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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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3 Tips to Incorporate Health Into the Financial Planning Discussion

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Carolyn McClanahan presenting at FPA BE Baltimore 2016

When a client who Carolyn McClanahan thought was 70 walked into her office, the woman told her she hadn’t been to a doctor in decades.

“Why are you coming in to see me now,” McClanahan, MD, CFP® asked.

The woman, who was actually 98, wanted to participate in her weekly tradition of acting out a play with her friends and needed a doctor to cut a thick toenail so she could fit in her fancy shoes.

When it comes to clients’ health, it runs the gamut from people like the 98-year-old recreational actress to chain-smoking overweight clients to vegan yoga practitioners. McClanahan said it is a good idea to incorporate discussing health into your practice to help your clients save money on insurance rates and overall health care spending.

“People are more comfortable talking about their health than they are about their money,” McClanahan said.

Regardless if your client has health issues, start with Livingto100.com, which helps project people’s longevity so you can do better planning.

McClanahan says incorporating health care into the discussion has three components: getting a health history, finding out what your clients’ health care mindset is and discussing advance directive planning. McClanahan offers the following tips to apply to discussing health with your clients:

The health history: start with open-ended questions. To get a better sense of your client’s health history, ask them an open-ended question. A good one is, “Tell me what you do to take care of your health.”

With that question, McClanahan said, people will tell you all you need to know. If your clients are overweight or they smoke, you can encourage them to get a little healthier before they start shopping for insurance and taking physicals. The cost-savings of doing so are “astronomical,” she said.

A basic health history includes the client’s body mass index, height, weight, smoking status, their exercise habits, whether they use drugs or alcohol, what medical problems they may have and their family history.

The health care mindset: figure out their attitude. Do they go to the doctor for everything? Do they go to the doctor only if they’re really sick? Figure these things out then figure out what it their projected cost of care will be over time based on these habits. Also encourage healthy clients to keep working.

Encourage all your clients, no matter their age, to have advanced directives. Simply having an advance directive can save your clients money. Have them map out their medical decisions now that they are healthy and ensure they have been shared with family members and health care professionals.

To see the slides from McClanahan’s FPA BE 2016 presentation, click here.

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

 

 


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4 Tips to Help Grieving Clients

Amy Florian, CEO of Corgenius, was a 25-year-old with a 7-month-old baby when her husband John kissed her good-bye for the last time to go on a business trip.

A car hit his car and John died instantly.

Florian was devastated. She had money from a life insurance policy she needed to invest so she sought out a financial adviser. He did right by her in terms of investing her money well, but he just didn’t understand what she was going through. He sometimes made her feel like a number in a portfolio rather than a whole person.

“I stayed with him for some time because it was clear he knew how to invest my money,” Florian explained. But then she switched. She found a planner who made her feel more comfortable.

Widows oftentimes feel uncomfortable with financial planners as shown in the fact that more than 70 percent switch advisers after their husband’s death. It’s helpful for your clients for you have the skills to help them deal with their grief.

Helping Them Through
Baby boomers are getting older.

“We had a baby boom,” Florian said. “We’re in for a death boom and we’re not prepared.”

You are going to have to deal with your client’s grief at that first appointment with them after their partner dies. It’s going to be difficult.

“It’s awkward,” Florian explained. “It’s uncomfortable.”

But with these helpful grief support tips, you will help your clients. It is important, Florian said, to note that grief happens whenever there is a transition, whether it’s death or moving to a new city.

Ask open-ended, invitational questions. Some examples include: What happened? Who was with you? How did you find out? Then after a few months have passed: Last time we talked you said you felt a certain way, do you still feel that way now? Grieving people want somebody who will listen.

Stay away from the standard responses, “I’m sorry,” or “I know what you’re going through.”

Know that there are two main styles of grief: instrumental grievers, who focus more on their heads (things like logistics and specific events); and intuitive grievers, who focus more on their heart (the experience of everything, what they are feeling).

Have boxes of tissues everywhere, but never hand them a box of tissues when they are crying as doing so will send the message that you are making them uncomfortable and you want them to stop. Say, “You could use any of these tissues if you’d like, it’s up to you.”

Let them know that your office is a safe space and that they can cry. Encourage them to feel their grief, because that is the truly strong thing to do.

Have them write down their fears. Ask them what’s the worst thing they can imagine happening to them right now and have them write it down. Studies show that when you write down fears, you take away their power.

“I’m teaching you to do the right thing for your client,” Florian said. “It’s what we all should be doing, we just haven’t been taught.”

AnaHeadshot

 

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

 


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The Value of Vulnerability

Over the past two years, I have had the pleasure of working with a very successful team of financial advisers. As their success has increased so has the amount of advisers that were added to their team. Currently they have nine team members.

Each week we focus on a specific exercise to increase their sales skills that I have designed for their weekly coaching session. The advisers learn the exercise, role play it and I, along with the two principal partners, would critique them. We continue to utilize the same exercise for weeks or even months (if need be) until each team member can do it seamlessly.

During a recent team coaching session, one of the principal partners told the group that they were not making a good connection during their role plays because they were not opening up and sharing their feelings about the subject at hand. In other words, they were not allowing themselves to be vulnerable. He went on to say that the value of vulnerability is that the prospect makes the realization that you have been in their shoes; consequently, in many cases, you are then able to make a connection.

The following is a simplified step-by-step process in finding the value to be vulnerable.

Ask Great Questions: Once you determine that the subject you are talking about is something that is very important to the prospect, it’s time to ask additional questions to uncover how they feel about the subject. Try something as simple as this:

Adviser: “What concerns you most about losing money now that you are retired?”

Uncover the Prospect’s Story and Feelings: At this point, it is important to listen, acknowledge what you heard and ask more questions so you can uncover the prospect’s story and feelings. Here is an example:

Prospect: “Well, I don’t really want to lose anything. In fact, I’m not sure what I would do if I did lose some of my retirement investments.”

Adviser: “I completely understand, but how do you think you’d feel if we had another 2008 and your current portfolio reacted like your portfolio did back then?”

Make a Connection: Next, we need to make a strong connection by talking genuinely about how you feel about the subject.

Prospect: “I would feel sick! I wouldn’t know what to do if I lost 20, 30 or 40 percent of my money. I lost a lot of money back then and it took years to get it back.”

Adviser: “I would feel sick too!”

Get Vulnerable: At this point, you need to explain why you feel this way by telling the prospect what you have experienced in the past. Here is a brief example:

Adviser: “My dad retired in late 2007 and I asked him the same type of question that I asked you about how he would feel if he lost money. He said he wouldn’t be able to handle even a 10 percent loss. Since I knew the market had had a great bull run, I recommended that we get very conservative and reposition a good percentage of his assets into something that wasn’t tethered to the market. We did that and he missed the bear years.”

Ask for the Order: In this example, if the prospect is giving you indications that they can relate by smiling, nodding or agreeing that you did the right thing! Try this close:

Adviser: “We have had a seven-year bull market; how would it help you most if we at least take a look at some alternative strategies so we reduce your risk to the stock market?”

Prospect: “I think that would give me some peace of mind. Let’s do that.”

Why Genuine Vulnerability Works
As the saying goes, “It’s simple but it’s not easy.” The “simple” part is opening up and telling the prospect what you or someone you know has experienced around the subject matter. The “not easy” part is having that topic be something that you genuinely care about. In other words, if it’s not from the heart, you are not going to make a connection. Conversely, genuine vulnerability works because you are discussing something that is important to you and if it’s also important to them then you have the foundation to form that connection.

If you want to learn more about the value of vulnerability, schedule a complimentary 30-minute coaching session with Dan Finley of Advisor Solutions by emailing Melissa Denham, director of client servicing at Melissa@advisorsolutionsinc.com.

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


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How to Make Buckets Work for You

In light of the recent fiduciary ruling by the Department of Labor, you may be wondering how using a bucket strategy can help you act in your clients’ best interest.

Investment research firm Morningstar defines the bucket approach to retirement planning as a strategy that funds cash-flow needs while the client maintains a diversified portfolio of stocks, bonds and cash. Morningstar offers this helpful video interview with Harold Evensky that further dives into the bucket strategy.

Basically, buckets provide a way for you to ensure that your clients’ short-term income needs are safe from market ups and downs while meeting their long-term growth objectives with market exposure. Buckets provide a way for advisers to create personal plans specific to their clients’ financial goals and needs while helping them understand that plan regardless of their previous financial experience.

Weathering Market Storms
One of the greatest benefits of bucketing is the safety net it casts for when the market inevitably rises and falls. When the market isn’t performing, clients may panic and be inclined to abandon the plan they had previously made for one that will make them feel safe and secure in that moment. Buckets, however, give them a clear picture of their retirement plan down the road. Seeing that they meet their income needs and that their investments will have time to recover from a downturn will help them stick with their bucket plans, which will greatly benefit them down the road.

In addition to bringing peace of mind by providing a visual for their income down the road, buckets provide clients with a steady cash flow in the present. Buckets are a systematic way for a steady income because each year is planned, as opposed to scrambling to liquidate assets so that they have enough money even while the market is struggling. Having that steady, certain income ensures that clients will be able to give great thought to when they sell investments and that ensures that they are selling them at the optimal times. This way, investments are serving at the greatest benefit to bring in the most income.

A Personalized Approach
Bucket strategies can be personalized to each client. Based on their risk profile and financial goals, you and your client can generate strategies with any number of buckets and any lengths of time. The flexibility of buckets even after the plan has been set is an added security because assets and investments can be adjusted, or have time to adjust, while the market weathers its ups and downs.

One of the most traditional methods of retirement income planning, Monte Carlo simulation, does not allow for personalized strategies, and yet, they produce the same rate of returns with the same amount of risk. There is no one-size-fits-all in retirement income planning, and clients forced into such a mold can feel anxious about their funds in retirement. Creating a strategy specific to each client will inspire trust in you and bring them peace of mind knowing that their retirement income plan was created with their unique circumstances and needs in mind.

Seeing is Believing
Bucket strategies can give clients a simple visual. With their personalized strategies, clients will have a better understanding of how their assets and investments will be used during their retirement.

In addition to the simple visual that a bucket strategy offers your clients, buckets create a plan that is easy for clients to understand. They will be able to see exactly where their money is, how it is being invested and how their plan will support them throughout retirement. With this simple, easy-to-understand approach to retirement income planning, clients will be confident in themselves, their finances and, in turn, you.

As your clients approach retirement, it’s important for you to provide them with an income plan that can give them financial security in a volatile market, a simple, understandable approach and a strategy that has been created with their unique needs in mind.

FPA partners with Last Advisor to offer “Bucket Bliss,” a software tool that offers a robust, state-of-the-art financial application designed for advisers to build individual bucket strategies while implementing a comprehensive retirement income plan for their clients. FPA members receive a special rate which can be accessed here.

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Madison Taylor
Clearfield, UT
Social Media and Marketing Director
Last Advisor
1-888–799-4328

Editor’s note: A version of this post originally appeared on the Last Advisor blog on August 15, 2016.


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5 Steps to the Agreement Close

Have you ever noticed that one of the most amazing moments is when one of your prospects comes to the conclusion that they want to buy? What a terrific feeling to know that they are in agreement that your recommendations are the solutions to their financial challenges.

At some point in your career you will realize that prospects and clients alike enjoy talking about themselves. And why shouldn’t they? It’s a subject that they are very familiar with. During these moments of revelation, you may make a realization that they have a real challenge and that you have the solution. However, just telling them this is not an effective strategy to making a good connection.

A method that may be helpful to close a sale or secure setting an appointment is one I call “The Agreement Close.” In order to utilize this tactic, you must know the steps to get a prospect to that point by using the following steps:

1. The Prospect’s Key Closing Phrase: One of the most important things to remember when using The Agreement Close is to know when to begin. The prospect will unknowingly tell you when that is by making a statement or using a phrase that indicates they are a little lost, frustrated or unsure about something you know you can help them with. The following is an example:

Prospect: “I’m not really sure how I’m doing with my portfolio.

2. Empathy/ Acknowledgement: At this point, just taking the time to empathize or even acknowledging what they said can go a long way in building a connection because it helps the prospect know that you truly and genuinely understand. Try something as simple as this:

Adviser: “I completely understand; most people don’t know how their portfolio is doing.”

3. Agreement Close: Next, we need to strengthen the connection by agreeing with them. This is a very important step because the prospect will find it very difficult to disagree with you for agreeing with them. The following is an example:

Adviser: “And, that’s exactly why we should get together.”

4. Benefit Statements: At this point, you need to add to the statement above and clarify why you said what you said so that the prospect understands what the benefits are to them. Once you do, they will soon be agreeing with you. Here is a brief example:

Adviser: “You don’t want to realize that you are taking too much risk after the market goes down and you lose a lot of money.”

5. Final Close: All you need to do now is ask for the order. Try this alternative close:

Adviser: “Do you have time to meet Tuesday at 3:00 or Wednesday at 4:00, which time works better for you?”

Prospect: “Tuesday at 3:00.”

Why The Agreement Close Works
The reason why The Agreement Close works is because you are agreeing with the prospect and explaining to them how moving forward with you will help them most. In other words, you are acknowledging their challenge, agreeing that it is a valid challenge and that is exactly why they need your solutions.

To learn more about The Agreement Close, schedule a complimentary 30-minute coaching session with me by emailing Melissa Denham, director of client servicing, at Melissa@advisorsolutionsinc.com.

Dan Finley

Daniel C. Finley
President
Advisor Solutions
St. Paul, Minn.


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Embrace Investor Decision-Making Preferences

The respondents to the 2016 Fidelity® Millionaire Outlook Study’s hit the bull’s eye for what most advisers would consider to be ideal client characteristics: entrepreneurs; $1,750,000 in median investable wealth; $125,000 in median income; 62 percent debt free. Although the study’s theme emphasized the worthy goal of making clients loyal advocates (see my Journal of Financial Planning article, “How to Deliver Empathetic Client Service and Gain Client Loyalty”), a significant strategic implication sat unattended.

When clients engage an adviser in this market, they are focused on an advisory relationship that shares decisions instead of the adviser taking the full-on discretionary lead. What’s even more threatening is that self-directed investors (i.e. do-it-yourself) represent the biggest segment.

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Advice, Yes; Control, No
There are three important conclusions to make from these segments:

  1. Advice is desired across all segments. Expertise is needed and valued, but the key issue is: where does it come from, an adviser, online or both?
  1. Investor involvement drives the go-forward market. The relationship model wherein a family would turn over their investments on a fully discretionary basis is extinct for all but an adviser’s oldest clients (i.e. the “delegators”). With much at stake, many threats, and still-fresh bad investing memories, investors want to be involved and watchful.
  1. The toughest advice competitor is no adviser. A plurality believes “I can do it better myself,” and this is difficult to argue against in rising markets when combined with many online services encouraging self-sufficiency.

Building Bridges to Joint Decision Making

If 42 percent of the market (“validators with a digital adviser” and “self-directed”) is adviser resistant and 25 percent are mostly locked into existing adviser relationships (“delegators), it seems that “validators with an adviser” is the only segment through which an advisory business can grow. Or, what does this suggest about a firm’s growth prospects if 67 percent of the market is structurally resistant to a fee on AUM model?

Market segments shift, sometimes quite dramatically. For example, the 39 percent “self-directed” may be in a very different mood for help when the next marketing downturn occurs and/or as life becomes more complicated. Or, as the “delegators” transfer wealth, the recipients of that wealth—millennials and gen Xers—will find the prospect of managing a lot of money more complex and the failure risk more daunting.

Any business seeking growth must commit to establishing as many marketing relationships as possible. Flexibility, when market shifts occur, guides business sustainability.

Planting Seeds for Long-Term Sustainability
An integrated marketing program applies the expensive resources—an adviser’s time—to prospective clients in the decision-making mode; what would right now be the “validators with an adviser” segment. Scalable marketing resources (i.e. low cost per relationship) such as website content, webinars, seminars, educational material and editorial outreach are used to seed the other segments for a later harvest.

Here is a marketing game plan to position an adviser for long-term business success.

Be an Expert Resource. Few “self-directed” investors are wealth planning and investment experts. Instead, these investors search out expertise and, upon acquiring sufficient knowledge, act upon it themselves.

Distribute educational material via the firm’s website, centers of influence, local gatherings and local publications. Tip: A well-designed and written document carries gravitas and promotes itself; consider an advice subscription service.

Price Services for Involvement. Even with a desire for self-sufficiency, there are certain topics too complicated, time consuming and/or important for surface-level learning.

Be willing to engage in short-term projects by offering a one-time consulting fee for complex planning or second opinions; at a minimum, the adviser is able to demonstrate capabilities that can turn into a referral source.

Tip: Illustrate the dollar benefits received not just the project fee in the proposal, and show the ramifications if self-directed execution were to fail (see my blog “Clients Buy Benefits not Features”).

Distribute Advice through Technology. Call it what you want, but technology-delivered advice is happening and the market wants it.

Commit to a robo solution that provides for an adviser’s advice and investment choices in portfolio design (i.e. don’t outsource investment advice, an adviser’s core differentiation). Tip: Minimize business risks by using robo offerings with low breakeven costs.

Listen to the Market and Respond
Sustainable businesses adapt to a market’s dynamics. For high net worth investors, the shared and independent decision-making models are currently the preferred engagement methods. An advisory firm able to generate revenue from these segments—even if it means doing things differently—gains long-term sustainability.

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