you that, since all our work is very confidential.” My reaction was, “Well, Cadillac has some secret electronics in their cars, but I’d never buy one without seeing it, driving it and imagining myself tooling safely down the road in luxury and new car smell.” I looked him straight in the eye and said, “Where’s your sample plan?” No answer…. “Are you going to need a lot of information from me?” He said, “Yes, of course” and he pulled out a fact finder with a life insurance company logo prominent on page one. So I told him exactly what a new prospective client would be thinking, “You just want to sell me a life insurance policy, don’t you!” We all know that a lot of the information required to prepare a high level plan is contained in various documents. Therefore I challenged him, “What do you have to make it easier to gather all the other documents?” No answer…. And then I counted off all the other things he did not have readily available: is brochure about the services he • H offers • A simple, one-page Engagement Agreement • A Fee Schedule that was objective • A Satisfaction Assurance certificate • A Plan Acceptance certificate • A Privacy and Non-disclosure Statement • A planning Documents Archive case I looked around his nicely appointed office, and pointed to his MDRT certificates and the handsome wall plaque for prior sales success with a well-known life company. I said, “Where is your RFC certificate and your Code of Ethics? You received the local Citizen of the Year award; that sort of civic recognition is always respected. Since you served in Viet Nam, where is your US flag or some Veteran’s certificate? All your walls are telling me is that you used to be very successful and you focus on life insurance — even though 60% of your income is now from non-insurance sources.” I then asked to see a real financial plan, and he got one out. In some ways it was a great plan and other ways it was awful. I quickly saw some colorful graphics that clearly pointed out surpluses (in green) and shortages (in red). Several pages had columns of numbers that clearly illustrated past or future performance. His recommendations, near the front of the plan, were appropriate and creative — but in the wrong place and wrong order. The binder was furnished by a life insurance company which was imprinted with their Page 26
logo, further emphasizing insurance as his motive. This 3-ring notebook included 120 pages of columns, charts text and suggestions but there was no Table of Contents, and no dividers to separate the components into logical format. His business card was glued (crooked) to the inside of the Plan notebook, and there was no identification of his Service Assistant. I had to tell him the truth, “Your recommendations are very solid and would make major improvements in this client’s financial situation, but the plan looks cheap — and your fee of $2,000 is far too low for a client like this one with a net worth of over two million. The plan and the fee are lacking in credibility! You do not identify the relationship between the Cost (your fee) and the Benefit (improved retirement or survivor income) of your planning services. You have omitted a critical issue – the justification for hiring you!” Pride is Transmitted When you are well and fully prepared for that first meeting with a prospect, it will be reflected in your attitude. It was missing in my friend, because he had not updated his initial presentation — and deep inside he knew that. So he did not appear ready, his body language and his vocal inflection detracted from the presentation. One reason that he was not charging an adequate fee is that he knew his preparation and plan were “not up to snuff.” When I showed him how to open and present a Documents Archive case, he instantly realized how this would transform the interview. He asked me about the cost of the case, and when I replied “between $60 and $80 depending on volume” he thought that was expensive. Why should he care — the cost was easily recoverable by increasing his plan fee to a reasonable level. The quality was apparent, and matched the caliber of his target clients.
The Interview Folder This is essential to displaying a sample plan effectively, because it avoids the issue of a client wanting to study the plan binder. They will have a nice folder with various items they can review at their leisure. Never give a sample plan to a client to take away for a review. They will not understand how the plan recommendations match the verbal comments of the client for whom the plan was prepared. I once had a physician request to take a sample plan home for study, and he was a bit upset when I declined. So I said, “Doctor, if one of your patients needing cardiac bypasses asked you to take home a sample, how would you reply?” His response said it all, “What do I sign for us to get started?” As you hand each item to your prospect, sign them with a flourish and pass them over with both hands. This is just a small bit of ceremony that emphasizes each one is important. These should be printed in color on nice stock. Class Tells When you make careful and professional preparation it will produce significant results. You will increase your fees, improve your closing ratio, gain more referrals, and enhance your own self-image. Not only will you feel better, you’ll soon feel richer.
Listen to Video Series at IARFC.org
Ed Morrow, CLU, ChFC, RFC®
Preparation is Inspirational When you have taken the time to be well prepared, it will inspire you to deliver the presentation of your services with confidence and flair. Your voice and mannerisms will impact your prospect. After all, why would anyone want to retain a financial consultant that did not have pride in his or her work and preparation?
Ed Morrow is the chairman and chief executive of the IARFC and has been a practicing financial advisor for forty years. Visit IARFC.org and access this month’s video, Building Your Client Base. Contact: 800 532 9060 edm@iarfc.org www.iarfc.org The Register | August 2013