Seven Reasons You'll Fail as a Financial Advisor

Seven Reasons You'll Fail as a Financial Advisor

If you're a financial advisor, make sure you get The Ultimate Financial Advisor's Guide to Getting More Clients. It comes with a money-back guarantee, because if you can't get more clients with the information, I don't deserve to keep your money. 

Is being a financial advisor worth it? 

I am an optimistic person and I encourage other people to keep a positive mental attitude (shout-out to Napoleon Hill and W. Clement Stone). However, by taking a good, hard look at the negatives in life, we can successfully pivot towards the positive aspects that will help us achieve our goals.

Here are the seven reasons that explain the low financial advisor success rate.

1. You won’t prospect.

You won’t make it in business if you don’t get clients. You won’t get clients if you don’t get prospects. Shocker! Luckily, my Ultimate Financial Advisor’s Guide to Getting More Clients goes into detail oncold calling, social media, referrals, direct mail, etc.

I understand that hearing the word “no” is painful. I don’t remember the exact statistic but I’ve heard that by the time we enter adulthood, we’ve heard the word “no” 250,000 times vs. “yes” a mere 10,000. Because of this, we’ve learned to associate “no” with not getting what you want, and it hurts.

I hear a lot of financial advisors say that they aren’t in sales and that they just want to help people. There’s nothing wrong with that, but if you want to increase your business and help LOTS of people,you have to prospect.  

2. You won’t follow up.

Follow-up is everything. People are busy, and your best clients are going to be the ones who are difficult to reach. How many times have you talked to someone for the first time and they said, “Oh, by the way – I want to let you handle all of my investable assets immediately! Where do I sign up?”

Some advisors talk a big game about following up and may even have the best of intentions, but they don’t automate the process or block it in their schedule. If you are truly committed to building your practice, you will make sure that nothing is left to chance or falls through the cracks.

3. You’ll let one bad experience throw you off your game.

Are you having a bad day or did you have a bad five minutes that you think is your whole day? I hope you memorize that sentence, because it changed my life. Whenever I feel bad, I ask myself if I’m really having a bad day. Most of the time, I’m just wallowing over a few bad minutes.

Bad stuff happens. Your clients leave you. Prospects who you thought were sure to convert end up with another advisor. People yell at you. Is your stomach churning yet?

Just keep moving. Deal with the stuff that comes up and do the best you can with what you have. Once you’ve done everything you can to remedy a situation, move on and do something else productive. Don’t get sucked into the bottomless pit of anxiety and worry. Napoleon Hill said it best: “NOTHING which life has to offer is worth the price of worry.” True that, Nap. True that.

4. You won’t make the decision to be great.

Oh yeah, you have to DECIDE that you’re going to be great. Getting clients and building a book of business isn’t terribly complicated. It’s simple, but not easy. There are so many excuses that people make up to avoid building their business. The industry’s changing, people don’t answer the phones anymore, it’s too competitive (we’ll get to that), and so on.

Whatever excuse you make up in your own mind will be true… for you. Not for me. Not for your competition. So you might as well give yourself an empowering mindset to help you persevere and succeed.  

5. You’ll think it’s too competitive.

I didn’t say “because it’s competitive.” I said because you’ll THINK it’s too competitive. Here are a couple reasons why you’ll buy into this false belief…

  • Because you don’t have a niche. If you are a generalist, your pool of competitors is HUGE. If you focus on a certain demographic, you give yourself a tremendous advantage.
  • You refuse to position yourself as a strong number two in the prospect’s mind. This is a problem with the advisors who get discouraged and think that “everyone already has an advisor”. This isn’t bad news – it’s great! These are people who have already demonstrated that having a financial advisor is important. Besides, if your competition won’t be a strong number two and you will, who do you think the person is going to call when the current advisor inevitably screws up?

6. You will keep making the same mistakes over and over.

When you fail to convert a prospect, do you ask why you didn’t get that person’s business? Most people don’t. It’s painful and uncomfortable and it forces you to acknowledge that you’re less than perfect. When you ask “why” you are humbling yourself to see what you could do differently next time to change the result. If it’s something you are unaware of, you will keep making the mistake until someone points it out for you!

If it can be measured, it can be improved, and you should be measuring everything you can. This includes your number of leads, number of contacts, number of follow ups, your ratios, and much more. When you have all of the data in front of your face, you can tweak your process to improve your results.

By the way, if you're not taking advantage of a CRM to track everything you do, read my article about the best CRM for financial advisors. 

7. Your outlook will be too short-sighted.

If you’re just looking for the next deal to put food on the table, you run the risk of cutting corners or making decisions that aren’t in your best interests for the long-term. Do the right thing all the time and you won’t have anything to worry about… even if it hurts in the short-term. 

James Pollard
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James Pollard is a marketing consultant who specializes in helping financial services professionals grow their business over at ... Click for full bio

What's an Investor to Do When History Doesn't Repeat Itself?

What's an Investor to Do When History Doesn't Repeat Itself?

We’re in an era of extremes. It seems a day doesn’t go by without the word “historical” popping up in the financial news.

The equities market and consumer debt are at historical highs. Interest rates and high-yield credit spreads are at historical lows. We haven’t seen even a 5% pull-back in the market this year—for the first time since 1995—and the DJIA is exhibiting its narrowest trading range in history. These are indeed historical times. And whether this fact has you filled with extreme optimism or extreme pessimism, you have some important decisions to make going forward.

There are theories about how we landed in this particular era of extremes, and most are rooted in the significant changes that have impacted both how we live and how we invest. At the top of the list are globalization, automation, and the largest aging population in history (yet another “historical” to add to the list). It’s said that the most dangerous words in investing are, “it’s different this time,” yet one has to wonder if, in fact, it really is different this time. Not just because of the historical market highs. After all, there always has been and always will be a new market high waiting around the corner. What’s different today is the sheer number and confluence of these extreme highs and lows—and their duration. It’s a situation no investor has experienced before, which can make these waters feel pretty daunting. History repeats itself, and investment strategies are largely built on that conviction. But what do we do when it doesn’t? When history fails to repeat itself, how can investors plan for tomorrow with confidence that they are positioned to protect their assets and gain a reasonable level of yield?

The first step is to recognize that, at least in many ways, the investment landscape really is different this time around. All you have to do is look at the numbers to be sure of that fact. And the catalysts I mentioned before—globalization, automation, and the aging population—aren’t going anywhere. If anything, the impact of each will only grow as time moves on. What that means is that there’s no way to predict what’s coming next. The only thing we know for certain is that predictability is a thing of the past (if it ever really existed at all). The result: you need to approach your portfolio differently than you ever have before.

Your goal, of course, is to find return given a risk tolerance. Current yield is an important part of total return and getting it is an elusive proposition in today’s market. If, like many people, you’re less than confident that the four major sectors that currently drive the equities market—healthcare, discretionary, tech, and financial—are poised to continue to rise at even close to recent rates, it may be wise to seek out alternatives to help drive yield without adding more risk to the equation.

But if alternatives are the wise path forward, which alternatives are the best options?

Real Estate Investment Trusts (REITs), Business Development Companies (BDCs), and energy stocks, traditionally the favored “non-correlated alternatives,” defied expectations when the stock market crashed in 2008, inconveniently revealing high correlations just as the equities market began its freefall. Anyone who was invested in these alternatives at the time knows all too well the devastating impact “non-correlated investments” can have on a portfolio, especially when they fail to do their job when it matters most.

Luckily, there is one alternative that can be counted on to remain uncorrelated to the traditional financial markets and, ultimately, deliver that precious yield: life insurance-based investments. And because this asset is literally built on one of the irreversible catalysts of change, the aging Baby Boomer population, owning life insurance may in fact be the ideal alternative to help investors generate non-correlated returns, regardless of where the market turns next. Even better, these investments typically deliver those returns with very low volatility.

Related: 3 Reasons Alternative Investments May Be Your New Key to Success in Changing Times

What makes life insurance different is that, unlike typical alternative vehicles, secondary life insurance returns aren’t based on the economy. Instead, they are inherently non-correlated because returns are based solely on the longevity of the individual insureds.

As much as we would all love for the bull market to continue on its merry way, one thing history does tell us even today is that a bear market will come. It’s only a matter of when. As you strive to hedge your portfolios and prepare for the inevitable, life insurance-based investments are one tool that can help you achieve the three things you need most: diversification, low volatility, and yield.

Bill Acheson
Investing in Life
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Bill Acheson is the Chief Financial Officer of GWG Holdings, Inc. Mr. Acheson has over 25 years of sophisticated financial services expertise. Mr. Acheson has extensive experi ... Click for full bio