Ditch the pitch

During my first year in the business a wholesaler at an insurance firm told me the key to success would be to get 20 meetings a week. Although 90% would say no, 10% would become clients. That’s the way it was at the time.

A few years later, I took in a presentation on ‘How Women Think and Make Decisions’. I learned it was a myth that women are more risk-averse investors than men. Most women will take on as much risk as most men as long as they understand the benefits and the risks of the investment – “understand” being the key word. That’s when I shifted my approach from selling a recommendation to helping clients understand a recommendation.

Since moving away from the sales pitch, I no longer have any objections to investment recommendations and almost all clients purchase the insurance coverage they need.

Here are a few ideas to help clients understand your recommendations.

1). Insurance 101

My first attempt at better educating clients was to create an Insurance 101 handout that explained on one piece of paper life, disability, critical illness and long-term care insurance. A chart explained how each coverage protected you and how your needs would change during your lifetime. The result was that I issued 500% more insurance policies in the following 12 months and now my clients are better protected.

Most insurance companies have a great selection of these educational pieces so go through them and order copies of the ones you feel most comfortable with.

2). Client friendly financial plans

The next step was to create a more client friendly financial plan. Financial planning software has come a long way, but the output – sometimes 100+ pages – is still overwhelming for clients. This forced myself and my colleague to create a custom financial plan executive summary into which charts from financial planning software could be pasted. The result was a financial plan that was just as detailed (behind the scenes) but much more concise and easier to understand for clients.

A sample of our financial plan is available online.

3. Keep a sample financial plan on your desk

Very few Canadians have a financial plan so we’ve found it very beneficial to keep a printed, complete, sample financial plan on each advisor’s desk. Having the sample financial plan turns something intangible (financial advice) into something tangible (the printed plan), so new clients can literally see what they will receive as a client.

When new clients have seen the type of plan we will create from them, paying a fee for a plan is no longer an issue.

4. Hold meaningful reviews

Our industry does a great job training on the front end, but client reviews are often not given the attention they deserve. We created our Client Dashboard™ to show clients:

• 1. Where we projected they would be.
• 2. Where they actually are.
• 3. The reason for being ahead or behind schedule.
• 4. What action we can take to get back on track, if need be.

The Dashboard essentially reviews the entire financial plan on one piece of paper so it reminds clients about why we decided to implement each recommendation.

5. Use effective client statements

Having the ability to provide a statement to your clients that includes the information they need to understand their investments is key. At the end of the day, all clients want to know:

• 1. How much was my initial investment?
• 2. How much have I contributed or withdrawn?
• 3. What is it worth today?

If your dealership does not have the systems to provide this information, ask for it.

How things have changed

To the disappointment of the wholesaler I met many years ago I’ve never met 20 new prospects in a single week, however over 98% of people who walk through our doors become long term clients. They stick with us not because of a great sales pitch but because they understand the plan we have created together.

Mathieu Paradis, B.Comm., CFP, CLU, FMA is co-founder of AdvisorPractice.com which offers advisors practical solutions to transition to a financial planning practice and offers a 12-week training program. He is a financial advisor and offers his clients comprehensive life goals financial plans.