I give 403b/401K advice away for free. I do this for clients for whom I am currently managing assets, which may range anywhere from $5000 to
$500,000. Ninety percent of the time, these clients ask me to review and advise them on how to allocate their company retirement plan. Historically, I have provided this advice for free and now I don't want to. How should I change my pattern and also charge for the advice?
Say something like this, "I used to provide this advice to you for free, however, I will no longer be doing that. My fee for giving you advice about is $, does that work for you?"
What would be the ideal software suite for the financial planning Subject Matter Expert to use, or as a tool to tie it all together as the Trusted Advisor? We're looking at either MoneyGuidePro or eMoney Advisor 360 Pro.
We don't have an opinion about which financial planning software to use. This is the job of your financial planning Subject Matter Expert and we don't believe you should be involved in making this decision. The "ideal" financial planning Subject Matter Expert does not need, or want, your help in making this decision any more than the ideal pilot needs you to tell them how to fly the plane. You will know you are truly dealing with experts when they don't need your help or guidance in their area of expertise.
How do I better describe my value? One potential client thought he was already living out many of his values and thus enjoying his ideal life. How do I describe that what I do provides incredible value even for the person who enjoys managing his own investments and has enough money and time to take plenty of vacations?
This particular person sounds like a do-it-yourselfer to me, therefore I suggest you pass on having him as a client and move on to the next person. Do not assume that if you described your value better that this person would have hired you. Keep in mind that you are not trying to convince, persuade, or sell. Most of the time you will know there is a fit, or not, during the Values Conversation™. Then it's a fairly simple matter of completing their Financial Road Map® and determining if they can afford you. If they can afford you and you would like to have them as a client you offer to be hired (Commitment to Hire Conversation™) and answer any questions they have about how much you charge and exactly what you do for them to help them actualize their Financial Road Map®. This is a professional conversation between you, a business person, and them, a prospective client. It is NOT, or should not be, a salesperson trying to "close." If they "get it" they hire you and if they don't get it...
How do I handle the following situation:
We had a minimum before BAI of $500,000 Assets Under Management that was typically waived for referrals from current clients as these clients were easy to "close". If we tell our new referrals that we only work with Ideal Clients who pay us a retainer of $15,000 and 1% on Assets Under Management, they may be left with the wrong impression that the non- Ideal Client who referred them is a very large client.
Bill’s Response: Try not to kill any brain cells wondering about hypothetical things people may or may not say.
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...
I often use the question "Do you have someone walking you through the financial aspects of...?" during my initial conversation with potential clients when they tell me of upcoming changes in their lives. If they answer, "Yes", what is an appropriate response?
For example, Betty is telling me she is going to retire this week. I say, "Wow, Betty, do you have someone walking you through the financial aspects of retirement?"
Your question is not part of our process; therefore I have no coaching feedback for you. I suggest you stop asking that question and follow the script you have for conducting Financial Road Map interviews.
It has been just over 12 months since I bought a client base of neglected clients. Over the holidays I have had time to consider where I am at in the context of Values-Based Financial Planning™. The situation is that I am still struggling with the question of who do I offer a Financial Road Map® to.
I feel I must offer an appointment to these acquired clients to discuss their current accounts (whatever they may have), I can’t extract any value from them or increased revenue from them otherwise. I cannot ignore them and only offer an appointment to those who want a Financial Road Map® which is what I took from Bill’s response to a question last year. The initial contact with them is effectively a cold call given the neglect they had by the previous adviser, therefore impossible to offer a Financial Road Map® as no trust or relationship is in existence.
The apathy and attitude towards an adviser from the majority of these people made it such that my assistant’s success in getting people in to just review what they had was less than anticipated. I could count maybe 10 appointments over 3 months he arranged and at a guess I know of three that cancelled or didn’t show up.
In the context of the ‘Ideal Client,’ I am seriously questioning whether I presently have a client base of the wrong type of people to be able to afford the service and to be able to mentally connect to the philosophy required to be an Ideal Client. If this is the case, then where do I get an Ideal Client from??? In speaking with Shane Hatch he mentioned that in his experience the person would probably need to have at least $500K in investible funds to be able to afford the program. And I would tend to agree to an extent. This would rule out every one of the clients I purchased.
I am thinking that the process I use may have to change to something as follows:
1. Invite each client in to review what they have and discuss this. This allows them to meet and maybe gain some trust and I can get a feel for them and their position.
2. After reviewing what they have, offer two options, to provide advice on what they have or anything else I pick up during the meeting, or, if I think warranted, offer a further appointment to undertake a Financial Road Map®. In the discussion offering the Financial Road Map® I explain what my business is about and they get a feel for what I do and not the perception of just being an ‘investment’ or ‘insurance’ adviser. The end result is that I get a win either way and re-engage with them.
I have some competing interests at play here that is difficult to work around. Firstly I have lost a lot more clients than budgeted for in the first 12 months (in fact a lot had cancelled before sale) and expected income is well below what was purchased. So I am trying to maintain this income or increase it any way possible by any amount to make the loan I have a worthwhile exercise. This is competing with wanting to deal with more engaged clients that want a meaningful advice relationship that is comprehensive in nature; those that have some money and the ability to make changes and can pay for service.
Can you give some advice as to how I deal with these people and secondly how I source Ideal Client if this isn't the solution I thought it was?
Completing a very important exercise will help you develop a specific strategy for each category of your existing clients. Go to the Ideal Life Evaluation Program Action Sequence #4, “Complete the Annual Recurring Revenue Exercise” on the Committed Advisor website (www.commitedadvisor.com) to complete the exercise and then implement the strategy you create for each category of existing client.
I am very new to this process. Because of some recent (very positive) publicity, we are receiving a number of telephone inquiries. What pre-screening questions should I have my assistant ask interested callers before making appointments with them?
Describe your Ideal Client Profile to the prospective client and tell them your minimum fee. If they would like to have an appointment with you, make sure they bring all of their financial documents and their spouse to the meeting in your office.
At the last Academy (January 2012 Academy 2), you mentioned that when someone asked us ‘What do you do, aren’t you a Financial Advisor?’, we should say ‘No.’ What do you say if you are still transitioning out of a position as a Financial Advisor- a role you plan on exiting at some stage?
If you are in the Committed Advisor Program (which you are) you have already "transitioned" when dealing with new people. Therefore, from now on, you would never tell someone new that you meet that you are what they would perceive as an old-school Financial Advisor. I think there is some golden content on the recordings from the last Academy (January 2012 Academy 2) that gives you the exact verbiage you are looking for to articulate your value proposition. If after giving them a book, conducting a phone consultation, and doing their Financial Road Map; you find that that they don't meet your Ideal Client Profile and your monthly must-have revenue worksheet indicates that you have to have to do some transactions with non-Ideal Clients to survive, follow the process I taught you on Day 6 of the Academy (January 2012 Academy 2) for doing so. Talk to lots of people and hone your skills.
What is your expectation of the amount of increased revenue a Trusted Advisor should have achieved by their first Academy as part of the Ideal Life Evaluation Program?
Your expected amount of increased revenue as a Trusted Advisor is $30,000 - $50,000.
The next Deliverables Team Member I'm supposed to acquire is a Property / Casualty Insurance Specialist. At my independent broker dealer, we have a division that can do this "in house" and the insurance products are proprietary.
Is it better to use recommendations from my own firm and their proprietary products or should I have someone truly independent handle this?
I'm worried an Ideal Client might cringe when I recommend they use proprietary insurance products. My assumption is that some Ideal Clients may want Property / Casualty Insurance advice from someone who has zero potential conflicts of interest. However, the other part of me assumes that a truly Ideal Client is a delegator and trusts me to get them the right advice, proprietary or not. I'm conflicted.
Worry less about what your clients might think about "it" and just make sure "it" gets done. Be a leader. Be a Trusted Advisor.
I wanted to get your feedback please on this email I received from the Chamber of Commerce, where I am a relatively new member.
The Chamber sent me a letter inviting me to a Trade Show. The invitation noted that the Trade Show was a great opportunity to display products or services, discover new businesses and network with other business people.
My questions to you are:
1. Would you attend this event?
2. If you did, would you attend it exclusively to complete Self-Referral Conversations™?
3. The invitation mentioned renting a booth to showcase your business – what is your take on this?
I was thinking of going to the Trade Show for the purpose of conducting Self-Referral Conversations™ with business people. I am not sure, however, about the idea of having a booth at an event like this.
Sit down with the President of your Chamber and have a real heart-to-heart conversation about the financial success of the members. Be very candid about the level of financial success a person needs to have to afford your services. ($2 - $10M of net worth or assets / $300,000+ personal income) Go down the member list and ask him / her to specifically identify those that he / she knows or believes have the level of income and / or net worth to meet your Ideal Client Profile. If the there are enough of them, ask the President to advise you on the best way to meet the people you really want to meet. Generally, high-end professionals (like the best Financial Advisor in Calgary and one of the best FAs in the world) are not "hanging around" the Chamber of Commerce. Nice people... but typically not Ideal Clients. So, unless your specific market research states otherwise, RUN! (Absolutely not a booth!)
I would like to spend between 2-3 hours per week of dedicated script rehearsal time. It seems to be very difficult to create sufficient time for this purpose. I have thought of doing it in a block on a Monday morning or a Saturday morning, but then I lack the immediacy of "real world" feedback. I don't want to interrupt Client Acquisition Time partly because of the lack of focus and partly because of the inability to fully predict when client interaction will be necessary. I also find myself unable to honor a regular morning or evening schedule for this purpose.
I recommend that you listen to recordings of yourself implementing the processes in the real world during your commute time, other drive time where possible, and during some of your exercise time. You will find this especially valuable when you have a recording of yourself that exactly, or close to exact, of how you would like to implement every time. It's more important to be implementing in the real world than it is to practice just for practice sake. You get enough of that at the Academy.
I am starting to attend a lot of networking events. At these events, you always get asked for your card. I have been reluctant to give my card out, however, due to your previous comments about our business cards. What is your advice for what information should be on the card (keep in mind for compliance reasons we need to have certain information on the card here in Australia)?
Use black ink on white paper. Include the following: your name; your address, phone number, and email address. Title: Financial Organizer.
I seem to have laser-like focus in my mountain bike race training. I'm constantly motivated to learn more about training, equipment, nutrition, and race tactics. It never wanes. However, I easily get frustrated with my progress in my Ideal Life Evaluation Program journey and I fall back to old habits (frustrating me more). Are there any good books, websites, or any other resources to help me achieve the same business focus as I have with my mountain biking?
Use your Success Road Map and Personal Inspiration Board to find reasons to do what you know you need to do, especially when you don't feel like it.
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...
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