As a financial planner, sometimes you must sell a prospect on the most intangible of products—your advice.

Michael Kitces recently published an excellent article titled, “Selling Is Essential, Even for Planners.” He points out that the planner who evolved into financial planning from the insurance, banking, or brokerage business, already had a relationship with clients who had an appreciation for the value of the advice for which they were being asked to pay. Also, they had been taught sales techniques for selling intangible products. But, planners just entering the profession need help selling their prospects on paying for their advice.

It’s a vicious circle: if they could see an example of exactly how you could provide them value, they would be willing to hire you. If they would hire you, you would show them the value you could specifically be to them. They need to see the value of your planning before they will agree to pay for it, and you need them to agree to pay for the planning before you agree to do it. What’s the solution to this dilemma?

Let me tell you the story of a similar dilemma. An estate planner in Los Angeles had a very successful friend that he had been working for over a year on his estate plan. It was the most complex, and largest case he had ever worked. He was able to get the insurer to offer the life insurance policy needed for the plan which had an annual premium of $1,000,000. The friend had a team of trust officers, attorneys and CPA that were among the best in L.A. Although the entire team recommended that he put the policy inforce, he refused to do so.

As the agent was losing hope for this sale, he received a program from the insurer asking him to evaluate this program and to determine if he thought it would be effective for agents in the estate planning market. He loaded the program in his laptop and saw that it was an interactive, graphic program that walked a person through the estate tax process. It visually showed how life insurance and a proper estate plan could protect the family of a successful person. By coincidence, he was to meet his friend for drinks later that afternoon. He took his laptop still loaded with the estate tax concepts program.

Over drinks he showed his friend the program and let him “play” with it. After a few minutes, his friend told him, “Let’s do that life insurance thing you’ve been talking to me about.” Without asking any further questions, he proceeded to get the policy put inforce and all of the other work required of the estate team.

Later, after everything was in place, he was having a drink with his friend again. He asked him, “You had refused to act on that life insurance, even when the best estate planning team in L.A. was advising you to do so. I showed you that program that was almost like an interactive PowerPoint, and you decided to do it. Why?”

His friend replied, “Until I saw that program, I really did not understand why I needed that big insurance policy. I was afraid someone would ask why I was spending a million dollars a year on it, and I didn’t know. That little program explained the concept so that I could answer that question if anyone asked.”

People often need to see how the concept of a plan would work for them, before they will commit to the planning process. This type of conceptual products can provide a “bridge” to the complete planning. Impact™ developed the product, Estate Tax Concepts, used in the example above to help provide a bridge for a prospect to a detailed estate planning process. Now, Impact ™ has developed a suite of tools that can help a planner show his or her prospects the type of advice and services they can provide. This suite of tools is referred to as PlanFacts which are conceptual financial tools. Software tools that require a minimum of facts—no lengthy fact finders—and produce powerful presentations designed to show a prospect the value they receive from various financial concepts and arrangements. These tools drive the prospects to actions—either buying the products illustrated or agreeing to further planning.

Conceptual tools such as PlanFacts do not provide detailed cash flow analysis or specific recommendations, but instead show how a concept offers significant advantages applicable to the prospect’s individual situation. Some of the financial concepts illustrated are as follows:

  • A Social Security filing strategy to maximize Social Security benefits or integrate benefits with a specific retirement goal (Social Security Pro)
  • Showing concepts that use required minimum distributions (RMD) to accomplish other financial goals (Qualified Plan Concepts)
  • Various estate planning techniques that can determine the impact of federal or state estate taxes on heirs, and a review of techniques that may be useful in the distribution of an estate (Estate Planning Concepts(This is a 2015 version of Estate Tax Concepts referred to above.)
  • The order in which assets are used for retirement income, especially as it relates to income taxation (Cash Flow Decisions
  • Retirement planning concepts and time horizon investing (Retirement Road Map)
  • Providing a secured retirement income floor during retirement with annuities (Cash Flow Decisions) and (Retirement Road Map)
  • Developing a conceptual retirement plan, without numbers, and the various retirement risks (Ready-2-Retire)

Each of the various conceptual tools provide answers and an action plan; thus the prospect sees the value that the planner can bring to the table. The “bridge” is then established—by working with the advisors to obtain more detailed information, a detailed financial plan can be developed and implemented. The details and the implementation of a plan is the advice that is being sold.

The graphic, easily understood concepts are much easier for the prospect to understand and to get a sense of exactly the type of services the planner is selling. The PlanFacts tools are not competing with the detailed analysis and financial plans being developed, but can be a catalyst to get them started. Similar to the example above, PlanFacts tools help your prospects understand what they are paying for.

Posted September 8, 2015 filed under Articles.