In my previous article for MorningstarAdvisor.com (place link here), I shared with you some of the most powerful ways of building a deep level of trust and rapport with prospects during the initial client meeting. I also covered some of the most effective ways of building credibility and believability with prospects. These are two of the seven most crucial steps in converting prospects into clients—clients for life.
In this article, I will share with you how to most persuasively describe the benefits you offer. If you master these skills of persuasion and presentation, along with those covered in my prior articles, you will be well on your way to being able to convert 80% or more of your prospects into profitable long-term clients.
Lesson #1: Do Not Be Afraid to Be Persuasive
“Sales” has become a four letter word in financial planning. No one wants to be perceived as a salesperson. That’s fine with me. I’ve been teaching trust-based financial planning for twenty years now. However, many financial advisors have thrown out the baby with the bath water. Let me explain.
In their quest to avoid “salesmanship” at any cost, many financial advisors have let their powers of persuasion atrophy. Others are not even developing skills in this area. These financial planners are forgoing hundreds of thousands or millions of dollars in potential income due to their lack of persuasion skills. At their conventions and workshops, many brokerage firms and financial planning firms no longer even offer seminars on salesmanship or persuasion. Executives at these firms wonder why their business has declined to the extent that it has. I have three words to share with them: cause and effect.
Earlier today, I received a call from a financial consultant at one of the largest brokerage houses in America. He was intelligent, well educated and offered his clients and prospects a wide range of outstanding financial products and services. However, he only had $3 million in assets under management. When he told me this, I was appalled. His senior partner, his mentor and advisor, who has been in the business many years, has less than $7 million in assets under management! How is this possible? Why are these intelligent, well-educated financial advisors so unsuccessful when the public has such a crying need for financial planning?
I asked the financial consultant to tell me how he describes his services to prospective clients. The cause for his lack of success was instantly apparent: he was bland and boring. We are talking plain vanilla. Milquetoast. Beige. I asked him if he had ever heard a tape recording of the presentation he gave clients and he admitted he hadn’t. He also admitted he seldom worked on improving his presentation. He had two rationalizations for not working on his presentation: he was too busy “researching the market” (fat lot of good that did him and his clients) and he didn’t want to “come off as a salesman” (there’s that old bugaboo again).
The Psychology of Financial Advisors
Many articles have been written on the psychology of investors. Much ink has been spilled explaining why millions of investors invariably buy when markets are at their frothy highs and then engage in panic selling when markets are at their lows. The area of expertise I have developed over the past twenty years is not the psychology of individual investors but is the psychology of financial advisors. Why do otherwise intelligent financial advisors do the things they do that limit their success? What can be done to help advisors who are struggling or who are in a slump?
There are several key factors that limit the success of many financial advisors. Hint: it is usually not lack of product knowledge, lack of tax knowledge or lack of compliance knowledge (although those are important subjects). One of the prime factors limiting the success of many financial advisors is the lack of ability to persuade another human being to take action. Thousands of financial advisors have been brainwashed into believing that sales and persuasion are bad. If this belief system, and its devastating consequences, have affected you and your success, read on. I have a cure.
The Superstar’s Mindset Toward Persuasion
Do you want to know how to more persuasively describe the many benefits of the products and services you offer? The first step, and the most important step, is to develop a healthy mindset towards persuasion. If you don’t have a healthy mindset towards persuasion, you will never use whatever sales and persuasion techniques you might know.
Let’s face it. Hundreds of books have been written on sales, persuasion and influence (granted, some of them are bad, but others are outstanding). You probably have a few in your library. Do you ever read them? Do you ever use the techniques described? Why not? There is probably a little voice in the back of your head saying, “That’s a sales book. That’s bad. I don’t need it. I want to be an advisor, not a salesperson.” So, you don’t read, don’t learn or use any persuasion techniques and you wonder why your practice is not growing.
Is knowledge of sales and persuasion techniques inherently bad? Let’s get beyond the superficial blather you hear at motivational seminars and take a deeper look. Misused, knowledge of sales and persuasion can be harmful. No doubt about it. Using powers of persuasion to sell penny stocks, bad investments and super high fee products is bad. I will not argue that point. I have testified as an expert witness in sales practices cases on these very issues. I have told defense lawyers that I will never defend a financial advisor who uses his or her powers of persuasion to sell an inappropriate or unsuitable product or service, or who churns an account to generate excessive commissions, or who engages in other unethical practices. Do you engage in those practices? I didn’t think so.
However, developing and using your powers of persuasion to sell good products and good services that people desperately need is a highly virtuous act. Doing so not only helps strengthen American families, it helps strengthen our national economy. In persuasively describing to clients what you do and the benefits you offer, you lay the ground work for a mutually beneficial long term relationship with clients.
Without persuasion, nothing happens. You should be proud of yourself if you can persuasively describe the benefits of your services. While thousands of financial advisors are inhibited about developing sales and persuasion skills, I have found that in business there is no one a chief executive or company president respects more than a top sales professional. Why is this? A company president knows that his or her company can develop the best products and services in the world, but if you don’t have highly skilled sale professionals to make these products and services come alive in the minds of clients, the company could flounder or even fail.
I could write an entire book on the most powerful persuasion and influence techniques in existence (and, in fact, I have written three such books), but it would not do many of you any good. Why not? Because deep down inside, many of you have a program holding you back that prevents you from being persuasive.
Some of you have a little voice inside your head that acts as a governor on your performance. Just when you are moving to a higher level of performance, the governor kicks in and shifts you back down. The little voice inside your head says, “Don’t be a salesperson,” and you shift back into describing product features, fee structures, taxes and other topics designed to turn off almost every sentient being in the universe. Congratulations! You have avoided being a salesperson, you avoided selling any products or services—and you avoided helping someone who really needed your help. Is something to be proud of?
The cure for what ails you, your practice and maybe your broker-dealer is that you must reprogram your attitude towards sales and persuasion. You must develop a healthy attitude and respect for persuasion skills. It sounds easier than it is. Once you have a healthy attitude towards persuasion, you will actually find it fun to work on perfecting your seminar presentation and your initial client interview. Of course you will also make a great deal more money and will have the opportunity to work with many more people who will want to become your clients for life.
Without a healthy attitude towards persuasion, you will never develop the skills you need to become highly successful as a financial advisor. You will never do the work you need to do to perfect your client presentations. It is as simple and profound as that. I find it ironic that some of the lecturers on the speaker circuit who exhort most strongly, “Don’t be a salesperson,” are themselves some of the biggest salespeople of all. They sell expensive training programs on “how not to be a salesperson,” and also sell expensive audio and video programs. I am not criticizing these people. The point is that we all need to know how to sell and be persuasive. Get to it if you are really serious about your career.
How do you start developing a healthy attitude towards persuasion? Place a high value on what you offer. If you don’t value it highly, how can anyone else? The way I see it is that you have a cure for cancer. You have a right to be somewhat persuasive in promoting it. If you aren’t persuasive, people won’t believe you and won’t take the medicine. If you aren’t very persuasive, not many people will do business with you—no matter what you are offering.
Millions of American, even high income Americans, are lured down the Avenue of High Risk and Low Reward. This Avenue has many side streets, including the Street of Financial Ruin. Lately this street has been very congested and has had some severe traffic jams due to commuters who owned stock in Enron, Global Crossing, Kmart, CMGI, Comdisco, Etoys, and hundreds of other stocks we’ve already forgotten. Think of how much you could have helped the millions of investors who collectively owned the billions of shares of stock in these and other companies. You have a right to be persuasive. To not be persuasive is a form of malpractice.
The Importance of Selling Yourself First
Like you, I am a prolific reader of publications for financial advisors. I see much data, but little wisdom. One dynamic that I have never seen any publication for financial advisors explore is the importance of selling yourself first.
If you don’t truly believe in the value of the services you provide, how can anyone else? I have actually had the President of a major brokerage firm tell me, “Nowadays, all firms offer just about the same products and services at more or less equivalent prices.” In other words, it is all about the same. He is no longer President of that major brokerage firm.
Granted: everyone has about the same products and everyone charges fairly similar prices and fees (look at how similar Merrill Lynch and Charles Schwab have become!). But if you can find the most appropriate and powerful products and services for a young family, if you can help them diversify, reduce risk, enhance returns, lower their taxes, avoid hidden fees, pay off the mortgage early, fund the kid’s college education and retire early and rich, over twenty-five years, you can turn a $1 million net worth family into a $25 million net worth family (remember to use a second-to-die life insurance policy and a Stretch IRA).
If you can accomplish the above (and I think you can—it isn’t rocket science), you can accomplish miracles. You can be the Savior to about 200 American families in your area. That’s all you need to earn more than $1 million a year, year after year. These families will think you walk on water. If anything, they will think you are underpaid for all the benefits your have provided them.
But first you must be persuasive. And the first person you must sell is yourself. If you do not believe in the core of your being in the value of your services, how can you possibly sell anyone else?
A fact that I have never seen in a publication for financial advisors is that persuasion is a transfer of conviction. When one human being encounters another human being, the most convinced person is usually the persuader. The less convinced person is usually the persuadee.
When you meet with a prospect in your initial client meeting, who is the most convinced person? If the prospect’s conviction of “I can manage my investments myself,” is stronger than your conviction of, “You need me,” the prospect will not become your client. You will both lose. He or she will never get the needed advice and you will not add another wonderful client to your business.
Why doesn’t every high net worth prospect do business with you? Do they think your fees are too high? Who is the most convinced? Who is the persuader and who is the persuadee? Do they think the market is too risky? Who is the most convinced in their beliefs? Do they think you don’t offer enough benefits for the fees you charge? Who is the persuader and who is the persuadee?
You must sell yourself first. You must be totally convinced of your value to be able to persuade anyone else. Unless and until you convince yourself first, you will never know the level of success you and your firm deserve to enjoy. I ask all of my financial planner clients to describe the benefits of the solutions and services they offer. I usually do this by going over one or two initial clients meetings they have recently conducted. Frequently, we go over meetings in which the prospect did not become a client. We go over everything the financial advisor said and everything the prospect said. As I show the financial advisor exactly how to turn these prospects into clients (while at the same time being totally honest and giving full disclosure to the client), I also deeply sell the planner on the benefits of his or her services.
I have found this to be the most powerful method of all in teaching practice building skills to financial advisors and I spend nearly 50% of my time now doing this kind of work. Instead of teaching theories of persuasion or going over lists of sales techniques, we use actual prospects and clients of the planner for real life teaching. Combining powerful persuasion skills with a deep conviction in the value of his or her services gives the planner tremendous self confidence and empowers the planner to convert the vast majority of prospects into clients.
Why don’t more financial advisors develop the ability to persuade? Many have told me that they are afraid of “looking like a salesperson.” The solution is to engage in what I call “Invisible Selling.” All the prospect or client will know is that they like you, they trust you, what you say makes sense, you have solutions for their financial challenges, they want to see you again, and they want you to be their financial advisor. They do not see any selling or persuading. They just see a kind, understanding, intelligent person who will help them and their family achieve their most cherished goals.
The irony is that to build this type of deep relationship, you must use certain forms of persuasion! You can’t just “shoot from the lip.” You can’t just hope that you will “think of something to say” and that it will be “good enough.” Those are the words of the amateur who wonders why he or she is not more successful.
There are many myths about persuasion and selling that may be hampering your success as a financial advisor. Unfortunately, many of these myths are perpetuated by gurus on the financial planner speaking circuit. Examine these false beliefs to determine if any of them are holding you back: “Selling is manipulating people.” “Selling is taking advantage of people.” “Selling is lying.” “Salespeople are dishonest.” “Salespeople should not be trusted.” None of these are true.
Persuasion has brought many benefits to mankind and has greatly speeded up the evolution of certain societies. All great world religions were founded by human beings who were persuasive. All great military leaders are persuasive. At one point, people had to be persuaded to bath more frequently. We had to be persuaded as to the benefits of school and education. We had to be persuaded about the benefits of the scientific method. Our ancestors had to be persuaded about the benefits of money, then of paper money and then of a common currency. We had to be persuaded of the benefits of the telephone, the automobile and the computer. Where would our society be today if we didn’t have persuasive people to motivate us to change and grow?
Why should financial planning be any different? Why should financial planning be the one discipline in the world that needs no salesmanship or persuasion? Think about it. If a financial planner engages in no persuasion, he or she is merely an order taker. Do you want to be an order taker? How much are the order takers in our society paid?
To dramatically improve your skills in persuasively describing the benefits you offer, first tape record yourself with prospects and clients. Listen to those tapes. You might be appalled at what you hear. That is perfectly fine. You have taken the first step (and the most important step) in growing and improving: you have learned what you need to improve! Write down what you say to prospects and clients. Rewrite it, improve it, practice it, focus on the benefits, make sure you do a great job answering every client question, add stories and metaphors to make financial concepts come alive to the client, be enthusiastic (enthusiasm is contagious!), be honest, be passionate and sincere. When you use your new, improved and vastly more persuasive presentation, almost all of your prospects will be excited about becoming your clients.
Keep improving your presentation over time. Financial advisor superstars know that working on one’s presentation is a process, not a one-time event. If you need help, ask your partner, your broker dealer, your wholesaler or a professional coach for assistance. Why should you do all of this extra work? What else is going to help you grow your business? More product knowledge, stock market information, tax knowledge or compliance knowledge seldom produce much growth in a financial advisor’s practice.
It is the process of working on one’s presentations to clients and making them more persuasive that can turn a $20 million practice into a $200 million practice. The process of making your presentations more persuasive can bring you hundreds of new clients (clients who really need you) and millions of dollars in extra income. Developing skills in becoming more persuasive will make you more self-confident, will take much of the stress out of practice building and will enable you to reach and help more people. This is a process that is truly win-win for both you and your clients.
Dr. Donald Moine, based in Palos Verdes, California, is a Sales and Marketing Psychologist specializing in working with financial advisors, mutual fund companies, brokerage houses and wholesalers. A popular seminar leader and marketing success coach, Dr. Moine is the author of seven books and more than 200 articles. He has just designed a new series of seminars for financial planners based on his popular MorningstarAdvisor articles on Practice Building. To receive a free copy of his report “How I Help Financial Advisors Rapidly Build Profitable Practices,” write to or call (310) 378-2666.