Financial Advisors - Part 3

The Sandbox Finance/Investments
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That’s a tale as old as time. Life insurance companies have been doing exactly what’s in that story for years. It’s not like NWM is an outlier here. You take 20 young people that are hungry, put them in front of a phone and make them start calling. 19 go broke, one succeeds. Hey, someone new to sell your insurance. Take another 20…

This type of sales has been superseded by ‘modern sales methodology’, something I was doing 25 years ago before this was even a term, and I wasn’t even aware it was a thing. I just knew I didn’t know how to sell, I just happened to know the product very well technically. And I sold unlike anywone else in the industry that I know. (and it works well. I went from no sales in October, to being top 6 out of thousands the following January).

Modern sales methodology is what tech firms do, all those startup types. It’s a funnel. You advertise to your target market, and drive them to action, say to your website. On your website, you drive them to become Marketing Qualified Leads or MQL’s - people interested in your product. You give them a call, discuss, and they become Sales Qualified Leads. You book a sales call, and some buy some don’t.

There’s a whole bunch of reasons why this is an excellent sales methodology (particularly from a testing, scaling, and repeatability view) but one of those reasons is you never speak to anyone who hasn’t reached out to you about your product first. There’s no ‘corner someone and have a chat to convince them to buy’. If you’re calling them, it’s because they’ve expressed interest. It’s a whole different sales thing.

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Cheeky Ned Ryerson gif goes here!

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BING!

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It’a a doooozy!

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The bottom line here is that people don’t want to pay for financial advise, even if it’s good advise that they need.

The businesses offering these services want to collect 1% AUM annually on at least half a million. Depending on the services offered this can be win-win but it’s no surprise that a lot of potential customers don’t like that deal.

In addition to selling insurance, there used to be a lot of people hawking high-cost mutual funds with outfits like Wadell and Reed and Ameriprise. The outrageous commissions that these companies charged were sometimes camouflaged as back-end loads. With the emergence of low and no cost trading, the market share of these legacy players is rapidly eroding.

With the proportion of the population that is retired growing rapidly I’d argue that the need for reliable financial advice has never been greater. I see a lot of people commenting that they don’t know where they should turn for advice. I only comment that there is no one size fits all answer.

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