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The market has tanked. Your clients are terrified. Your business is down. If you are like most advisors, you are playing defense. Nobody is going to seminars. Nobody wants to meet with you face-to-face. It is easy to be paralyzed and do nothing.
In the great recession of 2008, 72% of advisors were avoiding calling clients for fear of losing AUM. Ironically, 82% of clients during that period were looking for a new advisor because of the same lack of contact. As history repeats itself, you will lose clients and fail to gain new ones unless you make dramatic changes right now. The solution is to contact your clients and prospects at a rate you have rarely done before. But you must use the right script.
According to the University of Connecticut, 89% of your clients care more about the relationship with you than the fees they pay. According to Forrester Research, clients want three things:
- Understand what they bought;
- Have faith that you are watching out for them all the time; and
- Frequency of contact.
If you apply this research, your business will not only survive, but thrive. If you do the following steps effectively, your business will grow 38% in the next 30 days.
1. Catch up
Let’s break this down. Call any clients you want to retain and catch up on the family. Ask about the kids, spouse, and loved ones. You might even catch up on anything that happened since you last spoke. The average advisor talks to their clients every 18 months. The average client starts thinking about a new advisor relationship in the 19th month. During normal periods, you should be calling your clients every three months. Now, it’s critical to call your clients every two to four weeks.
This is the fun part. Update your client on what the market has done and what it may do. The most important thing is to only discuss three talking points. Any more than three can confuse your client. Any less than three becomes not very urgent. Even though you may have volumes of economic data, limit your update to three.
Update them on the economy and any trends you see happening in the next few months. At one point during the coronavirus crisis, J.P. Morgan predicted a 24% decrease in GDP. The St. Louis Fed predicted a 34% unemployment rate. While this is not happy talk, your clients want you to be realistic and honest. But most importantly, they want to know that you are in control. Your clients can deal with any kind of crisis, as long as they know you are watching out for them.
3. Five-step bridge
This is the part where you both help your clients and make money. You are looking for new assets or a possible new direction the client may want to go. Transition to the five-step bridge. This is a way to listen to your client and convince your client into doing what you would like them to do. The words are:
1. Transition – introductory sentence
“How do you feel about all that’s happened so far?”
Listen to their concerns and remind them of your focus on their financial goals. It’s also likely that you do not have all their assets. This is a great opportunity to gain knowledge of other assets and better serve your clients. Use these words:
“I’m watching over all the assets you have with me. Are there any other assets that might be at risk and that you may be concerned about?”
2. Search for needs
At that point, just listen. Ask about their assets and goals. Also ask what their plan is if the market drops even more. The client will likely have no plans. Ask them if they are concerned. As I’ve mentioned in previous articles in this publication, research has shown that if you can gather one need there is a 36% chance of doing business; two needs equals a 52% chance; and thee needs equates to a 92% chance you will gain assets and/or a new client. The elephant in the room during a crisis is massive portfolio loss.
Every psychotherapist worth their salt knows to focus on the client’s goals. Make them feel understood instead of making them understand. Try to recap their goals by reciting them back the way they stated them to you. For example:
“If I heard you correctly, you mentioned $300,000 in a Fidelity account. But you have no plans to prevent any more losses. Did I get that right?”
Either the client will correct you, or agree. Either one is good. You just clarified their emotions and focused them on what to do. Here’s how to commit them to a solution.
4. Trial close
“Listen to them” into the next step. You can do this using these words:
“If I heard you correctly, you said that you have $300,000 in a Fidelity account. You also said that you have no plans to prevent any more losses. If we can take a look at minimizing any more losses in that account, would that be helpful?”
Using a trial close will prevent anyone from ever saying “no” to you again. All you have two do now is listen to needs, and then gain commitment to a solution. Don’t pitch anything. Don’t sell anything. You need to close without closing. Sell without selling. You need to listen clients and prospects into doing things that are right for them. Listen them into doing what you would like them to do.
5. Book an appointment
Normally, a face-to-face appointment in the office will suffice. But today, you should be flexible enough to do a virtual video appointment using a conference line.
One of the best times to ask for referrals is when clients are most appreciative. The sentences most effective today are:
1. Let them know how much you value the relationship.
“I really enjoy working with you.”
2. Give them a reason to help their friends.
“83% of your friends, family and colleagues are really suffering. In fact, many because of this crisis will be totally dependent on Social Security at some point during their lives.”
3. Be very direct and ask for a referral. If you ask whom the client thinks needs you, they will try to remember who last asked for a financial advisor. They won’t remember, and you will not get a name. Instead use this phrase:
“Who do you know who could benefit from some of the things we’ve done together?”
Prospects who remember your name
If you are like most advisors, you’ve seen many prospects who stalled or said “no” in the past. Now is the time to re-engage. Nobody else is calling them. They are terrified during a crisis and need your help. This is the time to make that call. You are the only one reaching out.
Use the same script as above. But remind them of their three goals when you last spoke. Ask what they have done so far to reach solutions to those goals. 95% will not have done anything. Ask if they are concerned. Then go through the five-step bridge and book an appointment.
There is no reason why a crisis should paralyze you. There’s also no reason why your clients should be left alone panic. They need to talk to you. They need you to counsel them. In a way, they need a financial psychotherapist. Be that for your client and prospects. If you do this effectively, your business will increase by 38% in the next 30 days.
Dr. Kerry Johnson is “America’s Business Psychologist”. He is the best-selling author of 13 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.
If you will email me at [email protected], or call me at 714. 368. 3650, we can talk for 10 minutes about your practice and your goals. I will then send you a video on the step-by-step process discussed here. 38% of these phone calls will yield either more assets or referrals. Your clients currently need your financial ability – but most importantly, your counseling help.
Read more articles by Kerry Johnson