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Special thanks to our client, Eric J. Miller, for providing the inspiring story included in this case study.
When we first met Stan Summers he had just blown two significant business cases and was concerned about making the same mistake with his other high-net worth prospects.
Stan had been an advisor for three years. Prior to that he had been a consultant at a large firm. Though successful as a consultant, he was attracted to the idea of being his own boss and setting his own income ceiling. Furthermore, he knew he could bring an enviable asset to his advisory business — a large network of business contacts. After two years, with dedicated study and hard work, he had managed to grow a sizeable clientele. But he knew that he’d only scratched the surface of his potential. He had always known that through his network he could access some extremely affluent individuals, but had decided not to approach them until he felt he was ready. A year ago, he felt the time had come.
He arranged an appointment with the owner of a large import company, a prospect worth over $30 million. He progressed through a series of appointments and eventually put together an insurance package for $5 million, but then the case started to unravel. The client raised objections Stan couldn’t respond to and the deal fizzled out. He found the loss devastating, but soon opened another large case, only to find that fall through as well.
When we sat down, I asked Stan why he thought he’d lost the big cases. He admitted he’d felt a little out of his depth, didn’t know how to respond to the objections, and lacked expertise.
“What’s your strategy for getting that expertise?” I asked.
“That’s why I called you.”
“Okay, with our help then, when do you think you could expect to develop the expertise you’ll need to close big cases?”
“Months, maybe years,” he answered.
“Can you afford to go years without approaching big clients?”
“No, but I can’t afford to go on blowing my chances. You only get one chance with these prospects.”
“You spent your first couple of years ignoring large prospects because you weren’t ready,” I said. “In that time, some of those prospects were picked up as clients by other advisors. Prospects that are on your radar screen today might not be there tomorrow. You have a window of opportunity with some of these prospects, but you don’t know how large that window is.”
“So it’s a catch-22,” Stan said, “What do you recommend?”
“I recommend you get the expertise to go on those big cases.”
“But when would I be ready?”
“Today, if you’re willing.”
“Willing to do what?”
“Play the Infinite Game.”
He looked perplexed.
“Most advisors play the Finite Game,” I said, “they work by themselves, serving their clients as solitary advisors.”
Stan said he didn’t like the idea of working with other advisors and sharing commissions. Since he had the connections, he felt the prospects were his alone.
“You’ve just expressed the mindset of the Finite Game player. People who play the Finite Game think that the opportunity with certain markets or prospects is limited, and that their best strategy is to ensure they get the ‘whole pie’. However, the reality is far different – the limits advisors perceive are often based on their own limitations, not the limitations of the market or the client. To get beyond your limitations, you need to play the Infinite Game — you need to expand what you bring to your clients by working with others.
“Let me give you the example from a client of mine, Eric J. Miller of the Miller Consulting Group. Eric is a large-case expert based out of New York. Another agent, Henry, had come to Eric for help on a case he was having trouble with. Henry had sold a $3-million insurance policy with a $33,000 premium to Victor Winters, a wealthy entrepreneur. Henry had called Eric for help on the case when the second premium was due, saying that Victor was ‘choking on the premium.’ Henry had drafted a proposal to rewrite the insurance for a premium of $18,000, almost half the original cost, thinking that that would save the deal. When Eric and Henry went to see Victor, Henry opened the meeting by referring to Victor’s feeling the pain of the premium costs. Victor hotly denied that and clarified that he didn’t feel he was getting value for his money. Eric felt that Henry was about to bungle the whole deal and waded in. Eric began to talk about the value of the coverage and said he had a policy that represented tremendous value with a premium of $60,000. By now Henry had the wherewithal to keep quiet and let Eric run the meeting. Victor’s estate was worth $15 million, and growing. The potential tax liability was in the $6-million range. Eric relayed the benefits of having the insurance company pay the tax, rather than selling assets to do so. Eric stated that the original premium wasn’t too high — it was too low. Victor agreed. By the time the appointment was through Eric was proposing a solution with a $100,000 premium.
“Prior to the appointment, Henry had laid out his strategy to walk away with an $18,000 premium. We can clearly see that Eric moved the case from $18,000 to $100,000, but more importantly, Eric solved Victor’s tax liability problem. Henry’s strategy to lower the premium because of a perceived objection was a disservice to the client. Henry was out of his element here. Eric brought the necessary experience and expertise and was able to provide the advice Victor needed.
“It’s interesting to note that Henry’s perception of the size of the pie stemmed not at all from the reality of the client’s need but from his own personal feeling that a $33,000 premium was too much. It’s very difficult for inexperienced advisors to separate their emotions from a large case. They’re not used to dealing with large, complex client needs and let their own personal biases get in the way of serving the client. An experienced expert like Eric brings the necessary objectivity and cool-headedness to the table. Eric knows to ask the questions that an inexperienced advisor is too frightened to ask. In the end, the case with Victor eventually grew well beyond the $100,000-premium mark, and Henry shared half the case. That’s the value of playing the Infinite Game.”
Stan was blown away by the story. I could see his mind shift from a Finite-Game to an Infinite-Game mentality. I suggested Stan put together a plan for how he would approach his business from this point forward. A week later we reviewed Stan’s plan in which he mapped out a strategy for approaching his big-case prospects, but this time jointly with a business-case expert from his firm. At the time of writing, Stan and his partner have already closed one significant case, and are working on others.
Stan learned that his best strategy for tackling his high-net worth prospects was to play the Infinite Game — to team up with other professionals. He learned that in the big-case market it’s difficult for one advisor to have all the necessary ingredients for serving the client. While he had access to big prospects through his network, he lacked expertise. And it works the other way around. There are many advisors with expertise who lack access, so it’s essential for them to team with advisors who have valuable networks. Even though pooling resources means sharing commissions, each advisor benefits, because it’s better to have a smaller piece of a larger pie than a larger piece of a smaller pie — or, as is more often the case, no piece at all. And it’s infinitely better for your client if you bring in the needed expertise, otherwise you risk leaving your client exposed to the risks you were intending to minimize. Most advisors have heard the advice about sharing the pie, but few heed it. Perhaps the largest barrier to adopting the practice of playing the Infinite Game, as Stan learned, is the perception of the size of the pie. For many advisors, their perceived limitations of a case are based on their own feelings, and not on reality. As Eric’s story above has shown, the limits of the Victor deal far exceeded what Henry had ever entertained. And as Stan learned, the best way to push through your own limits is to start playing the Infinite Game.
Norm Trainor is the Founder and CEO of The Covenant Group, a company that specializes in educating and coaching financial advisors and entrepreneurs and providing them with business tools to enhance their performance. He can be reached at firstname.lastname@example.org or 1-877-903-3878 X333. Read more from the author/contributor here.
Tags: 30 Million, 5 Million, Advisory Business, Affluent Individuals, Appointments, Boss, Business Cases, Business Contacts, Case Study, Clientele, Import Company, Infinite Game, Inspiring Story, Insurance Package, J Miller, Mistake, Objections, Prospects, Special Thanks, Stan
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