Your best client is another advisor’s best prospect. If you work for a big name financial services firm, competitors are contacting your client making the case: “That’s not the place for you.” If you work at a big firm, there are many reasons to be proud. Communicate these reasons to your clients to strengthen the relationship and retain them.
Imagine your client hearing some of the following arguments over a gin martini or single malt scotch in a comfortable restaurant on a cold day:
1. You have outgrown that firm. In 1981, the brokerage firm Dean Witter was acquired by Sears Robuck & Co. Wall Street looked down its nose at the time and joked: “Stocks and socks. The logic from 40+ years ago applies here. The client is being flattered. The firm they are using is a “mass market” firm. They deserve the kind of attention lavished on the seriously wealthy. Their account might have been small once, making it a good fit for your firm. Now they should be taking a step up.
Consider: Everyone is going after the HNW and UHNW market. The difference is often how they define HNW and UHNW. If their account has grown over time, doesn’t that imply you, as their advisor, had something to do with that growth? Your firm offers tiers of service. This includes service online or by phone for small accounts, the service you provide within a band of asset size and private banking services for UHNW individuals. They have not outgrown your firm.
2. Your account is too small. They don’t want you. This is the opposite of the HNW argument. It makes the case firms are moving upmarket. If they haven’t sent you off to a call center, it’s simply a matter of time. They explain if you fall under a specific threshold, you will not have a dedicated local advisor anymore.
Consider: Advisors choose their own clients to a large extent. They seek long-term relationships. Your value as a client is not determined by the size of your assets. If you have chosen them as a client and you both get on well, they will remain your client. You might add you are aware some firms even build their business model around accounts that might be considered cast offs from the major firms.
3. Your firm only sells packaged products. You know this is not true. If you are licensed to sell individual securities like stocks and bonds, it’s highly likely your firm does business in this area. Your firm sells a wide range of products and services, probably as large or considerably larger than the competitor in question.
Consider: As an aside, exactly what is wrong with packaged products? Isn’t an index tracker fund a packaged product? Your firm has likely moved to an asset-based pricing system. If you want to trade individual stocks, what is stopping you.
4. We are fiduciaries. We put the client first. People often cite doctors, lawyers and accountants as fellow fiduciaries. They are implying if you do not meet this other party’s definition of a fiduciary, you are not putting the client first.
Consider: Your firm might consider you a fiduciary. You might consider yourself a fiduciary. Let us take that out of the equation. Let us assume you work for the firm that signs your paycheck. Your business succeeds when you have long-term relationships with your clients. You get these by giving them attention, treating them fairly, understanding their needs and goals plus doing your best to make them money. Regardless of what you call the relationship, you are both on the same side of the table.
5. We are smarter. The competitor might be a good stock picker. That’s the skill people traditionally associated with stockbrokers. They might be implying advisors at your firm are mere salespeople, not skilled practitioners.
Consider: Your firm is big. Big enough to operate a research department. Good enough to win awards. People often choose a firm not because of the likeability of the advisor, rather the resources the advisor has behind them. Resources they can deploy on behalf of the client.
6. You are paying too much. Your big firm is too expensive. They need to pay for all those offices around the country and that big headquarters. All that overhead gets built into the fees they charge clients like you. We are smaller. We can be more cost-effective.
Consider: Apparently, they have not heard of economies of scale. However, let us set that aside. Many firms have adopted an asset-based pricing model. This makes it easy to compare the offerings from firm to firm. You should have the ability to discount if negotiation is required.
7. We offer holistic services to our clients. The word “holistic” is quite popular. You look at the “whole” person or relationship. This implies you do not push products. The competitor is likely implying pushing product is what big firms do.
Consider: You can make the case big firms can deliver on “holistic” relationships better than smaller ones. Big firms are often owned by banks. That brings lending products like credit cards, mortgages and CDs into the relationship. They usually license their advisors for insurance products. If there is a situation requiring a solution, like providing for a special needs child, the chances are good there is a department at the firm specializing in that area.
8. You are just an account number over there. We know all our clients. You might be an account number if you are a “do-it-yourself” investor and trade online. Let us assume you work with an advisor who knows your name, someone you have met. The competitor might be trying to imply you have 10,000 clients. People are coming and going all the time.
Consider: The industry has moved in the direction of advisors building smaller clienteles. The expression “all things to some people” might be a good description. You might ask how many clients they think you have. Tell them if you have 50, 100 or 250. They should recognize that is a manageable number.
9. Our research is unbiased. This can be a clever way of admitting “We have no research department.” They buy research from one or several third-party providers. The client could actually do the same, if they chose. They are implying a big firm that does IPOs would taint its research in favor of its underwriting clients on the other side of the firm.
Consider: If your firm has a research department, it probably won awards. Third-party recognition of excellence is powerful. You might suggest they ask if the competitor’s research efforts have won any awards.
10. We are here to stay. This implies big firms are constantly reorganizing, opening and closing branch offices. The competitor is not doing that. The reason might be they only have one office.
Consider: How long has your firm had a presence in the local market. Offices get moved around when leases run out or the firm outgrows the space. That is normal. You are their advisor. As long as that relationship stays in place, where the firm puts your desk and chair is not very important. When was the last time they came into the office?
Big firms bring plenty of advantages to the relationship. You might be in a tall building in a prime location with the firm’s name on the roof. Do not let a competitor take these advantages away from you.
Bryce Sanders is president of Perceptive Business Solutions Inc. He provides HNW client acquisition training for the financial services industry. His book Captivating the Wealthy Investor is available on Amazon.