Lessons Learned From Referring Business to Advisors

by Dan Solin, 8/14/24

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Dan’s new book for millennials, Wealthier: The Investing Field Guide for Millennials, is now available on Amazon.

Occasionally, readers of my books and blogs will seek the expertise of my consulting firm to vet financial advisors and guide them in their decision-making process. While we don’t actively promote this service, it’s a valuable source of insight for my blogs, and I’m happy to provide it.

Here are some lessons from interviewing financial advisors and insights into the traits that lead to a recommendation.

Enthusiasm

Successful advisors are enthused, animated, and highly engaged in our conversations. They make me feel they are excited to be talking to me and genuinely want to be helpful.

Others appeared to consider our conversation another routine inquiry that they have fielded many times in the past. They didn’t smile. They spoke in a monotone, almost like they were reading from a teleprompter.

Curiosity

Some financial advisors are very curious. Most aren’t.

The curious ones pepper me with questions like:

Tell me more about your client.

What are they looking for?

What information do you want me to convey?

Those lacking curiosity “play the tape.” They tell me about their qualifications, experience, and investment philosophy. They try to persuade me that they are a good fit, even though they know little about my client.

Flexibility on fees

AUM-based fees aren’t suitable for everyone. I’m finding that clients are more sophisticated about fees. Often, they are looking for a project-based or retainer model. However, almost all the advisors I interviewed are AUM-based, which presents a challenge.

The successful ones demonstrate flexibility on fees. They explain that most of their clients pay based on AUM, but they have an hourly or project-based model where that makes more sense for the client.

I remember what one advisor said to me when I inquired about fees:

“We are primarily AUM-based but we’re flexible. Also, we want to establish a relationship with you and with your client. Can you suggest a fee structure you believe would be appealing?”

I recommended her.

Simple investment philosophy

The typical client who contacts me has assets ranging from $500,000-$1.5 million. I always inquire about investment philosophy. Most advisors have difficulty explaining in simple terms how they invest client’s funds, which surprises me.

When I ask what a sample portfolio would look like, the answers are all over the place. Many portfolios are unduly complicated for the client’s assets, consisting of 10 or more stock and bond ETFs, index funds, or passively managed funds.

A few advisors recommend only two or three broadly diversified ETF stock and bond funds. One even told me she saw no reason why a single 60/40 fund wouldn’t suit my client.

Those are the advisors who I recommend.

Emotional intelligence

There is a vast difference in the emotional intelligence of financial advisors (and the population generally). “Emotional intelligence” is the ability to understand the emotional makeup of others and to respond in ways that demonstrate compassion, kindness, and understanding.

In the scenario of being interviewed by me, it’s important to demonstrate high emotional intelligence. But how do you do this?

Wealthier:

The Investing Field Guide for Millennials.

Why have so many financial advisors agreed to review an advance copy of Wealthier: The Investing Field Guide for Millennials. It empowers millennials to be responsible DIY investors and financial planners. You can see some of their reviews here.

Dan’s new book for millennials, Wealthier: The Investing Field Guide for Millennials, is now available on Amazon.

Here’s what one advisor said: "Saplings grow into trees. We need to help the next generation of investors get to where they need our services."

For more information, visit the website for Wealthier:

To review Wealthier send an e-mail to: [email protected]

Start by following these practices:

Active listening: Show genuine interest in the prospect’s needs and concerns by actively listening. Maintain eye contact, nod to show understanding, and ask relevant follow-up questions.

Empathy: Seek to understand the prospect’s emotions, concerns, and goals. Demonstrate that you genuinely care about their financial well-being.

Know your audience: Being interviewed by me differs from a call with most prospects, yet some advisors don’t make this distinction. They speak to me like I am unsophisticated and need a lengthy explanation of basic investment terms. It’s important to know your audience and tailor your communications accordingly.

Build rapport: The advisors I recommend establish rapport with me by commenting on my books or blogs that have influenced them or finding other areas of shared interest. It’s difficult not to like someone who shows interest in you as a person.

Emotional intelligence is the most critical of all the traits that influence my decision.

Are you curious about your level of emotional intelligence?

It can be measured using assessment tools such as the Emotional Quotient (EQ) or the Mayer-Salovey-Caruso Emotional Intelligence Test (MSCEIT). These assessments evaluate your ability to perceive, understand, and manage emotions, as well as your ability to navigate social complexities and make responsible decisions. They are just one way to assess emotional intelligence and may not capture the full spectrum of your emotional aptitude.

Why emotional intelligence is so important

I highly recommend this insightful article by Carol Kinsey Goman, Ph.D. Dr. Goman explains that emotionally intelligent people are more likeable and “likability is evaluated before confidence.”

We hire people we like. As Richard Branson said:

“The first thing to look for when searching for a great employee is somebody with a personality that fits with your company culture. Most skills can be learned, but it is difficult to train people on their personality.”

When I went back and thought about why I recommended certain firms, it often came back to this: I liked them.

Dan coaches evidence-based financial advisors on how to convert more prospects into clients. His digital marketing firm is a leading provider of SEO, website design, branding, content marketing, and video production services to financial advisors worldwide.

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