Financial advisors invariably ask themselves one question which nags at them as they try to attract new business:
Is there benefit in being a pest?
At one point or another, most advisors find themselves in the position of needing to attract new clients. In fact, there may be advisors who never stop looking for new clients.
Advisors often have tried and true methods for finding new clients, while others are ready to adopt new methods to see if they can be more successful or attract new and lucrative business.
The difficult part about prospecting for new clients is that most advisors face a lot of negative response, or their sales ploys are ignored entirely. Such work is not for the faint of heart or pessimistic personality. Advisors who make the effort to sell themselves to prospective clients need to be able to handle rejection, because they will face a great deal of that.
But are advisors advised to take “No’’ for a final answer?
Spectrem’s study Preferred Sales Approach: Capturing the Wealthy Investor indicates that advisors should not necessarily close the book on investors who do not sign on the dotted line following an initial contact. Many investors prefer to start a dialogue with an advisor before agreeing to work with that person. And it is possible that a person addressed in January may not need an advisor but that same person in June will be looking for assistance.
In the Spectrem study, investors were asked a series of questions related to the timeframe in which they agreed to work with an advisor. For example, they were asked “how many meetings do you have with the advisor before making the decision to work with them?
While 60 percent of investors made the immediate decision to work with an advisor upon first meeting, 26 percent needed a second consult before signing up, and 14 percent needed at least three conversations before being convinced they should move ahead with the relationship. More than 30 percent of Millennials needed at least three meetings before agreeing to a working relationship.
When a first contact results in a suggestion that you “contact me again later”, it is fair for an advisor to ask for a definition of “later”. According to the study, 41 percent of investors believe contact once a quarter constitutes “later””, while almost 30 percent are willing to accept more frequent contact. The older the investor, the less frequent contact they desire. Among Millennials, almost one-quarter don’t mind being nudged two times a month.
How is an advisor to know the timing of follow-up inquiries? The best way is to ask and to record the responses. Investors who have no intention of working with you are likely to tell you so (they may be against the idea of a financial advisor entirely, so don’t take that sort of rejection personally). Investors who are on the fence about the idea are more likely to suggest an appropriate time for a second entreaty.
Most investor-advisor relationships are started within six months of the initial meeting, although investors who are more knowledgeable about investing and financing take longer to make decisions about advisors.
There is a fine line between being persistent and being a pest. Advisors learn over time how to handle repeated requests, but it is good to know how to handle investors who may appear to be wavering even as they say “no, thank you”.
Related: Do Investors Prefer a Male Advisor?