When Asked For Free Advice, Smart Planners Opt To Build Rapport

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Like doctors, advisors often get asked for free advice. Respond the right way and you can woo a new client.




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When you run into friends and acquaintances, they may pepper you with questions about their 401(k) or hot stocks. They perceive you as an expert and fish for information on the fly.

Giving a friendly, knowledgeable answer increases the odds that they’ll decide to retain your services. But if you’re curt — or unwilling to engage in any way — you can miss a chance to turn a casual conversation into a prospecting opportunity.

Experienced advisors capitalize on these encounters by highlighting a few salient points. They may introduce some helpful ideas or make a practical suggestion and then encourage a follow-up meeting.

“In times of market volatility, we can be the center of attention at a party,” said Tom Sedoric, an advisor in Portsmouth, N.H. “I may mention a few themes like tax efficiency and living in a global economy. But because we’re planners first and investments complement the planning process, we can’t extract as much from them in a social setting.”

Nevertheless, Sedoric welcomes these inquiries and seeks to provide general guidance. After 34 years in the business, he knows not to dig for details and get too specific.

Identify A Need

When you encounter people in public who want to pick your brain or get advice, it helps to uncover their underlying need. Some investors simply want reassurance that their current strategy meets your approval. Others may be grappling with an unresolved financial issue that’s nagging at them.

Sedoric says that some people “want us to hold their hand,” while others may face “a trigger event” that prompts their question. Identifying the circumstances surrounding their situation — from a recent inheritance to a pending business or real estate sale — can lay the groundwork for a more productive discussion at a later date.

For those hunting for investment ideas, many advisors prefer to redirect the chat and establish rapport. For example, they may ask about the individual’s dealings with other advisors or their track record as stock pickers.

“I try to put the question back on them and find out their goals,” said Ed Iannaccone, a certified financial planner in Paramus, N.J. If they open up, he might suggest they schedule a brief phone call so that he can learn more.

Iannaccone distinguishes between those who genuinely want help navigating their financial situation — and who honestly share their hopes and concerns — from seekers of stock tips who lack any interest in furthering the relationship.

“There are two categories,” he said. “They really want help or they just want to extract free information. If they have a pressing concern or an event that’s imminent in their life like they’re retiring in six months, that tends to lead to an appointment.”

Propose Next Steps

For some advisors, the real value of these chance encounters is turning them into prospecting opportunities. By probing and dangling a few enticing bits of information, advisors can parlay quick conversations into lasting client relationships.

Matt Oechsli, an author and speaker who helps advisors refine their marketing strategy, suggests redirecting an individual’s casual inquiry so that you gain more insight. If you’re asked about retirement savings, for example, respond with a genial question of your own such as, “Has your advisor reviewed your financial plan recently?”

“You’re potentially creating dissatisfaction,” said Oechsli, founder and chief executive of the Oechsli Institute in Greensboro, N.C. “By planting a seed of dissatisfaction and getting them talking, you can get to what we call a mini-close” by proposing an upcoming meeting.

Rather than give out your business card and invite the person to call your office for an appointment, Oechsli recommends that you schedule it right there. Say, “Let’s grab a cup of coffee” and firm up the day and time of the meeting before you part.

“That’s better than hoping they’ll follow up,” he said. “Follow-up is sometimes shaky.”

Avoid Arguments

Prospecting gets easier when you can succinctly describe your approach, philosophy or advisory process. Providing a clear overview of what you do, how you do it and why it matters can set expectations and persuade others to advance to the next step.

Above all, avoid debating investment tactics or criticizing other advisors. Getting into arguments rarely results in a fruitful new client relationship.

Look for an opening to say, “I think I can help you,” Iannaccone says. That sets the stage for further discussion, and it works better than lecturing others on what they don’t understand or mistakes they’ve made.

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