There are plenty of reasons advisors don’t actively
pursue relationship reviews with clients.
When conditions are bad, advisors think, “Let sleeping dogs
lie.”
When the need for more business isn’t obvious, we think,
“My clients know what I do for them.” Or, “I already have all their money.”
How to Conduct a Relationship Review
Everyone needs new sales and new clients, and many clients
have gaps in their retirement plans and personal protection arrangements. It
can be easier to find opportunities by improving the service you provide for
your current clients than by prospecting to find fresh clients.
A relationship review should be conducted face-to-face. For
accounts for couples, the review should include both of the spouses or
partners.
Why? Because you want a relationship with both in case one
predeceases the other. You also want to avoid the client saying, “Good
idea. Let me ask my spouse about it and I’ll get back to you.”
The review should be at a location convenient to the
client, so they don’t put off scheduling the meeting. Your office is ideal,
because every piece of data, form or sheet of paper is easily accessible.
The meeting should have a purpose, specifically to review
your clients’ progress toward their goals.
Where Does the New Business Come From?
Our story so far: You’re meeting with your clients.
You’re reviewing their long-term goals, asking if anything
has changed.
You’re showing where your clients were at the beginning of
the year and where they are now.
You’re putting this in context of a plan describing what
they need to reach their goals. You have data at your fingertips in case they
want to drill down. So where does the business come from?
1. I have ideas, but I like everything you’ve
got. You present a great new idea that fills a hole in their
retirement savings and personal protection arrangements. You explain you like everything
they’ve already got with you. This will require fresh money. You stop talking.
2. Has your other advisor given you a review
recently? When was that? How are your other insurance,
annuity and investment arrangements doing over there? You know they have a
relationship with a competitor. You are laying the groundwork for consolidating
them with you.
3. Tell me about your retirement plan assets at
work. They likely have a 401(k). They may also have
deferred compensation, restricted stock or a company stock purchase plan. Some
of this might be transferrable over now (or someday).
4. Did you know this relationship review can
include assets and policies held away? It’s a compelling reason
for them to share lots of data with you. You can include these holdings in
their overall asset allocation, allowing you to indirectly advise on them. You
are now one step closer to making the case for transferring them in.
5. Did you know we can look “under the hood” of
your mutual funds and variable annuities, looking for the risk of concentrated
positions? Your clients might think they are diversified because
they own many mutual funds, along with a variable annuity. What if the managers
of all of the funds, and of the funds inside the variable annuity, have all
gone after the same hot stocks?
6. Is there money you advise on? (1) Your
client might sit on the finance committee at a local religious institution, alumni
association or museum. That organization might have a foundation or endowment.
In many cases, the client may help to interview prospective future money
managers. Can you get your firm’s offerings into consideration?
7. Is there money you advise on? (2) Your
client might help aging parents invest their savings to supplement the parents’
fixed income in retirement. The parents’ objective might be capital
preservation. Bank CDs might be the only vehicle the parents have ever
considered. You might be able to offer alternatives consistent with the
parents’ goal of capital preservation.
8. Do you have any friends who…Complain about
their advisor? Your clients might know someone who says the
advisor never calls. A friend might have an advisor who was reassigned. The
friend might not have connected with the new guy. The friend might be unhappy
with an advisor’s fee structure. You would be interested in talking with the
friend.
9. Do you have any friends who…Are unhappy with
the returns they’ve been getting in the market? Plenty
of people choose to invest on their own, outside of arrangements that give them
any protection against market volatility. When investment markets are volatile
or start to move sideways, some independent investors might realize that
investing isn’t as easy as it looks. They might not be willing to put in the
attention needed. You would be interested in talking with those friends, too.
10. Do you have any friends who…Will be
retiring in the next six months? It’s a big change.
You’ve helped other people transition from paid employment to living on their
retirement plan payments, and the return they get on their investment assets.
You may be able to help them too.
Relationship reviews are report cards. Clients like that.
Relationship reviews are also an opportunity to do more
business, gather additional assets and open new accounts through referrals.
You need to have a plan when conducting those reviews.
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here for the original article from Think Advisor.