Master the art of successful client prospecting

By Rosemary McCracken | June 21 2012 03:24PM

Mastering the art of attracting new clients is essential for beginning advisors. And, according to Julie Littlechild, president and founder of Advisor Impact Inc., a financial advisor consultancy with offices in Toronto and New York, even established advisors today are open to new business.

“Our research shows that advisors are putting growth of their businesses at the top of their list of challenges,” she said. “This is a result of volatile markets, and the fact that people age and clients pass away.”

Neil Taylor, vice president, marketing, at Investors Group in Winnipeg, suggests advisors try out a variety of prospecting strategies, and then focus on those they have a particular aptitude for. “But make sure you give some time to mastering them,” he said. “Your initial results may not be great because you need practice. Hone your craft by watching other people, and practise, practise, practise.”

Cold calling

Cold calling, or making unsolicited calls to prospective clients, is the method most new advisors use to build a practice, Mr. Taylor noted. But before picking up the telephone, advisors need to give some thought to who their ideal client is. Without a clear idea of the market they want to serve, he said they’ll be taking a very broad, shotgun approach that probably won’t have the desired results.

Most advisors have natural markets they can tap, he added. “They may have had previous careers, such as teaching, and know the issues these professionals face. They have an opportunity to be seen as a financial expert by members of this group. A target market can also be a cultural community. Advisors who are members of a cultural group will have a natural advantage in winning the business of its members, but anyone who takes the time to get to know the community, its concerns and its centres of influence will be well positioned to serve its members.”

The very idea of cold calling leaves many people cold, but Mr. Taylor said the strategy shouldn’t be neglected by seasoned advisors. “Experienced advisors will be even better at it because they’ve developed their skills over the years. And these skills will stand them in good stead in other forms of prospecting. Professional networking, for instance, has elements of cold calling to it: talking to people with whom you haven’t yet established relationships.”

The best cold callers, he said, “just talk to people about what they do. There are thousands of Canadians out there who need help with their finances, and would love to talk to a financial advisor. Many don’t know how to go about finding one. It’s amazing the response you often get when you tell them what you do and ask if they need your services.”

Edward Jones advisors wholeheartedly embrace cold calling as the cornerstone to building their businesses. And before they make telephone calls, they knock on doors. “We knock on doors in the community in which we’re based in order to build relationships face-to-face,” said Steve Ison, principal, advanced training, at Edward Jones in Mississauga, Ont. “Face-to-face communication is the most effective way to build a business, and the first step in getting referrals. A common mistake in prospecting is not spending enough time making face-to-face contact, and not following up with a phone call and an invitation to attend a seminar. This business is based on relationships. Contact, plus frequency, plus focus on the client results in building a relationship.”


Referrals from existing clients are generally considered the most effective way to build a business. They are extremely powerful introductions, Ms. Littlechild noted, because a bond has already been formed between the advisor and the client.

Asking for an introduction can be daunting for some people, but Advisor Impact has conducted recent research that shows that asking for a referral can be much easier – and have the desired effect more often – when an advisor takes care to ensure that there is a sound connection between the type of advice he or she offers, and the person who is seeking advice. Ms. Littlechild noted that clients are only likely to provide a referral if they know that their friend or relative needs financial advice. “Otherwise, referring that person for advice would appear presumptuous,” she said. “You wouldn’t tell a friend out of the blue that you know a hairdresser she should try.”

Advisors should help clients identify the need for financial advice among the people they know, she added. “This often arises from life-changing situations such as divorce, the death of a spouse, losing a job or getting a new job or a promotion, starting up a business and approaching retirement.”

Mr. Ison likes the direct approach of asking established clients who in their circle might be a good fit to work with you. “You can say, ‘We’re looking for serious and conservative investors who are focused on investing for the long-term. Do you know anyone who might be a good fit for this?’”

Centres of influence

“A more indirect channel for generating business is to cultivate referrals from businesses and professions in your community,” Mr. Ison added. “Develop relationships with lawyers and accountants, for example. But the relationship has to be a good fit for both of you, and you have to be willing to give in order to receive. Encourage your clients to use these professionals’ services.”

Advisors see relationships with centres of influence as holding a lot of potential but they often feel they’re not carrying it out as well as they should, Ms. Littlechild noted. “These relationships take a great deal of time to implement. You can’t just approach other professionals and ask them to refer their clients to you. You need to build a relationship, earn their trust, demonstrate that you deliver good service and find out what you can do for them. Advisors who are the most successful at this are those who start by thinking, ‘My clients deserve a great network of professionals’ – and then go out and find people who have their own high business standards.”

Lawyers and accountants are usually at the top of financial advisors’ lists for building a professional network, but she suggests looking farther afield as well. “Look at personal bankers and life coaches,” she said.

Community networks

Advisors should also take advantage of opportunities to broaden their networks by taking part in community events, joining clubs and charitable fund-raising organizations, Ms. Littlechild said.

Writing articles on personal finance and the economy for newspapers and magazines, and discussing these topics on the radio and television are great ways of becoming known as an expert in your field, Ms. Littlechild said. “But the jury is out on whether this generates much new business. There’s the potential for lack of targeted focus, resulting in getting calls from people who are not your target market. But when you do find a prospect who is part of your target market, that person is more likely to sign on because he considers you an expert in your field.”


Some advisors say that running regular advertisements in local newspapers is effective, Ms. Littlechild said. “But it can run up a big bill. An ad announcing a specific event such as an educational workshop or seminar might be a better strategy.”

Selective advertising can generate business, Mr. Taylor added. “Advisors who are members of a local club or a faith community may want to advertise their services in the group’s newsletter, directory or bulletin. But mass-market advertising is expensive and less focused. People often use it as a crutch to avoid picking up the telephone.”

Social media can provide an opportunity to indirectly bring in new business.

“Some advisors think social media is a silver bullet and means that they no longer have to prospect for business,” noted Neil Taylor, vice president, marketing, at Investors Group in Winnipeg. “But just because an advisor has a Facebook page doesn’t mean people will seek out his services. On the other hand, social media can deepen relationships with existing clients.”

Jay Palter agrees. The Edmonton-based managing director of Accretive Advisor, practice management consultants for financial services professionals, believes advisors shouldn’t approach social media just to generate leads. “They should be using social media as an opportunity to deepen relationships and build engagement. By getting closer to their clients, their clients’ networks will generate leads. And by getting closer to their peers, these professionals’ networks will also generate leads.”

Professionals who approach social media just to generate new business will be less successful than those who use it to form good relationships, he added. “It’s just like at networking meetings where the person who constantly tries to sign up clients becomes known for this behaviour, instead of showing genuine interest in people.”

Social media

Mr. Palter suggests advisors learn how social media can build their businesses. “Social media is often perceived as using up time, but as you become more proficient at it you should consider how it can build your business. A group conversation on a LinkedIn group takes much less time than having that conversation with a number of different people. People who say social media will take up too much of their time are usually those who don’t want to deal with the learning curve.”

“What do I tweet or blog about?” is a question he is frequently asked by advisors. He suggests finding quality articles on the Internet and sharing them with your social media network. “These advisors will be seen as people who are well-read, who give valuable content and advice. They’ll be seen as giving people. If they do that consistently, over time they’ll become trusted sources of information. And because most people have a sense of reciprocity, they’ll want to reciprocate with these advisors. That’s how social media works.”

He recommends joining LinkedIn and sharing information there. “And advisors can join LinkedIn’s special-interest groups, such as Advisor Nation, Social Media Marketing for Financial Services and Advocis, for Advocis members, where financial professionals discuss the hot topics of the day.

“They can also write their own ideas and insights in a blog, or microblog them on Twitter,” he said. “But not everyone can write or has the time to write.”

Don’t hide your personality and interests, he added. “It’s good to share things you are passionate about…your interest in the arts, travel destinations, and the food and wine you like. People will ultimately do business with people they know, like and trust, so you need to share more than your business expertise.”

But there’s an art to being personal on social media, he said. “Always be conscious that you’re your own public relations manager. Some information should remain private. Avoid swearing, which can be misunderstood. Steer clear of expressing religious and political views because on social media you will encounter people with a wide range of views.”