Find the “Nagging Concern” and Become Your Client’s Trusted Advisor
February 21, 2013 by Mark Stone
Breaking down the trust barrier is an issue you probably face on a daily basis. It is the reason why insurance agents, advisors, lawyers and others in consultative roles are not often at the top of the trust surveys. It is fundamentally your biggest growth challenge and inhibitor to greater success.
Even after a dazzling sales presentation, you may have been troubled to find that the client wasn’t impressed, wasn’t “so sure” in their response.
The Easy Button
The truth is that we are all looking for that “easy button” that will enable us to connect with clients, have them hang on our every word, and have them follow our recommendations. But nothing is ever so easy.
If there were an easy button it would be “relationship management.” It is simply being the one advisor who finds out what your clients really care about, the nagging financial worry that they have, and then answering that concern.
You will find that their nagging financial worry is, generally, nearly always some variation of “How can I attain and maintain long-term financial security?” This will sometimes be expressed by younger clients as “How can I afford to send my kids to college?”, and sometimes by older clients as “How much can I withdraw from my assets each year without worrying about them running out?”
Every client has a core financial question and the advisor who uncovers that question and then answers it will become that client’s primary financial advisor.
Example
Imagine that you get a referral of a married couple in their upper fifties with approximately $500,000 in assets. They had just inherited an additional $500,000 and they were looking for advice as to what to do with it. Should they, for example, pay off their mortgage? By the way, they have already spoken with about a half dozen advisors and they have absolutely no intention of buying any financial product through you. Let’s say they had all of their money with Vanguard, they trusted Vanguard, and the new money is going to Vanguard as well.
So you ask: “What are you trying to achieve, and what financial concerns do you have?” This question is second nature to you, but apparently the six prior advisors to the client had never asked them. After discussing it, you come upon their nagging financial worry: “Can we retire in five years and maintain our current lifestyle?” (This was their personal version of the generic question “How can I attain and maintain long-term financial security?”)
In order to answer this question, you need to gather information on their entire financial situation; their current income, what income they expected after retirement, their current spending and any future plans, as well as an inventory of all their assets and liabilities. Then you plug the information into some financial projection software and create a variety of scenarios to present to the couple.
You have good news. If everything went well, their assets held their value and earned a respectable return, and if they both lived long, healthy lives in their existing home, they would be able to retire in five years and maintain their current lifestyle.
You also are able to identify their biggest threat – the possibility that either one of them could decline in health and require assistance on a daily basis for a lengthy period of time. If that scenario were to happen, their expenses would increase sharply causing them to start to burn through their assets too quickly. You discuss how Medicaid works and steps in after all assets are gone.
This motivates the couple to mitigate this risk. This opens up the door to a new type of sale, a new way to leverage a solution that offers critical illness or LTC protection on top of whatever financial vehicle you recommend…it all depends on the client’s situation of course.
Find that Nagging Financial Concern
So, looking at this example, how did I earn the clients’ trust and make a bigger sale than they ever would have expected? By becoming the one advisor who found out what they really cared about – the nagging financial worry that they had – and answering that concern. I then showed them the major threat to their long-term financial security, and how to address it.
You might be thinking that that’s obvious. On the contrary, my experience has shown that almost every prospective client has a nagging financial worry that none of their existing financial professionals have uncovered and answered. I suspect that this is because most financial professionals are, perhaps even subconsciously, more concerned about selling their favorite solution than about finding what truly motivates their client.
My challenge simply is to unearth the deep-rooted financial concerns of my clients. Whether that will lead to an annuity sale, a life insurance sale, a long-term insurance care sale, or any kind of sale, I will not know in advance. But once I have unearthed my clients’ deep-rooted financial concerns, I am well on my way to becoming their trusted financial advisor
