Originally published on Advisor Perspectives, July 10, 2017

When I introduce the Solin Process℠ to new clients, I ask about their investment philosophy. The response is almost always impressive. Advisors have a firm grasp on how they invest client funds and they can justify their approach.

Then I ask them to tell me how they go about converting prospects into clients. The responses vary widely. I follow up by inquiring how they justify their conversion strategy.

That’s when I get the “deer caught in the headlights” look.

The Solin Process℠ does for the conversion process what academics have long accomplished for the business of investing. It marshals peer-reviewed evidence – mostly from studies in neuroscience and psychology – that explains why we react to interpersonal situations the way we do.

One of the most powerful areas of research is the role cortisol plays when attempting to convert a prospect into a client.

Cortisol and stress

Cortisol is a primary stress hormone in humans. Elevated cortisol levels have a number of adverse health consequences, including lowering your immune system, increasing your blood pressure and making you more susceptible to heart disease.

If you love someone – or want to convert them from a prospect to a client – the last thing you want is to increase their cortisol level.

What elevates cortisol?

A number of studies (summarized here) have identified what causes elevated cortisol levels. They are:

• Being exposed to novel or unpredictable situations.
• Putting someone in a position where she has little control.
• Creating a situation threatening to the ego.

Here’s what struck me. The way most advisors conduct meetings with prospects checks each of these boxes.

Think about the typical meeting. The advisor takes charge, under the mistaken assumption she is supposed to “lead” the meeting and “educate” the prospect, as part of her “presentation.” For the prospect, this scenario is both “novel” and “unpredictable.”

Because the advisor takes charge, the prospect has “little control over the situation.” It’s often the advisor – not the prospect – who determines what will be discussed.

The situation is inherently threatening “to the ego of the other person.” In many cases, advisors are trying to show the prospect the error of past decisions and may even attempt to fundamentally change the way the prospect invests.

Advisors need to be mindful of the impact these meetings have on the cortisol level of prospects. A prospect whose cortisol level is elevated, and who is experiencing high levels of stress, is unlikely to become a client.

A different approach

Once you understand the need to avoid elevating the cortisol level of your prospect, the next step is to radically change your approach to these meetings. I can illustrate the difference with this example.

Think of how you feel when you read this sentence: If you confirm within 90 minutes of publication of this blog post, and agree to a minimum of 10 Skype sessions with me, I will reduce my fee from $5,000 to $4,000.

I can almost guarantee your cortisol level went up and your reaction was negative.

Do the same exercise when you read this sentence: Tell me how you and your spouse (or partner) met.

That inquiry is a surefire way to decrease cortisol levels.

Understanding this difference is the key to using your knowledge of cortisol to gather more AUM.