Reaching a prospect who already has an adviser – Part 2

01 April 2021 Myra Knoesen

Every adviser, according to Leslie Kramer, contributor at Investopedia and author of ‘How to Reach a Prospect Who Already Has an Adviser’, has been in that uncomfortable position where you start to chat with someone you think might be a potential client only to hear those most dreaded words: “I already have a financial adviser.”

However, Kramer says that does not necessarily mean it is time to end the conversation. In fact, there are many reasons to keep talking. You may find out that this person is indeed open to switching to a new adviser.

Evaluating their strategy

Kramer mentions that you may want to introduce the notion that it is difficult to make sure that one’s money does not run out during the retirement years. “Find out if the person feels secure that the adviser has come up with a strategy to best avoid this scenario from happening. Also find out if the current adviser is really helping the client achieve all goals. Does he feel he could be getting more from the adviser, in terms of setting up a secure retirement plan and monitoring all of his investments? Has the adviser sat down to write out a solid financial plan he's happy with?”

“Again, offer to have a sit-down with the client to go over his/her portfolio, if he/she would like a second opinion or if he/she is unhappy with the current financial plan. Even if the person ends up sticking with the current adviser, he/she may still consider working with you in the future or recommending your services to a friend,” says Kramer.

The tax burden

Tax strategy is another good topic to broach with a potential client, says Kramer. “Find out if the prospect’s adviser is working to ensure that his tax burden is the lowest it can be. Is the client worried that he may be paying more taxes than necessary because his adviser is not up-to-date on all the current strategies? Has the adviser spoken to the client about using different tax strategies for before and after retirement age?”

“You may also want to find out if the potential client feels good about his/her current life insurance and long term care insurance policies. Has the adviser recommended that the client talk to an insurance agent or has he made his own recommendations about insurance? This is another area where you may be more knowledgeable than the person’s current financial adviser.”

Rebalancing the portfolio

Another topic you should address when talking with a potential client, according to Kramer, is the strategy for rebalancing his/her portfolio and reviewing asset allocations.

“Has the current adviser taken the time to review the topic? Have they talked about ways to reduce volatility and make sure his/her portfolio will be protected in a down market? If the potential client is unclear about the answers, you may want to offer to sit with him/her at some point to explain how rebalancing for volatility may impact a portfolio and how returns can change drastically depending on asset allocation.”

The bottom line

Kramer says you should never write off potential clients just because they are already working with a financial adviser. “People change advisers all the time. Try to engage the person in a discussion about the current adviser’s performance. Ask pertinent questions and show the person your value as an adviser and as someone he or she may want to work with in the future or recommend to a friend,” concludes Kramer.

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