Given how RIAs have increasingly sought to differentiate themselves from competing broker-dealers by serving clients’ best interests and maintaining a fiduciary standard, financial advisors who are in the business of financial planning advice, and whose compensation is for that advice (what we at Kitces.com refer to as financial “advicers”) often feel wary about associating their practices with sales techniques. However, for these financial advisors, even though they are confident their services are of great value to clients, bringing prospects to and through the door can remain a significant obstacle. Regardless of how knowledgeable or capable an individual advisor may be, or how well their expertise may fit a client’s needs, getting a prospective client to commit requires both expertise and persuasion.
In his book Influence: The Psychology of Persuasion, Robert Cialdini presents research that helps to demonstrate how advisors can leverage three simple tools to better aid – and retain! – clients who are already coming to you for answers—ultimately allowing them to save time and help more people.
First, creating a perception of scarcity around what a financial advisor offers can crystalize the value of the advisor and motivate clients to action. One way this can be done is to use a scheduling approach that involves “surge meetings”, where advisors schedule prospects and clients in a very structured and condensed time period. Not only is this helpful to free up time for the advisor to focus on firm infrastructure and other priorities, but the apparent scarcity of available meetings tends to discourage prospects who aren’t ready to commit to working with an advisor from signing up, yet motivates clients who are ready to sign up for coveted meeting slots. This means that the people with whom advisors meet are much more likely to be ready to act in concrete ways and implement recommended changes.
Next, Cialdini proposes the idea of consistency, whereby individuals tend to strive for behavior that aligns with how they identify themselves. Thus, if a client views themselves as a proactive doer (opposed to a passive drifter), they are much more likely to commit to taking action – and advisors can leverage the client’s tendency to behave consistently with their ideal self-image. Additionally, a goals-based planning approach can be a powerful motivator by helping clients identify their financial planning priorities, along with the behaviors that will align with their ideal future self-image.
Finally, advisors can use reciprocity as a way to persuade prospects to sign up and ultimately build their businesses. Letting prospects test-drive the client experience (by offering a free preview of available planning services) can attract prospects and increase referrals, as this gesture of reciprocity can demonstrate the advisor’s value and skill by offering a clear example of what is actually delivered to clients. Exactly what is given away to prospects, and how, is up to the individual advisor, but treating a prospective client as if they have already joined the team is a great way to ensure that they actually do join the team!
Ultimately, it is important to remember that clients investigate and hire financial advisors because they want help reaching their goals. Advisors who are client-focused and have a good product to market can benefit from using Cialdini’s principles to persuade potential clients who would benefit from their help to take the leap into hiring them. By using Cialdini’s research to adapt strategies for use with clients, financial advisors can remove some of the resistance that prospects may initially feel by promoting trust, allowing clients to realize the reason that they sought out a financial advisor in the first place!