How to Conduct Appointments With Prospective Clients

The Independent Financial Advisor’s Guide to Conducting Appointments

In this article, we share Dean Zayed, founder, and CEO of StockPointDigital, tried and true method of conducting appointments. You can quickly establish a strong connection with potential clients to guide them toward their retirement and financial goals. Utilizing these field-tested, constantly adjusted, and improved rules should springboard you to conducting appointments and improving your closing ratio. This article highlights some actionable and repeatable steps for the first interaction with a potential client and is broken into three segments for the initial meeting.

The process is split into two parts. In the first part, you'll teach them everything about you by providing them with essential information like who you are, what makes you and your firm stand out, what services you provide, and how you get paid. Rest assured, transparency is vital in this conversation, creating a comfortable atmosphere for your clients/prospects.

Then we move onto the "Getting to Know the Client" segment; you'll discuss their financial status, investment objectives, and other relevant information. You will assess critical factors such as net worth, income, tax brackets, and years to retirement. This ensures that your advice is custom-tailored to your specific needs and risk tolerance. As the meeting concludes, you will leave them excited for more.

3 Segments to the First Meeting

1) Education of yourself and your firm - 15 minutes

• Answer four questions
• Positioning yourself and your firm
• Capitalizing on your credentials
• Utilizing the breadth of solutions available via StockPointDigital

2) Getting to know the client - 40 minutes

• What information do you need to determine suitability
• Financial considerations for determining the suitability
• Evaluating risk tolerance
• Evaluating cash flow needs and time horizon

3) Closing statement and set second appointment - 5 minutes

Segment 1: Education of Yourself And Your Firm -15 minutes

In this first part of the meeting, you want to address four questions:

• Who we are - Your 5-minute story
• What sets us apart as independent fiduciary financial advisors
• What financial advisors do
• How do we get paid

Question 1: Who You Are:

Positioning Yourself And Your Firm

In this first segment, discuss your background, firm details, historical context, methodology, fee structure, and what sets you apart. This should be implemented consistently with every prospect, regardless of the existing relationship.

The rationale behind this approach is that although there may be familiarity on a personal level, the prospect may not have a comprehensive understanding of how you conduct their business as a financial advisor. The goal is to create a non-threatening environment that fosters a comfortable conversation between you, the advisor, and the prospective client.

It is important to discuss compensation. If you don't do that early in the meeting, it can cost you some opportunity. Don't hide from fees. Address them right upfront to build value into the fees with no surprises.

You want to say, "We are an independent firm (the word 'independent' is a keyword to use), and there are two aspects to our practice." "One part of our practice is an independent insurance agency. We have access to virtually the entire universe of insurance products. Love it or hate it, everyone needs insurance for things like auto and home. However, that's different from what we do. We deal with life insurance, annuities, and long-term care."

"The key, however, is "independent"; we don't work for MetLife, State Farm, or Allstate. If you need a long-term care policy, we list all the appropriate options and help you understand everything in detail."

"The other part of our practice is as an independent Investment Advisor, dealing with more traditional managed investment portfolios. These are more fee-based solutions where we actively manage your money."

Question 2: What Sets You Apart

Capitalizing On Your Credentials

Provide a brief historical overview of the financial advisory industry, highlighting the key legislative acts that shaped its development. Explain the distinction between advisors who sell products under the suitability standard and those who provide advice under the fiduciary standard.

Then, discuss your decision to structure your firm differently than the big financial institutions. Explain the options available, such as affiliating with brokerage houses or banks—express concerns about brokerage houses' potential conflicts of interest and proprietary product focus.

Conclude question 2 by stating your choice not to align with a bank due to the revolving door of advisors, limited product selection, and transaction-based approach. You must emphasize the importance of building dedicated client relationships, aligning with their practice's philosophy.

Below is an example of a script that can convey this.

Utilizing the Breadth of Solutions Available via a Turnkey Asset Management Platform (TAMP) like StockPointDigital Capital Management

“The key phrase is independent advisors. We have chosen to affiliate with a company in Chicago called StockPointDigital. They are an independent Registered Investment Advisory Firm – independence being the key. They have access to various investment and insurance options and vehicles. I’ve chosen to build my business as an independent person. There are no sales quotas or sales pressure. There are no proprietary products crammed down my throat. I work for myself, and because I’ve adopted this fiduciary standard in my practice, my sole and singular focus is to do what’s in my client’s best interests. In doing so, I have choices for my business. I’ve chosen to affiliate with an independent firm through which I have access to very sophisticated portfolio management, and I use their intelligence and leverage that for your benefit. It is a very strategic partnership that I have chosen to pursue. So, it’s not just me in my office here. I have a dedicated team behind me with professionals backing me on this aspect of my business.

Oh, and on that other part of my business? I’ve also chosen to affiliate with and forge partnerships with (XYZ FMO) to give me this independent access to various insurance options. This allows me and my practice to offer what is best for my clients. 

When it is all said and done, I hope you will agree that now that you see what I can do, I have access to more things here; I can do more here in this office than the guy sitting in a Big Bank office down the street. I would love the opportunity to work with you. But, if it isn’t me, I’d like to offer some advice to you. The advice is this: You should work with someone who is independent and who works as a fiduciary.”

Key Buzzwords to Utilize

These are essential buzzwords you can use in your conversations. These are great words to use in your discussions:

• Independent
• Fiduciary
• Solutions
• Financial Quarterback (QB)
• Risk-Managed Strategies
• Income Planning
• Drawdowns

We’ve discussed “independent” and “fiduciary” up until this point, but now let's talk “solutions" with the prospect.

Do not sell products. You may include a product (like an annuity) in your proposal. Still, if you've got the prospect to understand who you are and what you do, propose an entire solution to their retirement needs in the second meeting.

This includes annuities, life insurance, and managed money. The managed money may include certain models and some other ala carte items that meet their needs, but don't pull out the annuity and dangle it like a carrot as a separate item. We’re selling the entire solution and presenting your team and your expertise, and they buy into your solution.

Examples of Key Phrases to Address:

Income Planning

“Our industry has done a phenomenal job over the last 50-60 years of educating a class of advisors primarily focused on accumulation. It’s all been about growth, growth, growth. Post WWII, it was growth. It was the Boomer generation that was 80 million strong. They were getting raised by their parents. They were getting into the workforce.

They started getting into 401ks. It’s all been about accumulation. We’ve done a fantastic job of promoting growth. If you look at Money magazine, Fortune magazine, what are they mainly promoting? Development of your money. The industry has done a less-than-stellar job educating advisors like me on the next phase. Here we are, demographically, with an entire generation retiring, living longer, etc. I think the industry has done a poor job of educating on Preservation, Distribution, and Income. Just so you know, Mr. Client, we’ve taken it upon ourselves as an independent firm to develop real expertise in Income and Distribution and Preservation planning.”

Drawdowns

“Wall Street has lied to you, Mr. Client. When they say: “This fund has averaged 10% return,” they don’t tell you that average returns don’t equate to DOLLARS. Average returns are not linear. It is the SEQUENCE OF RETURNS that is important. We all know that the market moves in two directions; up and down.

The sequence of those ups and downs and the severity of the downs make a difference in your portfolio (share some simple examples to show how/why “an average 10% return” doesn’t equate to that kind of growth in their portfolio). That’s the myth and the lies of Wall Street. We focus more on Preservation, avoiding the Drawdowns, but more on your dollars growing, not just “average returns.”

Question 3: What do we do?

You will want to explain what you and your practice do. Go through your process to:

• Identify the financial objectives
• Determine the financial risk profile (use a Risk Profile Questionnaire (RPQ) or Riskalyze)
• Match up your financial profile with the investment strategy that fits you
• Design a portfolio that helps you meet your financial objectives
• Monitor and review your portfolio with you

Explain that you are an independent advisory service uniquely qualified to achieve their goals. It’s a little bit of science and a little bit of art.

"Our experience helps us refine the plan to fit you, your needs uniquely, and your risk profile."

Question 4: How Do We Get Paid and What Compensation

You will want to explain how you can be compensated: commissions and fees. Clarify that commissions are earned when certain products, such as annuities, life insurance, or long-term care, are included in a client's portfolio.

Then discuss that you are compensated through monthly fees deducted from their portfolio. Explain the fee structure, depending on the portfolio value.

Emphasize that your firm operates with fees and commissions, allowing them to tailor the compensation structure to each client's needs.

MEETING TIP: Assure the prospect that you will clearly explain your recommended approach and how compensation in the next meeting.
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Segment 2: Getting to Know the Client- 40 minutes

Every effort should be made to obtain the following:

• The prospect's financial status
• The prospect's tax status
• The prospect's investment objectives
• Other information is used or considered reasonable in recommending health (for example) to the prospect.

You will also need to obtain the following background:

• Net worth (exclusive of home)
• Liquid net worth (cash and marketable securities)
• The concentration of a security or industry sector as a percentage of liquid net worth, average net equity, or total assets under management/control.
• Income
• Source, i.e., where the money originally came from and whether it is replaceable
• Need for liquidity
• History of withdrawals (if any)
• Tax bracket (present and historical), tax consequences of broker’s trading activities
• Years to Retirement

Gather as much data as possible during the meeting. It is generally recommended that the prospect brings their most recent statements on their financial holdings. After gathering all the necessary data, inform them there is one more task to complete: the Risk Questionnaire.

Step out of the room to make copies of their statements, allowing the prospect to debrief and discuss the information while it is still fresh in their minds. This allows them privacy to complete the questionnaire together.

When you return to the room, give them back their original statements.

If there are any questions, address them. The focus is on the overall experience and determining if there is a potential for working together.

The analysis of the statements will be done later after the prospect has left.

Segment 3: Closing Statements and Set Second Appointment and Expectations

Begin your closing statements and express gratitude for their honesty and transparency. They are acknowledging that it will benefit their analysis and assessment. Express that you will thoroughly study their situation and comprehensively evaluate their current portfolio without cost. Even if you don't do business together, you will present the current portfolio in a way they will appreciate.

Explain your second meeting and outline your thoughts and recommendations based on the risk tolerance to secure the best retirement plan.

Request a couple of weeks to complete the task and offer to schedule a follow-up meeting according to the prospect's availability. You may also want to create a no-pressure situation by mentioning they email or call back to the office and schedule a follow-up.

Creating a handout/reminder that lays out the next couple of steps will help:

1. What you will do (your role is an educator and mentor to the client):
2. Evaluate their current position and perform a thorough analysis of their existing portfolio
3. Outline your recommendations into one comprehensive solution
4. What are they to do:
5. Think about the things discussed
6. Write down any questions
7. Schedule 2nd appointment

After the meeting, there are a few things you will have to do in prep for your next appointment:

1. IMMEDIATELY journal your notes from the meeting!
2. Record your thoughts on your phone and use your CRM or some other transcription service/software to capture your thought.
3. Conduct a Portfolio Analysis
4. Holdings Analysis Report (Morningstar)
5. Direct Comparison Report
6. Risk Analysis Report (Riskalyze)
7. “Deck” Presentations (PowerPoint to use with the client)
8. The recommendation form that includes your thoughts on what might be best for the client and their situation based on the advisor's input

What StockPointDigital will bring to your initial appointments

StockPointDigital has always put a premium on financial advisor training. From conducting appointments to creating risk-managed portfolios, we offer independent financial advisors comprehensive training solutions. Learn more about our in-person advisor training at StockPointDigital.com/training.

StockPointDigital is a comprehensive turnkey asset management solution that combines technology, investments, training, marketing, compliance, and all your day-to-day operations into one platform to help you accelerate your success. With our centralized Advisor Portal, you can efficiently track prospects, access cutting-edge technology, and build portfolios tailored to your clients' needs.

Gain an edge by leveraging the expertise of our investment analysts or take charge and manage portfolios independently. Our platform offers a range of choices, including Turnkey Model Portfolios, renowned Brand Name Asset Managers, and fully customized strategies. With this diverse array of options, you can confidently serve your clients and achieve your goals seamlessly.

Discover more about our all-in-one solutions for independent financial advisors at StockPointDigital.com/advisor-solutions

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