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Are You Any Good? Dealing With the Experience Question

“Why should I invest with you? Are you any good?” Advisors at all stages of their career face this question. In many other businesses, you can share feedback from satisfied customers. Isn’t that what Trip Advisor is all about? This is especially an issue for people choosing the financial services industry as a second or third career. How do you address the experience question?

What’s the Problem?

The issue has many faces. Many people think providing investment advice is a learned skill. If prospects fear you are inexperienced, they worry they are part of your learning curve. “I’m so sorry! I completely forgot if you short a stock, your position can be closed if the firm can no longer borrow the stock!”

If you live in a city known for brusque attitudes a friend might say: “I know you married my sister. Practice with other people’s money for a few years. If you’re still employed (and still married to my sister) maybe then I’ll give you some money.” Ouch. You go home, telling your spouse this business isn’t as easy as you thought it would be.

Eleven Strategies

Here are a few ways to address the issue:

  • Define your role. You are not a stock picker. You are a relationship manager. Your client completes a financial plan. You help choose money managers that fill slots within their asset allocation model. You sit on the same side of the table as you review progress to goals. Prospects can often see you as qualified to be a relationship manager.
  • Sell the firm. The best advisors are often extroverts, selling themselves to win the business. The rationale is the client is coming aboard because of the long term personal relationship to follow. The reputation of the firm also plays a part. They are hiring you because you can apply the resources of the firm to solving their problems. The firm has a big building with a big sign. Use that to your advantage.
  • Sell the team. You are part of a team. You might be a junior member, but you are literally a (business) card carrying member. You are in the team photo on the team website. The team has a catchy name that sounds like a law firm. Quote the collective years of experience, assets under management and credentials of the members. It’s the firm strategy outlined above, on a smaller scale.
  • Lean on your credentials. You need to get certain licenses before you can ask for orders. Many firms have programs for advisors to earn professional certifications. These might be initials after your name or framed certificates in your office. Talk about them. Explain what they represent. Your prospect likely needed to earn certifications to do their own job.
  • Firm awards. OK, so they might be related to sales. They probably require a clean compliance record too. These imply you are successful at your job. It’s another way of conveying experience.
  • Family history. Were your parents in the business? This implies you are following in their footsteps. Your prospect can name many family firms off the top of their heads. You are piggybacking on their experience.
  • It’s your passion. Have you always wanted to do this job? When politicians run for higher office, they talk about other jobs being stepping stones to get them to the one they’ve always wanted to do. People want to do business with someone who is passionate, vs. someone who is making time until a better offer comes along.
  • Years with your firm. This shows stability. It shows a level of commitment. People who stick with one firm will likely consider client relationships long term and be there when needed. At least it shows you were good enough not to get yourself fired. Longevity has a value. It communicates experience.
  • Years in the industry. Oops! You have moved around. You are pretty new to your firm. Lean on your industry experience. You’ve seen different market cycles. Experience can be collective.
  • Previous roles in the firm. You were an analyst before you became an advisor. Maybe you were a banker. The firm is a big place. People move around. You have connections. Show how the knowledge you gained elsewhere in the firm could benefit your prospect. They have other needs beside investment advice.
  • You’ve been featured in print. Some advisors are very fortunate. They get written up. They are on one of the Barron’s top advisor lists. Others write columns, with compliance approval. Your name is known in the community. Publicity works in your favor.
  • Lack of experience sounds like an objection, yet it can be an issue of perception. There are many ways you can address the issue .