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Most advisors I meet are extremely competent. They spend a lot of time keeping up with the latest developments in the world of investing, which we all know isn’t easy. A review of current commentaries on Advisor Perspectives is illustrative. Subjects under discussion include yields, equity premiums, Morningstar’s “category flux,” copper prices, the “consumption drag” and emerging markets.
And that’s just this week.
It’s important to continually refine your knowledge, and it’s impressive so many of you do so. Presumably, one reason for spending this amount of time is to be in a better position to persuade prospects to become clients.
There is an immense amount of data on subjects related to investing, and there is an equally impressive amount of scientific and peer-reviewed information about the process of persuasion. If you ignore that data, you are not maximizing your potential for increasing assets under management (AUM). And it’s AUM that is the sine qua non for every advisory firm. Fees from AUM drive the top and bottom line.
You most likely approach investing based on a defined set of sound academic principles. In contrast, many advisors approach meeting with prospects on an ad hoc basis. The meetings vary widely, based on personalities and biases. If this dichotomy describes the way you do business, you should consider making some changes.
There are many ways to approach a meeting with a prospect. However, there is only one evidence-based way. You can be successful – and many of you have been – using an approach that is inconsistent with the evidence. But you will maximize the possibility for success if you follow evidence instead of ignoring it.
Here’s a suggested course of action:
- Spend at least as much time, effort and money learning the science of persuasion as you do enhancing your investing knowledge.
- Adopt a standardized format for use by every advisor in your firm, for every meeting with prospects.
Some elements of the process you will need to consider are:
- The critical importance of being on time
- The optimal time of day to have a prospect meeting
- The clothes you and your colleagues wear to the meeting
- How many people will attend the meeting
- Where you will sit at the meeting
- What you will bring to the meeting
- What your body language and that of your colleagues might convey to your prospect
- How to alter your body language to make the right impression
- What beverages or food you will serve at the meeting, including who offers and serves food and drinks and how prospects are served
- Whether you take notes at the meeting
- The goal of the meeting
- What to say at the start of the meeting
- How to visualize (and interpret) the brain of your prospect when you are speaking
- How to visualize (and interpret) the brain of your prospect when he or she is speaking
- How what you say and how you speak can advance or subtract from the likelihood of meeting your goal
- The power of likability
- Presenting data
- Why a seemingly perfect presentation may be counterproductive
- The power of humor and when to use it
- The effect of simple versus fancy words and terminology
- The power of shared experiences
- The power of “mirroring”
- The effect of asking for a favor or doing a favor
- The appropriate use of words that rhyme
- Effective ways to convert a reluctant prospect
- The power of commitments, reciprocity, concessions and peers
- The timing of your presentation
- The substance of your presentation
- Issues relating to different genders
- How to respond to commonly asked questions
- The power of believing
Each of these subjects – and this is a partial list – has a vast amount of data supporting the “right” approach. Two excellent books that discuss many of the relevant studies are Influence: Science and Practice (5th Edition) by Robert B. Cialdini and 59 Seconds: Change Your Life in Under a Minuteby Richard Wiseman.
Just like you wouldn’t ignore important developments in investing, you need to learn about effective ways to convert more prospects into clients.
Dan Solin is the director of investor advocacy for the BAM Alliance and a wealth advisor with Buckingham. He is a New York Times best-selling author of the Smartest series of books. His latest book is The Smartest Sales Book You'll Ever Read. He consults with corporations and advisory firms on ways to improve their sales.
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