[Editor's Note: This is a guest post from Mark Zoril, AIF®, a reformed financial salesman who saw the light and now runs his own company designing flat-fee small business retirement plans. Although this is not a paid post (I don't have those), he is a paid advertiser on this website. I hope you enjoy this post as much as I did. It provides an inside look at the industry.]


“Coffee is for closers!”

How closely does this (profanity warning) classic line from Glengarry Ross or scenes from The Boiler Room resemble the meetings or sales tactics of the modern financial professional? Sorry to let you down, but not that much. But advisors certainly use sales nonsense and pAlways Be Closingloys to add clients and grow their business. And you are the target!

Over the years, I have attended numerous company meetings, conferences, and industry events. I worked at a conventional broker/dealer, RIA for 17 years prior to setting up my own firm three years ago. I am well aware of the training. Advisers are taught to meet with people and provide value! The financial services industry offers more “value” than you can handle. All at a cost!

Before I share some of the tactics, let me add that there are many wonderful advisers doing great work with their clients in a straightforward manner. I would trust many of them to provide good advice and guidance to my family. I continue to get great ideas and information from them.

However, most advisers work as part of either a small or a large distribution system. Distribution systems focus on sales and most rely on effective sales strategies. Information and education only gets you so far. You need charm, networking, slick delivery, an angle–whatever it takes. Good sales skills are highly valued in the financial services industry, which is considered to be a “people” business.

These tactics appeal to your ego, fear, envy, and/or greed, and often rely on your ignorance and/or apathy. Since ignorance and apathy are in plentiful supply (no offense intended), many of us are susceptible to the tactics used to promote investment products and services.

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Here are ten effective sales tactics, ranked by impact on your finances. I would put each into one of two categories, with some overlap. The first category consists of methods used to get meetings with potential or current clients. The second category includes strategies to “add value” and persuade people to invest with you or purchase one of your products. There are certainly others (storytelling, analogies), but these are some of the most effective and frequently used. Let's get started!


# 10 Waiver of Liability for Long Term Care Insurance 

I saw this many years ago at one of our district meetings. An advisor introduced the idea of having your clients sign off on a letter relieving the advisor of liability in the event that the client does not purchase long term care insurance and is ruined financially because they need long term care. Basically it is saying to the client, “I tried to help you purchase long term care insurance, but I am not responsible for your cheap, stupid decision not to buy it.”


# 9 Updating Your Beneficiary Appointment

This is one of many ploys used to get a meeting with a client. Often used by advisors recently assigned to your account or new to the firm. The meeting invitation might go something like: “God forbid something happen to you, we want to make sure that the money you have earned and saved goes to the people most important to you. I have another meeting in your area with Joe next Tuesday, would you be available to visit and update this?” Right – that is all they want! Be prepared for new product sales at this meeting.


# 8 Regularly scheduled meetings

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Many advisory firms promote the need for quarterly or semi-annual meetings. The idea is to stay in front of your client as much as possible to “provide value” and grow your relationship. But are these frequent meetings really necessary? They have got to be agonizing. What drivel is discussed at these? Performance of small cap value stocks in former communist countries? Emerging political issues in micro and emerging Asian economies? Updates from their brilliant economist on how trends in consumer durables and recent uncertainty in short term interest rates will create opportunities in something? Rumors about more loosening (or tightening) of Fed policy?

If you like these so you feel “better informed”, than I am happy for you. But regular meetings are a great way for advisers to get paid by introducing new products and opportunities to their clients.


# 7 Social Security Decision

This is a newer one that is gaining popularity. You will hear about the 39, 81, 947, or 22,342 different ways you can take your social security. It is a complicated decision – if you don’t make the right choice it could cost you hundreds of thousands of dollars. Becoming an expert on helping people make the right decision on their social security is a great way for an adviser to add value and grow their business. You get help – they get sales.

I feel strongly that many people could definitely benefit from professional help on this. But why shouldn’t advisers just charge for the service? Maybe $500, or $1000 or $1500? Considering how beneficial it could be, that would be a very fair price to pay. Seems like a good model to me – get a client a day for $1000 and help them on their SS – that’s $250k/year. (I should do that). But why settle for a one time flat fee when you can make so much more over a longer period of time on other products?! BTW, there are on-line services and books that can help people review their options.


# 6 Client Appreciation Event

Oh yeah, baby! Show your clients how thankful you are for their support. Hold some impressive event for your “best” clients. Better yet, let them invite their friends and anyone else – with money. Create the event of the year that they can’t miss. Puhlease – give me a break.

Everyone should know that these can be great ways for advisers to grow their business. I have attended training sessions on how to run a successful client appreciation event. One adviser explained how clients actually wrote checks to invest right at the event. Advisers described how they brought along additional advisers that might have expertise in different areas of financial guidance and made sure that they were dispersed evenly amongst the crowd. These advisers would mingle from person to person to identify opportunities that they could follow-up on later. Leads, leads, leads!


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# 5 Implied Complexity

At a company meeting about 10 years ago, my then direct manager was providing guidance to our sales team – a mix of experienced and new advisers. One comment he made was to occasionally use industry words that might confuse your clients. Don’t go overboard with it, but just enough to make sure that your clients realize how much they don’t know and how much they need your help. Several years prior to that, my then manager suggested that when working with clients that I should come up with some explanation to increase their international holdings as a part of account reviews. There was no strategic reason to do this – it was just “doing something” for the client. An essential message of many in the financial services industry is that investing is too complicated and risky to do yourself. You don’t have the time, expertise, or experience to handle the nuances – you need us!


# 4 Fear of Missing Out

Similar to Implied Complexity, this is commonly used with Assets Under Management (AUM) programs. Advisors imply that their “experts” or “system” or “process” is watching the markets 25/8, 366 days a year. Every day, hour, minute, and second they will be looking for opportunities, taking advantage of trends, identifying the right investments. Don’t worry about a thing – a professional is watching your money and making it work for you. The implication is that without their managed program, you will lose out – and you can’t do that, can you? If you don’t pay them to have sophisticated professionals and systems manage your money, you will miss out on growth opportunities or take huge losses that you might otherwise avoid.


# 3 Value/Emotional Connection

Many years ago, values based selling was all the rage. The idea was to find out, by a series of questions, what was really important to a client. Find out what makes them tick – what do they really want to accomplish. You need to know your client intimately – know them better than they know themselves, and certainly better than their spouse knows them. You need to be their shrink, their bartender, the person they can trust with their hard earned money. You need to probe to learn more about their experience, values and motivation. What happened in 6th grade on the playground with Ronnie? Have you recovered from your public humiliation in college at the petting zoo? How well did you get along with your Mom? What keeps you awake at night? Once you “connect” with your client and form this understanding and bond, they will trust you forever, give you all their assets, refer everyone they know to you, and never ask you about fees.


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# 2 Dinner/Lunch Seminar

If you have never been to one of these, consider yourself lucky. Good advisers have these down – they can be a gold mine of revenue and commissions. It is a great way to start the relationship with a potential client. Use an effective advertising campaign, interesting and relevant topic, and maybe a guest speaker to increase attendance. The strategy for most presentations is to reveal just enough information or demonstrate enough competence to get a follow-up personal meeting. During the Q&A, the speaker may say things like “Your situation is really unique, we will have to meet separately to review that.” BTW, many investment firms help pay for these events. Do you think that might influence the kinds of products an adviser recommends??


 # 1 Financial Plan

This is the big goal! A financial plan is clearly the best way for an advisor to grow their business. The more plans you do, the more assets you will attract. Most advisers know that a financial plan will lead to product sales. They are trained on how to introduce financial plans, how to set them up, how to manage the collection of data, how to deliver and “sell” from the plan. If you cannot grow your business from financial planning, you might as well quit.

At my prior firm, over the course of several years before I left, the company changed its training emphasis to financial planning as the key to acquire assets. Advisers were measured on how many plans they did. More plans resulted in more assets under management. Understand that when an adviser does a plan for you there is a very high likelihood the plan will recommend buying something from the adviser. You get a plan – the adviser gets a sale.

I will never forget one of our training sessions. A big producer presented his use of financial plans. He explained how he introduced the idea of a financial plan to all of his clients. He provided his script and phraseology (lots of fear). After he had visited with a client, and developed the plan, he would delay delivery of the plan and explain that it is being “worked on” even though it was ready to go. What was most impressive, though, was how he used 4 specific pages on the plan to sell everyone a guaranteed minimum withdrawal benefit rider for their accounts. Ka-ching! This was his process and he was awesome at it. (And a hero in the company). I was so impressed I wanted to buy one – even though I knew it was a crappy product! (Author’s note: I am a huge fan of financial planning as a tool to help people prepare for their future – but not as a sales ploy).

I am not anti-adviser at all – I am anti-nonsense! I think many people benefit from at least infrequent guidance from a competent professional. Just avoid the sales baloney.


Tips to Avoid Salesmen and Their Tactics


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Here are some quick tips on how to avoid these tactics and have a healthy, productive relationship with your advisor:

  • Unless you are simply bored, don’t meet with your adviser without a bona fide reason.
  • Do not become friends with your adviser. This isn’t easy. I have broken this rule and am good friends with some of my clients. However, if you believe that you would have a hard time firing your adviser, avoid getting too close.
  • YOU control the meetings with your adviser – not the other way around! THIS IS CRITICAL. Send them an email telling them what you want to cover – this is your meeting, not their sales opportunity. If they are going to introduce a new idea or product, you want to be aware of that before the meeting! If you are cool with that, tell them you want information, not sales jargon.
  • Meet with your adviser by phone or video conference. Yes! We do most of our client meetings now by video conference and it is awesome. More efficient for us and a lot less costly for our clients. We have found that the meetings are much more on task and focused – less socializing and distractions. We get business done.
  • Never accept any gifts from your adviser. Try and keep the relationship purely professional.

Have you come across any others? Which one of these has been tried on you? Did it work? Who has the best story of how they were “sold”? Comment below!