Recently, I met with a center of influence, who happens to be a lawyer with a Taxation LL.M., which is an impressive combination of three years of law school and a year of education in taxes. I highly recommend consulting with a Taxation LL.M. when seeking legal tax strategy—their knowledge and strategic capacity is phenomenal. As it turns out, many advisors try to meet with the person I met with in an attempt to exchange referrals. My contact is not impressed with the approach, and his disdain for advisors is evident. Ironically, though, he needs referrals himself, but he is unwilling to team up with advisors because he believes they are just glorified salespeople.
My contact, the lawyer with a Taxation LL.M., is a center of influence for me—someone who is in a position to have an impact on prospects in my target market. As was the case with my contact, it’s not always easy to attract and work with centers of influence … the trick is to show them your true colors. And by colors, I mean your processes and procedures that will assure your COI that you are a strong, legitimate referral for his clients. You aren’t handing out free referrals to just anyone—you want to know that the person you are recommending is going to do a good job. So, why would you think your COI would expect anything less? Your COI wants to look good in the eyes of his friends/clients. To do this, show your true colors.
Start With How You Wow
To let your true colors shine, start by showing your centers of influence how you WOW your clients. The best way I know of doing this unveiling your discovery process. The discovery process is a defined procedure of asking questions that get to, or rather diagnose, the individual’s needs.
In many cases, clients do not know what they need. Therefore, it is your job to figure out what would benefit them. Some individuals need tax planning, others cash flow management, while some are concerned about acting as a benefactor to their children or charities. This is your chance to shine by truly understanding their needs.
The diagnosing conversation I use in my discovery process is from New Solution Selling, by Keith Eades. The questions create a roadmap for developing the who, what, why and to what effect something is occurring. The questions are open-ended for the client to elaborate, but you will have to dig deeper, often prodding “tell me more.” The nine questions are:
- What are you having difficulty with?
- What is the cause of the pain?
- As I understand it … [reframe what you heard; this affirms with the client that you are understanding his perspective]. Then follow up with “is that correct?”
- Who else is impacted?
- What is the impact to them?
- As I understand it, the reason for the pain impacting you and others is … [again you want to reframe the question to make sure you understand things]
- What will it take to attain your goal?
- Would it help if you could …. [from what you heard, outline a roadmap of how to solve their goal]
- If you had the ability to [put in your own words what you heard from the person], could you accomplish your goal?
For a more extensive discovery questionnaire, download the Centers of Influence: Discovery Work Plan (see Homework to download) I have put together for your use.
The purpose of the diagnosing questions is to get down to the real point of why a client is seeking your guidance and what value can you bring her. This process that you take to truly understand your client is exactly what you want to show your centers of influence. The lawyer with the Taxation LL.M. had a preconceived notion that all financial advisors have products to sell that they push to clients (rather than understand what clients need/want).
Then Paint A Picture of Your Process
The second element you should share with your centers of influence is your meticulous process for achieving your clients’ goals. Broadly speaking, your financial planning process for clients could cover risk management, asset allocation, cash flow management, tax planning, Social Security planning, college planning, estate planning and gifting. Of course, not every client needs assistance in all of these areas, but showing that you can help achieve your clients’ goals in these areas builds upon your roadmap for WOWING your clients (and your centers of influence).
Some advisors believe that the return on investment of providing these services is low and therefore should be avoided. On the contrary, I believe offering the services is what creates value. For the purpose of this entry, below are brief descriptions of a few of the major financial planning categories you could incorporate into your business to create added value for your clients. Look for more detail about each of them in future postings:
- Personal Balance Sheet: Just like a business’s net worth is analyzed through a balance sheet, the personal balance sheet determines an individual’s worth. More importantly, as a picture in time, you can see how to increase an individual’s worth. Secondly, you determine how well one is moving toward her goals over time.
- Cash Flow Management: Determining how much cash is needed on hand, how much to allocate for emergency funds and when to repay debt is critical to your client’s financial healthy. Sometimes the best return possible is through the repayment of debt.
- Tax Planning: There are thousands of pages of tax law. Clients neither have the time, inclination nor interest on how best to maneuver through tax policy. Therefore, you can provide significant value by plotting a course.
- Social Security Planning: Social Security benefits over a person’s lifetime can exceed $1 million dollars. Consequently, shrewd planning on Social Security builds client retention. Specifically, providing customized planning on Social Security builds trust and creates additional income. Read more about Social Security in our post, “Why Adding ‘Social Security Expert’ to Your Credentials Will Pay Off.”
- College Planning: For many parents, giving their kids a better life is their biggest goal. A college education is typically part of that goal. If you can provide guidance to that achievement, there is great value created for clients
- Estate Planning: Navigating how best to pass along assets with the least tax consequences is a significant topic. Because the laws seem to change so regularly, an advisor can make a significant impact by providing up-to-date information.
- Gifting: There are many strategies in addition to just writing a check. And, many individuals find this emotionally rewarding—second only to sending their kids to college. Due to the emotional impact, gift planning is a significant offering for clients.
I encourage you to identify a few of the above major financial planning categories and make sure you have a specified process for each of the items (or at least a couple of them).
Many centers of influence cringe at working with financial advisors for fear of passing their clients on to a glorified salesperson. You can change this misconception by showing your centers of influence your true colors: your discovery process that truly helps you understand what your client needs and your well-defined procedure for guiding a client through the many levels of financial planning to reach her goals.
- Review the diagnosing questions above. Make them your own. Think about how you would use them and what other questions might work well for you.
- Identify a few (or all) of the major financial planning categories/tools and create a specific process for helping a client.
- Review the Centers of Influence: Discovery Work Plan and set up three interviews with COIs. To download the plan, simply fill out the below contact information and you will receive a link to download the document.