ThinkAdvisor has prepared a list of 11 potential pitfalls that every firm should know in their sales process. Learning how to avoid these common mistakes can lead to lost business is crucial. Here is the ThinkAdvisor list:
1. Selling Before Gathering Information
Begin by gathering information instead of immediately engaging in selling. Take the time to understand the prospective client's needs and investment history.
2. Not Gathering Enough Data
After meeting with a prospect and collecting initial information, the next step is to create a financial plan and a subsequent proposal encompassing a retirement plan. However, if you unintentionally omitted inquiries about external sources of retirement income such as annuities, defined benefit pensions, or assets held in 401(k) plans, a follow-up call with the prospect may be necessary to address these missing details. This can sometimes make the prospect feel that the thoroughness of your approach is lacking. To prevent such oversights, it is advisable to work from a comprehensive checklist during your initial client meetings.
3. Not Involving a Partner in Making Decisions
Neglecting a prospect's spouse can potentially lead the advisor to create an adversary within the household, resulting in an uncomfortable home life for the decision-maker. To avoid this, it is essential to include both parties in the discussion, even if one of them prefers a more passive role. This approach demonstrates respect and has the potential to earn you an ally in the process.
4. Overwhelming with Numerous Alternatives
Prospective clients typically seek a recommendation. Therefore, sifting through the options and presenting one well-considered solution is advisable. It is also prudent to have a backup plan ready if the prospect raises any concerns or questions.
5. Not Explaining Fees and Commissions
Advisors frequently assure prospects that there are no additional fees, even when fees are embedded in the pricing structure or are not openly disclosed. Prospects may sense they are incurring costs, but the lack of transparency leaves them uncertain. Instead, advisors should discuss how their firm generates revenue, ensuring clear communication with prospective clients.
6. Not Asking For an Optimal Amount of Money
When advisors request a substantially large sum from a prospective client, it can create an uncomfortable situation for the prospect. Instead, advisors should focus on understanding how much the prospect has invested and where those investments are held. This approach allows them to propose an amount that is significant enough to demonstrate their capabilities but modest enough not to necessitate a significant disruption to the prospect's existing financial relationships.
7. Not Asking for the Order
Advisors should be explicit and direct when requesting the order rather than relying on the prospective client to independently commit to becoming a client.
8. Talking Yourself Out of the Order
When a prospective client provides signals indicating their readiness to commit, it's crucial for advisors not to overlook these cues. Advisors can employ trial-like closes as a strategy. Once an advisor presents the pertinent information, they can ask for the order while the prospect remains actively engaged in the conversation. This approach can help ensure that opportunities are not missed.
9. Neglecting the Client After the Sale
After a commitment, it is important to ensure that the new client does not perceive the advisor's attentiveness as merely a sales tactic. Instead, advisors should maintain a high level of client care. This includes making calls to confirm trades, as it is a regulatory requirement, and verifying the receipt of cash sent to a money manager. Consistently providing attention and support helps build trust and fosters a positive client-advisor relationship.
10. Not Asking for a Referral
Prospective clients are not isolated; they have connections with others who share similar economic circumstances. Advisors should capitalize on these opportunities for referrals and network expansion.
11. Not Following Up Promptly
Prospects do not adhere to your schedule, and when advisors fail to follow up promptly, prospects may allocate their funds elsewhere. To prevent this, advisors should maintain thorough records and initiate follow-up calls about a week before the time a client has indicated. By staying ahead of the competition and being proactive in your approach, you can better secure the client's commitment.
Financial Advisor Transitions consults advisors nationwide to explore employment transition options and to preserve and protect their practice in any transition that they make.
