/ by Don Connelly / Investing Wisdom / 0 comments
We’ve all encountered them: The prospect or client who wants to go it alone. They want to manage their own portfolio.
Well, here’s one approach you can use:
First, ask the question, “Can I share something with you?” (I like this phrase because it’s non-confrontational. It doesn’t activate the prospect’s ego, leading to an argument you can’t win. It neutralizes it.
Then you can show them the latest DALBAR study.
It doesn’t matter much what year you use. The results for individual DIY investors are almost always dismal: According to the 2019 DALBAR Quantitative Analysis of Investor Behavior, the typical do-it-yourselfer achieved an annual real return of just 1.71%.
Compared with the S&P 500, do-it-yourself investors lagged the S&P 500 by huge margins:
• 4.35 percentage points, annualized, over five years;
• 3.46 percentage points, annualized, over 10 years;
The reason: Bad market timing decisions. People pile into the market at the wrong times, and then they panic and sell at the wrong times.
Why? Because people are irrational, and are hardwired to make sub-optimal decisions.
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Reasons Clients Need a Financial Advisor – Overcoming the Do-It-Yourself Objection
/ by Don Connelly / Investing Wisdom / 0 comments
We’ve all encountered them: The prospect or client who wants to go it alone. They want to manage their own portfolio.
Well, here’s one approach you can use:
First, ask the question, “Can I share something with you?” (I like this phrase because it’s non-confrontational. It doesn’t activate the prospect’s ego, leading to an argument you can’t win. It neutralizes it.
Then you can show them the latest DALBAR study.
It doesn’t matter much what year you use. The results for individual DIY investors are almost always dismal: According to the 2019 DALBAR Quantitative Analysis of Investor Behavior, the typical do-it-yourselfer achieved an annual real return of just 1.71%.
Compared with the S&P 500, do-it-yourself investors lagged the S&P 500 by huge margins:
• 4.35 percentage points, annualized, over five years;
• 3.46 percentage points, annualized, over 10 years;
The reason: Bad market timing decisions. People pile into the market at the wrong times, and then they panic and sell at the wrong times.
Why? Because people are irrational, and are hardwired to make sub-optimal decisions.
Read more
Using Analogies in These 3 Situations Can Help Turn Prospects into Clients
/ by Don Connelly / Storytelling, analogies and power phrases / 0 comments
It’s your job to get prospects off the fence. You need to persuade them that hiring you to manage their investments is the right thing to do. Before they make that decision, however, they need to understand what it is they are buying, and why they need to buy it. Because “people don’t buy what they don’t understand.”
This is where analogies can help push the balance in your favor. They make the unfamiliar familiar.
An analogy is “a comparison between one thing and another, typically for the purposes of explanation or clarification”.
Analogies can help you put forward an argument so that prospects see things in a new light – and conclude, of their own accord – that it makes sense to do business with you.
Here are three situations that warrant the use of analogies.
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Why Your Clients and Prospects Need You
/ by Don Connelly / Investing Wisdom / 0 comments
Let’s talk some more about Mr. and Mrs. Client and why they need to invest now and with you. The whole discussion of commissions and fees is not about the question ‘what your commission is’; it’s ‘why should I pay a commission? Do I need to pay a commission or a fee when I can do this on my own? Why should I have a financial advisor?’
So when somebody says “What are your commissions? What are your fees?” I’d say “Let’s discuss the real question here, which is: do you need an advisor?”
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