Sourcing Indirect Financial Incentives
Indirect incentives differentiate you from other professionals and forge stronger bonds without necessarily sapping your revenues. But most financial advisors find it arduous and challenging coming up with viable indirect incentives (Exhibit 2).


We readily recognize the difficulties involved. Our answer is that, for many advisors, the answer isn’t to create something totally new of value but to do something better. In other words, deft and clever imitation of others is better than innovation. The simplest approach is to scan your own professional environment to see what resources are available to you and then slightly “repackage” or “repurpose” content for particular people by expanding the breadth of the material, by making it more usable or by making it easier to understand.

Implications
With competition for the affluent so intense, financial advisors are recognizing the business development opportunities in cultivating relationships with other professionals. But successfully getting new wealthy client introductions from other professionals means more than being good at what you do and having chemistry with these professionals.

Direct incentives (like trading clients) are always attractive, but there are lots of inherent complications. Thus, advisors would be wise to focus on delivering indirect incentives. Even if you don’t believe yourself capable of that, the reality is that it isn’t all that difficult to do. A critical benefit is that they are highly effective in differentiating you.

Russ Alan Prince is president of R.A. Prince & Associates Inc. and executive director of Private Wealth magazine.

Brett Van Bortel is director of consulting services for Invesco Consulting, the sales consulting group within Invesco Distributions Inc. The opinions expressed are those of Russ Alan Prince and Brett Van Bortel, and are based on current market conditions and subject to change without notice. These opinions may differ from those of other Invesco investment professionals.
 

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