The key to fast success involves only pursuing the opportunities that involve a client-owned catalyst. These opportunities generally have a higher probability of closing in your timeframe. Being able to tell the difference between the two catalyst styles and what prospects are motivated by is essential in assuring that you are operating in the most efficient and effective manner possible.

Becoming a good closer and a successful financial advisor starts before you pick up the phone, make the introduction, get the referral, etc., and continues after the phone is hung up. Arguably, more important than activity is the ability to find the right opportunities. What does that mean? As stated before, the process of trying to create a need in every single prospect, friend, or family member can prove to be a difficult road to travel in the new world of a new financial advisor who is on the clock. The driving force behind every sale is the element of trust. When someone does not have a need to make a decision, the trust part of the equation becomes the determining factor. Usually, obtaining this trust in an environment where there is not an immediate need will take longer than the financial advisor would like. When a need is present, the trust acquisition timeline is expedited. Think about someone who is selling their company. They may be coming into the largest amount of money they have ever had in their life. The deal closes in a month. They have to find someone they trust to help them in a month. If there is no catalyst, the trust acquisition timeline can be stretched out as long as the prospect feels necessary. Perhaps the trust acquisition timeline is directly related to the sale of the business. If there is no catalyst in the client’s situation and we try to create one we risk compromising our professionalism by making dangerous promises. Furthermore, I find that sales cycles involving advisor-created catalysts are almost always longer than those of client-created catalysts.

Everybody has heard that referrals are the best way to build business. This is absolutely true. Why is this heralded as the key to success? The difference is that the referee is someone who has already identified that they have a need, or perhaps a client or friend has identified that this particular person has a need and the referee trusts the friend enough to actually accept it as valid. Nevertheless, the need is preexisting by the time the advisor gets in the picture. The key to fast success is getting in front of enough people who already know that they need help. This concept often gets confused as new salespeople enter the market. To them, referral prospecting means traditional social networking, chance encounters, asking if their peers know anybody they can talk to. This way of prospecting often proves to be unproductive to financial advisors without them even being aware of it. They are successful at getting in front of a lot of people, but as discussed, these are not the right people.

As a side note to the above, if I hear one more financial advisor trainer come in and talk to a group of new financial advisors about how referrals are the best way to build a business – I am going to lose my marbles. Seriously, these folks maybe have three clients. How many times can they ask for a referral? This drives me crazy. Get it together, sales trainers!

The reason senior financial advisors have success with referral prospecting is one of two reasons. They either have trained their clients to search out individuals with needs, or they do a good enough job and have a good enough client base that the law of large numbers manifests opportunities. Both of these take time to build, and in my experience, it takes a good 3 to 7 years. In order for a financial advisor to become successful at referral prospecting with an abbreviated timeframe, they have to increase their activity level. Often, advisors do not have enough time in the day/week/year to juggle this level of activity with the other demands they have on their life. If their model says that they need to attend 10 networking meetings a week to get in front of enough people, the question then becomes, “Can I realistically do this?” This is where underperformance results and cold calling comes in.

If you have been lucky enough to work in a big office, you may have had the opportunity to talk with some of the senior financial advisors about what they have done to become successful. You may have even been directed to do so by your manager or sales manager. This can be a very dangerous exercise because people can be easily fooled by their own success. Let’s take, for example, the concept of prospecting centers of influences (COI’s) for referrals. You have probably heard this time and time again. Most big producers have developed some sort of incoming revenue channel that requires little or no work to maintain. They have some relationship that time and time again lands accounts on their desk. I have heard many successful financial advisors say that they have developed relationships with these COIs, and that was what others should do to be successful. They say that it worked for them, and now they are living the good life. Some of these financial advisors have even developed systems that other advisors can implement to try to create such relationships. So, everyone goes out and sets meetings with COIs and they do two things: 1) they talk about how they want to create a reciprocal relationship where both parties benefit by exchanging referrals, and 2) they attempt to educate the center of influence (COI) enough so that they can search out the types of people the financial advisor needs to be successful. The COI agrees and says that it sounds like a good idea. The financial advisor goes back to the office. Over the next 6 months to a year they send the COI a couple of referrals, and receive nothing in return. It doesn’t work. Why not? Why can some people get this to work and others can’t? Maybe it was the set up or maybe I should have educated the COI better? Maybe I should have taken them for some drinks? Maybe I should have sent more/less referrals. The financial advisor may even go back the same senior financial advisor and ask for help. Remember, by now the clock has ticked quite a bit, and there is not much time to make up lost ground. Here is why I think that this set up is not ideal for new financial advisors trying to become successful while on the clock.

First, let’s look at what natural human behavior is. Natural human behavior forces most people to try and explain what happens. Look at a sports team/game for example. Two football teams play each other on a Sunday. One loses and one wins. After the game, analysts break down (in painstaking and ridiculous detail) why things went one way or another. The quarterback was dropping his elbow more so on his passes this game than in the past. The turf was a factor. The referees made bad calls. The offensive line didn’t play well, etc. Or in baseball you might here the announcer say that this pitcher “pitches to contact”. Really, your telling me that the pitcher has enough skill to throw a pitch the hitter will swing and miss…but in the event the hitter makes contact it will be a routine groundball. Really? Maybe I don’t understand enough about pitching but sound to me like they are filling air space. There is a compulsion to explain why what happened did. I would love someone to say, for once, that it was luck that was the reason. The they don’t know why the hitter got the hit, maybe it was just his night. That the losing team just didn’t have the breaks fall their way that day. We, as humans, need to justify. Leaving results to the nebulous force that is luck, fate or faith feels uncomfortable. Apply this concept to the senior salesperson recommending that the junior salesperson attempt to cultivate COI relationships. Usually, if you dig a little deeper into the COIs that the senior financial advisors have obtained, you will find there is another factor. The COI was a college roommate of the senior financial advisor, a childhood friend, or you’ll find that the relationship with the COI took 4 years to get to the place where is at now. You see, this piece of information is a bit harder for the senior advisor to divulge because it was a lucky, fortuitous, serendipitous event. Something they did nothing to deserve. The senior financial advisor would rather talk about how smart they were to think of it, or how they had something about them that breathed success so the COI wanted to work with them. When this salesperson walks into the senior salesperson’s office one year after their approach hasn’t worked and asks for advice, the senior salesperson will say to themselves, “I guess this person isn’t good enough,” or “they didn’t do it right”, etc. This somewhat validates that the senior financial advisor has “it” and the junior advisor doesn’t.

Don’t get me wrong, if a financial advisor has a COI relationship that exists like this, then that is great. They have something that someone else doesn’t, and they should exploit that revenue channel to the best of their ability. Most people don’t happen to have a good friend or acquaintance to lever in such a manner and instruction that they can pursue and create such a relationship while on the clock can prove to be bad advice.

Getting in front of enough people who have an existing need is the key, and every financial advisor should try finding the way to get in front of these people with the least amount of effort. For those that don’t have relationships that would lend themselves to these types of incoming revenue channels, they must ask themselves, “Is my time better spent developing a relationship with someone that may refer these types of people to me if they understand what I do and care enough about my success, or should I spend my time hunting for the very people I am attempting to get them to refer?

I recently did an exercise with a new financial advisor, and I think it is relevant. We charged our advisors to come up with a list of 100 prospects in 6 months. The financial advisor walked into my office and placed his pipeline sheet on my desk. He did it. He had 100 prospects on his list as we had asked, but was not hitting his goals. He was at the beginning of the 6 to 9 month slump that all new financial advisors hit. A crisis of confidence is what my regional sales manager called it. Most new advisors walk in the door on their first day thinking that whatever network or past experiences they are carrying with them will promote them to the top of the ranks. After completing their training, they go forward with their half-constructed business plan and fully-developed assumptions about what it will take to be successful. At about 6 months, they hit a little snag. The accounts didn’t come in as planned. Their big prospect went out of town. This other prospect got divorced, and their best friend didn’t get the inheritance. Whatever it may be, things don’t always work out as planned, and most salespeople do not account for this. The particular advisor had assumed for the first 6 months that the hurdle associated with this point in his progress would be no problem. Guess what? It was a problem. I then told him that I wanted to do an exercise. I told him that there are two types of people I find on most prospect lists; the ones that have a legitimate need that you are attempting to address, and the ones you have told how great your firm and services are. We labeled these two types “need prospects” and “non-need prospects.” After going down the 100 names, there were only 32 prospects that actually had a need. The need prospects are the ones that come in on time. The others are the ones that don’t. We readjusted his pipeline, and he set out to find 68 more prospects that needed him.

The moral of the story is to find the ones that need you more than you need them.I can’t stress how important it is to understand the difference between a client-owned catalyst and an advisor-owned catalyst. Here are some examples:

A client-owned catalyst is where the client has decided that they need something, have a problem, or can do better. These are the opportunities that involve phrases from the client like: “It’s funny you called” or “You have good timing,” or, “We were just talking about that.” These are the prospects that, in the first couple of years, you need to be spending your time on.

An advisor-owned catalyst is where the advisor is trying to convince the prospect that they need something, can do better, or have a problem. These opportunities are ones which involve phrases like: “I wanted to meet with you because we have a great municipal bond desk” or “You should really look at our loan management account as we have some of the most competitive rates around.”

To summarize: the key to fast success involves only pursuing the opportunities that involve a client-owned catalyst. These opportunities generally have a higher probability of closing in your timeframe. Being able to tell the difference between the two catalyst styles and what prospects are motivated by is essential in assuring that you are operating in the most efficient and effective manner possible.