Power of the general idea
The following is based on one of The Covenant Group’s clients. All of the names and telling details have been changed.
How an advisor used the broad concept of wealth creation to build a business.
At The Covenant Group, our work with financial advisors, either one-on-one or in groups, is our learning laboratory. We are stimulated by what we learn from advisors at all levels and, as a result, are able to continuously reinvent our business, finding new and better ways to add value to our clients. Similarly, we find that the most successful advisors have the same attitude towards their work. They make a habit of learning from everyone they work with and every new situation they encounter.
Nancy Blair is a financial advisor who has become successful because she has a thirst for knowledge and practical ability to apply that knowledge to help her clients. Throughout the business, Nancy is known as a very creative thinker who is able to identify original financial concepts and spin them in a way that excites clients and prospects. She spends a lot of time researching and keeping abreast of the best practices in the field, but always finds a way to tweak an existing concept so that it becomes even more appropriate and helpful for her clients. She is so effective at selling these specific concepts that she became the top producer in her area.
However, when we first met Nancy and asked her how we could add value to her existing practice, she told us she wanted help breaking through to new revenue levels. For thirty years her business had been experiencing significant annual growth, but recently had plateaued. She told us that, although she had many high net-worth clients, she felt she was not leveraging the full potential of her strong relationships with her clients. She felt that the problem lay with her sales approach. For three decades Nancy had made sales by creating new financial concepts and matching them to her existing clients’ needs. Unfortunately, she was so successful at this approach that her clients began to expect her to have brilliant new ideas for them every time she met with them. In effect, she was pursuing a very transactional model of selling, making one sale at a time. Now she was feeling the pressure of constantly having to come up with new concepts to make sales.
The solution to her problem lay in the idea that there are two levels of concept that you can propose to a prospect or client. There is the ‘specific concept’, which she was already using, in which she explained how a specific financial idea could solve one of her client’s needs. But there is also a ‘broad concept’ which is an even more powerful tool for providing value and making multiple sales to individual clients.
We first learned of the ‘broad concept’ or “sale-before-the-sale” approach from Joe Dickstein, a legend in the financial services business and co-founder of PPI Financial Group. Joe had explained that using the broad concept approach means stimulating your prospect or client’s interest when you first meet by describing for them the way in which you work and add value in your clients’ lives. For example, many financial advisors use the broad concept of wealth creation to describe to their clients what they do and how they can add value.
As Nancy had discovered, it’s possible to be very successful using only the specific concept to make sales. Many advisors today find themselves in Nancy’s position, pursuing a transactional approach to selling and concentrating on specific financial concepts. However, that is, ultimately, a limiting strategy. As the industry leaders redefine their businesses away from the transactional model and become more relational — acting as trusted advisors who can meet all of their clients’ financial needs — the independent advisors are in danger of being squeezed dry. To prevent serious erosion in their businesses, Nancy and all advisers in her position need to reframe their business and identify a broad concept that would excite both them and their clients.
We asked Nancy what broad concept she would use to take her client relationships to a deeper level. She looked at the services she provided, the services she could provide through collateral professionals, and the services she would like to provide in the future, and came up with a good answer. Rather than solely using the specific concept approach to make single transactional sales to single clients to meet single needs, Nancy became very excited by the idea of using the broad concept approach to stimulate client interest by helping them create, conserve and preserve their wealth. She did, however, identify a problem with using that broad concept.
Although Nancy had been successful as an independent financial advisor over a thirty-year period, she had been tightly focused on a few specific areas of financial services. She now found herself without the tools to do a complete financial plan for her clients. Fortunately, there was an effective solution.
We suggested to Nancy that she use Best Practice Number 8: Utilize Resources, and work with her suppliers to fill her financial planning need. We knew that many financial services companies provide financial planning toolkits that add great value to the businesses of independent financial advisers. There are many great tools for completing comprehensive financial plans for your clients. This new tool became the key leverage point for her broad concept. With her new planning software, Nancy could approach all of her existing clients and tell them, “I now have a process I can use to effectively create, conserve and preserve your wealth.”
When she started using the broad concept, Nancy found that she was able to trade on the confidence her clients had in her as a result of the great ideas she had brought to them over their long history together. Because of the effectiveness of her original specific concept approach, they were very willing to give her a chance to meet more of their financial needs using her new approach. In this way, she was able to build her business using the specific and broad concepts together.
Using her financial planning software, she was able to drill down into her clients' lives and gained a much richer knowledge about their current situations, needs, and goals. After using her new approach for a few weeks Nancy told us she was astounded by the difference it had made to her business and her clients. She said that she was using the planning software with clients she had been advising for twenty-five years and had learned things about their lives and objectives she had never known before.
This enriched knowledge about her clients, combined with her broader mandate to offer a wider array of financial services which would create, conserve and preserve her clients’ wealth, transformed her business. In her first month using the new approach, she brought $3 million in assets under management from one of her clients. As a direct result of using the planning software and the broad concept, she was able to close a six-figure single premium life policy to preserve a client’s estate.
Ever since she has continued to grow her business by combining specific and broad concept sales.
Lessons Learned
As was the case with Nancy, many advisors are stuck in a rut, making transactions and not realizing their full potential. Advisors in this situation are playing a finite game. They can only see themselves competing for ever-shrinking pieces of a pie (the financial services niche within which they operate, such as insurance or estate planning). Unfortunately, this limited view puts their business at risk as the leaders in the industry turn to a broader, more consultative, approach. In order to avoid being beaten by such competition, you may need to change your mindset.
Much of the work we do at The Covenant Group is around helping financial advisors change their mindset and that work was key to helping Nancy resolve her problem. Her case shows how redefining your business away from transactional sales and learning to use a broad approach enables you to mine your client base and increase your revenue. To change your mindset you need to change your own perception of what you do for your clients and effectively communicate that to your clients. By changing your customer’s perception of what you can do for them you will change the nature of your business.
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The Covenant Group is referred to by many as the place entrepreneurs go to become Business Builders. They are considered to be thought leaders and have authored the best-selling books, The 8 Best Practices of High- Performing Salespeople, The Entrepreneurial Journey, and The Business Builder.