Advisors Vetting Prospects

Much is written on what an individual investor should be looking for in a financial advisor. Less discussed, however, is what advisors should look for in individual investors before accepting them as clients.

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    Advisors Vetting Prospects

    Advisors Vetting Prospects

    Much is written on what an individual investor should be looking for in a financial advisor. Less discussed, however, is what advisors should look for in individual investors before accepting them as clients.

    Vetting prospects is one of the great benefits of success. For successful advisors, the reward of working with clients they like and admire far outweighs the reward of adding assets from people whose personalities and attitudes are less than favorable to the advisor and his or her practice.

    Picking Up on Prospect Cues

    While the primary objective of prospecting is to persuade an individual to engage your wealth management services, the advisor should also use these interactions to assess whether he or she wants the prospect to be a client at all.

    This means going far beyond ascertaining whether the individual has sufficient financial assets. It means zeroing in on comments and behaviors that may be revealing of the nature of a future client relationship.

    There are several prospect types that advisors may want to avoid bringing on as clients.

    1. The Know-It-All—This personality type spends time telling you about the markets and great investment opportunities. He or she goes into great length about the rock-solid financial plans he or she has developed. They spend more time talking than asking questions of you. The Know-It-All as a client is likely to become a Category 4 headache to the advisor.
    2. The Unreliable—This prospect fails to show up to scheduled meetings, doesn’t return calls or requires multiple follow-ups to obtain information an advisor needs. The unreliable prospect doesn’t become more reliable as a client, meaning this individual is likely to take up a disproportionate amount of an advisor’s time and attention. Move on.
    3. The Fee Sensitive—These individuals focus on the price of something rather than its value. If a prospect seems to spend too much time talking about fees and even tries to negotiate them lower, their time with you will be measured in months, not years.
    4. Rude or Disrespectful—Individuals that treat, for example, your receptionist or building staff with disrespect may not be the sort of person with whom an advisor wishes to work. Yes, they may be courteous to the advisor (for now, at least), but it’s a flag for how they’ll potentially behave in the future.

    What’s been your experience? Do you have insights to share with fellow advisors that will help them avoid difficult clients?

    Please reference disclosures: https://blog.americanportfolios.com/disclosures/

    About The Author

     

    Director of Practice Management 
    631.439.4600, ext. 212 

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