Advisors reportedly love to talk. However, most prospects as well as clients want us to do more listening and less talking. As Ralph Nichols said,
“The most basic of all human needs is the need to understand and be understood. The best way to understand people is to listen to them.”
Ernest Hemingway said, “When people talk, listen completely. Most people never listen.”
This is your opportunity. As a great listener, you can differentiate yourself. This is still a relationship business and talking about yourself, your company, your products and services, or even your family is no way to start or foster a relationship. In an article by Peter M. Beaumont he says, “Recent studies have shown that we typically remember only 25-30% of what we hear. However, “Active Listening” can increase that figure enormously. One of the ways to use “Active Listening” is to remember the often-used expression that “eyes and ears (and mouths) should be used in the same proportion they have been allocated to us.”
Mr. Beaumont gives four reasons why listening builds relationships:
It should come as no surprise that people will like you more if you listen to them, especially when you “actively listen.” You can show you are listening to someone through body language (e.g., facing someone, mirroring person’s stance, nodding, leaning forward), eye contact and verbal confirmation such as brief verbal affirmations like “I see,” “I know,” or “I understand.”
If you really want to grow your business, get introductions and have long term, profitable relationships, you need to follow the 80/20 principle especially in initial client discovery meetings. That is, clients or prospects talk 80% of the time and you talk 20% of the time. To get people talking about themselves, you need to ask questions and the right questions. Following are a number of critical questions to ask. These questions can be used by financial advisors in initial and follow up discussions with prospects as well as with clients. Some questions can be used anywhere as conversation starters.
Intake is where you start to learn about your prospective clients but each contact is about gathering wisdom (knowledge) about your prospects and clients. The more you know, the more you can personalize your relationship and deliverables.
I suggest using a three meeting approach for the “intake process”. Whether or not you get to close in exactly three meetings will depend on how well you do and many prospect variables. Later in this article, I will discuss closing the prospect in less than three meetings.
Regardless, the first meeting is always about the prospects and their family. It’s in this meeting that the prospects should be speaking 80% of the time. Your job is to listen actively, as suggested. I strongly suggest using a recorder to record all your client meetings and also take notes. You would of course seek permission from the prospects to record the session. There are many good reasons for recording sessions from the prospect’s perspective. Explain that you want to make sure you fully understand and remember exactly what the prospects have said so your advice best fits them. Naturally, you can assure the prospects that they are fully free to change their answers down the road. Note that the recordings are also great tools for your team to learn about and understand the prospects. The recordings will also be of great value to you in learning how you sound, how much you spoke rather than listened, any points you may have missed, etc. It will be one of the best learning tools you have ever used. You may want to listen in private initially. It may not be fun to hear how you did in initial recordings but be brave, it’s very important.
Note that in the first prospect meeting you will have no prescriptions, recommendations, or opinions. You are there to learn. There are test questions you can ask to better understand the views of the prospects. This meeting is about the prospects and their family. It’s not even about their financial status though that may of course come up. My strong suggestion is that your first meeting is with both partners in a couple relationship. There are good reasons for suggesting that if there is no spouse in attendance, there be no meeting. The primary reason is that both spouses must view you as their advisor, their personal advisor. We know that after the death of a male spouse 70% of the surviving widows will leave your practice within a year. This and the relationship with adult children of clients are separate discussions. Suffice it to say; unless you establish a strong relationship with all parties in a household, you are likely to have challenges in retaining the relationship and assets after the death of one party if you don’t have a strong relationship with the other party.
At this point however, you must ensure you are treating each spouse/partner as equally as possible in terms of asking questions, getting answers, paying attention, etc. Remember that women and men think differently, notice things differently, care about things differently, act differently in similar situations and more. This is not about right and wrong, this is about perspectives and upbringing as well as many other factors. Women for example are more likely to notice more things than men are. They will notice the facility you are in, how it’s organized, the décor, the books and magazines, the pictures, how you dress and appear, how you and your staff interface, etc., etc., etc. You need to pay attention to these areas as well as what you have to say.
It is understood that part of this initial discovery meeting is to understand the prospect’s life and financial goals. As part of your consultative process, defining goals as well as risk tolerance is necessary to developing and executing your investment strategy. However many prospects are not fully prepared to define their “real” life and financial goals and they will likely change over time. This first meeting is to try to find where the hearts and souls of your prospects are, a somewhat lofty first meeting goal. From there you will develop, over time, an improving set of life and financial goals that may modify your investment strategy as life and time progress. Your initial meeting is about getting a pretty good idea of where the couple is and want to go in life and in building the relationship you need to acquire a new client. Your second meeting will start to refine the initial set of goals upon which you can create an initial financial plan and investment strategy.
Here are some ideas for first meeting questions starting with, “I would like to get to know you both better because it will allow me to make sure I give you both the proper advice for your situation.” Knowing that people are massively passionate about themselves a good first question is:
Another opening question or a second question could be “Tell me why they decided to come in today? What were you hoping would come out of today’s meeting?” Use the Socratic approach by asking thought-provoking questions and avoid closed end questions. You would follow up with asking them to tell you about themselves.
• Where are you from? (You can ask, “What it was like growing up,” if appropriate.)
These are a small sample of the questions and the types of questions you may want to ask. In our book, “The Financial Advisor’s Success Manual” there are about four dozen questions for your consideration. We have also prepared a separate updated questionnaire.
You will likely have too many questions to ask in a single session. At most, the first discovery session should be kept to 90 minutes, even 60 minutes, if possible. After that attention wanes, on the part of both the prospects and the advisor. It’s always courteous to ask your prospects (as well as clients) how much time they have allocated to the meeting before you start.
Prepare a questionnaire in advance. It’s quite okay to have it in front of you and use it to record answers, noting from whom the answers came (i.e., partner one or partner two). Feel free to ask the prospects if they mind if you use the questionnaire so you make sure to cover everything. It is extremely rare that people would ever say they would mind. In fact, using the questionnaire is one way of showing your preparation and professionalism.
There are some questions you can ask that give you time to respond to comments or questions if you need a minute to think about a reply. You can essentially ask for further clarification with these questions:
In addition to preparing a questionnaire in advance of the meeting, you should have researched the prospect. Prospects as well as clients want to know you have thought about the meeting prior to the meeting. They want to know you have put time into preparation for the meeting. Naturally, you would have googled the prospects, looked into their LinkedIn and Facebook pages if available, looked for news articles, etc. If you have an idea of what is important to them such as tax law changes or other items, list those that specifically pertains to them. If you know people in common, try to learn about their interests, but cautiously, as inquiries will get back to the prospect. At an appropriate point, early in the meeting, let them know that you have spent time preparing for the meeting by perhaps complimenting the couple on something your research has discovered. However, the most important point is to invite the prospects to let you know exactly what is top of mind for them.
By the end of this first meeting, you should have qualified the prospect and gained an understanding of whether you are on the road to a good relationship and they are willing to consider you as their advisor.
The most telling moment here is whether they commit to a second meeting. At the appropriate point, you can say, “Thank you very much for sharing about yourself and your situation with me today. Is there anything else you want to address that I may not have asked you about?
Your answers and comments have given us excellent background that we can integrate into your plan. Our next step will be a complete diagnostic of your current financial situation. I can’t promise that we can fulfill all of the wants, needs, and goals we discussed, but if you are comfortable with me so far, we need to see your financial data in detail.”
Then, provide a checklist.
At this point you should have begun to develop some rapport and a meeting of the minds. The moment of truth is now to invite the prospects to a second meeting to discuss their financial situation and in-depth experiences.
After the meeting, you need to reflect on the meeting perhaps with your team for 15 or 20 minutes. Meeting with a teammate can clarify what you heard. You need to get your notes recorded which can and should be using technology and/or delegated. You should listen to the recording as soon as possible after the meeting primarily at this point to update your notes that would be posted to your CRM. I also recommend you put together a summary of your notes into an email (or letter) to send to your prospects along with your thanks and comments telling them how much you look forward to your next meeting. (As a training tool you can listen to the recording a bit later but in enough time to improve your next meeting. When you are pleased with your meeting effectiveness you no longer need to listen to those recordings but an annual or semi-annual checkup by you and/or a teammate will be of value. Continue recordings as a standard practice.)
Your notes will be used as part of your second meeting kickoff. You first meeting goal will have been accomplished if you have started to learn about who your prospects really are and if they commit to the financial discovery meeting within the next week to 10 days.
Some of my clients find that in this day and age of “Right now!” three meetings may be too many for some prospects. Taking three meetings for some clients shows you are not overly anxious and that it’s most important to build a relationship correctly rather than too quickly. A first meeting done well can have some prospects ready to make a decision to move ahead with you right away. If they are willing to come in for a second meeting, they may be willing to sign on as clients. If they are ready to sign and it seems appropriate, move ahead but still complete the detailed discussion of the prospect’s financial situation (Meeting 2 content) and the detailed discussion of the prospect’s game plan (Meeting 3 content). It’s understood that some prospects don’t want to take the time to physically meet three times. Technology can be used to eliminate that need and in fact can be used effectively and efficiently for many client and some prospect meetings.
In summary, the process is the process whether it takes two, three or more meetings. If it’s a qualified and quality prospect and the relationship looks promising, the three elements that you must complete are:
If you want to improve your business by exploring ways to create new levels of client service, “signature experiences” if you will, make an appointment on my calendar to discuss if and how I can help you.
David I. Leo
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 would like additional details or have any questions about his articles or an interest in coaching schedule a free 45 Minute Strategy Session @ https://calendly.com/davidileo or contact him @ David@CoachDavidLeo.com. Call 212-598-4229 (Office) or 917-379-1249 (Cell) and visit @ www.CoachDavidLeo.com