Starting a new career always has its challenges. The toughest task for new financial advisors is building a pipeline of eligible prospects and, eventually, signing them on as clients.
The good news is that there’s a ready and willing group of potential clients out there looking for financial advice, says Vas Pachapurkar, vice president of financial services for Ontario with Investors Group Inc. (IG) in Toronto. The door is wide open, he says, for advisors and planners who can make prospects feel comfortable.
“People really do want to get involved in financial planning,” Pachapurkar says. “They just don’t know where to go and they want to work with someone they trust.”
Some dealer firms offer sales training for new advisors. For example, Pachapurkar says, Winnipeg-based IG, which has a dedicated slate of advisors, teaches new advisors about building relationships by developing rapport and trust with prospects before attempting to sell a product.
Many firms have mentoring programs and open-door policies involving their senior advisors to encourage those veteran advisors to help newcomers.
At some point, though, it is time for new advisors to leave the nest and build their own prospect pipelines.
For most new advisors, prospecting begins at home with family and friends. That’s a good start, but rarely sufficient to sustain a business.
“You need to keep your funnel full,” says Pachapurkar.
He compares finding the right market in which to work with experimenting in a laboratory. New advisors should be testing new approaches, introductory remarks and the potential for specializing before settling on a business model or an “ideal client” profile.
George Hartman, managing partner with Accretive Advisor Inc. in Toronto, suggests new advisors look at what kind of person they want as a client in terms of age, income and occupation.
“In one sense,” Hartman says, “a new advisor may say, ‘I’ll go anywhere and do business with anyone.’ But you shouldn’t. While you don’t want to be too narrow in the beginning, you should have a good idea [of the type of client you want to work with].”
Often, new advisors have success in courting prospects who share their characteristics – perhaps people in their 20s with an entrepreneurial spirit and a drive to get ahead. Prospects such as these can be found – or created – among your centres of influence, which can include real estate agents, mortgage brokers, lawyers and accountants who can provide a pipeline of referrals for each other.
Shaun Goolcharan, an advisor with Waterloo, Ont.-based Sun Life Financial (Canada) Inc. in Winnipeg, describes how such a relationship can work: “I deal with a real estate agent who often says to his clients: ‘I have set you up with a mortgage, but have you done a financial plan for yourself? Have you sat down with an advisor to help you with your retirement or long-term goals?’
“Some people say they already have [a financial plan],” Goolcharan continues, “and others ask if the real estate agent can recommend someone.”
And while many people consider a “new advisor” to be a 20-something university graduate who has passed the Canadian securities course and obtained a mutual fund sales licence, a relatively large number of advisors entering the business today are in their 40s. These older rookie advisors have extensive backgrounds, large networks, more confidence and access to more prospects, Hartman says, so they probably will be more successful in both the short and the long term.
New advisors who also are involved in their community – through volunteering, playing hockey on Sunday nights or participating in cultural events – can tap into those domains.
Goolcharan, for example, played in a band, among other cultural activities, prior to joining Sun Life. “And now,” he says, “any cultural event I go to, whether at my church or in general, there is usually one person who will come up to me – either an existing client or someone I met while prospecting – and tell me that they have switched their job or say they need life insurance.”
Approaching prospects can be difficult. Getting them to talk about themselves is always a good first step, says Hartman. Work on the questions ahead of time, show interest and be able to go with the flow of the conversation.
Young advisors, Hartman says, also should be prepared to answer the inevitable question of why a prospect should trust someone so new to the business. He suggests: “You can say, ‘You are right. I have been in the business for only a few months. But the good news is that the company I am with has been in the business for 100 years and they have a massive amount of resources to which they have given me full access’.”
Once you have determined your new market, tap into the communication lines that work best for that market, whether it’s social media, a newsletter or phone calls. Also, attend networking groups and seminars that interest you.
As a new advisor, work only on the pipelines you enjoy. So, if you don’t enjoy asking for referrals or cold-calling, then don’t work your network that way. Says Goolcharan: “You need to find what works best for you.”
The following are some dos and don’ts from our experts for new advisors:
–do:
– Make prospecting a consistent activity. Dedicate time to pursue new avenues of growth and business development.
– Develop an “ideal client” profile to help you determine the kinds of people you want to do business with.
– Listen. Talking too much can turn off prospects.
–don’t:
– Go after CEOs of Fortune 500 companies. You won’t make it past the gatekeeper.
– Hold yourself out as an instant expert. Let people get to know you first.
– Give up too soon on an individual prospect. It might take two, three or four attempts to get the attention of the right person.
– Start talking about your business immediately. Instead, chat as you would with anyone.IE
© 2013 Investment Executive. All rights reserved.