month you essentially are now giving yourself permission to stop doing your job and tackling items that your assistant really should be completing.

The Zone of Excellence. Successful advisers and agents find themselves in The Zone of Excellence when they are accomplishing activities that they do well and are getting compensated. Unfortunately, this can create a comfort zone which in the long term will hold one back from reaching their peak potential. In addition, you may find yourself falling into a rut doing what you do well but not liking what you are doing. In other words, if you are great at public speaking but are sick of doing seminars you may not be happy and thus need to find things you are good at and like doing. You will burnout otherwise.

The Zone of Genius. At some point, you need to ask yourself the tough question, If you couldn’t fail at your business, what is it that you really would love to be doing differently?” The answer to that question will lead you to The Zone of Genius, in which you are doing what you love to do. As a result, work won’t feel like work. In this zone time doesn’t fly but instead it flows; you are not exhausted, you feel fulfilled. Granted you will still have to work to make a great living but you would also be happy and passionate about your professional life.

Taking the Big Leap
Take a moment to determine what zone you are currently in. If you want to live your life’s purpose, then you must take a big leap of faith and commit to becoming the person you are meant to be by finding the work you love to do. Then express to your target market your unique abilities and genuine willingness to help them so that one day they too could be in a position to afford to do what they love to do. If you can take this leap, you will have done what Hendricks meant by conquering your hidden (or unknown) fear and taking yourself to the next level of work and life.

If you are ready to take your big leap, schedule a complimentary 30-minute coaching session with me by emailing Melissa Denham, director of client servicing at Advisor Solutions.

Dan FinleyDaniel C. Finley
President
Advisor Solutions
St. Paul, Minn.


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Top Blog Posts of 2016

Last year, 2016, was a record-breaking year in the number of visitors and views for the Financial Planning Association’s Practice Management Blog powered by the Journal of Financial Planning.

Here are the top 10 most-viewed blog posts of 2016:

No. 10: “Becoming an Authority: Establishing Your Financial Planning Career.” Emily Fisher, marketing copywriter for Advantage Media, gave planners tips on how to put themselves out there and attract new clients.

No 9: “Top Ten Tips to Implement CRM.” Jennifer Goldman, founder of My Virtual COO, gave planners insight into the best practices in order to maximize their CRM.

No. 8: “Fiduciary Rule for the Modern World.” This post covered the key elements from the press conference that announced the Department of Labor’s Final Rule (fiduciary rule and discussed FPA’s resources for its members.

No. 7: “7 Do’s and Don’ts of Collaborating with Estate Planning Attorneys.” Attorney Gary Altman gave planners insight on what you should look for when it comes to partnering with estate planning attorneys. This post was derived from an answer to a member question on FPA Connect.

No. 6: “9 Things Clients Need to Know about an Adviser.” Regular blog and Journal contributor Kirk Loury gave readers an overview of the things you should be communicating to your clients about yourselves.

No 5: “Advising Clients During Turbulent Times.” Professors Kent Baker (0f American University) and Victor Ricciardi (of Goucher College) gave insight into how to best handle clients who may be distressed during market downturns.

No. 4: “You Cannot Do this Alone.” In this post, Daniel Crosby, behavioral finance expert, published an excerpt of his book, The Laws of WealthThis post discussed the value financial planners bring to clients

No. 3: “8 Components of Social Media Policy.” Claudio Pannunzio, president of i-Impact Group Inc., offered planners the elements that should be included in a successful social media policy, including having a purpose, identifying authorized contributors and having an employee code of conduct.

1216JFP_BestOf2016_Cvr.inddNo. 2: “Framing the Conversation: What to Say in the First 60 Seconds.” Regular blog contributor Daniel Finley, president of Advisor Solutions, gave planners an outline for what to say to potential clients in the first minute.

No. 1: “How to Create Your Ideal Client Profile.” This year’s most-viewed blog post, another by Claudio Pannunzio, discussed how to successfully create an ideal client persona to better attract the clients you want to serve.
If you want to know what we determined as being the best of the Journal of Financial Planning, check out our Best of 2016 issue (picture, right) featuring a “2016 Personal Finance Year in Review,”  by the Journal‘s Academic Editor Barbara O’Neill.

Are you interested in contributing to the FPA Practice Management Blog? Email us with story ideas or content.

anaheadshot

Ana Trujillo
Associate Editor
Journal of Financial Planning
Denver, Colo.


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Staying Reasonable with Website Design

While most advisory firms have offices for client visits, the actual store front is the firm’s website. This is most often the place a prospective client first interacts with the firm and with portals becoming ever more common, it’s always the connecting place for clients. In the digital world we’re in, a stale adviser website raises questions and a contemporary design accelerates engagement.

Website design is a moving and subjective target. However, there are two important concepts that guide when to update an advisory firm’s website: 1) the diminishing return curve; and 2) the range of reasonableness.

Investing for the Biggest Benefits
The diminishing return curve is one of the most powerful decision-making concepts because it defines the value of investing to the benefits received. In the graph below, on the steep part of the curve (the “A” marker), greater benefits are gained for a given dollar invested.

loury_december-jpgThe further up the curve (“B”), fewer benefits are gained, ultimately leading to the curve flattening (“C”) where few benefits are achieved for the dollars paid. Generally, people often make continued investments expecting the same impact achieved with the first dollars; a linear relationship doesn’t exist. This leads to disappointment as assumed benefits fail to materialize.

For example, we see the diminishing return curve in portfolio risk management. The diversification benefit of the second holding in a portfolio is substantial, but the 30th holding has only marginal benefit (i.e. advisers often over-diversify portfolios leading to extra costs).

The flat part of the curve (“C”) is where resources are wasted. Waste occurs in failing to appreciate the “range of reasonableness”. This concept makes an essential marketing point: don’t be substandard, but being better than the best is unnecessary to win.

Generally, the range of reasonableness exists in the graph’s “B” area.

Monitoring for Shifting Curves and Reasonableness
People often have the mistaken belief that the diminishing return curve is static. In marketing the curve is dynamic and shifts with changing tastes.

For websites or marketing, a new curve doesn’t necessarily present itself at the onset of a design or presentation trend, but only after it achieves general appeal. This adoption occurs at very different speeds depending on the industry. In high-design businesses such as architecture, fashion and photography, shifts can occur in a matter of weeks. For wealth advisory, new presentation design standards emerge more slowly.

Knowing When a New Range Emerges
A new design trend that takes hold shifts the range of reasonableness such that what was once reasonable will soon be substandard.

We see this today across advisers’ websites, particularly independent firms that don’t have dedicated marketing resources. For example, a painfully large number of adviser sites still have the old tabbed menu that was within the reasonable range ten years ago but now is terribly stale. The new standard being a single page that tells a firm’s story in a graphical, vertical scroll.

Awareness of what is stale and contemporary doesn’t happen in a vacuum. Advisers’ clients and prospects (and advisers themselves) experience new website designs when visiting pages of companies in other industries. While wealth advisory isn’t judged for high-design achievement, the range of reasonableness does evolve based on other industries’ influence.

A Simple Monitoring Plan
There are five steps an adviser can do to keep a website in the range of reasonableness.

  1. Each quarter, take screen captures of non-financial sites’ home pages (e.g. news, sports, entertainment, shopping); these will be on the design frontier.
  2. Paste these captures in a document.
  3. At the same time as No. 1, visit major investment/wealth advisory sites and take screen captures of these sites’ home pages; paste them in the document too.
  4. If No. 3 shows designs similar to No. 1, the range of reasonableness (“B” on the curve) has shifted.
  5. Present the document to the firm’s web designer to incorporate the new design elements into the firm’s site.

Lost Business to the New Mandate
The competitive mandate is this: as new website designs and functionality become common in financial sites, an adviser’s market becomes accustomed to a new range of reasonableness. The now stale site (below the new range) implies a firm falling behind. First impressions do matter in decision making, and the greatest risk—and one unknowable—is the number of prospects that never contact an advisory firm that has a stale site. Remaining in the range of reasonableness is a small investment that brings valuable business benefits.

Kirk Loury

 

Kirk Loury
President
Wealth Planning Consulting Inc.
Princeton Junction, New Jersey


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Creating a Childlike Curiosity

We have all heard the saying, “Curiosity killed the cat,” that implies it is better to mind your own business. However, as advisers/agents do we truly believe that that is the best course of action to make a connection?

I think it’s safe to say that most of us think we ask a lot of questions. Unfortunately, I’ve found that many of the questions that we ask are merely designed to uncover facts and not to truly understand the prospect or client’s situation and how they feel about it.

Young children have a genuine and innate curiosity when they want to get to know someone and they seem to have no problem asking a multitude of questions. Let’s take a look at how this type of curiosity can benefit you and your prospects/clients.

Gives you time to think. During one of my group coaching critic sessions, in which we role-play with our group members as if they were on the phone with prospects, I noticed that one adviser used what I call a “curiosity question.” It was, “That’s interesting could you tell me more about that?” This was in response to a prospect who gave him an objection about how he didn’t like to use certain investment products and thus wasn’t interested in setting up a meeting. After using his curiosity question, his prospect relaxed, opened up and ended up telling a story about his investment experience. This gave the adviser more time to think about what direction he wanted to turn the conversation.

Uncovers important information. The prospect revealed some interesting information about his concerns regarding a financial adviser he had worked with because years ago that adviser put him into a product that he perceived as expensive and it had lost him money when he was told that it was safe. As a result, he felt that he was misled and that consequently all advisers would mislead him. This helped my adviser client truly understand that his prospect’s real objection was trust and not about a specific product at all.

Shows that you care. After listening to the real objection about trust, the adviser acknowledged what he had heard by summarizing how it must have made the prospect feel. “That sounds frustrating, was it,” he posed. The prospect quickly shared with him how frustrated he was and the adviser in turn showed he cared by being even more curious and asking, “Why is that? Why do you think some advisers don’t take the time to fully explain their recommendations?”

Creates a connection. By now the adviser was creating a connection because he was open to getting to know the prospect and the prospect was connecting because he felt that he was being heard.

After a lengthy conversation the adviser inquired, “I’m kind of curious, if we met and I did give you a second opinion on the investments you own, would you be open to speaking with a couple of my clients to hear what type of experience they have had working with me? It’s free and maybe it would help you see that all advisers are not alike.” It didn’t take long for the prospect to simply reply, “Yes, I would like that.”

Why Childlike Curiosity Works
It’s no secret that people want to be heard. The reason that childlike curiosity works is because when you truly exude through your choice of words and tone that you care, prospects are more open to telling you a lot more about themselves. Everyone has a story, so get genuinely curious and find out what it is.

If you are ready to learn this and other valuable techniques for connecting with prospects and clients, email Melissa Denham, director of client servicing, to schedule a complimentary 30-minute coaching session.

Dan FinleyDaniel C. Finley
President
Advisor Solutions
St. Paul, Minn.


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Are You Maximizing Your ROT (Return on Time)?

Do you ever feel like you are living your life by a checklist? Do you feel like you are constantly running from one activity to the next and that there is so much more to do? How often do you find yourself asking, “When did life become so chaotic?”

We feel that time is the most precious commodity of today. With an increase in industry regulations and administrative requirements, financial professionals are finding that they are spending too much time doing the wrong activities. How wise are your choices on where you expend your time? Are you allowing yourself to be held hostage to the reactive? Below we provide some basic best practice reminders to help increase your return on time.

  1. Build a team to complement your abilities so that you can focus on what you do best and assign all other responsibilities according to the natural strengths of others.
  2. Learn how to fully utilize your technology resources to create capacity.
  3. Do, delegate, delete. For each daily task, consider whether it is something that you actually need to do, something that you should delegate or something that you can delete as it has no bearing on your goals.
  4. Utilize a priority system so that no task is ever assigned without a deadline attached to it. This helps all associates understand levels of urgency and better balance daily activities.
  5. Proactively block to create a balanced calendar. It is important to allocate time to all essential business functions such as prospecting, client management, planning, team management, continuing education and so on. Don’t let an area of your business suffer by ignoring it.
  6. Making a commitment to creating, documenting and utilizing processes so that every repeated activity is executed in the same way every time will substantially impact efficiency.
  7. Identify time wasters. Conduct a time study on where your time is spent so that you can identify what (and in some cases, who) tends to drain your time. Determine the best course of action to take back control of your time and set parameters and expectations to better manage these situations.
  8. Consistently execute effective team communication. When communication falters, errors and frustrations increase and a vast amount of time is wasted.
  9. Maintain an organized client base. Segmenting your clientele based on each relationship’s value to your business helps to create scalability to efficiently drive client deliverables.
  10. Train your clients. Help them understand what to expect from the practice, when to expect it and the roles of each team member. Set realistic expectations for your team to respond to your clients’ needs.

How each associate chooses to utilize time will dramatically impact your results. Review each of the practices above with your team and gain specific commitments. If you are looking to grow your business, you must make wise decisions every day. There should be no excuses and no procrastination, but rather an ongoing commitment to consistently and proactively manage your time. What is your ROT?

Sarah E. Dale, President of Know No Bounds, LLC

Sarah E. Dale
Partner
Performance Insights
Atlanta, Ga.

 

krista_smKrista S. Sheets
President
Performance Insights
Atlanta, Ga.


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The Fulfillment Formula: Increase Return on Effort and Reap Full Benefits of Independence

If you ask independent financial advisers what the most rewarding part of being on their own is, most would answer:

(1) freedom of being an entrepreneur without a boss or a set schedule, where you can do what matters most to you when you choose;

(2) empowerment from creating your own destiny, leading your life, achieving success on your terms; and

(3) deep satisfaction that comes from developing meaningful connection with clients while directly and positively impacting lives.

These three benefits blend together to render a certain level of fulfillment. Whether that fulfillment is slight or maximized depends on how realized each one is in your professional (and daily) life. Essentially your fulfillment becomes a function of your return on your effort.

I don’t like to trivialize the concept of fulfillment as it is one of my driving core values; however, I know that if I keep the notion of fulfillment amorphous you will not make the progress you desire to mold your practice into what you know it can be. Too many advisers linger in a state of mediocre fulfillment, wondering why they aren’t getting more satisfaction from their work or unsure what to do next to leap from their current plateau.

To help you find clarity I have broken down the concept into what I call The Fulfillment Formula.

fulfillment-formula-jpg

Copyright 2016 Broderick Street Partners, LLC. All rights reserved.

The Numerator: Revenue
To increase your return, you can increase your revenue. It may seem obvious why we care about revenue, but for advisers who do not operate with intention to increase revenue, I want to remind you of this: you run a business. You need to make money to continue to have a profitable sustainable business over the long term. Otherwise, you have a hobby, a side gig or a charitable endeavor, and this formula does not apply.

At the very least your revenue needs to cover business expenses and the necessary personal expenses that your income funds. Revenue over that baseline threshold serves luxury personal expenses, savings and retirement, donations, gifts, child or parent support and wherever you choose to direct your cash.

Keeping effort constant, as you increase your revenue, you can achieve a higher return on effort and, thus, greater fulfillment.

The Denominator: Effort
We usually think about effort as the time, energy or money going into your business.

As an entrepreneur, you know it is much more than those resources—it’s also the heart, soul, sweat, blood and tears, too.

With only 24 hours in a day, multiple hats to wear as an entrepreneur, and the pressures of life outside the office, your personal effort can only take you so far before you start to exhaust your resources. You need to shift your support system to your team and technology to gain leverage and lower the effort you exert.

Even if revenue stays the same, as you decrease your effort you increase your return on effort and fulfillment level.

Amplify Your Fulfillment
As you can see, the relationship between revenue and effort renders either positive or negative fulfillment:

  • If your revenue is greater than your effort, you have positive return on effort and therefore a positive level of fulfillment. You may be satisfied with your current position, or you may desire to leap from this plateau to new levels of achievement in your business.
  • If your revenue is less the sum of your effort that you invest, then you will be in a negative state of fulfillment, perhaps questioning why you are continuing on this path or wondering how long it will last.

In either position, your can change your status quo when you increase the dollars coming into your business and/or decrease the effort that you exert in the business.

fulfillment-formula-2-jpg

Copyright 2016 Broderick Street Partners, LLC. All rights reserved.

As you grow the numerator or reduce the denominator, you will improve the return on your effort and experience an upward movement of your fulfillment.

Over time, as you build out client attraction and relationship marketing systems and find support for your operations to maximize return from The Fulfillment Formula, you will be able to amplify your fulfillment and reap the full benefits of independence.

Kristin Harad 2014Kristin C. Harad, CFP®
Marketing Trainer/Coach
KristinHarad.com
San Francisco, Calif.