Pick Up New Clients Using a Simple 3-Bucket Approach to Retirement Planning
What approach do you use when trying to pick up new clients?
-Some advisors focus on one narrow topic, concept, or product.
-Some offer full blown financial planning where they use software that generates a 20, 30, or even sometimes 40+ page sales outputs.
-How about using a sales process that has been proven to work by hundreds of advisors?
-How about using a sales approach that is mind numbingly simple and something clients will understand and embrace?
Using a simple 3-bucket approach
When we built the OnPointe Risk Analyzer software, we built into the client questionnaire (which is used to determine the client’s risk tolerance and risk capacity) an OPTIONAL page that has the following 3-bucket approach to wealth building.
We built in the OPTIONAL 3-bucket page because an RIA I work with used it for years to help advisors bring in over $1 billion in AUM and sell hundreds of millions of dollars in FIAs.
I figured if it worked for them it can work for just about any advisor.
To try the OnPointe client questionnaire that has the 3-bucket output, click on the following link:
The following are the questions and images from the 3-bucket wealth building page from the OnPointe software.
IF YOU WERE TO DIVIDE YOUR INVESTMENT DOLLARS INTO THREE GROUPS, HOW MUCH WOULD YOU PUT INTO EACH BUCKET?
Please keep this in mind: Historically the S&P 500 has averaged over 8% growth, but sustained multiple losses with some being greater than 50%.
–Question 1: If you could obtain a 3-5% rate of return with no risk of loss, how much money would you put in this investment bucket?
–Question 2: If you could obtain a 5-7% rate of return with lower risk investments, meaning strategies are generally defined as strategies that have a 10-year maximum drawdown of less than 15%, how much would you put in this investment bucket?”
–Question 3: If you could obtain 8-10% rate of return with higher risk investments, meaning strategies that have a 10-year maximum drawdown of 15-30%, how much money would you put in this investment bucket?
The following would be fairly typical of people who answered the above questions.
Bucket #1 has limited options. You can use CDs or money market accounts, but the rate of return will be low. Most advisors recommend FIAs (Fixed Indexed Annuities) which have no risk of loss and lock in the gains on an annual basis.
Bucket #2 has more options. Most advisors will use some asset allocation blend of stocks and bonds and those who embrace the use of cash value life as an asset class will recommend IUL (Indexed Universal Life) for some money in bucket #2. Also, advisors who use tactically managed strategies will allocate money to such strategies for money in this bucket.
Bucket #3 can use a more aggressive mix of stocks, mutual funds, and bonds or a mix of tactically managed strategies with a higher risk profile than those used in bucket #2.
K-I-S-S (Keep It Simple Stupid)
Far too often financial planners put forth very complex offerings that clients have little chance of understanding. The bi-product of this is that clients are not able to make “informed” decisions about how to protect and grow their wealth.
With the 3-bucket approach, things are simple but there is still sufficient information for the advisor to put together a financial plan that will meet the needs and risk tolerance of clients.
Should you give the 3-bucket approach a try?
Well…, I think everyone should be using the OnPointe Risk Analyzer software with every client. Obtaining a client’s personal risk score is a baseline item that should be determined with every client.
And if you are using the OnPointe Risk Analyzer software you will then have the option to try this powerful and proven 3-bucket sales approach. I think if you try it, you will have success with bringing new clients on board.
Roccy DeFrancesco, JD