Whether you are relatively new to the planning business or have been in the profession for decades, odds are you have lost potential clients as a result of mistakes made at a first meeting.

For one very young advisor with about two years of experience, a nightmarish meeting involved a man with a net worth of $20 million to $30 million, who had been identified as a prospect because he knew the advisor's father. The session was reported by Alfred Longtin, ChFC and CEO of abResources in Frankfort, Ill., who sometimes consults with advisors and was serving that day in that role.

The advisor began by talking about what he could do for the prospect. So far, so good. About five minutes into the meeting, the prospect received a phone call. "I could tell something was wrong when he got off the phone, because his face had turned white," Longtin says. Nevertheless, the advisor continued with his promotional pitch.

"Two or three minutes later," Longtin recounts, "I realized that something was really wrong, so I stopped the advisor and asked the prospect, 'Is there something that's on your mind?' The prospect responded, 'Yeah, my mother just died.' Upon hearing this, the advisor said, 'Wow, that's not good, but we should be able to wrap things up here in about half an hour. ' The prospect said, 'No, I think it's time for you to leave' - and threw us out of the office."

Fortunately, few first meetings involve life-and-death drama, but they can hinge on mistakes that are avoidable. There are numerous ways to make sure that a first impression is a positive one - one that leads prospects to decide to become clients. Here are a dozen ideas:



"People love to see their names in print," says Katherine Vessenes, JD, CFP, RFC and president of Vestment Advisors and Vestment Financial in Chanhassen, Minn. When prospects visit Vessenes for the first time, their names are posted in a silver-plated frame prominently displayed where they first enter the office. The sign might read, "Vestment Financial Welcomes John and Mary."

"This may seem like a small thing," Vessenes says, but it really resonates with clients."



According to Howard Erman, CFP, president of Erman Retirement Advisory in Seal Beach, Calif., planners too often convey in the first meeting that they care more about making money for themselves than they do about making money for the potential clients. "You have to show that you care about prospects," he emphasizes. One way he does this is to make sure that, during that first meeting, he listens more than he talks. "Nobody cares about what you have to tell them until they know that you understand them and care about them, and understanding and caring come from listening," he says.



To develop a bond with prospects, Longtin opens the initial meeting with generic personal questions, such as, "How is your day going?"

When he sits in as a consultant on other planners' first meetings with prospects, he finds that some advisors fail to use such ice-breakers. "They just skip over this," he says. Afterward, these planners explain that they think prospects would be offended by these kinds of questions. "They think that prospects only want to talk about business," Longtin says.

But starting with general conversation can lead to important information and outcomes. For example, a small business owner might respond with, "Well, my two best people just quit," or "We just closed one of our biggest accounts ever." These kinds of responses, Longtin says, are priceless. They create an opportunity to get the prospect talking about himself or herself, and to build rapport quickly.

Vessenes agrees. "People may think they select advisors based on references, knowledge and skills," she says. "However, they select them based on emotion. They want to be able to feel that they click." For this reason, Vessenes also begins first meetings with brief chit-chat.



When prospects visit Karna Trautman, CEO of Trautman International in Minneapolis, one of the first things she wants to determine is whether she and her team will really be able to help them. "I try to determine if it is even worth it for them to meet with a planner," she states. Trautman has found that some people "just aren't ready to take the advice that is necessary."



According to Erman, the biggest mistake an advisor can make is to tell a prospect how smart he or she is and how much he or she can do for them. "You need to make the meeting about the prospects, not about yourself," he emphasizes. "A lot of planners start out talking about their philosophies, their management systems, their fees and their backgrounds."

Erman, however, focuses on finding out what prospects need and want. For example: Are they focused on how to pay for their kids' college educations, or retirement? Or both? Do they need to find money to start a business? Do they want to buy investment real estate?

Trautman also sees the benefit of focusing on "what the prospects think they need, what they really need, what they already have and what they don't have, both in terms of a financial perspective and a values perspective." She has found that the best meeting is one in which you find out first what the prospect values, and then figure out the financials that go with it.

Vessenes remembers a consulting session that involved two advisors, when one person would have accomplished much more. "They spent 35 minutes chit-chatting with the prospect, sharing stories back and forth," she says. "The prospect would share a story. One of the advisors would try to top it, and the second advisor would then try to top what the first advisor said. It was a very poor use of time."



Longtin likes to ask prospects about past experiences they have had with other planners, investment advisors or other financial professionals. Getting this information is important, Longtin says, to understand what the prospects want, don't want, like and don't like. For example, if a prospect says to Longtin, "I was working with Jerry at the ABC firm," Longtin will follow up by asking, "How did you meet Jerry? Tell me more about him. What did he do for you?"



Asking questions has a number of benefits. It shows that you care about prospects, and it gathers useful information. Longtin believes open-ended questions are particularly effective. "A lot of planners are trained to ask closed-ended questions, believing it will help them close the sale faster," he says. But doing so reduces the likelihood of gaining valuable information on prospects, which is what is likely to ultimately win their business.



Contrary to popular belief, go easy on the gadgets. Avoid devices that cause prospects to take their eyes off of you - things like TV screens, PowerPoint presentations and large flip charts. It is important that prospects are able to maintain eye contact with you at all times. As a consultant, Vessenes observed one planner who began the meeting by taking his prospect into a dark room and giving a PowerPoint presentation about his firm.

"When you need to share information with prospects, provide them with sheets of paper that they can hold in their hands so that they can look up at you after you have referred them to something on the paper," she suggests. She painfully recalled a consulting session with another advisor who spent much of a meeting with his back to a client as he looked up information on a computer, talking over his shoulder.



One of the best ways to gain business from prospects is to identify their pain points, some of which may be problems about which they aren't even aware. Whenever Vessenes is reviewing information that prospects provide, she looks for red flags. For example, she may find that the prospects haven't thought about the long-term tax consequences of certain investments. Or she may find they aren't managing their 401(k)s or aren't insured adequately. Or, she might say, "I notice that you don't have any particular investment strategy."

Vessenes has found that if she can identify five or six red flags, virtually 100% of the prospects will end up becoming clients. In most cases, she can find 12 to 15. On occasion, though, she meets prospects with almost no red flags. "I have found that these people just aren't in enough pain," she says, "and they're probably not going to become clients."



While Longtin has many years of experience, he admits he doesn't know everything and he finds prospects and clients appreciate his candor. "When you select a doctor, you don't want someone who acts like he knows everything right away," Longtin explains. "You want someone who may not know what your problem is right away, but who will take the time to figure things out and will then show that he cares by demonstrating a good bedside manner."



Vessenes doesn't talk about herself until the end of a first meeting. She then asks, "Do you have any questions about me and my team?" How do prospects respond? "I can't recall even one time when anyone ever asked me for more information," she replies. By that time, she says, they know that she cares about them and can help them.



"If you don't set the next meeting at the end of the first meeting, you have to start calling the person later on to schedule it, and it can be difficult to make contact and nail down a specific time," Vessenes says. "You can even burn up an hour or more of staff time on this."



Following the playbook is important, advisors say. In general, first meetings should be run the same way regardless of circumstances, Vessenes says, but she does allow for some variation. If meeting with a low-net-worth prospect, she will set aside an hour to an hour and a half. If meeting with a high-net-worth prospect, she schedules two and a half hours. She also maintains a slower pace during those longer meetings to emphasize that there is no rush. "I also ask higher-end clients more questions because they tend to have more detailed needs," she adds.

Longtin maintains that not much variation is needed. "Regardless of the situation, you need to convey that you are there to listen to them, learn what their problems and needs are, and then demonstrate how you can help them with those problems and needs," he says.



William Atkinson is a business and financial writer in Carterville, Ill.

Register or login for access to this item and much more

All Financial Planning content is archived after seven days.

Community members receive:
  • All recent and archived articles
  • Conference offers and updates
  • A full menu of enewsletter options
  • Web seminars, white papers, ebooks

Don't have an account? Register for Free Unlimited Access