In this column from Insurance Journal’s archives, Jim Ruta explains how to avoid the gaping traps you inadvertently create by being too casual about your incidental business processes. 

Question: What are some of the simple, little things in the business that can have the biggest overall impact on your success? 

Some simple, little things in the advisor business don’t matter until they matter, and then they matter a lot. Here are three examples and the big reasons you want to include them in your business.

  • Many advisors don’t bother engaging their clients in writing because it doesn’t matter to them when they start with a new client. It’s step 1 in the 6 step CFP approach, but it isn’t urgent. It suddenly becomes urgent though when you do all the heavy lifting to solve a prospect’s problem and they go elsewhere with the business. That’s when a good engagement document would have been very valuable. Properly presented initially, it’s insurance against losing business this way by confirming you are their agent. You can’t do this when the business is walking out the door. Engagement only matters when trouble breaks out, but it can only be done when none is contemplated. What’s more, you’ll be ahead of the compliance curve too. 
  • For many advisors, their client files are an afterthought. If they have enough information to get the business written, the file is good. They don’t concern themselves with dates and times of all contacts, relevant correspondence, client communications documentation, signed client engagement documents, relevant client financial and family information, copies of all periodic reviews, and introductions noted, to name only a few. But, if you want to sell your business, complete files significantly increase your business value and they are very important. Buyers pay a better price when they have good client files. Embedded liability questions are easier to spot. Goodwill value can be more easily validated. It means you get a better price, more quickly. And, when the regulators come knocking, you’ll realize that the little extra time you invested has paid off handsomely.
  • Annual client reviews don’t happen annually any more. Advisors continually look for new business and much of that new business is waiting for them in their old clients. New business is unlocked by annual reviews. They are key to building successful relationships, attracting new sales and key introductions, testimonials, recommendations and referrals, retaining business, and being a compliant professional. Still, nothing happens regularly. But if more business matters to you, reviews should matter.

    Review value really stands out when client knowledge matters. Like for claims and policy issue questions when it is so valuable to be able to speak confidently about the lives and lifestyles of your clients, like you will know from regular reviews. Moreover, client health issues and client goal changes can be factored into plans as they happen rather than try to catch up after the fact. Family situation changes like births, deaths, adoptions, marriages, separations and divorce can be accounted for as early as possible to maximize planning, product effectiveness and your client value. And finally, you can catch complaints and expectation differences early so they can be minimized or even eliminated. The power is in the annual review – that doesn’t matter until it matters. 

The lesson is simple, avoid the gaping traps that you inadvertently create when you are too casual about your incidental business processes. Pay attention to these little things that matter when it matters most, and you’ll do better. 

This column by renowned advisor coach Jim Ruta was first published in the april/march 2019 edition of Insurance Journal magazine.

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Jim Ruta’s mission is simple – to preserve, promote and propel the financial advisor business. A former insurance advisor and executive manager of a 250-advisor agency, Jim is a highly regarded coach, author, podcaster and keynote speaker. He has spoken 4 times at the MDRT Annual Meeting including the Main Platform. Jim Ruta is an Executive Coach and Keynote speaker specializing in life insurance advisors and leaders. He works with top advisors around the world and re-energizes audiences with his deep insight and passion. 

If you have a question for Jim, you may send an email to [email protected]