Below are the Top 5 deadly mistakes Financial Advisors tend to make unknowingly.
1. Relying solely on external motivations
Most financial advisors, regardless of the number of years in the industries, lean towards external stimuli such as videos, seminars, success stories to maintain motivation. It is true that motivation plays an important part of an advisor's momentum in developing his business and increasing his insurance sales, especially when it comes to prospecting. Don't we all hate prospecting new clients through endless cold calling, road shows, surveys, etc?
For new financial advisors, the reliance on external motivation is even the more exaggerating. I personally know of some financial advisors who actually paid over S $ 3,000 for a 5 days 'intensive' course which is so commercialized that as if anyone who went through it will come out the other end as a producer. The actual results can be rather depressing and mainly due to the rationales below.
- Firstly, by taking away 5 precious days from a month is going to be a major setback in momentum. Some courses even insist that an advisor will not be able to perform unless they find their meaning in co-existing with the Universe. Aftermath? That advisor will spend the next few weeks or even months trying to find out his meaning in life, while his sales and income goes downhill even faster than a runaway train in for a wreck.
- Secondly, such courses are so commercialized that their proposed solutions are usually those few, despite the variety of problems, challenges, fears and mental barriers different advisors are having. It's like a doctor prescribing cough syrup for every single patient who walks into his clinic!
- Thirdly, these courses will usually soak the participants in a high energy atmosphere, which than invite them to take part in some activities which when one is sober and sane, one would never do such a thing. The argument? Yes, by getting you out of your 'comfort zone', literally! And as we all seen more than often, the effect varies on different individuals and the duration seldom last. Sooner or later, often sooner, the advisor will go back to his old self, looking forward to the next motivation boost.
2. Trying to sell before being adequately trained
Here is the familiar story of an advisor, so eager to perform in his new career, with an organization which promise 'unlimited income potential', 'work as and when you like' and 'be your own boss', with an even eager manager who expect competent insurance sales in less than the required time for that particular advisor to develop. Some managers will even ask their advisors to shamelessly approach their friends and relatives, without understanding the background their advisors are from and if selling to friends and relatives is an alternative, ending up souring friendships and even kinships, which might take years to salvage, if that is even possible.
Financial products should never be sold in the first place by selling supports and end up straining relationships, putting them on the line. Financial products are vehicles to help a client to move from one phase of their life to the next, avoiding financial pitfalls and attaining financial goals. Should there be no other alternative but to sell only to friends and relatives, there are subtler ways of having it tastefully and professionally done.
Definitely there is a need to balance the pace of learning and income necessary to sustain through the developing stage, but faking it till you make it is a dangerous way to close sales.
3. Moonlighting financial advisory career
A big bulk of managers still believes that a career in financial advisory can be done as a part-time job. Yes, it can be done 20 years back in time, where insurance sales need not uphold as high a standard as financial advisory have to deliver now, especially true when compliance is cramming down hard on poor sales process, mis-selling, non-disclosure , etc. Supply will always follow demand, and the demand had evolved over the last few decades.
For agencies which rely on part-timers to maintain their positions usually have difficulties threading water. Majority of these agencies are at the bottom 20% of any organizations they are in.
- Taking in part-timers in the hope of them turning full time when they see the money is like gambling. And in gambling, the player always loses. Part time advisors, especially those who have other focus outside the financial advisory career, usually underperform. And agencies which take in part time advisors often are not confident that their support, training and culture will enable these advisors to make a decent living.
- Moonlighting of the financial advisory career on top of their day job also means that the objectives of the advisor are usually self-centered. And how would one expect the service level of an advisor whose purpose of joining this industry is incorrect. The mentality and attitude is simply wrong, and the production is minimal.
- Of course, there is also the time factor. An advisor with sufficient time on hand is able to prospect more clients and build more meaningful relationships than another advisor who can only sell insurance on a 'by the way' basis for people around him.
4. Seeking business before earning trust
The primary problem with this approach is putting the selling emphasis on asking for business when it should be on building rapport. It simply is an impatient approach to selling that puts the chance of success on an advisor's ability to close rather than the ability to connect.
When advisors make this fatal mistake, they spend very little time on the initial trust building steps of the selling process, which are approaching and fact-finding their prospects. They usually induce meaningless small talk that does not ascertain any needs that would fulfill the reason for their prospect to buy. These advisors end up spending most of the time during an appointment handling objections and trying to close the sales. This is also one sure way to disinterest an advisor into leaving the financial advisory industry.
5. Losing sales edge by neglecting personal development
Being successful in insurance sales takes more than courtesy and mere professionalism. It takes a lot more than merely meeting client's need, yet many advisors are still selling with a simple arsenal of service, value and products. While these things are parts of being a successful advisor, they are not enough to set an advisor apart from the competition in the long run. Adequate service, value and products can earn the trust of the clients, but far from enough to keep them loyal in the long run.
Everything changes, all the time. Therefore to overcome the fatal mistake of stagnating, so must an advisor. A competent advisor who is looking at career longevity in the financial advisory will always find ways to improve his knowledge and skills to outside the career context, so as to put more things on the table as compared to an average advisor.
Let us take a quick glance on the 5 fatal pitfalls to avoid.
- Relying solely on external motivation
- Trying to sell before being adequately trained
- Moonlighting financial advisory career
- Seeking business before earning trust
- Losing sales edge by neglecting personal development
If you create selling habits that allow you to consistently sidestep these fatal mistakes, you will succeed on a regular basis. And it's not just talking about making more money, if you know what I mean.