Treasure Island was a novel written by Robert Louis Stevenson. It is a classic. The famous writer also made the important observation “Everyone lives by selling something.” This speaks to pride in your profession as a financial advisor.
There are people who separate “professions” from other occupations. They often consider people in sales or whose jobs involve sales are not peers or on the same social level in society. Stevenson’s point is every career you can imagine involves some degree of sales. Here are a few examples:
- Doctors. The patient really needs to drink less, lose weight and exercise. The doctor needs to persuade them to take the necessary steps to avoid tragic consequences.
- Lawyers. Attorneys stand up in the courtroom arguing cases before the jury. Both the prosecution and defense are laying out their narrative, asking the jury to choose their alternative explanation of the facts. They are selling their narrative to the jury.
- Clergy. They preach to encourage people to, live better lives, but also to keep coming back and support their faith community financially.
- Politicians. They try to get legislation passed by building support and making deals. They also need to convince the electorate to vote for them and donors to support them financially.
Pride and Salesmanship
It seems obvious financial advisors are salespeople. They try to persuade people to buy products. Where else does salesmanship and pride enter into the equation?
- Choosing your firm. The advisor is proud of the firm they have chosen. They were not drafted into the firm through conscription. There are many firms providing many similar services. The advisor chose this one above others. They need to make the case why it is the best.
- Turning the prospect into a client. The investor isn’t buying into a subscription service like Netflix, offering a set of services you can choose (or not choose) to access. The advisor is the point person in the relationship. The advisor needs to get the message across this will be an ongoing relationship.
- You will be an important client. This is a long-term relationship. If the prospect decides “You are the right advisor for me” the advisor is not going to reassign the client or disappear behind a team structure, rarely interacting with the client.
- Stay the course. The stock market can be volatile. If your client watches TV news they might think it’s time to sell everything. They can get scared. The advisor needs to help them focus on the long view, put things in perspective and look for opportunities other might be missing.
- Keeping the client. There are times when clients and advisors disagree. Sometimes clients have unrealistic expectations. Other time a problem arose requiring a resolution. The client could easily decide to move their account elsewhere. Through understanding and negotiation, the advisor works to retain the client.
- Those who tempt the client. Advisors focus on getting new clients. Your best clients are another advisor’s best prospects. They try to convince your client the grass is greener on the other side. The advisor needs to explain why it is the same grass.
- The client as advocate and cheerleader. The advisor does the best job possible for their client. They need to sell their own performance to the client, encouraging them to tell the advisor’s story to their friends, become an advocate and refer their friends.
- Establishing the fee structure is fair. Clients pay to be clients. It is human nature to want as much as you can get while paying as little as necessary. The advisor must make the case they are delivering value for money, especially after the fact when the client thinks the outcome was obvious.
- The concept of trust. The advisor needs to establish themselves as trustworthy, otherwise there is an adversarial relationship. The advisor intends to act in the best interests of the client. This is not a relationship with a winner and a loser.
- Selling the long-term goal. Many people are into immediate gratification. TV advertising tells us we should buy things immediately. Through financial planning, the advisor helps the client see a long-term goal. It requires discipline because they need to save money regularly along the way. They need to measure progress along the way. The goal needs to feel achievable. It needs to be great enough to justify short term sacrifice and delayed gratification.
Advisors are in the business of selling. Robert Louis Stevenson explained so is everyone else. You are not merely selling an investment. There are many aspects of sales within the advisory relationship.