Journal of Financial Planning: May 2018
Advisers reportedly love to talk. However, most prospects and clients want us to do more listening and less talking.
As a great listener you can differentiate yourself. This is still a relationship business, and talking about yourself, your company, and your products and services is no way to start or foster a relationship.
In a post on his consulting firm’s website, “4 Reasons Why Listening Builds Relationships,” Peter M. Beaumont writes that we only remember 25 to 30 percent of what we hear, but that active listening can increase that figure and help you get new clients.
Beaumont’s four reasons why listening builds relationships are: (1) we can gain information; (2) we build trust; (3) we increase our accuracy; and (4) we build a relationship.
You can better build relationships with people if you actively listen to them. You can show you are actively listening to someone through body language (for example, facing someone, mirroring a person’s stance, nodding, and leaning forward), eye contact, verbal affirmations like, “I see,” “I know,” or “I understand,” and asking insightful questions.
If you really want to grow your business, get introductions, and have long-term, profitable relationships, you need to follow the 80/20 principle—clients or prospects talk 80 percent of the time and you talk 20 percent of the time—especially in initial client discovery meetings. To get people talking about themselves, you need to ask the right questions in initial and follow-up discussions with prospects and clients.
A Three-Meeting Approach for Intake
Intake is where you start to learn about your prospective clients. Each contact is about gathering 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 you close in three meetings depends on how well you do and other prospect variables). Taking three meetings shows you are not overly anxious and that it’s most important to build a relationship correctly rather than too quickly.
The first meeting is always about prospects and their family. In this meeting prospects should be speaking 80 percent of the time while you actively listen. Take notes and use a recorder to record all prospect and client meetings. Remember to ask for permission to record the session while sharing your reasons for recording. Explain that you want to make sure you fully understand and remember exactly what they have said so your advice best fits them. Assure prospects that they are free to change their answers down the road and that the recordings are great tools for your team to learn about and understand them. The recordings are also a helpful learning tool to see how you sound, how much you spoke rather than listened, any points you may have missed, etc. It might not be fun to hear how you did in initial recordings but be brave, it’s very important.
In the first prospect meeting, you will have no prescriptions, recommendations, or opinions. You are there to learn about the prospects and their family.
I strongly suggest that your first meeting is with both partners in a couple relationship. The primary reason is that both spouses must view you as their personal adviser. We know that after the death of a male spouse, 70 percent of the surviving widows will leave a practice within a year. 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 surviving party.
At this point, you must ensure you are treating each spouse/partner as equally as possible in terms of asking questions, getting answers, and paying attention. Remember that women and men think differently, notice things differently, care about things differently, and act differently in similar situations. This is not about right and wrong; this is about perspectives and upbringing (as well as many other factors).
Part of this initial discovery meeting is to understand the prospect’s life and financial goals. Defining goals and risk tolerance is necessary to developing and executing your investment strategy. Many prospects may not have clarified or defined their real life and financial goals yet, and even if they have they will likely change over time. This first meeting is to try to find where the hearts and souls of your prospects are—a rather lofty first meeting goal. From there you will develop an improving set of life and financial goals that can modify your investment strategy as time progresses.
Your initial meeting is about getting a good idea of where the couple is and where they want to go in life and in building the relationship you need to acquire a new client.
Conversation Starters
Following are some ideas for first-meeting conversation starters. Use the Socratic approach by asking thought-provoking questions and avoid closed-ended questions:
- Tell me about yourselves. 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. (Note that each spouse must give a separate answer. Both you and they might find some interesting perspectives.)
The second questions could be:
- Tell me why you decided to come in today.
- What were you hoping would come out of today’s meeting?
Follow-up with more questions about themselves, including:
- Where are you from? (If appropriate, you can ask, “What was it like growing up?”)
- What was your financial situation growing up?
- How did you two meet?
- Tell me about your family.
- Is there anyone besides yourself whose future hinges on your financial decisions?
- What are your most important financial concerns? How do you hope we can address them?
- What are your most important non-financial concerns and objectives?
- What are some of the things in your life that you are most passionate about? People? Causes?
- Is there anything else you’d like to accomplish? Is there a dream you’ve yet to fulfill?
- What things would you like to do in your life that you haven’t gotten around to yet?
- If you had no constraints such as children, money, or yours or your spouse’s job, what would you like to do? What would be most rewarding about that for you? What’s getting in the way of you doing that?
- What is the greatest achievement in your life?
- Can you tell me what your biggest priorities are for this year? The coming years?
If needed, you can ask for further clarification with these questions:
- What’s important about that to you? Why is that important? (Ask the other partner if they feel the same way.)
- Tell me why you say that. (For example, if a prospect suggests the cost of a comprehensive financial adviser is too high, you can ask, “Why do you say that?” Understand what the prospect’s experience may have been before responding. You do have to answer this question in many cases, whether it’s overtly asked or not. You can also ask what they had in mind for costs that are not “too high.” It’s likely too early to get into your deliverables and selling your value as this is a discovery meeting, but flags have been raised at this point that will require more discussion.)
- Tell me more. (You can slow a conversation with these three words.)
These are just a small sample of the questions you may want to ask. If you have discovered specific information about the prospects, ask questions in that area to show you have done homework in preparing for your meeting.
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 adviser. It’s always courteous to ask your prospects and clients how much time they have allocated to the meeting before you start.
Prepping for the First Meeting
Prepare a questionnaire in advance so you make sure you have identified all you want to ask. It’s OK to have it in front of you and use it to record answers, noting from whom the answers came. Feel free to ask the prospects if they mind whether you use the questionnaire. It is rare for people to mind. In fact, using the questionnaire is one way of showing your preparation and professionalism.
In addition to preparing a questionnaire, you should have researched the prospect. Prospects and clients want to know you have thought about and prepared for the meeting in advance. 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—like tax law changes or other items—list those. 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 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 adviser.
At this point you should have begun to develop some rapport. The moment of truth is now to invite the prospects to a second meeting to discuss their financial situation and in-depth experiences.
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.
Your second meeting will start to refine the initial set of goals upon which you can create an initial financial plan and investment strategy.
The Next Meetings
After the first meeting, reflect on the meeting with your team for 15 or 20 minutes to clarify what you heard. Listen to the recording as soon as possible after the meeting, primarily to update your notes that would be posted to your CRM. (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. However, continue recordings as a standard practice.)
I also recommend you put together a summary of your notes into an email or letter to send to prospects along with your thanks and comments telling them how much you look forward to your next meeting.
Your notes will be used as part of your second meeting kickoff. Your 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.
In this day and age of “right now,” three meetings may be too many for some prospects. 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 two) and the detailed discussion of the prospect’s game plan (meeting three). It’s understood that some prospects don’t want to take the time to physically meet three times. Technology can be used effectively and efficiently for many prospect and client meetings.
If it’s a qualified and quality prospect and the relationship looks promising, the three elements that you must complete are:
- In-depth discovery of your prospects as people;
- In-depth discovery of the prospect’s current life and financial situation and their desired life and financial future; and
- Presentation and acceptance of your specific and personalized plan for their future financial and life situation.
In summary, the process is the process whether it takes two, three, or more meetings.
David I. Leo is founder of Street Smart Research Group LLC. He is an author, speaker, coach, consultant, and trainer to financial professionals. His latest book, co-authored with Craig Cmiel, is The Financial Advisor’s Success Manual.