The Evolution of Prospecting with Financial Planning

I’ve known and worked with a lot of advisors over the years.  In my wealth management life, I led operations for a $500M RIA, and in my inStream life I’ve led the product team (and now the marketing team) since the inception of the company back in 2010.  I take an active role in supporting our clients and speaking with prospective clients, all ofwho range from solo-practitioners to large enterprise organizations.  To be honest, it’s one of the best ways to stay current with industry trends.

Lately, I’ve been noticing an evolution of the prospecting process to include financial planning.  It’s a general trend that is getting underway.  Actually, it’s in full swing for some, while for others, it’s a pivot.  Why the generally tried-and-true prospecting process is changing is interesting and compelling. 

The most common, broad-stroke approach to prospecting among financial advisors that I typically see is something like this:

  1. Discovery meeting with a prospective client
  2. Portfolio Analysis and/or Investment Philosophy conversation
  3. Discussion around more specific strategies (investments, estate, taxes, etc)
  4. Contractual discussions (Investment Policy Statement, Wealth Management Agreement, etc.)

The planning conversation traditionally did not come into the picture until after the prospect becomes a client.  But that’s changing.  In some part, I believe the evolution of including planning in the prospecting phase has been caused by competition and the drive to differentiate advisory services.  The desire to illustrate one’s value prompts the provision of financial planning as early as possible in the prospect conversation.  Technologically sophisticated products like inStream make the inclusion of financial planning while prospecting both a simple and effective matter for the advisor and the end client.

I can’t tell you how many advisors have called the inStream offices saying that planning is not something they do a lot of, but they’re feeling “behind the curve” and need to “catch up.”  Now, I do believe that  population of advisors is dwindling, and that’s a good thing because it means more end clients are getting planning services.  But what I always wonder is whether an advisor is providing planning because competition dictates that he must, or because it’s the right thing to do for the clients?

I believe that the majority are doing right by their clients because they understand that, among other things, having a financial plan can improve how clients save, how they manage taxes and long-term goals, and how they deal with market-anxiety and other behavioral finance issues.  Numerous studies over the years have showcased the benefits of having a financial advisor who helps strategize and plan.  Here’s a study that highlights some of the financial advice industry’s shortcomings.

So, if having an advisor is so beneficial, and having a financial plan is so useful, why do so many advisors not provide that service until a person becomes a client, or unless the prospect has a lot of money?

Simply put, it’s because most advisors don’t want to spend the time to build a plan for someone who may not become a client.  That made sense 15-years ago.  Back then, financial plans were like full volume encyclopedias that took forever to create and forever to read.  But technology has evolved significantly, and with that comes new opportunities.  The first plan that you create for a prospective client doesn’t (and shouldn’t) be the full blown financial plan, and with technology these days, that first plan can be created so much faster than in years past.  We’re going to cover the methods to help you speed up your planning efforts. After all, we want you to cultivate more prospects, convert more prospects, live a better life yourself and help your end clients do the same.  This is the role of software – enabling you to do more of what you are good at, and allowing people to live better lives.

We now realize that the BIG comprehensive financial plan is not necessarily for everyone, and that as advisors, we should tailor our story based on our audience.  The days of financial advice being exclusive to the ultra-high net worth are long gone.  These days, everyone wants a simpler plan that doesn’t break the bank (for the advisor or the end-client).

While we need to make smart business decisions about how we spend our resources, there’s a very strong case to be made that the best businesses serve people’s best interests as soon and as often as possible.  You’re a fiduciary…you know more about that than most people

If your local coffee shop gave away a free coffee (or free donut) to every new customer, would they put themselves out of business?  If free coffee was too much to bear, could they do it for half off?  Do they offer other high margin items that they’d like to sell along with your free coffee?  Does the free coffee show that your personal caffeine fix is what really matters…more than a sale?  Do you, as a customer, feel at all obliged to “make it up” to that coffee shop for the free drink – if only to think very positively of them?  The free wifi in every coffee shop, to some extent, is another example.  Do the coffee shop’s actions build goodwill and stronger relationships in the community?

I know that your practice is not a coffee shop.  Making and pouring a free coffee may not be the same relative amount of work that it is for you to create a financial plan for a prospective client.  The point that I’m trying to make is that the general business, marketing, and sales concepts are the same whether you’re selling wealth management services or espressos.  I suppose that a better analogy than a free coffee or donut, might be a handcrafted latte with 3-D foam designed as a panda.  Technology is supposed to make our lives easier and better, and it can do that in part by emphasizing and complimenting your skills.


A latte my wife had in Penang, Malaysia with a 3-D foam panda.

Through the rest of this series, we're going to look at the general workflow of the prospecting process, and we'll dive deep into each step.

Thanks for reading!  Stay tuned for more, or go ahead and download the whole ebook now.





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About the Author: Bryan Lee

Bryan Lee

Bryan is Director of Marketing and Business Development at inStream. Prior to this role, Bryan led the Product team at inStream, and in a former life, he led operations for McLean Asset Management Corporation, an RIA outside of Washington, DC.

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