Identifying Hidden Risks Creates Sales Demand
The world changes; clients’ circumstances change; motivations and interests change. As these changes occur—often gradually—“hidden” risks emerge that can significantly deteriorate future wealth if left unattended. By “hidden” risks, we mean exposures of which the client or potential client is likely to be unaware. Identifying hidden risks in an education-based marketing program delivers an important service to your marketplace and, with this knowledge, provides you with a gateway to meaningful conversations about the added value you can deliver to existing and prospective clients.
– From the past several years, people understand the devastating impact of unmanaged financial risks.
– A client’s changing circumstances, needs, and aspirations open holes that allow hidden risks to creep in.
– Identifying the variety and impact of these hidden risks provides the opportunity for thoughtful and informed risk-management discussions.
– Presenting these hidden-risk categories as an education topic offers the practitioner a platform to secure new clients, particularly those that have hidden risks but have been lulled into thinking that “everything is fine with their plan” by their current advisor.
Most Practices Require “Demand Pull” Marketing to Increase Growth
The two basic types of sales circumstances are “Demand Push” and “Demand Pull.” The Demand Push client is a prospective client who has already identified the need for a financial plan and investment solution and is conducting due diligence to hire a practitioner. You’re hearing from a Demand Push client when you receive a web inquiry, a referral, or a phone call. Your market presence (local search access, professional connections, active client referrals, and website clarity) activates this demand. A strong market presence will increase the regularity of inquiries from Demand Push clients. For some financial professionals, Demand Push marketing and word-of-mouth activity produces growth sufficient to meet the firm’s revenue objectives.
Outcome If Identified and resolved
|Low-basis stock (i.e., appreciated securities portfolio)|
|Unexercised, in-the-money stock options|
|Life insurance with substantial cash value|
|Unmatched life insurance death benefit (consider ownership by an ILIT)|
|Sub-optimal insurance products|
|Earned income in retirement|
|Ownership of an employer’s stock|
|Current chronic illness, poor family health histories, or both|
|Estate Plan relying on wills|
|High-risk business or investments|
|At-home, teenaged dependents (or “rebound” children)|
Actions to Consider:
– Educate yourself on these hidden risks and how your solutions help manage the risks.
– For hidden risks beyond your expertise or solution set, partner with other practitioners (e.g., our firm, CPAs, insurance and investment advisors, etc.) to present a holistic solution proposal.
– Consider seminars or small-group meetings with prospective clients to create leveraged sales opportunities.
– In a group setting, present the entire hidden risk list to ensure coverage of the variety of attendees’ circumstances.
– Regularly meet with existing clients to ensure that a hidden risk hasn’t crept into the client’s life. If one has, engage in a plan and solution update for optimal risk management.