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Take your wealth management business to the next level

Brad Brain, CFP, CLU

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Audio 0:52:41

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Brain shares practical tips you can implement immediately, which will help you deliver professional advice that is consistent with your client’s retirement objectives, even in the face of a changing industry. In this session, you will also uncover cross-selling opportunities, discover ways to reduce compliance headaches and liability exposure, and learn how to increase revenue by growing assets under administration.

I am going to share with you some time-tested ideas regarding running a wealth management advisory practice. Some of these will be practical tips you can implement right away. Others would be more along the lines of insights I have picked up over two decades of retirement income planning on various themes that I see as vital in the evolution of a wealth management practice.

I will be presenting a number of separate ideas. It may seem like I am bouncing around. My objective is to give you some things to think about and to stimulate some progress in the evolution of your own business model.

As I review some of these tips I have picked up over the years, I want you to think about what you aren’t doing now that you should be doing. Or maybe what you are doing now that you need to stop doing. Maybe something I say inspires you to put your own twist on it so that it better fits into your own business model, and that’s fine too. I hope there is something in my speech for everyone, whether you are brand new to wealth management or a seasoned veteran.

Let me ask you a question: What do you think is the number one fear that people have as they enter retirement? Do you think it is failing health? Losing loved ones? Having to leave the family home? What do you think it is?

The number one fear that people have as they enter retirement is running out of money.

Now, the wonderful part is that, as insurance professionals, we are uniquely positioned to help them deal with that great fear.

Visualize the situation. You are in your office and sitting across from you is someone about to enter a brand-new phase of his life, a time where he will no longer have the luxury of a new paycheck that can erase any errors he makes with his existing wealth. This person is thinking of the decades ahead and if he is going to be able to stretch hard-earned savings out over the remainder of a lifetime. This person is confused and anxious and, rightfully so, is looking across the table to you for answers.

That’s a situation that I relish. I love it when I can look people in the eye and say, “If you do what I say, and you follow this plan, you are guaranteed to never run out of cash, regardless of longevity and regardless of how cruel the markets are to you in retirement.”

We can say that because we are insurance people—we have products that provide guaranteed income for life. That’s the type of impact that we can have in this profession. We can alleviate a person’s greatest retirement fear. It’s a wonderful thing.

So the number one fear that people have as they enter retirement is running out of money. Let’s talk about what you can do as an advisor to alleviate that fear. Because if you can eliminate the fear of running out of money for people, you have yourself the makings of a very fine career.

In Canada, we have a product called a guaranteed minimum withdrawal benefit. This is our version of a variable annuity. But, in Canada, people don’t know what a variable annuity is. In the industry, we say, “guaranteed minimum withdrawal benefit,” but most people don’t know what that is either. The only reason I am using these terms today is because of the audience that I am speaking to. You can say things like this in an audience of insurance and financial advisors. If you speak like that outside this room, you run the risk of people looking at you like this. [visual]

I clipped this from a trade journal early in my career as a reminder that we have our own language. [visual] And to keep me humble.

Here’s one of my tips. Speak in a way that people can understand. People don’t really care about smart beta or Sharpe ratios. They just want to know that they are going to be OK.

Here’s another question for you to consider: What would you say is the true purpose of communicating in a way that people will understand? Think about this for a minute. What would you say is the most important aspect of being able to communicate complex ideas in simple terms?

I’m going to suggest that speaking in a way that your client can understand helps build trust. And you need to build trust. Clients won’t be ready to put their financial future—all their hopes and dreams—in your hands if they hesitate to trust you.

Let me share with you one of my all-time favorite trust-building moments. In the early 1990s, some very big problems were revealed at a company called Salomon, a firm that Warren Buffett had a stake in. Buffett had nothing to do with the scandal, but he stepped up after the fact to help repair the damage.

This is what he said to a US House of Representatives subcommittee:

Mr. Chairman, I thank you for the opportunity to appear before this subcommittee. I would like to start by apologizing for the acts that have brought us here. The nation has a right to expect its rules and laws to be obeyed. And at Salomon, certain of these were broken. Almost all of Salomon’s 8,000 employees regret this as deeply as I do. And I apologize on their behalf as well as mine.

My job is to deal with both the past and the future. The past actions of Salomon are presently causing our 8,000 employees and their families to bear a stain. Virtually all these employees are hardworking, able and honest. I want to find out exactly what happened in the past so that this stain is borne by the guilty few and removed from the innocent. To help do this, I promise to you, Mr. Chairman, and to the American people, Salomon’s wholehearted cooperation with all authorities. These authorities have the power of subpoena, the ability to immunize witnesses, and the power to prosecute for perjury. Our internal investigation has not had these tools. We welcome their use.

As to the future, the submission to this subcommittee details actions that I believe will make Salomon the leader within the financial services industry in controls and compliance procedures. But in the end, the spirit about compliance is as important or more so than words about compliance. I want the right words and I want the full range of internal controls. But I also have asked every Salomon employee to be his or her own compliance officer. After they first obey all rules, I then want employees to ask themselves whether they are willing to have any contemplated act appear the next day on the front page of their local paper, to be read by their spouses, children, and friends, with the reporting done by an informed and critical reporter. If they follow this test, they need not fear my other message to them: Lose money for the firm, and I will be understanding. Lose a shred of reputation for the firm, and I will be ruthless. I welcome your questions.

Follow Buffett’s advice, and you will go far. Ask yourself whether you are willing to have any contemplated act appear the next day on the front page of your local paper, to be read by your spouse, children, and friends, with the reporting done by an informed and critical reporter. If you do this, you are well on your way to being a trusted advisor.

Here is another piece of the puzzle when it comes to building trust. You want to be passionate about what you do. I mentioned that I have used a fair bit of variable annuities in my practice. But that doesn’t automatically mean that you should too. You don’t have to use variable annuities if you don’t fully endorse them. In fact, you probably shouldn’t. You don’t have to build your career exactly the way I have built mine.

The point is, find something that you believe in, and be passionate about it. Become an expert in your field. Be brilliant at what you do.

Personally, I am a value investor. I can drop Warren Buffett quotes all day long. Here’s one: “Rule No. 1: Never lose money. Rule No. 2: Don’t forget rule No. 1.” Or: “To invest successfully over a lifetime does not require a stratospheric IQ, unusual business insight, or inside information. What’s needed is a sound intellectual framework for making decisions and the ability to keep emotions from corroding that framework.”

That’s not to say that you need to have the same mindset as I have. Maybe you are going to be a leading authority on passive investing or some other discipline. That’s fine too. Personally, I think that long-term success often comes more from sticking to what you know best than it does trying to be all things to all people.

So, I am not actually advocating for what I happen to prefer here, but rather that you discover what kind of wealth management philosophies really resonate with you. And then just be the best you can be and be passionate about it. Clients will pick up on that. I think it would be very difficult for people to build a successful wealth management practice if they are wishy-washy.

A common mistake that people make when starting out is to try to embrace too many ideas. They find an idea that they like, and it will end up in their clients’ portfolios. Then another idea that sounds good will come along. Then another. In time, the clients have portfolios that contain a bunch of ideas that seemed good at the time.

I don’t think that you can run an efficient practice if your book of business contains hundreds of mutual funds from dozens of investment firms. You just can’t stay on top of all of that.

So, stay inside your circle of competence. When you are confident and passionate about what you do, you will build trust. As the famous American football coach Vince Lombardi said, “Confidence is contagious. So is lack of confidence.”

My next point about building and maintaining trust that I think is absolutely vital is client service. I don’t think it’s necessary to mirror my client service model, but I think it is essential that you have one. For me, I want to return all client calls immediately. I generally don’t have my staff screen my calls. Now, there are actually some pretty good counterarguments to doing things the way I tend to, the main one being that you can get sucked into doing things that aren’t always the best way to spend your time.

Here’s why I want to be fanatical about client service: It’s because the lack of client service is the number one reason why clients will defect. You can make a mistake, and clients can forgive you. You can recommend a bad investment, and clients will still stick with you. But if you make them feel like they aren’t valued, they will leave in a heartbeat. You want your clients to feel that you have their back.

It is vital to deliver the right level of high-quality service to the right clients. You can’t be all things to all people.

Here is an example of a client service matrix. [visual] This defines what level of service is delivered at different asset levels, and what fees clients pay.

There are different viewpoints on minimum client size. Personally, I think that it makes sense to be flexible, but the main point is that there is a point where a client is not profitable, and there is a limit to how many unprofitable clients you can take on.

We only have so much time to spend. We can spend that on client service, building client loyalty and retention, prospecting, and professional development.

With a service level matrix, you get to define how you are going to spend your time, and with whom, ensuring that the clients who are responsible for the success of your practice are looked after accordingly.

The bottom line is that you are going to need a system for following up with clients. That might be one of the primary distinctions between wealth management and other lines of work—money business needs some periodic maintenance. You can’t just ignore client service, even for clients with long-term investments. Again, the number one reason why clients leave is a lack of contact from their advisor.

We want to start out by using understandable language, being trustworthy in our words and deeds, and constantly staying in touch with clients. Now, the question is, what are we going to be talking about?

I’ve noticed that the phrase goals-based investing has become popular lately. Goals-based investing is intended to measure progress toward a client’s specific goals, such as saving for children’s education or building a retirement nest egg, rather than focusing on generating the highest possible portfolio return or beating the market.

Personally, I think that the term goals-based investing is redundant. What other kind of investing can there possibly be? If clients lose 20 percent of their money, but they beat the benchmark, did they “win”? If they accomplish all the things that they want in life without taking on unnecessary risk, but underperform the Standard & Poor’s 500 Index, did they lose? I don’t think so.

To me, all true investing should be linked and deeply integrated with planning decisions that are consistent with a client’s objectives. If that isn’t happening, I suggest that we have exited the realm of investing and entered the realm of speculation.

Have you ever had a client ask, “Do you think I should be buying shares of Apple or Facebook?” Is this a question that makes sense in a vacuum? It doesn’t. The only context in which this question should ever be asked is “Does this help me reach my personal objectives, my great goals in life?” If it doesn’t, then why waste time, money, or energy on it?

Financial planning is a process that can have a magnificent, meaningful impact on your quality of life. Some people equate financial planning with getting an adequate rate of return on their retirement savings plan. That’s fine as far as it goes, but it’s an inadequate definition of financial planning.

Financial planning is a six-step process that involves examining a client’s position, setting some objectives, identifying obstacles, designing a plan, implementing the plan, and monitoring the plan to make sure that you are on track. Each of these steps is a necessary part of maximizing the likelihood of obtaining your goals.

I am going to suggest that getting a particular rate of return on your investment, or accumulating a certain amount of money, or saving on your tax bill are not really financial objectives. Or, if they are, they are pretty superficial goals to have. Rather, I would say that these things help you reach your “great goals” in life.

What do I mean by great goals? These are the really important things that are worth working toward—worthwhile things, things of substance. Here are some examples: being financially stable so that you can enjoy time with your family; having a retirement income that you can’t outlive; ensuring that your family will be taken care of if you are hurt or sick or dead; helping with your grandchildren’s education, or caring for your aged parents; ensuring the multigenerational transfer of wealth; charitable gifting. These are things worth working toward, and if you have conversations with your clients about these things, you are going to have better conversations, and you are going to get far better results.

These goals aren’t going to happen on their own. People must plan for them, and then they must work toward them. Here is the six-step financial planning process that we use:

  1. The financial planner clarifies the client’s present situation by collecting and assessing all relevant financial data such as lists of assets and liabilities, tax returns, records of securities transactions, insurance policies, wills, pension plans, etc.
  2. The financial planner helps the client identify both financial and personal goals and objectives as well as clarify that person’s financial and personal values and attitudes. These may include providing for children’s education, supporting elderly parents, or relieving immediate financial pressures that would help maintain the client’s current lifestyle and provide for retirement. These considerations are important in determining the client’s best financial planning strategy.
  3. The financial planner identifies financial problems that create barriers to achieving financial independence. Problem areas can include too little insurance coverage or a high tax burden. The client’s cash flow may be inadequate, or the current investments may not be winning the battle with changing economic times. These possible problem areas must be identified before solutions can be found.
  4. The financial planner provides written recommendations and alternative solutions. The length of the recommendations will vary with the complexity of the client’s individual situation, but they should always be structured to meet the client’s needs without undue emphasis on purchasing certain investment products.
  5. A financial plan is only helpful if the recommendations are put into action. Implementing the right strategy will help the client reach the desired goals and objectives. The financial planner should assist the client in either executing the recommendations or coordinating their execution with other knowledgeable professionals.
  6. The financial planner provides periodic review and revision of the client’s plan to assure that the goals are achieved. A client’s financial situation should be reassessed at least once a year to account for changes in that person’s life and current economic conditions.

There are some wonderful benefits that come with taking this planning approach rather than dealing with clients on a transactional basis. Step one in the process is clarifying the client’s present situation. This is how we can uncover cross-selling opportunities. We will know if a client is underinsured or has assets at other institutions.

Here is a part of a sample fact finder. [visual] Look at all the juicy information we can collect—net worth and cash flow and existing insurance coverage. All the stuff that we need to help uncover client needs, which leads to cross-selling opportunities.

Cross-selling makes a lot of sense. For one, we are taking care of the client’s needs, which is why we are here in the first place. But there are a few more aspects to this.

Cross-selling is efficient. We know it costs less to do business with existing clients than it does to bring new ones in the door. There are a number of studies that state that it costs six times more to attract a new client than it does to keep an old one.

Cross-selling is a defense against allegations of some type of inadequate service. The last thing I want is a widow showing up on my doorstep asking me why I didn’t discuss life insurance with an investment client. If I offer insurance to her, and she says no, that’s her business. If I don’t discuss it with her in the first place, that’s on me.

But here is another important part. Cross-selling builds a fence around your clients. Studies show that the more pieces of business a client has with you, not only the more lucrative that relationship is, but also the more loyal that relationship is. It is exponentially harder for the competition to get their foot in your client’s door the more pieces of business you have with that client. The deeper your relationship with your clients, the more likely they are to retain you.

So by taking a planning approach, we can have more meaningful conversations with clients, which builds trust and uncovers cross-selling opportunities that will build fences around our clients, which will then help keep the competition away.

Now I want to talk specifically about how to increase your revenue by growing your assets under administration.

Early in my career, I was at a seminar, and I had a moment of illumination when I realized something for the very first time—the power of recurring revenue.

At the time, my income was primarily first-year commission. I had to write new business in order to have a paycheck. Then, one day I was at a corporate seminar, and the speaker, who obviously knew some of the senior advisors in the room, singled out one of the fellows for his career success. I still remember his words when he said, “Having a $100 million book of business generating 1 percent revenue was a really smart way to build an investment practice.”

I must say that I agree. Do the math on that: 1 percent of $100 million. That’s right—$1 million of annual revenue, every year, just for looking after the clients you already have.

Now, that’s a pretty good scenario to be in, and it just happens to be my first exposure to what recurring revenue could really look like. The point isn’t the details but rather how the money rolls in annually versus a onetime revenue. That’s an advantage that many wealth management business models will have over the more transaction-oriented revenue streams that come from other lines of work. If your practice is transaction based, give some thought as to how you can implement a business model that facilitates recurring revenue streams.

And the beautiful part about the wealth management business is that the income can increase over time from organic growth. If your revenue comes in as a percentage of your assets under management, and the markets go up by 10 percent a year, then what happens to your own income? That’s right—your income goes up by 10 percent, compounded.

Now, here is another method to help grow your revenue in the wealth management business. Encourage dollar cost averaging. We all know that it’s good for clients as they will be able to take advantage of whenever the markets are on sale and buy more units at reduced prices, but the point is, it’s a great way to build your assets under management as well. What I have found is that people may have the best intentions to make a lump-sum investment before the end of the year, but for many of them, if they have money in their bank account, they are going to find a use for it. If they commit to a regular and automatic investment program, then there is a better chance of success.

Let’s switch to compliance for a minute. Compliance in the wealth management business is not to be trifled with. Litigation is becoming more and more of an issue within our profession. The bottom line is that you absolutely need to have meticulous notes.

Recently, an advisor in Canada agreed to pay $13,000 in fines and costs to an industry regulator. The client had transferred in an account worth less than $6,000. The advisor invested the funds once the transfer arrived.

Later, the client called in to see how the transfer was going. The advisor admitted that he had forgotten that they were supposed to meet before investing the funds. The client then asked the advisor to move the investments into a money market mutual fund.

The client suffered a loss of $6.26. That’s it. Six lousy bucks. There was no other evidence of any other wrongdoing, and the advisor didn’t materially benefit other than the commissions on the trade. But the client complained, and the advisor was fined $13,000 and has a permanent stain on his record. All for a lousy six bucks. True story. This is the regulatory world that we operate in.

I happen to serve on our provincial insurance regulator, and one of my main jobs is to investigate client complaints. More often, the advisors who have good notes also have a good defense against wrongdoing. Advisors who take little or even no notes are often the ones who end up in front of us. You need to take good notes!

But good notes are more than just a defense against the allegation of wrongdoing. With good notes, you can reduce the chance of cross-selling opportunities slipping through the cracks.

There are many ways to help with your note-taking activities. As an example, we are working on implementing voice transcription in my business.

And another advantage of good meeting notes that we take advantage of is where we send a copy of the meeting notes to the client. There are a number of benefits to this. When it comes to compliance, it will be hard for disgruntled former clients to complain that we didn’t disclose something to them when they have a copy of what we talked about.

But also remember that we have our own language. If we aren’t careful, clients are going to look at us like bug-eyed aliens. It’s very difficult for many clients to remember and retain all the material that can get covered in a financial planning meeting. So by giving them a copy of what was discussed, we are also giving them an opportunity to refer back to what we discussed. That’s very helpful when we are trying to move people to make a decision. And when clients can understand you better, you are more trustworthy and more referable.

The next thing I am going to cover is going to seem so simple you might wonder why I would make a big fuss about it. If this seems simplistic, indulge me. I promise that if you make this a habit until it is ingrained into your daily routine, you are almost sure to get significantly better results.

Now, if you are like me, you might be inclined to resist this for some reason—maybe it seems too much like a gimmick, or it’s outside your comfort zone, or there’s some other reason. Please, just do it, even if you have reservations at the outset.

I am reminded of a time that I went to a Focus Session at a past Annual Meeting with Dan Sullivan of Strategic Coach. He said something that stuck with me. He mentioned something along these lines: The people who get the most out of the Strategic Coach Program are the ones who just accept the material as being true and correct, and then adopt it. Other people seem to want to quibble about the details, or even argue with him. I found that strange. These are people who are paying money to be in a coaching program, but then want to argue with the coach.

I joined the Strategic Coach shortly after that, and as I was going through the program, I was reminded that from time to time, when I came across a concept that I had reservations about, to not argue it and to not try to find why it wouldn’t work, but to just accept it and implement it.

Because the first time I heard of what I am about to tell you, I just didn’t get it. I didn’t see how it worked, so I didn’t do it. Eventually—to be honest, because my production was nowhere near where I wanted it to be—I tried it. And it really, really works. I could have saved myself a good year of aggravation if I had just done it in the first place.

So here is my big secret—track your activity.

Here is what tracking your activity does. It allows you to find, as Nick Murray puts it, your “N.”

Let’s say that your goal is Top of the Table. In US dollars, you need to make $564,000 of commission income in 2017. Let’s say that you have $314,000 of recurring revenue already, so you need to make $250,000 in first-year commission. Now, further, let’s say that you plan on working 250 days in 2017.

This means that you need to make $1,000 on each working day to make your Top of the Table target.

Let’s say that you know you make $1,000 per sale. This means that you need one sale per day.

Let’s say that on average you make one sale for every three appointments. This means that you need three appointments per day.

Let’s say that on average you book one appointment for every three people you talk to. We will call this “contact” with your client or prospect. This means that you need to talk to nine people in order to book three appointments.

Let’s say that on average, because of voicemail and so on, you actually talk to a human being every second time you pick up the phone and call someone. We will call these “approaches.” This means that you have to make 18 calls per day in order to talk to nine people.

So this is what it boils down to: In order to make Top of the Table, you need to make $1,000 per day, which is three appointments per working day, which is nine contacts per day, which is 18 approaches per day.

In other words, pick up the phone 18 times per day and call a legitimate prospect, and you will be at Top of the Table.

Now, these numbers aren’t your numbers, and that’s another reason to track your activity. You can see where the bottlenecks are. If you have to make a lot of approaches in order to get a contact, then maybe you are calling at the wrong time of day. If you need to make a lot of approaches to book appointments, then maybe you need to work on your phone script. If you are having a lot of meetings without getting a lot of sales, then maybe you need to look at your closing techniques. If you are making a lot of sales without making a lot of income per sale, then maybe you have to look at that too.

The other useful part about this is that if you know you need to make $1,000 per day, and you catch yourself doing things that don’t have the capability of generating $1,000 per day, then you can recognize when your behavior is not consistent with your objectives.

On this sheet, there is also a spot to track how many times you ask for a referral. [visual] If you track it, you can see whether or not you are doing the things that you know you need to be doing.

You can’t control your outcomes. You can only control your inputs. Because of this, nowadays the only thing I track consistently is how many times a day I call a client. Because I know that everything else flows from activity.

Tracking your activity will lead to measurably improved results. That’s a promise.

So even if this sounds funny, seems weird, seems overly simplistic, I want you to indulge me. Try it, stick with it, and if your production hasn’t shown meaningful progress in six months, email me your tracking sheets. I’ll buy you lunch at next year’s Annual Meeting. How’s that sound?

Here’s a belief that I want you to reflect on. All problems are prospecting problems.

Let me ask you a question: How many people hate rejection? Hating the feeling of rejection is completely normal and natural. As human begins, we want to be loved and accepted.

But in this business, you need to understand that if people say no to your idea, they are not rejecting you as a person. They are saying that they aren’t ready to join you right now, for their own reasons, whatever those reasons are. And that’s a good thing. Because it allows you to move on to the next person whom you want to invite to join you in your business.

You can’t be all things to all people. You aren’t looking to have everyone as a client. You are looking to find the right ones to be clients. Being told no is a great and beautiful thing because it moves you that much closer to yes.

Call reluctance is the number one reason that people don’t make it in this business. You need to get on the phone. If you are tracking your calls, you can’t hide from the results. Either you called people or you didn’t. If you called people, the inevitable results will eventually be seen on your commission check. And if you didn’t call people, that will eventually also be evident on your commission check.

Rejection is a good thing when it comes to prospecting. No does not hurt. No lets you get to yes.

You only have room for so many clients. And not everyone deserves you. Hearing a no is not a bad thing; it frees you up to get to the people who are going to say yes. A no is better than a maybe. Don’t take a no personally—that’s corrosive.

All problems are prospecting problems. Think about that for a moment. All problems are prospecting problems. This is a very liberating thought because it means that everything is inside your control. Don’t have good clients? Go get better ones! You are completely and 100 percent in control of your career.

This is an important thing. Not all clients deserve you. If you have a toxic client, one that just sucks your energy, get rid of that client. Or, even better, don’t take that client on in the first place. There is an expression that I first heard at MDRT: Yellow lights always turn red. If you have a client who is becoming a yellow light, deal with it prior to the light turning red.

Switching gears, let’s talk about how the regulatory environment is changing.

Commissions have already been banned in a number of different jurisdictions, disclosure rules are changing, and obligations are changing. Probably, all of these rules are well intentioned, but I think that a lot of them are going to have unintended consequences.

In Canada, I believe that we are moving in a direction where, among other things, commissions will eventually be banned. And I don’t agree with that, because I see that the inevitable consequence is that the average consumer is going to lose access to professional advice. It’s not so much that consumers won’t be able to afford me; it’s that I won’t be able to afford working with them. We can’t take on new clients, with all the obligations that come with that, unless we are fairly compensated, and the removal of commissions is not a solution to that.

I think that this is a vital thought exercise. Let’s consider what you would need to do if commissions were banned. Or if they already are banned where you practice, consider your own next steps in light of your regulatory regime.

Because we need to be in front of this. The last place you want to be is thinking about how you need to reinvent yourself after the change has been announced. So think about this. If commissions are banned, how are you going to earn a living? Who are your clients? How do they pay for your expertise? What is it that you need to do in order for people to be happily willing to pay for your services? These are big things to think about. So write this down now: “What do I need to do in order to be fee worthy?”

I really think that we need to be out in front of this. Rightly or wrongly, the idea of banning commissions is an idea that has momentum. If you are delivering service that people are willing to pay for, then you have the luxury of structuring your business practice the way that you want, not the way that you have to.

What do you need to do now to keep pace with these changes? Here is another thought exercise. If Warren Buffett moved to your town next week and set up a practice right across the street from you, what would you need to do in order to survive? The good news is that Buffett is pretty well established in Omaha, so he’s probably not coming to your town. But someone is. So if you were in the face of heavy competition, what would you need to do in order to not just survive but thrive? What would you need to do to lock up your clients? How would you grow your business? Who are your prospects, and how are you going to get in front of them?

Don’t take this for granted or get complacent just because you can get away with it now. If you would need to do things differently if competition was fierce, why are you not already doing these things? Be referable at every opportunity.

There are a few things that I think that people can do in order to prosper when others are perishing. One of them is to get your credentials. Credentials build trust. And they build income.

According to the Certified Financial Planner Board of Standards, Certified Financial Planner professional practices generate 40 percent more revenue based on average practice revenue and almost 70 percent more revenue per client. CFP professionals are more likely to work with high-net-worth families than are other financial advisors. High-net-worth clients will contribute more revenue to any practice due to their larger balances and their need for multiple wealth management services, including fee-based financial or wealth planning.

But the biggest thing that you need to do in order to excel in the wealth management business is to always have prospects in the pipeline. Always be prospecting.

I’m going to share with you something I picked up from Dan Sullivan’s Strategic Coach program.

Have a list of your Top 20 prospects for immediate and significant business, and think about that list each day. What do you need to do in order to move them off the list of potential for doing business and put them on the list of completed business? Then, you also have a second list, which is your “Farm Club.” These are the people who have the potential to move onto your Top 20 list in the near future. When you aren’t working on your Top 20, work on your Farm Club.

Many of the ideas I am sharing with you today I certainly can’t take credit for. Warren Buffett, Nick Murray, Dan Sullivan, and many others have all had a big impact on my career. If I have seen further and achieved success, it is only because I have stood on the shoulders of giants.

Here is the summary of what we discussed:

  • The number one fear of people approaching retirement is running out of money. If you can alleviate that fear for people, you will have your pick of clients.
  • You need to be beyond reproach and earn the trust of your client.
  • Speak in a language that people can understand. Minimize the jargon.
  • Be passionate about what you do.
  • The number one reason why clients change advisors is the lack of contact. Stay in touch with your clients.
  • Cross-selling is good business for everyone—for both you and the client.
  • Tracking your activity will lead to measurably improved results.
  • Know your “N.” Make your calls to reach your goals.
  • Rejection is a good thing when it comes to prospecting. No does not hurt.
  • Call reluctance is the number one reason that people don’t make it in this business.
  • What do I need to do in order to be fee-worthy?
  • Be referable at every opportunity.
  • What would I need to do in order to thrive in the face of intense competition? Now do it anyway.
  • The biggest thing that you need to do in order to excel in the wealth management business is to always have prospects in the pipeline.
  • If you get inspired, but do nothing new, you won’t get new results. Don’t slip back into your old habits.

I am confident that if you take these ideas, implement them, and stick with them, you will have great days ahead.

Brad Brain, CFP, CLU, is an eight-year MDRT member with five Court of the Table honors from Fort St. John, British Columbia, Canada. He has helped to author the Certified Financial Planner exam, and is a nationally recognized thought leader in the field of retirement income planning.


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