March 2015

Financial Advisor IQ – Using Client X’s Success Story to Inspire Client Y

Advisor Mike Perry likes to tell his clients about one another: not to satisfy prurient curiosity — and not, of course, as a testimonial — but to show how a particular planning strategy worked for someone else in the past. The president of Szarka Financial in North Olmsted, Ohio, finds that a real-life narrative about how others have overcome similar financial hurdles can motivate clients to take the right steps, even if they’re difficult ones.

Success stories about peers often boost clients’ confidence, experts say, while providing a road map for action. “Each person’s situation is unique, but it helps to let people know we don’t necessarily have to reinvent the wheel to help them overcome a problem,” says Perry, whose practice manages $350 million.

Advisor John DiCiaccio of New York-based Snowden Lane Partners turns certain client stories into case studies that address situations he encounters frequently. The one-page summaries let him reach for the right example when a particular issue comes up in a client meeting. “The key is to make each case study generic enough to honor a client’s confidentiality but still give the sort of details that will grab someone’s attention,” says DiCiaccio, whose Pasadena, Calif.-based practice has about $225 million in assets.

For example, one case study relates how a widow learned to manage her finances after her husband died. Although it talks about specific changes the woman made, including getting into the habit of monthly bill-paying and downsizing to a smaller house, most of the story concerns how she overcame her fears of poverty and of becoming a burden on her adult children — anxieties very common among widows who must suddenly become financially self-reliant. “You’ve got to be careful not to overwhelm people with too many details,” says DiCiaccio.

By contrast, Szarka Financial’s Perry likes to tell stories on the fly — finding that spontaneity works well. Last year, for example, he met a prospect who had recently been laid off. The man had a specialized skill set, having worked in a niche area of financial services, and also had high salary expectations.

Perry told the prospect he had worked with other experienced executives who survived corporate downsizing by forming their own consulting businesses. He didn’t have to provide much more in the way of specifics. “A light went off in his eyes,” says Perry. “He told me forming his own company hadn’t even occurred to him before.” The prospect has become a client, he reports, and the new entrepreneur recently hired two full-time employees. “As an advisor, my main goal in presenting real-life stories is to help people get over emotional anxieties that can paralyze the decision making process,” Perry says.

Stories need not be dramatic to have an impact. Some clients can benefit from hearing that others achieved their goals just by preparing the right documents, says Jonathan Foster, CEO of Angeles Wealth Management. The Santa Monica, Calif., RIA is the private-client division of Angeles Investment Advisors, an institutional firm advising on $48 billion in client assets, including $2 billion in discretionary assets.

Advisors can make tedious tasks — drawing up a will, completing paperwork for a foundation or forming a trust, for instance — more compelling by attaching them to human-interest stories, according to Foster. Indeed, other families’ examples can make even the delicate terrain of estate planning more navigable. Recently, he met with an ultra-high-net-worth couple who were concerned about whether their college-age kids would be financially responsible as adults. They were particularly worried about what would happen if their children married unsuitably.

Foster told them about other clients he advised who drafted prenuptial agreements for their children and their putative spouses long before any wedding bells rang. Just having the document in their file had eased the parents’ minds — and the story did the same thing for Foster’s current clients.

“They were reassured by the fact this wasn’t something new and that other people had found a prenup as a good way to help protect a family’s wealth,” says Foster. “It turned out to be a good way to make estate planning less theoretical and inject a real-world perspective into the process.”

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