Financial Advisor Hypocrite


fat-doctorSuppose you walk into a doctor’s office for an exam. After the exam he says to you, “You know, you really need to lose some weight.” You think to yourself, “Wow! That’s the pot calling the kettle black. My doctor must be at least 60 pounds overweight and he is telling me about my weight. Where does he get off?”

How different is the above scenario from you telling your clients how to improve their net worth and protect their estate when your net worth is in shambles and you have no estate to speak of? Don’t be offended by this. The best way to change something is to accept the truth. Don’t deny it-- you really have no right to tell others how to manage their finances when you have no evidence that you can manage your own.

When I posted this notion previously on LinkedIn, there was a slew of comments from people who had been ill and used that as a justification for their low net worth. Others mentioned their youth and how they cannot be expected to have accumulated much. Again, you have more power when you accept the truth rather than generate defenses to it. Don’t rebuff the issue or defend yourself. If your net worth is abysmal, accept it and read the remainder of this article for the fix.

A Formula for Your Net Worth

In the best-selling book, “The Millionaire Next Door,” author Tom Stanley gives us a formula to determine how we are doing financially. Here’s the formula -- how do you stack up?

Multiply your age times your realized pretax annual household income from all sources except inheritances. Divide by 10 this less any inherited wealth is what your net worth should be.

Let’s assume, that you fall short in the above test. This failure is does not cast doubt on the quality of your financial advice or your ability to help people build their own net worth or protect their estates. More likely, it is a testament to your lack of marketing or poor marketing tactics.poor guy

Low net worth is a result of low income. And the fastest way to generate income, as a financial professional, is to speak with more prospects every month. I was fortunate to realize this early in my career and let me tell you what I did.

First, the evidence that I was successful. Out of 6000 brokers at Prudential Securities (acquired by Wachovia Securities and now part of Wells Fargo Advisors) I was one of the top account openers every month. I would typically open 15 new accounts each month. While I was doing this, I noticed that the other brokers in the office were depending on business from their existing clients.

I assume from past activities, these brokers had somehow accumulated a book of business but then had stopped prospecting so that their income hit a plateau and there was no further growth in their income or net worth.

Secondly, I had the good fortune to get a one-word lesson from Bill Good: MORE.  If you have success with some form of marketing, then do MORE of it. I was doing so much direct mail that I purchased an envelope feeder that would fold, stuff and seal envelopes by the hundreds per hour.  The other brokers in the office looked at me as if I were from Mars when the machine was installed. However, it paid off as my income accounted for 23% of the office production of 20 brokers.

Unless your net worth exceeds the formula developed by Tom Stanley, this nation’s authority on wealth, then you have work to do. So let’s dig in.

Financial Advisor Marketing - Methods to Gain New Clients

At first, this section will seem to offer nothing new that you don’t already know. But I promise that I deliver at least one valuable insight before the end of this article.

Seminars work

financial advisor marketing with seminarsSeminars will never stop working. The reason that seminars work for some and not others is that some have realized that words are the most important aspect of gaining attendance. For example, which of these seminars do you think is more widely attended:

“Everything You Know To Meet the Cost of a College Education”

“Why Your Neighbors Kids Can Go To Harvard and Yours Can’t”

Both of the above seminars cover the same exact material but the second title will get you far more attendance. So here’s what you need to know:

You need to become an expert marketer (which includes expert copy writer) or hire an expert marketer to have success in your financial services practice. Your financial success depends on your marketing success -- it has little to do with your competency as a financial advisor. You may not like this, but it is the way it is. And as stated earlier in the article, rather than rebuff or deny reality, it is much more powerful to accept it and then you can take appropriate action.

When I ran seminars, I typically had 15 to 30 buying units in the room, closed appointments with 65% of the buying units and gathered over 1 million per seminar. The remaining details are beyond the scope of this post but you can find some of our articles at the link I will provided the end of this post.

Direct Mail Works

Most everyone who does seminars successfully uses direct mail as their invitation method. But direct mail also works for other offers to get responses. It does not matter what product or service you offer, direct mail can be successful. One piece of direct mail that is poorly worded will get poor results while he other with masterful wording will get outstanding results and be highly profitable.

Side note -- I had to read about 10 books and took a self-study course on copy writing before I was able to get consistently excellent results using compelling words in my marketing. So this is an area in which you will need to develop expertise or hire it.

Cold Calling Works

financial advisor marketing - cold callingUp until the end of these firms: Bear Stearns, Lehman Brothers, Salomon Brothers; their successful brokers used cold calling as a method of gaining business. These firms no longer exist, not because of the cold calling not working, but because of financial mismanagement by the firm's executives. Other top-tier brokerage firms such as Credit Suisse, Goldman Sachs and Morgan Stanley continue to use cold calling as the backbone of client acquisition. And it’s not just the new brokers who use it. The tenured and highly successful brokers will have three or four cold callers on their team to consistently bring in new business.

Most every type of financial advisor marketing you have ever heard of works when done correctly. Unfortunately, most people in financial services who do not have marketing expertise will take a stab at some marketing method and do it incorrectly and get poor results. They will then conclude that such a method doesn’t work. The correct conclusion is, “the marketing method works but I don’t have the expertise yet to do it successfully.” The good news is that in the age of the Internet, you can learn anything or within minutes, find experts who can do it for you.

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