I’ve met with thousands of financial advisors over the years. It pains me that more investors don’t use their services.
According to one survey, only 1% of those polled said they use a financial advisor.
Among the reasons given was the availability of more information online and a perception that financial advisors are “expensive and only for the wealthy.”
I believe there’s another reason which wasn’t mentioned in the survey: Most financial advisors haven’t received sales training supported by peer-reviewed research.
If you ask a financial advisor to set forth her investment philosophy, she will have no trouble. When you ask her to explain the research supporting that philosophy, she can often refer to many academic articles and even the work of Nobel Laureates in Economics.
Clearly, having an understanding of the evidence underlying their investment approach is important to these advisors. It adds to their credibility.
But when I ask these advisors this question, I get a blank look: What’s the evidence that supports the way you try to convert prospects into clients?
I’ve never met an advisor who could answer that question. Instead, each advisor approaches this issue differently, based on their personality and style – and little else.
The reason for this anomaly is a lack of knowledge of the extensive research on this subject. I set forth many of these studies in my recent book, Ask: How to Relate to Anyone.
My research fully supports these bold statements:
- There is powerful research on the subject of converting prospects into clients.
- This research is applicable to all business relationships and is not limited to financial advisors.
- This research indicates the way most advisors (and others) attempt to convert prospects into clients is fundamentally misguided.
- Implementing this research has the potential to positively transform all relationships, both business and personal.
Effective sales training for financial advisors (and others) requires a major switch in focus. Instead of conveying information, your goal will be to elicit it.
Doing so is the equivalent of reverse engineering every encounter to ensure that it’s a positive one for the prospect, while maximizing the possibility of converting that person into a client.
The research underlying this advice is set forth this seminal study authored by two professors at Harvard. They found that when we empower others to talk about themselves, the hormone oxytocin is released into the pre-frontal cortex of their brain.
Why is this important?
Oxytocin is a chemical messenger that triggers bonding between mothers and their newborns. There’s evidence that an increase in levels of oxytocin may enhance levels of trust in humans, which can enhance social interactions.
When you cause oxytocin to be released in others, the effect can be powerful. The authors of the Harvard study concluded that simply empowering others to talk about themselves “represents an event with intrinsic value, in the same way as with primary rewards such as food and sex”.
Effective sales training for financial advisors begins with an understanding of the importance of having others talk about themselves. Doing so is a critical first step in achieving a positive outcome.
What happens when your approach involves giving a presentation or “educating” the prospect?
According to Judith E. Glaser, author of Conversational Intelligence, the person listening to you may feel minimized, trivialized and rejected. Instead of experiencing the positive benefits caused by a release of oxytocin, the passive listener may be experiencing the same neurochemicals as physical pain.
The next time you are in a situation where you’re attempting to convert a prospect into a client, remember that’s it’s your choice.
You can ask questions causing the release of oxytocin (and another “happiness” hormone, dopamine) which will cause the other person to feel happy and inspire trust.
Or you can talk, causing them to experience a release of cortisol, the stress hormone. They will feel unimportant, diminished, stressed and distracted.
This research is a powerful tool.
Dan Solin is the founder and President of Evidence Based Advisor Marketing and Solin Strategic. He teaches evidence based sales training to financial advisors and others. He is the creator of The Solin Process, an evidence based sales training tool applicable in any business or personal interaction. His online course on his evidence based approach to effective sales training will be available October 1, 2021.