Why it is that the leading financial planning practitioners earn well in excess of $500,000 a year, while the vast majority of advisers generate annual incomes of less than $100,000?
The main reason is that the leading financial planners do not make the following common marketing mistakes. And, as a result, they are rewarded with a steady stream of new clients knocking on their front doors, year after year.
Mistake No. 1: Not having have a system for harvesting client referrals
The biggest mistake financial planners can make is to assume that, just because they do a good job, referrals from clients will roll in. Research shows that most clients are either reluctant to refer their friends and family to you for advice… or, if they are happy to refer, they are not proficient at making the referral.
So, if you want a higher level of client referrals for your practice, you need to work at it. You need a system which will maximise the potential in your “filing cabinet”.
I have developed a simple, easy-to-implement 5-step referral system for some of the top financial planners in Australia called REFER (see Box).
Mistake No. 2: Not building enduring relationships with centres-of-influence
While most advisers are successful in winning the trust and confidence of the centres-of-influence, few are able to convert that into enduring and profitable relationships.
The mistake most advisers make is that they reach an informal referral agreement with a centre-of-influence, but then sit back and wait for an avalanche of leads.
Nine times out of ten, it just won’t happen. Most centres-of-influence are too busy running their own businesses to go through their client or employee bases looking for leads for you.
You’ve got to become the marketing arm of their business. One example here is for you to draft the direct mail pieces to be sent to the centre-of-influence’s clients or employees (on their letterheads). For example, the letter introducing your practice’s financial planning services … or inviting them to a seminar … or giving details of a special offer.
Mistake No. 3: Targeting clients who don’t suit you
Don’t make the common mistake of choosing a ‘preferred client’ profile which you’ll find difficult to win over because you do not have the required skills or character traits.
Instead, ask yourself these questions:
? What are your areas of genuine technical expertise?
? Of your existing clients, with which types do you relate to best?
? Which client types most easily agree to become your clients?
? Which types of clients are most likely to be happy paying your fees?
The answers will give you a very clear picture of what your ‘preferred client’ should be.
Mistake No. 4: Not measuring the success of your marketing initiatives
You might recall the famous John Wanamaker quote about advertising: “Half the money I spend on advertising is wasted. The trouble is, I don’t know which half.”
I know a lot of financial planners who have the same lament. And it’s a costly mistake.
However, there’s no such confusion with the top planners about their marketing.
They know exactly what’s working and what isn’t. They measure the results from each marketing initiative – and they refine their marketing mix accordingly.
Mistake No. 5: Talking more than you listen
There’s an old sales training maxim which goes like this: You’ve got two ears, but only one mouth, so you should listen twice as much as you speak.
Why is it that so many advisers spend virtually the whole of the first interview talking about how great they – and their company – are?
And then, at the end of the interview, the adviser is surprised when the prospect does not wish to proceed. And why would they proceed? The adviser has done nothing more than subject the prospect to an hour-long unsolicited commercial, with little or no indication that the adviser can provide a solution to their problem.
As the top financial planners know, the initial purpose of the first interview should be for the prospect to say what their need is for consulting you.
This is usually done by you asking the prospect “How can I help you?” and then by you skilfully asking questions at appropriate times to help the prospect ‘drill down’ so that they can clearly explain the exact nature and extent of their problem.
You should then demonstrate (rather than boast about) your expertise by proffering a solution to their problem.
The ensuing discussion should result in a strategy being formulated with which the prospect is happy and comfortable (and has ownership of). As a result, the prospect will have “bought” the strategy … and you.
Mistake No. 6: Not outsourcing the execution of your marketing ideas
A lot of financial planners are natural marketers. They know which marketing strategies they need to use in order to build their practices.
However, what most advisers do not know is how to execute (in the written sense) many of their strategies. For example, they do not have the skills – or perhaps the inclination – to write compelling seminars, advertisements, articles, direct mail and so on.
Financial planners will therefore be best served by outsourcing the written execution of their marketing tools to one of their employees or to the marketing team of their dealer group.
Stewart Paul is a marketing consultant specialising in the financial services industry. He is also author of The Marketing Reference Series – a bi-monthly newsletter which helps financial planners build their practices.
The REFER System
1. Give clients a reason for talking about you
You can overcome your clients’ reluctance to refer by giving them reasons to mention your name when they are having conversations with their friends, thus increasing the potential for a positive referral.
For example, you might provide a level of service which exceeds their expectations, or you might invite clients to a special event (like a golf day or the opera).
2. Educate your clients about how you want them to describe your work to their friends.
The top financial planners educate their clients to give compelling and persuasive referrals by articulating to their clients the benefits they bring, either quantifiably or qualitatively.
3. Facilitate referrals
Facilitating referrals will help you to overcome problems like clients not referring clients to you because they think you are too busy. Ask for referrals (For example: “Peter, if any of your colleagues also need advice on how to save lump sum tax when they leave <company>, I’ll be happy to accommodate them.
Please feel free to give them one of my business cards.”)
? Provide clients with the mechanisms and tools to easily refer
? Establish a culture which leads your clients to understand that you expect and appreciate referrals.
4. Inquire as to how all new clients found out about you
5. Reward clients who refer to you
Your clients welcome positive re-inforcement that they have done the right thing by referring. So, you should:
? Acknowledge and thank your client for giving the referral.
? Consider giving your better referrers a small gift by way of a token of your appreciation.
