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Effective Sales Tips for Investment Advisors

When I speak to investment advisors about the principles in my Smartest Sales book, the only presentation tool I use is a picture of a huge elephant. Assets under management is “the elephant in the room.”

I have never met an advisor who does not want to increase her assets under management, yet this subject is rarely discussed at advisor conferences. Instead, most sessions focus on technical financial issues, like active versus passive management, the direction of markets, alternative investments and similar subjects.

There is little, if any, discussion on how to turn a prospect into a client. As a consequence, every advisor has her own way of “selling”, based largely on her background and intuition. Results vary widely. Many advisors would admit they are not very good at sales and have no understanding of why they succeed or fail with a particular prospect.

Sales training is important, but there is an even more fundamental issue. Many advisors refuse to acknowledge that they are engaged in sales. Is there really any doubt that you are engaged in “selling”? I can understand why investment advisors don’t want to be associated with the negative stereotypes of “salespeople”. In surveys of attitudes towards various groups, salespeople have been described in very unflattering terms, like “sharks”, “lower than pond scum” and “leg-humping dogs” who “will promise their first-born to get the sale.”

Investment advisors seek to distance themselves from this image by not only denying they are engaged in sales, but elevating themselves to the status of “educators.” On many occasions, advisors have told me they perceive their job as “educating” their clients. This misconception poses a significant barrier to effective selling for two reasons:

First, it is inaccurate. Real educators are teachers and professors. In the world of finance, these educators have advanced degrees in finance or economics and teach undergraduate or graduate students at universities. Their students are there for the purpose of being educated.

Second, while being perceived as an “educator” may be good for your ego, it’s bad for sales. Real educators lecture while students take notes. The amount of interaction varies, but there is no doubt who sets the agenda. Being an educator means conveying information rather than eliciting it. Effective selling relies on eliciting information rather than conveying it. To be effective at sales, don’t emulate the role of legitimate educators. Distance yourself from them.

The first step for investment advisors is to let go of the pretense. Then, take the steps necessary improve the way you sell.

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