Friday, February 26, 2010

Research. Research. Research. You’re on deck and getting ready to face the pitcher…

No wealth manager with any experience would go into a sales engagement without knowing some facts and making some fact-based assumptions about the prospect, for without this preparation he or she wouldn’t have been in the field long-enough to get any experience. These facts or assumptions would require you to assume the prospect’s stage in the wealth life cycle (roughly: accumulation, maintenance, distribution). For without this knowledge, you don’t know whether to prepare to discuss savings and investment strategies, asset allocation, or how to maximize estate and charitable-giving, or intergenerational wealth transfer strategies.

First, remember the basic fact of wealth management new business: it’s all about “money in motion”

Understand that most new wealth management business comes from “money in motion,” life events such as inheritances, sale of a business, divorce (ugh), settlements, etc. Rarely, very rarely, does new wealth management business come from a “take-away” unless the former advisor gave terrible service (portfolio performance ranks far lower in reasons for switching advisors - don't fall for that faulty "performance" argument). And, it’s more rare that a “take-away” comes from persuasional strength, or sales pitch quality. Let’s not fool ourselves.

Research deliverables and how to get them

For many of you, this is pretty basic, but it never hurts to revisit what we already know.

Prospect demographics – facts you can discover – such as age, gender, occupation, place of employment, civic and professional activities, education, etc. What once required researching volumes of “Who’s Who” publications, city directories, public tax records, newspaper morgues, etc. ad nauseum, is now replaced simply with two sources “” and “”

No only can your discover the demographic information to help your structure your product emphasis, you can find interesting tidbits to discuss in that very first few minutes in the sales engagement, where you are building a cursory relationship. Like, “I understand you’re a runner, too…” (you found her race times in your Google search), or “I really appreciate your leadership of the Alzheimer’s Association…” (again, easy to find on the web), or “How about those Jayhawks (or Longhorns, Huskies, Trojans, Sooners, yada, yada)...” found because the prospect’s information on Google includes their alumni activities.

Buyer behavior – yes, you can often find what financial products they already own and even approximations of their existing asset allocations. This is the study of their “buyer behavior.” It gives you the ability to laser-target your sales engagement. How?

If you “own” identifying customer data, for example you are in wealth management of a bank, you can see if they rely heavily on debt, the size and types of their deposits, durations on their CDs, you can even delve into ACH data payments into and out of their accounts. Shocking, but it’s true, you can do that. There are federal regs which must be, and are easily, abided by, but the data is mostly available.

Whether being in a financial institution’s wealth management function, or you own the data through some sort of prospect relationship and purchase (insurance, for example) or an inquiry, you can “bounce” your own data against external sources (again, comply with federal regs). Those sources can then apply estimates of “income producing assets,” or “specific investment products and values.” Some of those estimates rely heavily on geo-coding, but they are close enough to pre-qualify your prospect and help target your sales effort.

Psychographics – Projected psychological needs which prospects would hold and the financial products that may meet those needs can be determined through either “bouncing your list” (see above) or purchasing very expensive, highly selective, lists from vendors. Of course, the latter, buying lists, means you’re cold calling and that’s a very inefficient, very difficult and not-too-productive way to sell. If you’re good at it, congratulations. That’s not something that I’d advocate, save for the entry level broker and that’s not who this blog is devoted to.

If you know their demographics, which are easy to discover, you can study-up and use your own application of psychographics to fashion your pitch. If you find someone that is male, 68, lives in a $750,000 home, he would likely be seeking “self actualization” (look-up “Maslow’s Hierarchy of Needs” if you don’t understand) and likely would find interest in intergenerational transfer or charitable-giving strategies, not the “security” of a retirement plan.

Next blog, those “dozen ways to help craft your pitch.”


  1. Great post. The "money in motion" is so true and so forgotten. People think that some folks can sell anything anytime. Isn't so.

  2. The reality is that if money is not "in motion," 99.99% of new business attempts will fail. Hence, in the famous phrase "follow the money." (Thanks, DeepThroat.)