Prospecting new clients is always a priority for financial advisory firms with aggressive growth goals, and those that are training individuals to develop this important skill even before they become lead advisers are finding the most success.
Firms that put professionals through their own formal programs or hire outside coaches to teach them how to attract clients and referrals are growing faster than those that rely on ad-hoc mentoring from a senior partner, according to findings in the
2015 InvestmentNews Adviser Compensation and Staffing Study.
But can business prospecting really be taught or is it an innate skill that someone either has or doesn't have?
Experts are confident that even though some seem like natural-born salespeople, the ones who are most successful at prospecting in the advisory business genuinely want to help other people solve their problems — and that comes across.
"You don't have to become this verbal, outgoing, back-slapping person," said Beverly Flaxington, principal at The Collaborative, which helps advisers working on business development skills. "You have to learn how to ask the right questions and how to deliver solutions to them clearly."
(More: Independent advisers' growth is slowing)
Of course, advisers do have to take the step of actually asking for the business, she said.
That's where many advisers need the most help.
"You have to say something like, 'I'd really like to work with you; can we get this in motion?'" Ms. Flaxington said.
The
InvestmentNews study found that the largest firms, those with more than $10 million in revenue, showed the greatest use of business development education and training for employees, and had higher growth rates than most smaller advisory firms. About a quarter of these super-sized firms had a formal training program they developed themselves, and 21% used third-party training, the survey found.
The most common method of business development training at all firms is through ad-hoc mentoring by a senior-level adviser, according to the survey.
(More: Mentor encouraged adviser's adventure)
The reason mentoring may not be as effective as more formal guidance is that to work, both the mentor and mentee must be motivated and set on achieving the same goals, said Brie Williams, head of practice management for
State Street Global Advisors.
"Chemistry and commitment on both sides are essential to success," she said.
That requires senior advisers to bring their mentees to networking events, to prospect pitches, as well as to client meetings so the junior adviser can watch and absorb those "soft" selling skills, Ms. Williams said.
"Essentially advisers sell what
financial planning is, which is an intangible, and it's tough to visualize," she said. "It comes down to whether they can explain their value proposition and why they're worth paying for."
The
InvestmentNews study also found that as firms get bigger and growth is harder to sustain, it's just about an even split of new assets coming from business development as
referrals, compared with about 33% coming from business development for smaller advisers.
Dawn Rapoport, chief operating officer of advisory firm Waddell and Associates, said she is thinking about adding formal sales training for the firm, which has eight advisers.
“I have seen it be successful at other companies,” she said.
Currently the firm has monthly sales meetings, sets and tracks goals and shares with each other how they won over recent clients, Ms. Rapoport said.
