How advisers should prospect clients

This post was written by Allyson Lewis of The 7 Minute Life for MorningstarAdvisor.com.

Three decades ago, prospecting was fun. I enjoyed cold calling. In the morning, my boss would hand me a list of computer-generated prospects. Each lead was printed on a perforated postcard, and those postcards looked like money to me. I would sit down at my desk and start dialing: 10 calls, 20 calls, 50 calls. And it worked.

Prospecting was easy because I was selling a product, not a service. Let me say that again: It was fun to cold call when I was selling a 7% AAA-rated 30-year municipal bond. The prequalified prospect from the postcard could care less who I was, or the firm I worked for, or my education, or anything else. In 1982, selling municipal bonds to people I didn't know had nothing to do with me. I was a vendor, and if I called the right person, on the right day, with the right bond, they would buy it. I was selling a product.

Prospecting is different now … You are the product

Today, it is impossible to make a living selling products. Investment products are a commodity.

When you call a prospect, you're not selling the yield and maturity date of a bond; you are selling yourself. You have become the product. The perceived value of a new relationship is based on your sales skills, market knowledge, likability, designations, and trust.

And the experience of rejection is infinitely more painful. When a prospect says “no,” you feel a kick in your gut. With every rejection, your subconscious mind is saying, “What is wrong with me? Why didn't they like me?”

In sales, your success depends on turning prospects into clients. The number of people on your prospecting list and the quality of your pipeline is serious business. But having a big list of prospects is worthless when you feel trapped and choose not to ask prospects to do business with you.

Here are some common reasons financial advisers don't pick up the phone:

• not enough time
• too much administrative work
• don't know who to call
• don't know what to say
• don't know how to follow-up

Understanding the emotional risks, it occurred to me that these bullet points weren't objections, they were excuses. Prospecting is painful, and the fear of rejection is more legitimate than ever. But rather than acknowledge the problems, financial advisors will come up with all kinds of reasons not to put themselves at the emotional risk of selling.

If financial advisers won't prospect, how are they going to succeed?

I hated prospecting

During the last 15 years of my career, I hated prospecting. I found myself running into people at the grocery store and subconsciously asking myself, “I wonder if they would be a good prospect.” It was almost creepy. 

I was constantly racking my brain for high-net-worth prospects. I wanted to know people who had money. I wanted to hang out with rich people. And I regularly attended expensive charity events hoping to meet someone with millions of dollars.

Over the last years of my career, prospecting became increasingly painful. I would pick up the phone and say something like, "Hi! I am Allyson Lewis, a wealth adviser calling from XYZ company. I help people blah – blah – blah – blah – blah – blah - blah. I would like to meet with you to find out if we can work together."

Even worse, manufacturing an awkward way to ask a client for a referral felt like an invasion. I hated saying, "Mr. Jones, I am actively growing my practice. We have worked well together for the last five years. Can you give me the names of two or three of your friends?"

And the reality is, rich people already have smart financial advisers. And I can't imagine that my irritating prospecting script would convince a wealthy person to terminate a long-term relationship with their current adviser.

So how do you get those clients?

Our team had amazing clients, both large and small. When I look at the clients with $500,000 to $5,000,000 in assets, almost all of them became clients because of an unexpected and life-changing event.

• Death
• Divorce
• Sale of a business
• Insurance settlement
• Retirement

These clients were not people I had prospected, nor were they referrals from clients I had awkwardly asked for the names of two or three of their friends.

Let me explain by sharing a hypothetical example. Let's say there is a man who spent 30 years working for a Fortune 500 company as the director of marketing. During his lifetime the family built a net worth of more than $3,000,000. This man was very happy with his financial adviser. Unexpectedly, the man dies.

The wife never met the financial adviser, and now she is devastated and overwhelmed. At the age of 68, she is faced with the death of her husband and has no idea of what to do next. There is a brokerage account, bank accounts, annuities, stock options, a pension plan, and the life insurance proceeds. After a few months, her daughter calls me and says, "My father has died, and I think we need your help. Can we meet?"

I was an acquaintance of the daughter through a civic club. For the last 10 years, we worked on committees together and became friends. She knew me and she knew I was a financial adviser with a major firm. When her father died, she called me and asked for help. I met with the daughter and her mother, and step-by-step we worked together to untangle their financial concerns. We opened accounts, transferred millions of dollars, and developed a relationship that has lasted more than 10 years.

This specific story is hypothetical, but more than half of the high-net-worth clients in our practice called us because of a precipitating event. A friend's boss might pass away, your second grade teacher receives a large insurance settlement from a horrific accident, an acquaintance is getting a divorce, or someone who heard you deliver a seminar two years ago suddenly sells 1,000 acres of family farmland.

Take a moment and think about how you acquired the largest accounts in your practice. Did they come from cold calling, networking, or teaching a seminar?

Or did a new client call you because an unexpected event happened?

There is a better way to tell people what you do

Studies show you should ask for referrals, but I hated it. I think there is a better way to ask for business. Instead of asking for a referral, what if you said, "Great to see you today. There is a lot going on in the world, and life is unpredictable. Over the next few years unexpected events will happen in the lives of your family and friends. Someone you know may unexpectedly die, or you may have a friend sell their business or retire. Unexpected events happen every day. I want to make sure you know I can be a resource for you. If you ever need me, just give me a call and I will help."

That is a conversation, not a request for the names of two of their friends. Rather than sell something, just tell people what you do and tell them how you can help them. I don't believe it is ever offensive to tell people what you do and make it clear if a situation arises that you would love to help them.

Here's why this surprising prospecting strategy is working for me

• My prospects are not necessarily event planners or people looking for an executive coach. My prospects are people who attend conferences that hire speakers. And, my prospects are business people who are friends with someone looking to hire an executive coach.

• I am telling people what I do and how I can help them – I am a speaker and coach.

• I am not whacking them over the head with a snazzy sales pitch.

• I focus my information on a single pain point, with a call to action: “If you feel stuck, and are ready to take action… call me.”

• I am not assuming they need a speaker or coach today.

• I have planted a seed in their mind to remember me for the future.

• I give them my contact information and ask them to call me.