Add Value With Your Investment Planning Process

“whatever you have to do to gain self-knowledge, do it. Find out who you are and what you want. Then you can stop wasting your life energy and your money on stuff that doesn’t matter to you—and start making financial decisions that will get you to your true goals.” ― Carl Richards 

The investment planning process, a subset of the broader subject of wealth management, is a core capability of advisors who have gone through much training and experience. Our goal in this section is to show the value you add over and above portfolio construction, which is essentially a commodity and can be accomplished by technology.

Today’s competitive investment management/wealth management marketplace requires a consultative selling approach and has for almost 50 years. Before “consultative selling,” selling investments tended to be about products. Advisors may have called clients or prospects to buy a “hot stock,” offer a bond with a good interest rate and rating, or offer “penny stocks” or some high-performing fund, among other offerings.

The term “consultative selling” first appeared in the 1970s book Consultative Selling by Mack Hanan. It describes a selling technique in which the salesperson acts as an expert consultant for the prospect, asking questions to determine the prospect’s needs and wants, then using that information to select the best product or service to match those needs.

Consultative selling also works with value-added selling. Properly done, the consultative process digs deeply into the prospect’s wants and needs starting with the “intake process” and continuing through all six of your core client-facing processes. The intent is for you to be able to incorporate the prospect’s wants and needs and match them with the wealth management solutions you offer. The consultative approach is also intended to discover your prospect’s emotional as well as financial wants and needs, and, critically, to develop rapport as an expert who truly understands and will be an outstanding resource for your prospect.

Building rapport will result from sharing information that is both helpful and valuable while not pressing too soon for a commitment. By demonstrating your understanding, even compassion when appropriate, your expertise, and how you can meet your prospect’s wants and needs, you will earn the right to establish a mutually beneficial relationship.

Consultative professionals do not rush the process.

Consultative selling has advanced over the years and needs to be customized to the industry in which it is used. However, the tenets are the same:

• Understanding the client as discussed in the intake process,
• Building rapport as is done in every communications with the client or prospect whether business or social,
• Understanding the value and benefits you offer in context of the client’s situation,
• Being expert at what you do, and
• Building confidence so that you can present a plan that delivers solutions to the client’s needs so that they know you are their trusted partner acting in their best interests.

The steps in a wealth management consultative process include working with the investor interactively to:

• Define their attitudes toward investing, their experiences with investing, their personal and family situation, their work situation, their income, the level of investment risk they are willing to accept, their wants, needs, dreams and goals as discussed in the intake process.
• Articulate and prioritize the investor’s financial needs and life goals to ensure a meeting of the minds.
• Assess the investor’s financial situation and needs. The FA works with the client’s current situation in terms of current and projected income, all forms of assets including investments and real and personal property, their status regarding insurance, even health, hobbies, and other interests.
• Create a portfolio investment approach that is intended to help meet the investor’s objectives, through an initial planning document.
• Develop and agree to an implementation strategy to enable the initial plan. Working together, the investor and advisor would then modify the plan as needed and/or desired.
• Review the progress of the investments to the plan and goals and, as needed, periodically adjust the portfolio. This is an ongoing and interactive process with the client and advisor incorporating any changes to the current situation of the client and/or markets as appropriate.

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David I. Leo, Your Investment Planning Process Snippet 9

David Leo is Founder of Street Smart Research Group LLC. He is an author, speaker, coach, consultant, and trainer to financial professionals. David is an experienced business manager who works solely with Financial Advisors, Planners and firms who want to organize, structure & grow their businesses by attracting, servicing, and retaining affluent clients.

If you have questions or would like assistance in personalizing and implementing approaches from The Financial Advisor’s Success Manual, schedule a free 45 Minute Strategy Session at https://calendly.com/davidileo or contact me at [email protected] or visit my website at www.CoachDavidLeo.com

​My book is available at Amazon at https://www.amazon.com/Financial-Advisors-Success-Manual-Structure/dp/0814439136