Prospecting ideas for financial advisors: 6 ways to build leads

by Tim Halverson, Russell Investments

How do financial advisors get more clients?

The biggest question I get when I meet with advisors is: How are other advisors generating new business? I thought it would be great to update a blog I wrote before the pandemic on this subject. At that time, we used the acronym LEADS to represent different ideas, and since I have now learned another great way to create new leads, I have added one more S.

Leverage your existing client base

Engage the next generation

Adapt to technology

Do the activity

Seize the opportunity for tax-managed investing

Subject matter expert

Let’s look at each letter.

Leverage your existing client base

The world operates on referrals. Anytime I need any work done to my house, I ask for a referral. Anytime I need an expert, I ask for a referral. Think of any important project you have needed done in the past. How many times did you ask for a referral from a trusted person?

The best leads you will receive will be from your best clients. How well do you know your best clients? Have you segmented your book of business and are you giving your best clients the service they deserve? (If you haven’t, we can help.)  If so, is it likely your best clients know anyone who may need the help of a financial advisor at this time?

A while back one of my colleagues wrote a terrific article on getting referrals through client events, which is now more appropriate in our post-pandemic world. It talks about how to lock in client loyalty while creating experiences that make it easy for your best clients to refer business.

A great question to ask your best clients would be: Do you know anybody in your circle who may need to talk to me? I would leave it at that. You could also remind them that since they are in an advisory relationship with you, you are able to be a sounding board for anyone in their family who might need help. Empathy is the new currency in this world.

You could also set up a virtual advisory board and see what other ideas or insights your best clients might have. You should also track how many times you are asking for these referrals and how many you receive. I am sure we have all heard this phrase, anything worth doing is worth tracking.

Engage the next generation

How well do you know your clients’ family? Does it include young people just entering the workforce or establishing their careers?

If the kids don’t need your help now, they never will. Two bear markets in 10 years? If you have been introduced to them, now is the time to call. If not, it’s time to rediscover your clients to learn who they are and how to contact them. If you have clients who are reluctant to give you this information, tell them you want to make sure their planning includes their children, because in the end their family is going to a big part of the plan. If your client is still apprehensive, invite them to share your contact information with their children. I love the idea of doing a family meeting either in person or virtually. Have your client invite their children. It is a great way to meet the next generation.

With most of the world reopening this could also be a great time to think of events that could target the next generation. Consider an event at a local children’s museum, maybe an outing to a baseball or hockey game, or a painting class. How about a birthday party for your client and invite the kids? Rent a movie theater? There are countless options!

Adapt to technology

This could be looked at a couple of ways. Do you know how to use virtual meeting tools? You might think clients do not want to use this technology, but you may be wrong. I think people are starting to use Zoom and Microsoft Teams more often, but those are not the only tools available.

Clients are looking at their balances online more frequently, so make sure clients know what tools are available on your website. If you use our client engagement roadmap, maybe put the website tour as a topic for your next meeting.

Technology also allows you to reach out to people across the country. As I noted above, try a family meeting for your best clients. It doesn’t matter how far-flung they may be, because you can connect online.

Just one caveat: I truly believe virtual meetings, virtual events and virtual check-ins are helpful, but seeing people face-to-face is still important. I have been truly shocked by the number of people who still want to meet in person. In my experience, Zoom is a great way to start a relationship, but face-to-face is the best way to deepen the relationship. Maybe consider a hybrid option? The first two days of the week you conduct virtual meetings and the last three are face-to-face with clients.

Do the activity

I am guilty as anyone when it comes to hiding from activity. I have read enough sales books for two lifetimes. Just because I know how to do something does not mean I will do it. I know what it takes to be healthy, but it sure is hard to stay healthy. You have to take action. We all know how many appointments and prospecting calls we need to make each week to be successful.

I have been following both the Pillar system (Brian Margolis) and the daily activity model (Sequoia). Pick something and go with it. It doesn’t matter how much you plan unless you execute on the plan. If you need help on setting up a strategy, please reach out.

A big key to hitting your numbers is to be productive whether you’re remote or in the office. Early in the pandemic, a colleague wrote a blog about being productive from home. If you do not know what your numbers are, please reach out and we can help you. Personally, I know that each week, I need to book at least 20 appointments and prospect at least 30 people. These numbers do not change whether I’m working from home or from the office. It’s often been said, if you take care of the numbers, the numbers will take care of you.

Seize the ability to manage taxes

Even though none of us know what the market is going to do, I think we all agree that taxes are likely to go up. If you look at the stimulus packages or all the other programs launched to help people and businesses through the pandemic, the blunt truth is that we are eventually going to have to pay for them. What about your own clients? What kind of fiscal shape are they in? Do they have an emergency fund? Is it well-funded?

I think almost every investor out there is trying to save every dollar they can. We believe you can use the current market volatility to potentially lower a client’s tax bill by implementing tax-management techniques like Roth conversions, tax-loss harvesting and moving non-tax efficient monies to tax-managed portfolios. Think how powerful your conversations can be when you demonstrate to clients how much they can save by investing in tax-managed solutions. If you don’t know how to get started, check out my article about how to talk about taxes to clients. It’s a great primer as we prepare to go into tax season.

With the recent selloff in the market this is a great time to think about making lemonade out of those market lemons.

What do I mean? If you have clients who are underwater because of recent performance (we all do), this might be an opportunity to tax-loss harvest. Look through your book of business and identify 50 clients who have started new accounts and see if there is an opportunity to capture that loss (create tax assets) and reposition them into solutions that are designed to manage their tax bill.We all know this could be a year in which client statements will be negative but they could still receive taxable capital gains. How awkward do you imagine that conversation could be?

I also believe products are evolving in this space to help address the issue of investment taxes. Russell Investments now offers solutions that take full advantage of direct indexing and ongoing tax harvesting, which are tax-management tools that can help more and more people. If you have questions, feel free to reach out.

Subject matter expert

The one thing I don’t think advisors do enough is write. No, I am not asking you to write a haiku or a novel, just write about what you already know. Be the expert at something. Maybe your specialty is retirement income or social security. Maybe you are an expert in a certain niche of clients—for example, nurses. My son is studying to be a nurse and I can already see how busy his life will be when he graduates and what issues he might be facing in the future. Once you write about a particular subject, now you have a document to share with clients. And you can never have too much information.

The bottom line

As the new year begins, please look at the six ideas above and consider implementing a few (or all) of them. Hopefully this is the year when your leads become the “Glengarry leads.”¹

Related articles by Tim Halverson:

Here’s how advisors can help make dreams come true

When it comes to talking about taxes, sometimes all you need is the right story

Top 5 questions advisors should be asking every client

7 things every advisor should know about the slacker generation

¹ Referring to the movie Glengarry Glen Ross, a behind-the-scenes look at the world of sales https://www.imdb.com/title/tt0104348/