How to Instantly Become Your Client's Trusted Advisor
By Chris Conklin, Principal and Actuary
Insurance Insight Group

As insurance agents and financial advisors, we work in a great industry where we get the opportunity to make a difference in our clients' lives. But one of our biggest challenges is getting prospective clients to trust us and become interested in our recommendations.

How many times have you made what you thought was a dazzling sales presentation, only to find that the client wasn't impressed?

The silver bullet

We all want the "silver bullet" that will enable us to connect with clients, have them hang on our every word, and have them follow most of our recommendations. What is that magic bullet? It is simply this: Be the one advisor who finds out what your clients really care about -- the nagging financial worry that they have -- and answer that concern.

You are going to find that their nagging financial worry, expressed in a generic way, is nearly always some variation of "How can I attain and maintain long-term financial security?" Some younger clients will express this as "How can I afford to send my kids to college?", and some older clients will express this as "How much can I withdraw from my assets each year without worrying about running out?"

Every client has a question like this, and the advisor who uncovers the question and then answers it will become the client's primary financial advisor.

They said they wouldn't buy from me

Let me give you an example. I once had prospective clients, a married couple in their upper fifties, referred to me. They told me that they had about $500,000 in assets, and that they had just inherited an additional $500,000. They were looking for advice as to what to do with the inheritance. Should they, for example, pay off their mortgage? By the way, they wanted me to know that they had previously talked to about a half dozen advisors, and they had absolutely no intention of buying any financial product through me. They had all of their money with Vanguard, they trusted Vanguard, and the new money is going to Vanguard.

I then asked them something that is second nature to me, but that apparently the six prior advisors had never asked them: "What are you trying to achieve, and what financial concerns do you have?" After a brief discussion, we came upon their nagging financial worry: "Can we retire in five years and maintain our current lifestyle?" This was their personal version of the generic question "How can I attain and maintain long-term financial security?"

To answer a question like this, I needed to gather information on their entire financial situation: their current income, what income they expected after retirement, their current spending, and any future plans, as well as an inventory of all their assets and liabilities. I then plugged all the information into some financial projection software and created a variety of scenarios to present to them.

The good news is that if everything went well -- if their assets held their value and earned a respectable return, and if they both lived long, healthy lives in their existing home -- they would be able to retire in five years and maintain their current lifestyle. But, I was also able to identify the biggest threat to that rosy picture -- the possibility that either one of them could decline in health and require assistance on a daily basis for a lengthy period of time. In such a scenario, their expenses would increase sharply, and they would start to burn through their assets too quickly. I let them know that the only government program that would help pay for that sort of assistance is Medicaid, and that they would need to burn through almost all of their assets before Medicaid would start to pay.

They immediately were very motivated to know how to mitigate this risk. The answer, as you probably know, is long term care insurance (LTCI). I recommended insurance on both of them, with a $150 daily benefit to cover the current average cost of assistance, with a 5 percent cost of living adjustment to keep pace with inflation, with an eight-year benefit period, since their major risk was a lengthy need for assistance, with a shared care rider to further extend the insurance benefit if needed. As you can imagine, the premium wasn't a trivial number -- about $3,500 annually on their limited budget. But, I noted that the purpose of the insurance was to preserve their assets, and the $3,500 premium was less than one-half of 1 percent of their assets annually -- a drop in the bucket compared to the unpleasantness of the risk.

They wholeheartedly agreed, and they asked me to obtain that insurance for them.

Interestingly, they then mentioned to me that one of the prior advisors had mentioned LTCI to them, and the prices he quoted were lower because of a shorter benefit period. But they never bought because it seemed too expensive and they figured they probably wouldn't need it.

Find that nagging financial concern

In hindsight, how did I earn my clients' trust and make a bigger sale than they ever would have expected? I became the one advisor who found out what they really cared about -- the nagging financial worry that they had -- and answered that concern. I then pointed out the major threat to their long-term financial security, and showed them how to address the issue.

You may think, well, isn't that obvious? On the contrary, my experience is that almost every prospective client has a nagging financial worry that none of their existing financial professionals have uncovered and answered. I suspect that is because most financial professionals are, perhaps subconsciously, more concerned about selling their favorite solution than about finding what truly motivates the client.

My challenge simply is to unearth my clients' deep-rooted financial concerns. Whether that will lead to an annuity sale, a life insurance sale, a long-term insurance care sale, or anything else, I will not know in advance. But once I have unearth my clients' deep-rooted financial concerns, I am well on my way to becoming their trusted financial advisor.