I can remember, as if it were yesterday, the beginning of my consulting practice some 40 plus years ago, saddled with nearly $10,000 of debt, and my primary concern was keeping the lights on. So when it came to prospects, my sole objective was to turn every one of them into clients.
Can you relate? I’d wager that you can. You know the old saying – if they could fog a mirror they qualified. Ouch! It hurts just writing that phrase. However, I did everything in my power to sell my services; I wanted them to like me, respect my knowledge, see me as a viable solution, and hire me.
It didn’t take me long to learn the flaws of that approach. Although it was usually a positive client-consultant relationship, there were plenty of examples to the contrary. Whether they were overly needy, had unrealistic expectations, or were simply unpleasant, over time these types of clients wreak havoc with our emotions and create “speed bumps” to productivity.
In this environment, you have to be careful in getting blindsided. Neil, a financial advisor in our coaching program recently told us, “I recently took on a couple that was recommended by a good client. It’s been two months and they’re a disaster – constant phone calls and complaining about fees. I should have known. They’re now complaining about the same things they were trashing their previous advisor about.”
Neil is a financial advisor who’s in a serious growth mode. He’s brought in $13 million YTD. The lesson he learned, expressed in his frustration quoted above, was “Just because they had $1.4 million and were willing to become a client, I needed to further qualify them. I got seduced by the $1.4 million.”
This happens. The key is to not let it occur very often. We find that a few key actions will not only prevent you from taking on the “wrong” client, but it will also make you more desirable within affluent circles. You increase your appeal when word gets around, and it will, that you don’t work with everyone.
First and foremost, you must “flip that mental switch in your brain” and make the decision that you’re not going to accept any prospect, regardless of assets, if they don’t meet your qualifications. As much as you might want the assets in the short term, in the long run, your reputation that spreads through affluent word-of-mouth-influence for being discriminating on who you work with will bring in far more assets.
Second, you need to establish qualifications. This will vary from financial advisor to financial advisor. Some will insist upon working from a financial plan, having a certain asset number, or being able to manage all of their assets. One thing should be a constant, however, that you have a good working relationship. Here’s verbiage that uses reverse psychology and is money in the bank:
“Before moving forward, we need to feel comfortable that we can have a good working relationship with you and your family, and you need to feel the same about working with us – as we work closely with all of our clients.”
Third, be on the lookout for clues that indicate they may be a difficult client. Are they bashing their previous advisor? Are they already questioning fees? Are they a classic DIYer? Are they overly demanding? Are they constantly grilling you about performance? Trust your gut when you spot these clues. If you take on a difficult prospect, they’re likely to be a difficult client.
Fourth, you need to make your clients and referral alliances aware of your qualifications. This doesn’t need to be in a written document, rather a simple narrative that reinforces the value you’re delivering prepares them for the chance that someone they refer doesn’t qualify. Bill’s really an outstanding financial advisor, but he doesn’t work with everybody – he is very discriminating.
Fifth, always circle back to your client or referral alliance partner when a prospect whom they referred doesn’t fit– I really appreciate you referring the Smiths, but they’re not going to be a good fit because…
Be gentle in your explanation, but if the Smith’s are difficult to deal with, the odds are that the client who referred them is well aware.
There are many ways to approach this, but the reality is that when you don’t take everyone you have a double win: eliminating headaches and attracting more affluent prospects.