Mark Zinder, president of a training firm for advisors, says that those who are looking to grow their books need to start approaching things differently. He notes that there are about 200,000 financial advisors in the country, but that only about 1,000 or so are producing $1 million a year. And he has one question for the rest: “What are they doing that you’re not doing. After all, you’re all selling the same thing.”
Looking to history as a guide, he compares an advisor’s situation today to April 1775 when Paul Revere made his famous midnight ride to Lexington. “He was shouting ‘The British are coming! The British are coming!” Zinder says. “And about 90 percent of the men who heard him responded by coming out with their guns and joining the battle. But there was another man, William Dawes, who also rode out that day from Boston in a different direction shouting the same thing, and only 10% of the men who heard him turned out. Why was that?”
The answer, he suggests, came down to trust and communication. As a noted silversmith in Boston, Revere had trust in the community. As for an advisor, he says, “If a client calls you, they want to be called back within three hours.”
Zinder says many advisors approach new potential clients the wrong way. The classic first step is to have new prospective clients fill out a questionnaire, listing their assets, their liabilities, and their goals. “The only thing worse than filling out a form that I can think of is having to answer questions that are put to you orally from a form.” He says, “I understand that FINRA has said you need to ask all these questions, but pulling out a form to comply with FINRA is not the way to win a client.”
He says it’s okay to ask a client, “How are you?” at the start of a meeting, but adds, “you have to listen to the answer.” He explains, “Everyone says they’re fine when you ask them, but they’re not. Nobody’s fine. You need to find out what their problems are, and then offer solutions, saying, “I’m recommending this because of what you told me.”
Perhaps his most interesting tip relates to how advisors segment and then deal with their clients. Typically, he says, advisors have clients they hate, clients they tolerate, clients they like, and clients they love. Generally they will spend roughly equal time on each group, but he says that is a mistake.
As an example he cites a mistake he made early in his career when he was a broker with Dean Witter. “There was this woman who came in. She had me buy her a $10,000 muni bond. After that she would call me every week, but she never invested any more money. She was really annoying, but I put up with her calls and visits because I knew she had a mother who was in a nursing home who had $5 million in assets, which I also knew she would get when her mother died.”
When the mother passed away, Zinder says he called the woman to ask if she wanted to see him about investing the money. “She said, ‘Nah, I’m going to move it,” he recalls. “Basically, when you don’t like clients, or you just tolerate them, they’re feeling the same way about you. Yet if you look, you’re probably spending 70% of your time with those clients. What you should be doing is focusing your time on the clients you love. Because even if those clients—they ones you might go to a game with—don’t have a lot of money to invest, they are the ones who love you and who are likely to recommend you to a friend who does have assets.”