People postpone investing for a variety of reasons. It’s your job to identify the source of their inaction. Then you can present them with a strong case as to why they need to start an investment plan.Here are some reasons why people may be reluctant to invest, and how to change their mind and influence them into action.
Reason #1: Instant gratification is the highest priority
The fact is most people would rather spend money now than save it for a rainy day. The lure of a new kitchen or car prevents them from doing the right thing and starting an investment plan.To help you overcome their reluctance to act use visualization techniques
. Encourage prospects to imagine their dream retirement – or picture how it will feel to get the kids through college without any financial disruption.If you’re talking to future retirees, help them paint a picture of their pre-funded retirement in clear, vivid detail. They need to imagine not just a ‘generic’ comfortable retirement, but a personal in-depth vision of their own dream retirement.Ask questions to help them envision the future. Where will they be living? Somewhere sunny with a golf course? How will it feel to get up every day safe in the knowledge that they’re free to do whatever they want – to travel, eat at nice restaurants, etc. By becoming fully immersed in this bright future, they can adopt a new mindset and give themselves a reason to save rather than spend.Re-iterate that their perfect retirement is possible – but only if they start their investment journey without delay. Yes, they will have to sacrifice instant gratification
– but the payoff will be huge, and you will be there to help them every step of the way.
Reason #2: The future looks a long way off
The future looks a long time off. When people have young children or it’s still twenty years until they retire, they may have the impression there’s plenty of time left in which to save. They see no reason to rush into investing. It’s your job to convince them otherwise
and make them understand that their apathy could incur disastrous consequences. Do this by presenting prospects with a reality check.If you are talking to a couple with a young family, get across that they only have around 180 pay checks left before their children enter higher education.Based on their circumstances, can they afford to pay the equivalent of a new car every year to fund this education? And if they have several children, the burden will be even higher. If they don’t start an investment plan right away, they may have to go into debt or rely on friends and family for help.Similarly, if you’re meeting with people of middle age, remind them how few pay checks they have left – maybe just 240 or so until they retire. If they don’t get started funding their retirement right away, there will be no way it will be comfortable.When presented with the reality of the situation prospects could start to see things differently and decide to take things further.
Reason #3: People don’t understand inflation
Many prospective clients disregard inflation when they’re thinking of the future. They don’t consider the rising costs of living, or the fact they may require an increasing amount of costly medications as they get older.It’s your job to tell clients that if they want a comfortable retirement, they must realize that while prices may triple their income won’t. They may in fact require millions of dollars to fund what could turn out to be a long retirement. Their only option is to develop a realistic plan to ensure they can enjoy the latter stages of their lives. The alternative would be to postpone retiring or rely on family or state benefits.As a financial advisor it’s your job to get people to see their financial situation as it really is. Unless prospects overcome their apathy towards investing, they could be in serious trouble in years to come. Help them understand
why having a solid financial plan is so important and you will not only win their business but be doing them a huge favor.Related: How to Elevate Your Brand and Justify Your Fees