The Advisor Tipping Point
New York City: “I don’t know whether I’m feeling ‘Madoffed’ or this economic meltdown has taken a serious toll on my confidence,” said Charlie, “Whatever the reason I’m not performing at the level I should.”
Charlie is not alone. A quick glance at our research illustrates a trend line from 2007 to 2009 regarding affluent client acquisition that is not good. Findings tell the story (the percentages indicate the financial advisors who brought in 10 or more clients over the past 12 months):
| 10 or more: | 2007 | 2008 | 2009 |
| $250,000 | 26% | 12% | 3.2% |
| $500,000 | 12% | 7.9% | 1.3% |
| $1MM or greater | 7% | 3.9% | 1.3% |
From a statistical vantage point this signals advisor paralysis. You can consider this a leading indicator, for if advisors don’t stop playing victim and start going on the offense, there will be fewer advisors in the future.
Our “Winning in Tough Times” mantra; Your actions over the next 12 to 24 months will define your business for the next ten years cuts both ways. Invert that statement in the spirit of Charlie Munger and you will probably be taking a glimpse into the future.
The irony is that this environment, as challenging as it may be, is the perfect storm for Rainmaking. We have seen advisors bringing in assets at a pace and level they have never experienced. Affluent investors are beyond dissatisfied, many are disgusted. And not only with Wall Street, politicians, and regulators, if their advisor has been playing the role of victim, they’re also disgusted with their financial advisor.
Voila – the Rainmaking opportunity of a lifetime! You have no competition (98.7% of your colleagues are not Rainmakers), you have dissatisfaction at record levels (you must have dissatisfaction in order to sell intangibles), which have created opportunities nearly everywhere you turn on the affluent playing field (people are incessantly talking about our financial crisis). You couldn’t make up this scenario if you tried.
In this environment, spending all day talking to existing clients is not good for an advisor’s sanity, much less the future of his business. Whether you realize it or not, most of these conversations revolve around events that are outside of your control and you find yourself playing defense. Even with clients who understand that Wall Street’s meltdown is not your fault, a twinge of guilt will seep into your psyche. Too much of this will zap the energy and enthusiasm from even the best advisors. It’s become all too obvious that this is occurring more than anyone would like to admit.
Regaining your MOJO is a two-step process. First, it requires that you flip the switch in your mind and make a commitment to focus your energy only on things that you can control. This alone will allow you to be proactive rather than reactive. Whether it’s taking time to exercise, enjoying activities with your family or at work, being proactive is always a tonic to one’s attitude.
Second, as a financial advisor, it is important that you make the necessary adjustments to your daily routine. Again, the idea is to regain control by being proactive. I recognize this is easier said than done, but by simply blocking time for making outbound calls to clients (servicing — playing defense) you will limit the number of inbound calls that force you to react. Then by allotting another block of time for getting out of the office and executing one or two high-impact Rainmaking activities (playing offense), you will find yourself very naturally reaffirming your value.
As a Rainmaker told me recently, “My value was reaffirmed. I couldn’t believe it, my two new clients weren’t even getting their calls returned from their advisors. Their comment to me was ‘I don’t care if you beat this guy’s performance; I just want you to communicate with me and guide my family through this mess.’ It feels so good talking with clients of other advisors – when I’m Rainmaking I’m reminded of how well we serve our clients compared to the competition.”
Not only did this advisor land two new affluent clients, $1.5MM and $2.3MM respectively, he understands the psychological importance of prospecting in today’s environment. He’s using his offense to keep his mojo on track.
I am not advocating that you neglect your clients. Hardly! But you cannot do your clients much good playing the role of a victim. What I am strongly recommending is that every day you need to get out of your office, engage in conversations with non-clients, apply your affluent sales skills, and aggressively go after new affluent relationships.
After all, the prospecting stars are aligned and there is NO competition.