Years ago, I had an amazing epiphany about financial advisors and the essence of team building in wealth management, “No financial advisor makes it to high seven figures without a team.” And further, “A financial advisor and one assistant don’t make a team. The minimum team size is advisor, assistant, and part-time computer operator…
Think Windfalls Are Just Good Luck? Think Again
The original version of this story was published on ThinkAdvisor®
Unless you’re brand new as a financial advisor, you’ve likely had one or more windfalls. One might have made your month. Another could have made your year.
Occasionally, you will hear of a windfall that makes a career. Perhaps yours.
Here are two that made careers.
A phone call to an advisor, “I want you to meet my new wife.”
This call led to a transfer of 83 accounts. The sucking sound was so loud that the CEO of the national firm jumped into the corporate jet and flew to Texas to try to save the client. Too late.
The second career-maker was from a young man with a $40,000 account.
He borrowed enough money to live for a year. He spent that year writing some computer code that is part of the data management systems for cloud computing.
He’s now adding about $40 million a year to his investment accounts.
How Do Windfalls Happen?
In the context of your practice, a windfall is a substantial asset that suddenly moves or becomes cash.
Whether you get it is luck, right? Well, maybe not.
Consider these philosophical gems:
“Luck is when preparation meets opportunity.” Seneca, Stoic philosopher, 1st Century AD
“I believe luck is preparation meeting opportunity. If you hadn’t been prepared when the opportunity came along, you wouldn’t have been lucky.” Oprah Winfrey, modern philosopher
“Give me six hours to chop down a tree and I will spend the first four sharpening the ax.” Abraham Lincoln
“We should remember that good fortune often happens when opportunity meets with preparation.” Thomas Edison
Let’s assume these sages are correct. Opportunity, luck if you will, requires preparation.
Be Prepared: The Essentials
In my opinion, based on coaching thousands of advisors over decades in this industry, preparation is four things.
It is creating and sustaining the trusted advisor relationship with every client. This alone can direct an “out of the blue” windfall to you.
To increase your odds, have detailed knowledge of every asset which could re-materialize into an opportunity.
The first step in acquiring this knowledge is to find and catalog these assets. “The ‘How’ of Windfall Prospecting” on my website truly is the “how to” you are going to need (and can be downloaded).
Finally, engage with your biggest competitor.
“Hold on Bill,” you say. “How am I supposed to engage my biggest competitor?
Let’s think for a minute. Is your biggest competitor “that nice young advisor at the bank?” Doubtful.
What about, “We’ve been with our other advisors for 20 years?” Is it them?
Maybe. Most likely, your biggest competition is the prospect’s family.
Kid #1: Mom, Dad, those student loans are killing us.
Kid #2: We should never have re-financed the house. With college coming, they are going to have to go to community college and get a job.
Kid #3: We’re just not making enough. We want to buy a tanning franchise.
Mom: The bathrooms and kitchen in this house are awful.
Dad: I want a boat.
How much is left for their investment account? Zero, zilch, nada.
Windfall Facts of Life
Some windfalls will completely surprise you. These are the windfalls that appear “out of the blue.”
Most windfalls will surprise you only in their timing. Who could have predicted that a man with 100 shares of Walmart in his account would marry a woman who made her first fortune in cable TV? And then loaned money to Sam Walton?
Betty Boop and Alfred Neuman inherited four duplexes from her Uncle Carl. They plan to pass them on to their children.
But one night, about 2 a.m., Betty gets an agonized call from a renter. The basement is flooded with sewage. It’s ruined their priceless sugar bag collection.
Betty is done with the duplexes.
Two days later, the duplexes, all with zero mortgages, are on the market. Are you going to be able to invest the roughly $800K? Or are Kids #1, #2, #3, Mom and Dad going to spend it?
You will get it if you are there when the check is cut by the title company and if you host the family meeting.
But to do these two things, you better know Kids #1, #2 and #3. And you better have had detailed conversations with Mom and Dad about their real estate holdings.
Sharpen Your Ax
Have intimate knowledge of parents, if living, and beneficiaries.
Always look for and catalog all outside assets held by the client so, when life intervenes, your in-depth knowledge of the family assets makes you and your team part of the decision-making process.
And by doing this, you will find that these windfalls will be less an “out of the blue” pleasant surprise and more a directed channel of expected future income.
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