My Secret to AUM Growth
By Dan Solin
March 11, 2014
At this year's Sohn Investment Conference, Dan Sundheim, the founder and CIO of D1 Capital Partners, spoke with John Collison, the co-founder of Stripe. Q1 2021 hedge fund letters, conferences and more D1 manages $20 billion. Of this, $10 billion is invested in fast-growing private businesses such as Stripe. Stripe is currently valued at around Read More
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I thought a comprehensive understanding of investing would be enough to grow my advisory practice. I’ve written a number of books on investing, so I considered myself an expert in the profession. But after reflecting on my less than stellar success closing sales leads, I found a deeper – and more scientific – approach to converting prospects into clients that yielded far better results.
Most of my leads came from people who had read my books and blogs. I assumed they came “pre-sold.” A typical scenario would go like this: I would get a call from someone saying how much he loved my book. He would ask if I would consider managing his money. When I said I would be happy to explore a relationship, he was thrilled.
Frequently a meeting would start with a request for my autograph. After such an auspicious beginning, what could go wrong?
Plenty, I soon discovered.
My former approach
I would talk about our advisory firm, including how it was founded and its investing philosophy. I buttressed my points with data, much of which is referenced in my books. I presented much like an attorney (I was a former trial lawyer) would to a jury: Here are all the reasons why you should invest with me and why we are a good fit for you.
Sometimes I would get the business, but more often I didn’t. In five years, I generated about $50 million in assets under management. Not terrible, but disappointing for someone who received so many promising leads.
Was I inept? How did other advisors approach prospects? To answer these questions, I accompanied other advisors on their presentations. I was struck by how similar their approach was to mine. Some even adopted a more formal lecturing style, standing at a podium and using PowerPoint or a whiteboard to emphasize their points to the one or two prospects in attendance.
I found out their closing rate was no better than mine. When I asked how they formulated their presentation strategies, they said they had never really considered doing anything different. The most common response was, “What other options are there?”
As an author, I rely heavily on research from peer-reviewed articles appearing in prestigious journals.. I wondered whether the same kind of research might help me convert more prospects into clients. Was there a more scientific way to sell?
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