We are fortunate to have a number of very well qualified advisors in our firm. We all have different styles, and I believe that is a good thing. That being said, I think there are some important elements of style that we all need to share. Similarity of style can be especially important during our initial interviews with prospective clients. Listening to the client intently is the most important thing each of us can do in this first meeting, so sharing that high-level skill is advantageous to us all. Only by listening well will we know how to tailor our responses to their questions and expressed concerns. We need to fully understand those unique concerns in order to know how to approach helping them solve their financial issues, how to communicate why we think we are the best advisor for their needs, and to determine whether they are a good fit for our firm.
In our practice, we want to do everything we can to ensure that the relationships we have with our clients continue for the long term. If we have the right clients, and we meet their needs and expectations, then a long-term relationship becomes possible. Therefore, we spend a lot of time and energy up front, getting to know the client and their circumstances so we can develop appropriate analyses, plans and strategies for them. While we charge a substantial retainer fee for that first year's planning, the truth is that--due to the time we spend--almost every first-year client relationship is unprofitable. Ongoing client relationships, on the other hand, are very profitable. That is why it's important that we take on clients who are going to want and appreciate what we do, so they will be around a long time.
The First Contact
Most of the time, in our experience, prospective clients are the ones who make initial contact. They may have seen our name in the news or through a Web search; they may have been referred by a client, attorney or CPA. We actively work to build more of those informational bridges and get more "traffic" on those referral pathways, but the first contact usually comes with the prospect calling us.
When they call, we try to respond immediately, to show we are responsive and interested in them. We also want to use the opportunity to screen out prospects who would not be appropriate clients for us. If at all possible, one of our advisors talks with the prospective client when that first call comes in. If one of the advisors isn't available when they call, we make a return call as soon as possible. In either case, that initial phone conversation may take anywhere from 10 to 30 minutes. We are screening the call to make sure that we have the person's contact information and that they qualify according to our target client profile. Often they have questions of their own they need to ask before they will consider us. Advisors take those calls, since we have found that neither part of this conversation can be accomplished effectively by clerical staff.
The Initial Questionnaire
If they pass through that first phone screen, we email or post them a short questionnaire. This is actually a "test" to see if the client is interested enough to spend 10 minutes filling out the form and responsible enough to get it back to us before the meeting. It asks them
o Why they are seeking an advisor
o What they are looking for in an advisor
o How they heard of us
o Their contact information and some minor personal information
o Big picture: What they earn and how much they save
o Big picture: What they own and what they owe
o A list of topics regarding what they are happy/unhappy with in their personal financial lives
Filling out the form prompts prospective clients to think about issues which are important to them in preparation for our meeting. Reviewing the answers helps us to further qualify the client as well as to understand how to direct the conversation.
The First Face-to-Face Meeting
When we meet with prospective clients for the first time, we have three objectives:
1. To learn about their concerns and their issues, so that we can address them specifically in our presentation;
2. To answer their specific questions;
3. To learn enough about them to evaluate whether they would be good clients for us and whether we can add value to their financial life.
Each of these objectives can only be accomplished if we spend most of the discussion asking questions and listening very intently to the answers. None of these objectives is accomplished by telling the prospect all about what we do or how we do it. I'd say the ideal conversation ratio ought to be about three parts client talking to one part our asking questions, answering their questions and telling them about our firm and our services. In my opinion, if that ratio is less than two to one, we've failed.
Whether clients realize it or not, what they are looking for is an advisor who will be responsive to them and who will be someone they can trust. How do we best manifest our ability to satisfy those criteria? First, we have to learn what to be responsive to, and then offer ideas and insights that directly target those concerns. If instead we start by telling them all about us and how we do things and why we are special, this unfiltered list is guaranteed to include some information that does not interest them. Of course we are excited about what we do and want to share it all, but this approach simply overwhelms most clients and, more often than not, signals that we are more interested in what we do than in what they need.
In fact, most prospects don't care about all the things we do for our clients. They want to know how we are going to help them with their specific needs. If we can't address those needs, they will keep looking for a viable advisor. Our job is to make sure that we are focusing our discussion on the things that are important to our prospective client. The further we go beyond those concerns and the more time we spend on other items, the less interested they are likely to be, and the less likely they are to think we are the right advisor for them.
If they have no interest in charitable giving, for example, we waste everyone's time by talking about all the wonderful things we can do for our clients in this regard.
Our job is to learn what is important to clients and then convince them that we can help them with those issues. If we do that, we'll enjoy much success. If we fail to learn what is important, then we are unlikely to be successful. Asking good questions and being a good listener are the keys to our ability to be successful in the effort to add new clients.
We can't discuss what benefits they will enjoy in working with us, unless we first spend a significant amount of time finding out just what is important to them.
The evidence is indisputable that if we spend more time listening to prospective clients and less time trying to convince them of all the wonderful things we can do, our success rate in attracting new clients will significantly improve. To gain their trust and to bring them to the point of engaging us, we need to be listeners, counselors and coaches. In general, clients and prospects enjoy it when we are enthusiastic about our work and can communicate how we can apply our various tools to help them. This can be infectious and a very positive thing--if it interests them. But we can't make our work relevant or interesting to the prospective client if we haven't first asked the right questions and listened carefully to the answers.
Norman M. Boone, MBA, CFP, is the founder and president of Mosaic Financial Partners, Inc. a San Francisco-based fee-only financial planning and investment firm and the co-creator of IPS AdvisorPro, an on-line Investment Policy Statement solution for wealth managers.
