I have a regular column in Horsesmouth, the leading online practice management resource for US financial advisors. 

Recently, I read an article that impressed me. Written by Katherine Vessenes, a lawyer and well known consultant to successful advisors, she has given permission to reproduce her article. To see more about her work or to sign up for her newsletter, go to www.vestmentadvisors.com. 

By Katherine Vessenes: 

As a student of great financial advisors and their sales processes, I have been fortunate to actually sit in on client meetings with some of the top financial advisors in the country. Who wouldn’t want to be a fly on the wall when an $8 million dollar advisor closes the sale? It has been my privilege, as a practice management coach, to not only watch the great financial advisors in action, but to even offer a few suggestions on how they might close more business. 

Here is what I have learned, just this last summer, as we coached two of the top advisors in the country on managing their practice and improving their sales practice: 

A shortened, quick sales process that was very effective 10 years ago, is much less effective today.  

In 2000, it was not unusual for our firm, Vestment Advisors, to consult with $3 million

financial advisors who worked with the middle market. Our goal was to use our practice

management process to increase these advisors' sales and build the value of their

business. Every one of them got their sales process down to two meetings of an hour

and a half each; three meetings were needed only in the rare case for higher-end or

more complicated clients.

That kind of compressed, quick sales process was very effective 10 years ago, but it is

much less effective in today's wary economic climate. Ten years ago, it was common

practice. Not so today.

Today, many clients are not prepared to make a decision at the second meeting.

Most clients haven't yet built up a trust factor with their financial advisor by the second

meeting. They are still skeptical. The reason: clients are fearful about changing money

managers, investment styles, and advisors, even though they are in a lot of emotional

pain.

Furthermore, clients don't like sitting for long meetings. They are busy, much busier

than 10 years ago. They don't have the time, energy, or attention span to meet for two

hours. Today, the shorter the meetings, the better for most clients.

Two of the advisors we coached this summer had both lengthened their sales process

to four shorter meetings. It was working so well for them that their closing ratios were far

higher than we currently are seeing with other firms. In fact, they were probably closing

80% to 95%. These ratios are quite high, given the current market.

Here's what's covered in each of the four meetings:

First meeting: Orientation or "getting-to-know-you"

Time: 45 minutes to an hour

The whole purpose in this meeting is to get a better feel for prospects, how they tick,

and what they are looking for in a relationship. As New Jersey advisor Paul Hartline (not

his real name) said to me, "When you have been in the business for 30 years, you can

tell in that initial meeting if you want them for a client or not."

Most advisors who use a "get-to-know-you" meeting ask the client not to bring in any

personal financial data. They feel it helps build trust and makes the client feel more

comfortable.

Hartline does this meeting in his office because he also wants new clients to get a feel

for him. Hartline is in a class-A space, and his office and staff show very well. The whole

setup makes a great first impression on prospects.

On the other hand, George Jackson (also not his real name), from Seattle, does a first

meeting that is all about the new client. Jackson usually conducts this meeting at a

prospect's office or even at his or her home. This lets them feel comfortable, lets him

get to know them better, and he says the client then feels obligated to come to George's

office for the next meeting as a social courtesy.

Second meeting: Data gathering

Time: 1 to 1½ hours

During this meeting, the advisor gathers the data necessary to complete a financial

plan. Advisors are reviewing all the investments, insurance, and other data that will be

needed to make recommendations.

Paul does this meeting in the client's home. He says he likes to see how the clients live.

It lets him know if they are big spenders or savers, and he gets a better feel for them as

people. It also makes it easier to gather the information Paul needs for the planning.

George does just the opposite. Since he has already met with the prospects in their

home or office, they come to George's office for the data gathering.

Third meeting: Plan presentation and gap analysis

Time: Up to 2 hours

We have seen advisors call this meeting many things. Most of them are presenting what

we call the "plan," but it's really a situational analysis of the new client's numbers, where

that person stands, and the likelihood he or she will run out of money in retirement.

Advisors also look at the gaps between the clients' goals and where they are likely to

end up.

Universally, these meetings are held in the advisor's office.

Typically, the client leaves the third meeting with answers to these questions:

• Will I run out of money in retirement?
• How much do I need to save to reach my goals?
• What can I do to save taxes now and in the future?

Some advisors may present a few products here. Many will talk about the products only

generically. They might discuss REITs in general, and why it would be a good choice,

but stop short of naming a specific one.

Fourth meeting: Implementation

Time: 1½ to 2 hours.

At this meeting, the advisor is talking about specific products, money managers, signing

paperwork, and moving the investments over to the new firm.

For particularly fearful clients, or for those with complicated situations, this meeting

could stretch into two meetings.

Key takeaways

Practice management lessons and adaptive strategies learned from flexible—and

therefore successful—advisors and planners:

• What worked really well 10 years ago may not work so well now. We all have to change with the times and be sensitive to where clients are emotionally these days.
• The overall amount of time you spend with clients is likely to be more than it was 10 years ago. Even though each meeting is shorter, chances are you will be holding more meetings, and therefore spending more time, with potential clients before they are ready to commit.
• Just as I like to remind advisors that all marketing is trial and error, the same is true with your sales process. Test out different strategies and orders to see what works for you and what doesn't.
• Nothing, no matter how great the system, works 100% of the time.
• Prospects and clients simply are more fearful now, so it will take longer to build up substantial trust with new people.

Katherine Vessenes, JD, CFP, a nationally known author and speaker, has the best job in the world.

She turns average producers into stars by focusing on sales, marketing, compliance, and practice

management issues for broker-dealers and advisors. You can contact Katherine at (952) 401-1045 or at

katherine@vestmentadvisors.com. Or visit her website: www.vestmentadvisors.com.