I don’t think any financial advisor wakes up in the morning and intentionally sets out to fail. But I can think of many examples of advisors who unwittingly find ways to sabotage their efforts to build a successful practice. It’s often the little things they are either unaware of or don’t recognize as problems. But they’re big enough to turn prospects and clients away from you.
While you may not think you are setting yourself up to fail, you have to consider whether you’re doing the things necessary to prepare yourself for success. That includes taking a critical look at yourself and the way you conduct business and making immediate course corrections.
While there are dozens of ways advisors may be sabotaging their business, here are five we see most often.
#1. Talking down to your prospects and clients
You spend a lot of time and effort acquiring the knowledge and skills necessary to present yourself as a knowledgeable and competent financial advisor. So, you may feel the need to showcase your expertise to your prospects and clients through the use of sophisticated language and visuals. In doing so, if you haven’t seen the “deer in the headlights” look coming back at you, you’re not paying attention. Clients won’t be impressed by your expertise if they don’t understand what you’re saying and it’s not placed in the context of their own situations.
In all your interactions with your clients and prospects, it’s critical to stow the jargon and colorful graphs and find ways to connect with them on a personal level. It should never be about you and what you know—it should always be about them.
#2. Ignoring the spouse
I don’t think advisors intentionally ignore the spouse. But, when one of the spouses, typically the husband, stands out as the primary decision-maker or is more investment savvy, advisors tend to give them more of their attention. They may sit back and do more listening, but you’d be surprised at how many wives take command of financial conversations at home. If they don’t feel you take them seriously or that their input isn’t important, they will exert their veto power.
It’s also essential to be aware that, either through death or divorce, most wives will become sole decision-makers. And studies show that nearly three-quarters of widows and divorcees wind up seeking a new advisory relationship.
It’s your job to make a connection with the wives and draw them into the conversation, asking for their input and making them feel like an equal in the relationship.
#3. Not knowing anything about your prospect
These days, when you demonstrate a lack of knowledge about your prospects, you are confirming your laziness and a lack of interest. With all the information available on social media and Google, there is never a good reason not to know everything about your prospects, including their lives, careers, education, hobbies, and community involvement. Having that background on your prospects is key to building a personal connection through shared interests and values. Most people would expect you to do your research, and if you didn’t, they would probably be insulted.
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#4. Trying to be everything to everybody
If you’re hungry for business, it seems reasonable to cast as wide a net as possible to find prospects, ending up with a potpourri of personas. You become less unique, less differentiated, and less appealing to the ideal clients you want to attract. You also become less efficient in building a practice and less effective at honing a compelling value proposition.
That’s okay if you need to fill the pipeline, but it won’t necessarily translate to more clients. It’s essential to work simultaneously at identifying and developing a niche market where you can narrow your focus and channel your energy and resources more productively into a more targeted market. It doesn’t take long to develop a reputation as an expert working with a particular niche, where you can differentiate yourself.
#5. Overpromising and underdelivering
It’s not uncommon for advisors, in an effort to win new clients, to make promises they’re not sure they can fulfill. The most obvious example is investment returns—telling prospective clients they should expect above-average returns when they have absolutely no control over the actual results. That sets your clients up for disappointment, giving them a good reason to leave. It also happens when setting client service expectations. The moment clients realize they’re not experiencing the level of service promised, they’re out the door.
First, take the emphasis off of investment performance and refocus it on your clients’ goals and objectives. Second, while you can’t control investment returns, you can control how well your clients are treated. Only promise what you know you can deliver and then do everything you can to exceed their expectations.
Related: How to Build Immediate Personal Connections Naturally