What to Do With an Ideal Prospect With Little to Invest?

What do you do if you’re talking to the nicest prospect, who you think would be the ideal client, until you find out they’re broke?

This was exactly the situation an advisor called me with a couple of weeks back. She had met with a neat couple she really enjoyed. This young lady was a schoolteacher. Her husband was a musician. They were serious about what they wanted to achieve financially, but it was way down the track, and, relative to assets, they had practically none. They had just moved into their first home, everything had gone into the mortgage, and so there were no assets to speak of that were going to come in for the advisor. So I asked her what she did.

She did offer to do a financial plan for them, but reduced her price — reduced the fee to $1500. Then she said she was thinking about managing the assets (what little they had) at no cost until they reached a certain threshold. I thought that was a great idea.

She had reduced the fee from $3000 for a plan to $1500 because, as I pointed out to her, she needed to provide value. Something that’s given for free is usually not valued. I talk with advisors who think giving away a financial plan for free will entice the person to come on and develop a relationship. Maybe, but oftentimes anything that we receive for free, we value less.

So you can reduce your fee, and she did to $1500, but I suggested to her, “Wait until they have a certain number of assets with you, and then start charging them.”

So she went back, clarified exactly how that would work, and she was very specific:

“For not charging you anything for the little you have with me, we’ll meet two times a year by phone, or by teleconference, and you can then ask me any questions at those points. If you have something crop up between our meetings that you feel is urgent, just send me a text, or send me an email, and I’ll respond to you that way. Or maybe we’ll jump on the phone and have a quick five-minute call.”She defined the scope of the relationship. She was also very clear that once the asset level reaches a certain threshold, she is going to start charging her regular fee. The new clients went away very happy, very positive. She felt like she had provided a really great service and really enjoyed working with these people. So ...

  1. When you have somebody that’s below your minimum, but you like working with them, figure out a way to do it.
  2. Figure out a system, a process for bringing people like this on board, and get comfortable communicating to them exactly how the relationship is going to work.
  3. No matter how nice they might be as people, if they overstep those boundaries, you have to let them know, “Hey, this is what we agreed upon. I want to keep working with you, but we have to follow things this way. This is the only way it’s going to work.”

Bring on people you love working with, have ways to charge them accordingly and appropriately so they appreciate your efforts, deepen the relationships and then, eventually, you will actually be earning money on the assets that they bring you as they grow and follow your original financial plan for them.

Related: Why Advisors Should Be Careful Saying These Nice Words