How to Get Clients to Stick to the Plan
It’s crucial that you get your clients to stick to the plan. If they don’t, they could forgo their comfortable retirement or build up debt when they put their kids through college. Your responsibility, as their financial advisor is to keep them on track. Here are three effective ways to do that.
Keep your clients’ vision alive
When you first sit down with a client your primary aim is to get across to them the value of investing. You need to convince them that adding money into their accounts over the forthcoming years will be worth more to them than spending it now.
A good way to do this is to encourage them to envision their future in close up ‘technicolor’ detail. Once they are fully immersed in their ‘perfect’ retirement they will feel more inclined to save towards it.
This is a great way to get clients to kick-start an investment – however, over time this image may fade – and they may start to forget why they invested in the first place. The lure of a new kitchen or car may start to take precedence.
As soon as you sense that their enthusiasm is ebbing – it’s time to step in.
Remind them once again what life will be like if they stick with the plan – and that they will only achieve their happy ending if they do stick to the plan. Paint the future for them in vivid colors. Use your charisma to stir up clients’ emotions and curb their impatience. Give them sufficient reason to exercise the discipline necessary to invest for the long haul.
Earn your clients’ trust
You need to establish trust so that clients will follow your advice without hesitation. Convince clients that they can trust you by demonstrating the right behaviors.
Always be consistent. Nurture your relationship by being 100% reliable. Don’t slip up. Call when you say you will. Never lie. Don’t do anything that could put you at risk of destroying the trust. Remember that excuses and trust are mutually exclusive. Tell the truth even when it hurts – be open and own your mistakes.
If you act with integrity, you will build up your client’s belief in your trustworthiness. Then when you tell them you will get them to their destination on time, they’ll believe you without hesitation and they’ll take your advice. When you say that sticking to the plan is the right thing to do, that’s just what they’ll do.
Get across that investing is a long-term game
Clients need to understand that investing is a process that has to take place over many years, perhaps decades. They also need to understand that over the short term their investments may go up or down – they may even fall significantly for a certain period of time.
Then reinforce the message that, over the long run, stocks have always risen
What happens today or next week will be insignificant in ten years’ time. Taking the money out when times are tough is not the right thing to do – time spent obsessing on the sidelines is a missed opportunity.
Tell clients to ignore the white noise – the endlessly negative media soundbites – and put their focus on the end game. Investing is not a part-time endeavor but if they stay in the game, their patience will win the day and they will beat the bank.
Illustrate why they should put their faith in the markets by asking your clients the following – “every time the markets have gone down they come back up – true or false?” Answer: “that’s true”. ‘
Then ask them “and isn’t it also true that every time the markets come back up they eventually end on an all-time high?” Again “true”.
By getting clients to think about the transient nature of market volatility you’re helping to reassure them that it makes sense to stay the course.
Once you’ve led clients to the point that they decide to do the right thing – i.e. hire you to oversee their investments – you’ll then find that you’ll spend the next years convincing them to stick with that decision.
Do this by earning their trust and using vision and teaching stories. While this will take effort, the payoff will be worth it for both you and your clients.