Three Major Challenges Financial Advisors Face when Acquiring Clients
Pinpointing the main challenges Financial Advisors face in their daily work is a challenge in itself, considering there are so many. But here are three of the most often cited pain points – with a few tips on how to address them.
#1. Getting referrals
If like a lot of other advisors, you often find it difficult to ask for referrals it’s because asking for referrals is essentially like asking for help to grow your business. And having to ask for someone’s help feels like admitting that your business is deficient in some way. Asking for referrals also means facing up to your fear of rejection.
But as a financial advisor you will have to do things you don’t like doing, and that includes asking for referrals. It may be a bitter medicine – but you need to take it if you want your business to get better.
To overcome your aversion, try to approach this task from a different perspective.
When you ask for referrals don’t think of yourself – think of others. Ask yourself – have you added value to your clients’ lives? If the answer is yes, ask your current clients if they’re happy they found you and started their investment journey with you. Re-visit their reasons for investing. Then ask your clients whether they know people who should be doing what they are doing. Do they have friends or family who may be jeopardizing their financial future by not planning for retirement?
If so they need to get them on the phone and get them to make an appointment with you, and soon.
#2. Finding the right people to speak to
Many advisors say they find it relatively easy sitting down with clients and discussing their financial goals. The difficult part is finding a way of getting hold of the right people to sit down with in the first place.
The only way you will be able to set appointments with relevant prospects is to firstly, identify your target market and secondly, find ways to approach them.
To identify your target market, write yourself an ideal client sheet. Think hard and try to pinpoint in detail all the characteristics your ideal clients should have, covering their age, marital status, location, the industry they work in and so on – until you have a very clear idea of who you should be targeting. Ask yourself how you can help these types of people achieve their goals, whether it’s to plan for retirement or pay for their children’s education.
Then it’s time to work out how you are going to meet these prospective clients. Is it by networking on LinkedIn? By giving seminars? Or by getting involved in local community events? Aim to meet your target audience where they spend their time, be it at the health club or online. To break the ice and grab your prospects’ attention give or send them your ideal client sheet – this will set the stage for taking things further.
#3. Creating urgency and interest with prospects
Advisors often complain that prospects constantly tell them they’re not ready to commit. And it can be difficult to break this apathy towards investing. The problem is, it’s far more fun to spend than save. People tend to care more about buying clothes and cars than saving for their future.
To overcome their apathy, give prospects a reality check.
Talk in terms of real numbers prospects can understand. If you’re speaking to parents with a 3-year-old child remind them they have only 180 months before that child will be in college. And when it comes around, the cost of their college fees will be the equivalent of buying a new car every year for four years. If you’re talking to people aged 45 tell them they have just 240 pay checks left before retirement at 65 – a retirement that could last many years.
And you can’t disregard inflation. If clients want to retire comfortably they have to bear in mind that prices may triple but their income won’t. Rising costs mean they may need millions of dollars to fund a lengthy retirement – or face the alternative of having to live on state handouts or friends and family.
Stress to prospects that if they don’t take care of things and act now to secure their family’s future, no-one else will.
Finally, if you want to get clients off the fence ensure you build a rapport with them. Spend time letting people get to know you. Don’t try to be the number one professional advisor – just be yourself. Prospects need to like and trust you before they commit to doing business with you.
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