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6 Common Sales Mistakes Made by Financial Advisors

If you’re a financial advisor closing less than 50% of your prospects, you’re probably making one of these six common sales mistakes.  Making common sales mistakes can make your sales appointments go "the wrong way" quickly.

Now, maybe you enjoy selling and maybe you don’t. But as a financial advisor, selling makes up a gigantic portion of your job. That’s true whether you’re in a wirehouse or an RIA; whether you’re with a large bank or an independent broker/dealer.

Because selling is such a major part of your job, it’s critical that you avoid the most common sales mistakes that many advisors make.

I’ve been coaching advisors to improve their sales skills for over 40 years. The following sales mistakes are not the only ones out there, but they are some of the most common. I’ve seen them time and time again … and I’ve also seen how avoiding these sales mistakes can dramatically boost your closing ratio. So without further ado, let’s start with:

SALES MISTAKE #1: Pitching in the first meeting

People buy from people—specifically from those they like and trust. No matter how compelling a pitch you have, no matter how chock-full of benefits, your chances of making the sale are considerably diminished if you have not established a personal rapport with the prospect.

Establishing a rapport takes time—almost always more than one meeting. For that reason, make your first appointment about gathering information and creating a connection. Save the pitch till later!

SALES MISTAKE #2: Talking to the prospect about investments before profiling the prospect and prospect’s family.

This is similar to the first mistake. The reason a prospect is coming to you, as opposed to using a robo-advisor or simply relying on Google, is because they are looking for someone to give personalized advice for their personal goals and needs. If you start talking about investments before understanding what the prospect really wants, fears, and cares about, you’re little better than a Google search.

SALES MISTAKE #3: Preparing an unreadable proposal.

Over the past dozen years or so, selling has become much more complex.

In the past, you could sell a product to get your foot in the door. Because of regulations and changing client expectations, advisors now have to propose recommendations for entire portfolios. These solutions are often generated by programs developed by various firms as well as creators of portfolio management software. The portfolio proposals I have seen run many pages.

I was once asked by a client to review one of these proposals. It was immediately obvious why he was having difficulty closing the sale. It was 37 pages long. It included 12 pages of disclosures. It included terms that I had to look up that were not included in its glossary. To a client, it would be incomprehensible.

What do you think happens when clients or prospects who are marginally financially literate encounter terms such as “US Short Term Fixed Income,” “Secular Return Estimate” and (Gasp) “Monte Carlo Target Band”?

That sale is dead.

In short, make your proposal simple. Make it readable. Make it in Plain English.

SALES MISTAKE #4: Assuming any degree of financial literacy.

See above, re: “Monte Carlo Target Band”/”Secular Return Estimate”/”Any financial jargon.”

SALES MISTAKE #5: Failing to provide a written set of recommendations.

An unreadable proposal is bad enough—but no proposal at all might be even worse.

What good does a written set of recommendations do? Well …

  1. It provides the prospect something of value, helping them feel their time meeting with you has been worth it.
  2. It gives the prospect something to mull over and consider and MAKE A DECISION ON.
  3. It helps the prospect understand exactly what it is that you want them to do—which, again, helps them actually make a decision.
  4. It enhances your “expert financial advisor identity.”

Professional-grade sales, especially when you are competing for any kind of a substantial portfolio, require written recommendations. Period.

SALES MISTAKE #6: Talking too much when the prospect asks a question.

Too many sales people talk too much and they interrupt. Great sales professionals do neither. Instead, when a prospect asks a question, take a moment to think about what you want to say. Give as brief and concise of answer as you can—and then SHUT UP! If the prospect needs (or wants) to know more, he/she will ask another question. (By the way, when a prospect asks a question, that’s a great sign that they are interested.)

So there you have it. Six common sales mistakes financial advisors often make.

Now, your task is simple. Ask yourself: “Do I ever make any of these mistakes?”

If your answer is either YES or “I’m not sure,” then it’s time to take action. Specifically, it’s time to read my white paper on The Good Way to Sell.

Effective selling is a process. It’s a series of steps, disciplines, tools, and techniques that you can apply to every client or prospect every single time. When done correctly, selling enables you to find out what your prospects really want, offer the solution, and then move the sale through to a timely, profitable conclusion.

The Good Way to Sell is my process.  Download it for free by clicking here.  

By avoiding the sales mistakes listed above, and by implementing The Good Way to Sellyou will be well on your way to achieving the sort of sales success you’ve been looking for throughout your career.

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