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Top 10 tips for new financial advisers

Top 10 tips for new financial advisers

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By David Bax ·
October 16 2015

Top 10 tips for new financial advisers

The career path of a financial adviser can be extremely rewarding, but it can also be extremely frustrating.

So you want to help people reach their full financial potential? Assist clients to make sense of the complicated, heavily legislated world of finance and investments?

I have compiled 10 tips and techniques that I have developed in my first two years of advising.

It's a sales game you're playing

While the emotional rewards are what drive me as a financial adviser, I would not have remained employed if revenue was not flowing into my employer's advice practice.

I always contemplate if the client I am speaking with is of value to the practice and worth my time in helping.

I know this may sound mercenary, however, I have attempted to do "love jobs" in the past. These clients don't seem to value my expertise as much as paying clients do. They throw up more roadblocks and they certainly don't help me validate my targets or keep my employer happy.


Walk into every meeting as if you have met your targets

I force myself into a state of thinking that I don't need to sign potential clients into an advice relationship. Early on I would offer advice to anyone with a pulse, attempting to persuade clients that there is a great benefit.

I have not yet met a client that I couldn't help either by sorting out superannuation, educating them on investment markets, insuring them against misfortune, restructuring debt, allowing them to take control of their cash flow.

However, the truth is that not everyone wants advice. Not everyone is ready to make a change. The apathy Australians have towards their finances is endemic.

By walking into a meeting with the mindset of not needing a signature, it allows me to validate my potential clients. It allows me to have more meaningful conversations about their needs and concerns. It also creates an atmosphere where proactive clients, who want to take control, gravitate to the close on their own.

They will often say: "I was hoping you could help with that."

Build a pipeline of potential clients 

Once again this stems from Australians' apathy. In my first 12 months of financial planning I had only two clients ring the practice seeking financial advice.

You need to be proactive in communicating whether by phone, email or face-to-face. Building pipelines of clients who you would like to meet, may like to meet in a few months, or contact in the future, ensures sustainable success.

I keep a detailed spreadsheet of the clients I have spoken to, what we discussed and when they would like to be contacted again. I then set up meetings in my outlook calender for when callbacks need to be made. Always call when you say you will. If you can't seem trustworthy to do what you say, how will clients trust you with their wealth and life savings?

Work out your ratios. I know if I spend an hour on the phone I should book one to three appointments. Sometimes it will be none, sometimes I may book five, but averages are your friend here.

I also know that I will sign up one in three face-to-face meetings. One client will sign in the first meeting, one will sign in a month or two and one will be too apathetic to want advice.

Therefore I know I must spend six to 10 hours on the phone each week to get six appointments that will lead to two sign-ups, two future sign-ups and two clients I may call back in six to 12 months to see how they are going.

Find a mentor

I was lucky in that my first financial planning role I was working for a small family business. There was never a question I couldn't ask. We would do joint appointments and evaluate each other openly and honestly.

I would finish some appointments at 9pm on a weeknight and call my mentor on the way home. Either pumped up because I had brought on a client or dejected because I couldn't connect with a client. He was always there to answer the phone and we would chat in length about ways I could improve.

The knowledge and value our relationship has provided me is tremendous.

Develop a simple process, then implement it

Keeping things simple allows for greater efficiency.

I know some financial advisers who have massive spreadsheets and delve in to the nitty gritty detail on specific fund managers. While it is important to be across this, you can easily get bogged down in it and prevent yourself from making prospecting calls, seeing clients, and bringing in results.

I also have a simple process for on-boarding and working through clients' situations: I delegate as much work as possible. I don't prepare application forms, lodge paperwork or follow up with external providers - my administration staff does.

I also outsource paraplanning. As soon as a client's file is on my desk, my aim is to have it off my desk as soon as possible. This creates time for me to do what I do best - build relationships and see clients face-to-face.

Sell the relationship, not the product

I sell the relationship and strategies of financial advice. I market myself as a trustworthy person who knows the current rules and regulations and can educate clients as times and needs change.

I do not sell specific fund managers, mortgages, cheaper fees or that my model portfolio will outperform the market by five per cent.

I feel you are setting yourself up for failure by focusing on products, fees and performance.

If that is your only value add, then clients will be happy to leave should a cheaper solution come along.

You build a sales business, then a service business

During your first year as a new adviser, you are solely running a sales business.

My goal is to bring in as many new, qualified clients as possible. You then need to build and add value to these relationships over time. Eventually I aim to have a core business of 100-200 clients, which provide ongoing revenue. I am then able to choose my new clients more specifically and focus more on servicing existing clients rather than finding new ones.

I firmly believe it is easier to keep clients than to attract new ones.

Eat your own cooking

I have met plenty of advisers who do not take their own advice. Advisers who rely solely on their employers' superannuation guarantee contributions, don't build investment assets and don't have a personal budget.

My mentor's first assignment for me when starting out was to create my own budget, look at my personal debt and build a debt reduction plan. Through doing this I saw the tangible benefits of the advice I was providing. I could relate to clients about my own personal journey and how the strategies I was discussing could help them also.

I am able to advise with conviction. I know the strategy works!

Prepare for heartbreak

Providing financial advice isn't easy. It takes a unique individual who enjoys building relationships and can handle the anguish when those relationships vanish without a specific reason or a fault on your part.

You can put together the most amazing financial plan only to review the client in 12 months to find out their surplus has turned into a deficit, or they have borrowed against their home without contacting you.

So prepare for heartbreak.

Search for learning

After every meeting I evaluate myself, asking questions such as "What could I have done better?", "What topics had the client engaged?" and "Where did I lose their interest?"

I constantly apply new techniques and mix up my presentations to suit prospective clients. I speak differently to a 30 year old than I do to a 58 year old.

I may paraphrase or parrot phrase, depending on the situation.

As well as learning from your own actions and results, make sure you learn from your clients.

You will meet wealthy clients, poor clients, young and old. When I meet clients who are wealthy I try to absorb as much from them as possible. How did they build their wealth? and what could I learn from them to help me in my own life? On the other side of the coin are clients who are in financial trouble. I learn how they got into that situation and how can I avoid making those mistakes or decisions.

 David Bax is a senior financial adviser at Activate Financial Services.

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