Getting Past the “I Already Have an Advisor” Response
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You received a referral to a potential high-net worth client. Your referral source built up the great opportunity. You are excited. A referral like this doesn’t come around often. You gathered enough courage to make the call. The prospect is polite, but soon says they have another advisor.
You don’t know what to say.
In desperation, you ask them to call you if they ever need help.
They never will.
Among investors, 60% are do-it-yourselfers. But 80% of high-net worth investors have an advisor. It doesn’t mean they are happy. It only means someone is managing their money. They realize there is too much effort and complexity to get maximum returns and mitigate taxes. It’s not worth it to do it themselves.
But are they happy with their advisor? Would they make a change if presented with a better opportunity?
In most cases the answer is “yes.”
Frequency of contact
It all depends on communication. Very few clients understand the extent of what you do for them. They have a fundamental sense you are helping build a retirement portfolio. But not much else. The top five reasons why your clients stay is based on the relationship. If you call the A and B segment clients every three months, they will stay. If you don’t, they may consider working with someone else. A good tool to use is the three-month call script, which I have written about in these pages before.
The power of incumbency
Most advisors will talk about how they differ from other advisors. They may even berate the incumbent FA. Both approaches are wrong. Years ago, an advisor looked through my portfolio and said what a bad job my advisor did. The investments weren’t diverse enough, some were too risky for my goals and there were better vehicles offering superior tax savings.
I said, “I will think about it,” then called my existing advisor for an explanation. When you criticize a past advisor, it will cause confusion. When a client gets confused, they will call the incumbent advisor.
And then you lose.
The power of communication frequency
When you contact a potential client, always ask when they last spoke to their advisor. If it’s been more than three months, you have a shot. If it’s been less, you have none. The reason is “status quo bias.” In my book, Why Smart People Make Dumb Mistakes with their Money, I mentioned that status quo is the strongest emotional glue known to mankind.
One of my coaching clients, Cathy, spoke to a 75-year-old woman in 2009 who lost 45% of her retirement assets. She hadn’t spoken to her advisor in 10 years. Cathy pointed out to the woman how risky her portfolio was and what needed to be fixed to make her retirement income last. The elderly woman was profusely grateful and said she would be back the following morning with a check. The retiree did come back the next morning, but without the check. She called her incumbent broker (the one she hadn’t spoken to in 10 years), who said to keep her portfolio assets where they were.
When prospects get confused, they call the existing advisor. Then you lose.
What to do
Here are a few steps to separate a potential client from an existing advisor.
1. Move past the reflex response
Have you ever been asked by a store clerk “Can I help you?” The response is always “No, I’m just looking.” You walked in to buy a jacket. Why did you say that? It’s a reflex response. Expect any prospect to reflexively respond with, “I already have an advisor.”
2. Never ask to meet unless you can find three needs
I have written before in this publication about why it’s so important to identify three needs before you offer solutions.
According to LIMRA research:
1 need = 35% closing rate.
2 Needs = 56% closing rate
3 Needs = 92% closing rate
After an elevator speech illustrating what you do, ask about their retirement plan. Listen for needs. Don’t pitch, suggest solutions or offer to solve any problems. Just listen and recap what they said. Then “trial close” by asking whether they would like to talk more about solutions later.
I played tennis recently with some of my buddies. We had a beer after. One said, “You are like a business psychologist, right?” I said, “Yep.” He said, “I have a sales guy who isn’t hitting his goals, annoys my staff, comes in late, leaves early, and generally irritates me. What do you think?” I recapped, “Your sales person isn’t hitting his goals, annoys you and everybody else right?” He said, “Absolutely.” I said, “If we could take a look at what to do with this guy, would that help?” He looked out at the tennis courts, back at me and said, “Naw, I’ve got it covered.” Beer please!”
At some point, the prospective client may say they have an advisor. Use these steps:
- Congratulate them on having an advisor. Many investors don’t have one.
- Ask what they like best about what the advisor is doing for them right now. Don’t ask if they like the advisor.
- Ask what they would like to see improved. If don’t like the relationship, it’s a lay down.
- Use the “let’s assume” technique
Say, "Let’s assume it’s 20 years in the future. Looking back to today, what happened that let you know you had a perfect retirement plan and a great advisor relationship?”
The next step to listen and don’t interrupt. I have discussed the “let’s assume” technique in earlier articles. After that ask, “Are you 100% on track to hitting those goals now?”
Likely, they don’t know. If they are on track and sure of it, move on. Keep them on a follow up, three-month call list, but the conversation is done. Most of the time, they won’t be sure. They may even share their disappointment. Offer an appointment to find out if they will hit the goals you uncovered during the “let’s assume” technique.
One of my colleagues asks, “Do you have enough faith in your current advisor to get a second opinion?” This is a great question after you have uncovered three needs. But not until.
Most clients would like to see something improved in their retirement plan and advisor relationship. Most aren’t contacted frequently enough by their advisor to maintain a solid relationship. If you want to separate a potential client from their incumbent advisor, first probe. Don’t give up after the first reflex response. Get the prospect to tell you what they aren’t getting before you try to sell what you can do for them.
If you call me at 714-368-3650 and chat for 10 minutes, I will send you a video on how you can get past the, “I already have an advisor” reflex response.
Dr. Kerry Johnson, MBA, Ph.D., is “America’s Business Psychologist”. He is the best-selling author of 11 books and a frequent speaker at financial conferences around the world. Peak Performance Coaching, his one on one coaching program, promises to increase your business by 80% in 8 weeks. To see if you are a candidate for this fast track system, click on www.KerryJohnson.com/coaching and take a free evaluation test. You will learn about your strengths and what is holding you back. Or call, 714-368-3650 for more information.