The Top Five Advisory Misperceptions That Harm Advisors by Dan Solin

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I enjoy coaching advisors. I respect your work. You positively impact the lives of your clients, their families and heirs.

But you can’t have this impact unless you’re successful in converting prospects into clients. While reliable information on conversion rates is hard to come by, based on my experience, it appears 10-40% is the range for many advisors.

Advisory Misperceptions
Photo by Dave Dugdale
Advisory Misperceptions

If you want to increase your conversion rate, you need to change your perception of the process you use with prospective clients. Here’s my list of the top five most common misperceptions I’ve observed, in reverse order of importance:

  • You underestimate the importance of self-awareness

It’s difficult to have a positive interaction with prospects unless you understand some basics about yourself. The single, most critical factor that informs how we behave is whether we are an introvert, extrovert or ambivert. If you haven’t read Susan Cain’s wonderful book Quiet, The Power of Introverts in a World That Can’t Stop Talking, I highly recommend you do so.

It’s very difficult to get honest feedback to this question: How do I come across?

Yet, it’s the starting point to understanding how prospects perceive you and how you can alter that perception, if necessary.

  • You underestimate the importance of first impressions

I’ve previously written about the importance of first impressions. You can find those articles here and here.

It’s unlikely you’ll succeed in converting a prospect into a client unless you make a positive first impression. Fortunately, there’s a lot you can do to shift the odds. Unfortunately, you may not be aware of this research, let alone be acting on it.

Underestimating the importance of first impressions is like running a sprint with a huge weight on your back. You might still come in ahead of the pack, but it won’t be easy.

  • You overestimate the significance of rational thought

Do you believe decisions are made based on a rational thought process? If so, you assume all you have to do in a prospect meeting is marshal the facts supporting your service, like the history of your firm, your qualifications and your investment philosophy.

The data doesn’t support this assumption. We make decisions emotionally, and then persuade ourselves we did so based on an objective review of the facts. Unless you understand the emotional side of decision-making, your conversion rate is unlikely to improve.

  • You take on an unnecessary burden

How do you feel before a meeting with a prospect who has meaningful assets? I suspect you’re both nervous and excited. You measure a “win” as your ability to convert that prospect into a client. If this is your attitude, you’re focusing on the wrong issue and going about the process in the wrong way.

My coaching clients are surprised when I tell them their job at these meetings is very simple. It should be stress-free. All they have to do is collaborate with the prospect and figure out if the two of them should work together. They don’t have to “present” anything. Their job is not to “persuade.” It’s to “discover.”

If you engage in the process correctly, it will convert a “win-lose” situation into a “win-win.”

  • You’re in denial

I’m working on a new book that will discuss changes in the investing world and new options available to investors. I have no special insight, but I am confident about this unremarkable prediction: The advisory business will look markedly different in the next 3-5 years.

I see a bright future for those who adapt and a bleak future for those who don’t. The recently announced joint venture between Betterment and Uber is an example of a strategic alliance almost unimaginable a few years ago. This trend of easier accessibility at a low cost is likely to continue unabated. It will impact every aspect of the advisory business, including individual clients, 401(k) plans, TAMPs, custodians and even mutual funds.

If you don’t have a plan to deal with this change, you’re in denial.

Read the full article here.