Numbers and spreadsheets are not sufficient in the world of finance where regulations constantly evolve, markets fluctuate, and client needs vary. Especially when The Bureau of Labor Statistics reports a higher-than-average growth rate of 15% for financial advisors, meaning the competition has become increasingly fierce. The harsh circumstances are becoming more obvious as 80-90% of advisors shut down their companies within three years of operation.
Given the daunting statistics, it’s vital to have effective strategies besides simply qualifying for the role. Things such as getting an education, either a finance, economics, or accounting degree; obtaining certifications or licenses such as Certified Financial Planner (CFP), Chartered Financial Analyst (CFA), or Chartered Life Underwriter (CLU) which familiarizes you with regulatory requirements; having experiences in the field, such as becoming an intern, a junior financial advisor, or shadow at a firm; and lastly, advertising high quality content to create a strong and reliable personal brand. Though it requires rigorous commitment, these qualifications have become the standard, and clients are looking for more.
Here are 5 skills you need to succeed and stand out as a financial advisor.
Contents
1. Building strong relationships
A common mistake advisors make is treating clients simply just as a sale and deals to close. The key to success is to create long lasting relationships with them. Therefore, you need to have effective communication skills to foster trust and transparency, which solidifies your credibility. This is beneficial in a couple of ways. First, it allows you to gain a better understanding of your client and their financial situation. Getting clients to open up is a critical skill needed to help them reach their planning goals.
Second, people need to have confidence in you (their advisor) that you have their best interest and are offering unbiased advice. It establishes you as their go-to guide when faced with complex financial concerns. Advising is not a one-time transaction but an ongoing partnership which needs trust to foster. The key is continuity: by maintaining regular contact, providing timely updates, and being responsive to their needs. Subsequently, their trust in you manifests into retention and loyalty.
2. Knowing the facts
Fact finding is an essential part of client-advisor relationships. It allows you to gather information on their financial situation. It serves as a powerful tool for risk assessment and mitigation. Specifically, it reveals potential risks in a client’s investments, insurance coverage, or debt management, which you can create suitable strategies to optimize their financial well-being.
In order to have tailored recommendations you need to ask open ended questions while empathizing with their concerns.
Here are two good examples:
“What are your priorities when it comes to financial planning, and are there any specific concerns or questions you have?”
This allows the client to voice any particular areas of concern or interest, ensuring that the financial advisor addresses all relevant aspects and tailors their advice accordingly.
“How do you feel about your current financial status and the progress you’re making toward your goals?”
This question delves into the client’s emotional relationship with their finances, uncovering any anxieties or confidence they might have.
However, avoid immediately assuming their needs as everyone has their unique circumstances and objectives. Fact finding brings benefits as strong client relationships may lead to referrals and new business opportunities. There’s a simple concept around fact finding… “If you ask people what they want, they will tell you. And when you give it to them, they will buy it.”
The sheer fact that you asked the right questions, got the client to open up, and then used their answers effectively to create solutions will show the client you heard them. Clients who feel valued are more likely to recommend their advisor to friends, family, or colleagues. This could massively contribute to your professional growth and your brand’s reputation.
3. Solidifying your prospecting strategy
Developing a prospecting strategy is how you make yourself known, which is crucial for your business as it maintains a steady flow of clients. Beyond potential referrals from your clients, you can continually strengthen your brand and prompt them to mention you when the topic of financial planning arises. This results in expanding your outreach which allows you access to wealthier clients and bigger deals.
Networking is also a trustworthy method, as it provides a wide range of opportunities and resources. Attending industry events or joining professional organizations to connect with others in the field can open new doors. Networking allows for exchanging ideas, insights, and better practices to keep you informed, especially if you’re new to the industry. It also gives you a competitive edge since those who actively participate in social activities demonstrate their commitment to professional growth and client success. Ultimately, it enables you to adapt in response to changing market conditions or industry trends, competitive benchmarks, and emerging technologies.
Finally, cold calling is an effective way of reaching new leads. It is abundantly important to have a clear and direct script. Though daunting and filled with potential objections, it can put you in control and allows for direct engagement with potential clients. This also means you’ll get immediate feedback which allows you to adjust your pitch for future calls if necessary.
4. The Close
The close should come naturally in the sales process after getting to know your client, addressing their needs, and introducing solutions that align with their goals. Yet, without the right components, there may still be room for mistakes that risks all the rigor you put into helping your client. It is important to articulate the value of your proposed solution and highlight the benefits using examples or case studies. Create a sense of urgency without pressuring the client and confidently guide the conversation towards a decision.
When offering solutions, suggest no more than two or three options; otherwise, clients feel unsure or overwhelmed. However, anticipate objections. By listening to people’s concerns, providing thoughtful responses, and using concrete facts to support your argument, you can close the deal. Once you have a verbal agreement, follow up shortly with written documentation with the expectations and necessary actions. Lastly, continue developing the long-relationship by providing ongoing support, active communication, and regular check-ins to ensure their financial journey remains on track.
5. Never Stop Learning
Lastly, never be complacent in a dynamic field such as finance. In order to excel, the field demands commitment to constant learning, innovations, and adaptation. If complacent, there is more room for stagnation which leads to negative habits such as decreased productivity or creativity, and more procrastination. It is through diligence that you can accurately accommodate your clients. In order to learn, you could attend industry conferences and events, read relevant publications, take courses, or receive coaching.
There is obviously no plan to success that works for everyone. Even with the best training or experience, everyone faces challenges in their careers, especially in such a multi-faceted and competitive field. However, with the correct attitude and skills, you can navigate the complex situations. Thus, with diligence you can succeed and become more than just a statistic of advisors who close shop.