Always Remember Your Clients’ Reasons to Invest

Always Remember Your Clients' Reasons to InvestFailing to understand a client’s goals and objectives ranks highly when it comes to why financial advisors get fired. So it pays to remember that your client’s reasons to invest are the same as they’ve always been: they want to generate more cash in the future, whether it’s to send the kids to college, or to retire on a yacht in the Caribbean.

Your clients want to educate their children and build a retirement fund. That’s generally it.

They aren’t trying to achieve anything exceptional, so as a financial advisor you don’t need to promise the earth, you simply need to set and manage realistic expectations. Don’t overpromise. Always remember their goals and make these goals real and achievable to keep clients focused on the long run.

Investing is simply a route to getting to where they want to be

Markets change frequently but the reasons your clients invest don’t. Despite a falling stock market, clients still need to save for retirement or build funds to pay off college fees. When they’re talking to you they’re saying the same thing. ‘Make it possible for me to pay my fees or taxes’, ‘get me on stable ground’, ‘get my kids to college’ and I will repay you with fees or commission. That’s the bottom line.

One of the most compelling reasons to start investing is the prospect of not having to work your whole life. And when considering how much you’ll need to spend in retirement get them to consider this: ‘Every day will be a Saturday and we all tend to spend the most on Saturdays’.

Beating the bank is another reason to start investing. For the most part, clients simply want to beat the bank. The cost of living isn’t going to go down – many people over age  60 you paid more for their last car than their  first house. If you keep your money in your back pocket instead of investing it, it will decrease in value over time due to inflation. By investing you can get it to generate more money by earning interest on what’s been put away, or you can buy and sell assets that will grow in value. Ask your clients – ‘If prices triple in your retirement years how are you going to live comfortably?’

You need to get clients to act now

While your clients know the kids will need to go to college they often don’t realize that this event is not actually all that many pay checks away. Clients will always try to find reasons to put off investing so it’s your job to convince them that the decision to delay investing is like delaying an important car journey; if they leave too late, they will have to drive dangerously over the speed limit to get there in time. You need to convince your clients not to put their child’s future education or their retirement plans in jeopardy. The best time to invest is when they have the money and that’s right now.

The decision to invest is not a logical decision, it’s an emotional one. To get people to act you need to give them compelling emotional reasons to do so. People find it impossible to imagine what life will be like in the future.

At 21 you can’t imagine being 40 and  a 40-year-old can’t imagine  being 60. Everyone wants growth but no-one wants the pain of getting there. You need to get them to understand that a little pain today will offset lots of pain tomorrow. When they’re retirees they can’t fight back. You need to get them to learn to distinguish their wants from their needs – to keep them strong down the line.

Tell a vision story to get them on board with investing

The only way we can understand is through experience, having the benefit of hindsight. But new clients don’t have the luxury of experience. They don’t know the benefits of long-term investing. So it’s up  to you to get them to understand, and the best way to do this is to tell them stories.

Vision stories build a vision about dreams coming true. Get your clients to picture themselves sitting on the back porch many years’ hence. Get them to ask themselves ‘what were our three main goals in life?’ and ‘did we hit them?’ Were those goals to get the kids the best education they could, own two homes, give money to charity? Travel around the world? What things did you want to accomplish?

You need to guide their behavior so they will follow your advice. Encourage them to have a very clear vision about where they want to be to give them a determination to stick with a plan. Tell a story to instigate this. Remind them that, although you can’t do it for them, you will be there every step of the way to get them where they want to go.

Remind clients continually about their reasons for investing

To keep clients on board for the long term remind them that their reasons to invest have not changed. They still need to invest for college tuition  or for retirement. The decision to invest is not a part-time decision – so make it a habit to continually remind clients of their goals. Their goal is not to beat the Dow, it’s to build money. Focus on the destination not the journey, since things will surely go up and down along the way.

Don’t let your client’s biggest regret be that they didn’t start investing sooner. Remind your clients that they and they alone are responsible for their family, their future, no-one else.

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Don tells you exactly what to say to your clients or better yet, let him speak to them directly through this Investor CD. Be sure to get approval from your Compliance Department before sending to clients.


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