Before the Financial Road Map® meeting, I find myself talking about all the ways I'm different from the average advisor. I discuss the 5 Critical Reports, visualizing your Ideal Life, not being on commission, etc. I do this with people who have and have not worked with an "advisor" in the past. Sometimes it must sound like I'm too busy defending myself rather than being confident in the process. Should I even discuss how I'm different or should I just take them through the process and trust that they will come up with these discoveries on their own?
You are correct. Take them through the Financial Road Map® experience. The level of detail you get into about what you do, how you do it, and how much you charge will be in response to their questions after Commitment to Hire™.
I recently completed a Financial Road Map® for a referred couple. At the end of the Commitment To Hire Conversation™ they enthusiastically said ‘yes’ to hiring me and we completed the paperwork to get things started. I am not sure if my answer to the couple’s next question was the best response:
The client said, "You know I'm the President of Bradford Christian Academy, and as such I need to make financial decisions every day. One of the things we review on every purchase or project and this includes consultants who we bring in from time-to-time. One thing we look at is our Return on Investment. Since the services you provide are not necessarily financial, other than portfolio performance, how would we determine the dollar value of our business together to use to determine the Return on Investment on the relationship?"
My response was, "Well Vicki, you and Bob do not have any plan in place now for retirement, college financial planning, and other major purchases, which is what has brought you to this point in our meeting. You are also concerned with your portfolio and how it is invested because neither of you are professional investment people and you're looking for help in that area. You have big dreams and values and right now are not sure how you will achieve them with your current process. So I guess I would ask you, what is the value, monetary value, you would place on a comprehensive plan that would give you the peace of mind to rest knowing you have a plan to give you the highest probability to achieve these items on your road map regardless of what happens in the world?"
I felt guilty because I turned the question back to them and they said they would have to think about that answer and hadn't thought about it that way. Do you have a better answer that you would have used? I feel that I did not really answer their question, but I am not sure I could have come up with better answer than that.
That's a great question! I think it will be very easy for you to quantify your Return on Investment in terms of quality of life. The benefits of having a Values-Based Financial Planner™ are freedom and confidence. The physical freedom from having to do the work to learn everything you would need to learn and do everything you would have to do to be your own financial advisor; mental freedom from worry, stress, and anxiety about your money; and the confidence that your financial choices are in alignment with your most important goals and your most deeply-held values. You will have the confidence that comes from getting your entire financial house in perfect order and keeping it that way forever and the confidence that comes from knowing that you will achieve your goals regardless of what happens in the financial markets, the economy, or world events. You have this confidence because you have a Trusted Advisor, that's me, supported by a Deliverables Team of Subject Matter Experts in all...
What would you say at the Commitment To Hire Conversation™ stage when a client says they have an advisor that does all that I am offering, or the client perceives that their advisors does all this for them already? How would you approach this or what type of script would be good in this circumstance?
I think we covered this very well at the last Academy (January 2012 Academy 2). I suggest that you listen to the audio recordings about the Commitment to Hire Conversation™ where we discussed the use of the diagrams to make your points visually about what you do for your clients. These were the 3 Meeting Process™ and the Conceptual Deliverables Team structure diagrams. You might also use the chart (created by Mark Scorer) that illustrates cycling through the 143 Deliverables Check Points in the first 59 days and then cycling through them again as part of the 3 Meeting Process™ that follows the Implementation Meeting and Initial Progress Update meeting (the first 59 days). The written explanation from the Trusted Advisor Toolkit Kit™ about the 10 Client Deliverables™ could also be used, but it's a little text-heavy for my taste. If I felt that I had explained what we do well during Commitment To Hire Conversation™ already, then I might ask this question of the person who claims that...
In a Financial Road Map® with a potential client we got to Commitment to Hire™. The husband said that he had a pretty good handle on everything and most of their finances were in his head. In going through what we do, I saw many flaws in their financial plans.
In the end I asked the question regarding, “on a scale of 1 - 10…” The husband was an 8 and the wife was a 6-7. What would you say when you can see many flaws in a prospective client’s current planning and when there is a difference in the partners’ opinion on their financial house position? The husband is a lawyer and after hearing your latest webinar can understand why they may not be good fit.
The husband said they needed some planning but not at the fee I had set. The potential clients could see the value for “certain people” for this service however cost seemed to be a major issue for them. These people fit my Ideal Client Profile.
There is no need to point out "flaws." All that matters is that they are not a ‘10’ and want to be. If they do not desire to be a ‘10’ and / or are unwilling to pay your fee they are not Ideal Clients. The sure sign that someone is actually an Ideal Client is that they hire you. That's what Ideal Clients do. If they did not hire you... they are not an Ideal Client... period. I believe you are in a degree of Ideal Client denial in that you want people who are not Ideal Clients to be Ideal Clients. This is understandable, but not acceptable. You must see people for who they really are, not who you want them to be. If you wanted to have some fun, you could ask the question, "If it's all in your head, what happens to your wife if something happens to you?" Or, ask her, "How do you feel about your financial future being in your husband’s head?" Or, say to him, "You're kidding, right? Are you really sitting here, with a straight face, justifying that you don't need to hire me because 'you...
You have been speaking a lot lately on charging 1% fee for financial services instead of the typical wrap fee for just investment management. The only times I can think of that converting into a single fee for service would be the following:
- I don't have any clients that can afford a Predictable Minimum Annual Recurring Revenue of $10,000+ (perhaps this is my own thinking getting in the way).
- I work for another advisor who owns a franchise with our broker / dealer and I can't stray far from the compensation model he's set for his and my clients.
If there's any other reasons not to make the transition to a single fee for service please let me know. Also, do advisors make the transition from earning money via wrap fees to a single fee for service all at once or over time?
My favorite way to be a Financial Advisor is to deliver truly comprehensive financial services, as we define it with our complete deliverables checklist, and charge a flat fee between $20,000 and $50,000 / year. $36,000 is a good number because it easily divides as $3,000 / month or $9,000 / quarter. I believe you know where to find people in your community who can afford this fee. The challenge isn't finding financially successful people. The challenge is having a value proposition that would impress financially successful people and the communication skills to articulate that value proposition to financially successful people so they will meet you in the first place and subsequently terminate their relationships with other advisors and institutions and do all of their business with you. Our forte is providing you with such a value proposition and teaching you to be this good. Most advisors make this transition by simultaneously building their Ideal Client Community and...
I joined the Ideal Life Evaluation Program a couple weeks ago. I am starting to have my initial Financial Road Map® Interviews. During the Commitment to Hire Conversation™ (and/or Commit to Implement Conversation™) the subject of what services we provide will come up. What are the 143 Deliverables Checkpoints that we are going to provide once we are fully armed with the Values-Based Financial Planning™ process? Should we provide that list to a prospective client to show them exactly what they will get from us?
Answer the questions that actually come up during Commitment to Hire Conversation™ with the truth about what you currently do for your clients.
I am one of the newer converts to Values-Based Financial Planning™ so this may be a mindset issue for me, but I have had several prospective Ideal Clients ask me, "How are you going to help me have a 10 level of confidence with so much going on in the world? " I tend to repeat much of what I have already said from the Pivotal Questions, but I am not convinced I have that way of being with my answer.
I have begun scripting some stuff out based on the answers to the pivotal questions, but I wanted your thoughts on answering the HOW question. It’s a little different from the, "What do I get for the fee?" and, "How do I know that I can trust you?" and, "What’s the process?" scripting, so I am piecing together my answers from there.
"I can appreciate you wondering how you'll have a 10 level of confidence given all the negative events happening in the world. You look at these events through the lens of a person who does not yet have their entire financial house in order with all of their choices about money aligned with their most important goals and their most deeply held values. Over the next 12-15 months as this changes for you so will view about those things which are outside of your control. I'll be interested to hear your thoughts about your confidence a year from now. Are you ready to get started?" Or: "No one can control all of these events that are outside of your control. All you can do is hire me to help you make sure that all of your financial choices are aligned with your most important goals and your most deeply held values and get your entire financial house in perfect order. And when you are certain that you have done all that you can do you no longer have stress, worry, and anxiety over what you...
A client owns a business which has several insurance policies, significant debt with banks and other lenders, and even an investment portfolio. The owner employs a CFO to oversee those issues.
Are we offering in the Commit to Hire Conversation™ to handle these areas for the client in addition to their personal insurance, debt, and investments?
You are offering to be their personal financial advisor. You may interface with their business advisors or key employees, like their CFO, but you don't replace them.
I have several existing clients and prospects that have zero debt and range typically from $3-$10 million in liquid net worth. Many of them have believed in “Term and invest the rest” mentality and therefore don't like to discuss insurance needs and their term policies have expired. By this, I'm referring to clients who are past the accumulation phase and confident in their mind that they have been adequately insured and no longer need much insurance (I realize this may not be true), and have the notion typically to only buy term and put the rest of their money into savings.
When we get to the Commitment to Hire Conversation™. Many of my existing clients have zero debt, more cash then they need to have sitting around (I realize this needs to be addressed), and don't feel they need much help with insurance. Therefore the step-by-step plan addressing these four areas only has one area where they typically want, or feel, they need help in creating a plan.
I'm curious if it would it make sense to change the "What you get” discussion to something that could provide a little more value than the 4 bullets currently in the script?
Can you please tell me perhaps a different word track then the Financial Road Map® script since two of the four areas are not of much interest to these types of clients?
I wouldn't change anything. Whether they believe in insurance or not doesn't change the fact that it's your job to review their situation and give advice. Even if they can afford to self-insure, they may choose to lay that risk off to an insurance company. Many very financially successful people still buy insurance. Keep in mind that we're not just talking about life insurance here. As you progress in the Committed Advisor Program you will learn to present the offer of the Full Values-Based Financial Planning™ Value Proposition as well as answer the "pivotal questions" that we know from experience some prospects and clients will ask.
Can you point me in the right direction for a letter or document I can provide Potential Ideal Clients who may want to talk with existing Ideal Clients about our work.
Is there a template – I am sure it has been spoken about but cannot easily find anything online.
I Have a 2nd round meeting this Friday with Potential Ideal Clients that said yes, and then thought about the fee and said it was too much. I want to have something I can give for them to call existing Ideal Clients.
Have chatted with some existing Ideal Clients and they are happy to take calls.
This doesn't sound like something that requires a letter. If you have Ideal Clients who are willing to be a reference and prospects who need a reference before they hire you, just make the connection. 1. Provide the name and contact information for the reference to the prospect. 2. Email the client letting them know who will be contacting them. Before providing a reference, however, confirm that this is the only remaining and final thing they need before making their decision. And that, barring some negative feedback from a client, they are going to hire you. You don't want to waste your Ideal Clients time with someone who is just on a fishing expedition. "Other than confirming with a client that we do what we say we do, is there anything else you need to know before you hire us?" If the answer is yes, find out what that is. Clarifying and expanding questions will be valuable here. "So, and , what I'm hearing you say is that, barring one of my clients saying something...
I am struggling not discussing an ongoing fee in Financial Road Map® Meeting. During this conversation the clients ask me how much? The Financial Road Map® Meeting has been around 45 minutes so far and going well. I say $5,000 for the initial plan. They say what do you get? I then run through my 2 page letter of engagement which outlines upfront and ongoing service offering and takes another 45 minutes. After 1.5 hours I feel like the clients are tired and the "would you like to proceed” has lost its presence because of the meeting time. How do I avoid this? I would love to skip the letter of engagement all together, should I just briefly talk about deliverables team (which I have) best-in-class Subject Matters Experts. I am also struggling to understand in the Implementation Meeting how to address the ongoing fee is $1k-$3k per month and not go over the plan in any detail.
I agree with you, it can't take 45 minutes to answer the questions about the cost and what they get. Listen to your recordings and figure out a way to be more succinct. The fee is for the advice, not the plan detail.
I am struggling not discussing an ongoing fee in Financial Road Map® Meeting. During this conversation the clients ask me how much? The Financial Road Map® Meeting has been around 45 minutes so far and going well. I say $5,000 for the initial plan. They say what do you get? I then run through my 2 page letter of engagement which outlines upfront and ongoing service offering and takes another 45 minutes. After 1.5 hours I feel like the clients are tired and the "would you like to proceed” has lost its presence because of the meeting time. How do I avoid this? I would love to skip the letter of engagement all together, should I just briefly talk about deliverables team (which I have) best-in-class Subject Matters Experts. I am also struggling to understand in the Implementation Meeting how to address the ongoing fee is $1k-$3k per month and not go over the plan in any detail.
I agree with you, it can't take 45 minutes to answer the questions about the cost and what they get. Listen to your recordings and figure out a way to be more succinct. The fee is for the advice, not the plan detail.
I completed a Financial Road Map® with this gentleman and his wife. He loved the experience and was very excited to go ahead and have us create an action plan. We requested additional information needed to complete the plan. I then received this email (see below). How would you respond? Thanks.
Morning,
Michele and I had the opportunity to sit down with an investment adviser yesterday and discovered that Optimal Performance is not only an investment company but also a financial planning firm.
Embarrassing for me, as we have worked with Diane for over five years and she has helped us manage a myriad of financial challenges over that time. To realize that I have not fully taken advantage of her years of experience her expertise was "uncomfortable" to say the least.
That said, Michele and I have decided not to continue moving forward with Ideal Life and re-engage Diane since we are already paying for that service. Additional, I am sure you can appreciate that we do not want to put our relationship with Diane in jeopardy especially after she has been a cornerstone for us.
I have reviewed our chequing account and as of Friday, our cheque has not been processed and we would ask that it does not happen. We are prepared to pay a small fee for the work to date (including the Value-Based book) and will issue another cheque to cover that amount. I can have that available when I come to pick up our binder.
As you witnessed, we were ready to make the move to see the plan and realize this a disappointing news however this is the right thing for us and aligns with the values we hold true.
First of all, great job being in the game! You never know how people will respond, but you have to do the work, make the offers, and deal with whatever you get. Essentially, you can take one of 3 roads with an email response: Dear : I am glad you found value from your experience working with us and hope that it helps you make better choices about your money so you achieve your goals for the reasons that are important to you. There will be no charge for the work we've done together. Let me know how else I can be of service. ****** I'm not sure how accurate the following communication would be because I'm making up a few things to fill in gaps that I can't fill without more information, but you'll get the idea. Dear: Please forgive me. The fact you believe you can get the same services from an investment management firm who also does financial planning means I did a poor job of articulating the value to you of joining our Ideal Client Community. I apologize. ...
I’m very new to offering financial planning and even newer to Values-Based Financial Planning™, how should I answer the question, “How do I know that you can deliver what you are promising?”
That's not the kind of direct question you're likely to get. More typically, they will ask you questions about how you do what you do and, at some point, they will either take the leap of faith and hire you... or not. All decisions are to some degree a leap of faith because it's hard to pre-determine the outcome of any decision. It is important that you are able to answer questions about what you do and how you do it with confidence and conviction. People regularly make their decisions as much by how you answer the question as the substance of the answer.
At the end of the most recent webinar you gave an example of what you would say to a prospect who wanted to wait on doing a plan. One of the things you mentioned is that the advisor’s main benefit is not in the plan or any other technical work, but in the coaching and accountability. I hate to ask, but why don’t we include that in the script to make sure every prospect knows just what they are getting and why this will be different?
It could be something you tell them during Commitment to Hire depending on the questions they ask. For example, if they get to the point where they ask something like, “what makes you different from the other advisors I’m working with now or have worked with in the past?” You might say something like, “One big thing is accountability. I can tell from looking at your current financial reality that your current advisors do not hold you accountable to implement. For example, your estate situation and legal documents are a disaster. I’m sure you know that you need to get this done and are aware that you’ve just been lucky that this hasn’t bitten you in the butt. What this tells me is that your current advisors might be making recommendations, but aren’t holding you accountable to actually GET THESE THINGS DONE. When you work with me these things WILL GET DONE. Does that appeal to you?"
When you say, "Now let me tell you what you are going to get," and go through that language, are you showing the other items they will get? Value adds? eMoney, Newsletter, etc. Could I show the eMoney commercial at this point?
What they “get” is more significant than things like newsletters. And it’s more than a list of features and benefits. Think in terms of bigger outcomes such as confidence that they are track to achieve their goals. If the video does a better job of explaining what they get you can, perhaps you should use the video. However, I would hope that you can explain that better than a generic video.
I wondered as an advisor who primarily was operating using asset-based fees if you guys have any templates or samples of the contracts which an advisor might use if he wished to switch to a flat annual retainer, which I know Bill recommends.
When I set up my RIA firm the compliance firm drafted all my contracts and ADVs etc. using asset-based fee terminology and language. I just wondered if you might have a sample or template of what a client contract might look like for an annual retainer practice?
We're sorry, but providing sample legal documents is outside the scope of this platform as we are not attorneys or compliance specialists.
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