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Prospects do not need a financial advisor to invest in the stock market. It is easy to do online. They can also represent themselves in court and file their own taxes. Bringing in a professional costs money. If they are prepared to incur the cost, what are they looking for in the person they choose?
11. Positive recommendations. Everyone will probably agree Millennials do plenty of online research before choosing a restaurant or buying a product. They want to be comfortable other people have had a good experience. Investing and insurance are more complicated topics. Confidentiality is involved. Making a mistake can get expensive. In addition to online research, they will likely ask around for feedback based on personal experiences of other people they know who work with the same advisor.
Strategy: Let clients know the bond of confidentiality prevents you from telling others you work together. They do not share this requirement. You encourage them to tell everyone about their experience. They should also be able to find you easily on the Internet.
2. Honesty. No one wants to be cheated. Following that logic, everyone wants to work with an honest broker. There is a universal value to working with someone who follows the rules. If they did something illegal and the spotlight were shown onto them, you might wonder “What have they been doing in my account?”
Strategy: FINRA has the BrokerCheck tool. You should have a clean record. If you have treated your clients fairly, no red flags should come up when they ask about you.
4. Integrity. Good financial advisory relationships are based on trust. You want an advisor who puts the interest of their client first. You do not want “let the buyer beware” to enter people’s minds. They want to be comfortable hearing you give a recommendation and saying “Do it.”
Strategy: Talk about the number of long term relationships in your practice. How many are multi generational?
4. Transparency. Prospects know advice is not free and advisors get paid. They want to know how much they are paying and how their advisor gets paid. They do not want to do their own research concerning direct and indirect fees.
Strategy: When working with clients and prospects, it makes sense to have a conversation concerning “This is how we get paid.” This is important now, but in the future when new products are introduced.
5. Confidentiality. You have given them in depth details about your financial history. You want to be sure this stays between you and them. You do not want them telling your friends about your finances, nor do you want your advisor volunteering you as a prospective donor to a local charity.
Strategy: How can you prove you don’t talk about your clients? It is almost impossible to prove a negative. You can rely on your past history in your social circle. “We’ve known each other five years. We know many of the same people. Some might be clients. (They will likely know.) In five years, have you ever heard me talk about having a client relationship with someone? The answer is no. I am not going to start now.
6. Communication. They want to be treated as an important client. Everyone wants to have that feeling. They want to feel they are a market of one and you understand their situation, which they consider unique. They want to hear from you on a regular basis.
Strategy: Agree on the frequency of calls and their preferred communication channel. Stick with your schedule, but reach out at other times when you feel they might appreciate attention.
7. Knowledge and experience. They might consider themselves unique and therefore are a niche market. They want to feel you have helped people similar to them. They want their questions answered from a base of personal and professional experience, not a situation where you need to get the answer because you do not know.
Strategy: While maintaining confidentiality, explain how you have helped people with similar situations or problems. Mention additional certifications you have earned. This establishes expertise in a certain field.
8. Performance. Doctors are meant to keep people in good health. Lawyers hired to keep people out of trouble with the law. Financial advisors are expected to help make and preserve money. The prospect wants an advisor who has made money for someone they know.
Strategy: This will likely come from people they know. You might utilize client testimonials that have met industry guidelines. You might have strategies or work with money managers with established track records.
9. Succession planning. This is very important for senior advisors. If the prospect is anticipating a long term relationship, they don’t want to choose an advisor, develop a relationship and then learn they are retiring.
Strategy: Explain you love your job and do not have immediate plans to retire. If you are planning to step away soon, explain how your team or the office continues the relationship.
10. Sharing similar values. Although this is not critical, many people like to work with people who share the same priorities, convictions and values. These might be political, religious or social values. A person opposed to fossil fuels might prefer to work with an advisor who supports environmental causes.
Strategy: In this case, giving back to the community is a great credential to promote. Although you would not highlight divisive causes, your support for various charities, nonprofits, cultural organization, your alma mater and business organizations like the chamber should gain positive publicity.
There are many traits prospects look for when considering which advisor to choose for a business relationship. Ideally you tick all the boxes.