Prospecting is one of the most important skills for a financial advisor to develop. It involves initiating conversations and building relationships with potential new clients. Many advisors struggle with prospecting because rejection can be difficult to face on a regular basis. However, consistently prospecting is essential for growing an advisory business over time. Here is a step-by-step guide on how to get started with prospecting as a financial advisor:
Step 1: Identify your ideal client
The first step is to get very clear on who your ideal client is. This includes defining details like:
- Demographics such as age, income, family status
- Psychographics like values, interests, personality traits
- Financial situation and needs
Creating a detailed client avatar will help you tailor your messaging and outreach approach to appeal to your perfect prospect. It will also help qualify or disqualify prospects more quickly. Spend time developing a clear picture of who you work best with.
Step 2: Make a target list
With your ideal client defined, make a list of potential prospects to begin reaching out to. This can include:
- Existing clients – Referrals and introductions from happy clients are a top source of new business. Regularly ask for referrals.
- Centers of influence – Build relationships with professionals like attorneys and CPAs who can refer prospects to you.
- Past prospects – Don’t forget about those you’ve already been in contact with. Follow up again in the future.
- Friends and family – Let those closest to you know you are building your practice and ask for introductions to people in their networks.
- Local organizations and associations – Get involved with groups like the chamber of commerce where you’re likely to meet potential clients.
- Social media – Platforms like LinkedIn are great for identifying prospects.
Aim to build a list that provides enough leads to fill your sales pipeline. Ideal list size will depend on your goals and how quickly you progress leads through the sales process.
Step 3: Craft your prospecting message
With your list in place, the next step is to develop an outreach message that will compellingly introduce you and your services. Your prospecting message should communicate:
- Who you are
- What you do
- Who you help
- A compelling reason to connect
For example:
“Hi [name], my name is [your name] and I’m a financial advisor who helps [target clients] achieve [result you provide, like retirement readiness]. I noticed [relevant connection point like local association membership] and wanted to introduce myself in case you might benefit from a conversation about [topic that would appeal to them].”
The goal is to grab attention and start a dialogue in just a few sentences. Refine your message over time for maximum impact.
Step 4: Build a prospecting plan
Consistent prospecting requires a structured plan. Outline activities, goals, and timelines to keep yourself on track. Key elements to include:
- Who you will contact each week/month
- How you will reach out – phone, email, social media, events etc.
- Number of new contacts and conversations to achieve
- Follow up sequences
- Tools and systems to use
- Time allocated each week for prospecting
Start with reasonable goals that you can scale up over time. The more discipline and organization you apply, the more effective your prospecting will be.
Step 5: Practice and get comfortable with outreach
Many advisors feel awkward or anxious when first reaching out to prospects. The key is practicing regularly to become comfortable with prospecting activities and conversations.
- Role play phone and email outreach with colleagues
- Work on your body language and tone
- Listen to recordings to sharpen communication
- Script conversations if needed until you find your natural voice
- Remember you are trying to help, not sell
The more you do it, the easier prospecting becomes. Don’t underestimate the power of practice.
Step 6: Leverage tools and technology
Take advantage of prospecting tools and systems to maximize efficiency and effectiveness. Useful solutions include:
- CRM software to organize prospects and record interactions
- Email tracking to see open and response rates
- Automated follow up emails
- LinkedIn Sales Navigator for identifying prospects
- Telemarketing services to book more meetings
- Webinars and online events to reach many prospects at once
Finding the right mix of tools for your business can significantly boost your prospecting productivity.
Step 7: Be persistent and consistent
Prospecting is a numbers game. The more consistent and persistent you are, the better your results will be. Cultivate persistence by:
- Following up with prospects multiple times over several months
- Setting regular time for prospecting each week
- Tracking activities and goals to stay motivated
- Celebrating small wins like booking meetings
- Not taking rejection personally
Stay determined through ups and downs to build pipeline momentum and achieve prospecting success.
Step 8: Review and refine regularly
Prospecting is not a set and forget activity. You must continually review what’s working and what’s not and adjust your approach accordingly.
- Monitor prospecting metrics like calls made, conversations had, meetings set
- Determine which outreach methods and messages get the best response
- Ask for feedback from prospects on what resonates or doesn’t
- Review target list for better potential matches
- Experiment with new prospecting channels and tools
Refine over time for better conversion rates. Prospecting is a process of continual optimization.
Conclusion
Starting an effective prospecting program takes research, planning, practice and perseverance. But it is one of the most essential skills for growing a profitable financial advisory firm. Define your ideal clients, create systems and scripts, leverage technology, get comfortable with outreach through practice, and work diligently to build relationships over time. With the right approach, prospecting can become a steady source of new business.
Frequently Asked Questions
What are the best places to find new prospects?
Some top places to find new prospects include:
- Your existing client base through referrals
- Centers of influence like accountants and attorneys
- Local professional associations and networking groups
- Social media sites, especially LinkedIn
- Local events and organizations related to your target clients
- Webinars, seminars, and workshops you host or participate in
Leverage both professional and personal networks. Let everyone know you are building your advisory practice.
What metrics should I track for prospecting?
Important prospecting metrics to track include:
- Number of initial outreach messages sent
- Response rate to initial messages
- Number of meaningful conversations had
- Number of discovery meetings scheduled
- Ratio of scheduled meetings to actual meetings held
- Number of proposals or follow up meetings
- Closed sales
Monitor metrics weekly and monthly to assess effectiveness.
How much time should be devoted to prospecting?
Most financial advisors should spend 20% to 35% of their total working hours prospecting. This equates to:
- 10 hours per week if working 50 hours total
- 15 hours per week if working 60 hours total
- 20 hours per week if working 70 hours total
Schedule time blocks for prospecting activities and do it consistently.
What tools help manage the prospecting process?
Top tools for prospecting management include:
- CRM software like Salesforce, HubSpot, or Zoho to track interactions
- LinkedIn tools like Sales Navigator to identify prospects
- Email tracking software to optimize messages
- CRM workflows and email sequencing for automated follow ups
- Telemarketing services to schedule more meetings
- Webinar software to host online events
Leverage technology to work smarter and maximize your time.
Prospecting Activity Examples
Here are some examples of key prospecting activities to execute regularly:
Referral requests
- Ask every client for introductions to 2-3 people in their network who might benefit from your services
- Send periodic email campaigns to solicit referrals from your entire client base
- Call clients to have referral conversations
- Send handwritten thank you notes when you receive a referral
Centers of Influence outreach
- Identify key COIs like attorneys and CPAs in your geographic area
- Introduce yourself and provide relevant content to begin a relationship
- Set up in person meetings to understand their client base and referral approach
- Explore opportunities for joint seminars or events
- Stay in regular contact and express appreciation for any referrals
Local networking events
- Research upcoming events for professional organizations and associations in your town or city
- Attend events and come prepared with business cards and your introductory prospecting message
- Set goals for the number of people you will meet and follow up with after the event
- Connect event contacts to your LinkedIn network
- Consider hosting or sponsoring events to expand your visibility
LinkedIn outreach
- Use Sales Navigator to identify qualified prospects
- Customize your LinkedIn connection requests with a note
- Engage prospects by commenting on posts and sharing relevant content
- Direct message prospects to schedule calls and meetings
- Watch for changes at a prospect’s company as an opportunity to reconnect
Webinars and seminars
- Create a webinar or local seminar on a topic that will attract your target clients
- Promote through your website, email lists, social media, and any other available channels
- Provide something of value but also describe your services
- Capture contact info and follow up with all registrants and attendees
- Repurpose content into videos, blogs, podcasts to generate more prospects
Executing a combination of outbound and inbound prospecting activities will lead to a steady stream of new potential clients entering your pipeline over time.
Sample Prospecting Schedule
Here is an example weekly schedule incorporating a variety of prospecting activities:
Time | Monday | Tuesday | Wednesday | Thursday | Friday |
---|---|---|---|---|---|
8:00 – 9:00 am | In person networking breakfast | COI outreach calls | Review CRM and sales metrics | LinkedIn messaging | Webinar promotion |
9:00 – 10:00 am | Lead follow up calls | Referral outreach calls | Lead qualification calls | New lead research | Blog writing |
10:00 – 11:00 am | Appointments with prospects | Appointments with prospects | Appointments with prospects | Appointments with prospects | Appointments with prospects |
2:00 – 3:00 pm | Referral email outreach | LinkedIn profile reviews | Local event research | New lead outreach calls | Appointments with prospects |
3:00 – 4:00 pm | Webinar preparation | Appointments with prospects | Email outreach | Appointments with prospects | Content creation |
Blocking time for a mix of in person and digital prospecting will generate plenty of new conversations and opportunities over time.
Answering Prospect Concerns and Objections
When reaching out to prospects, there are a variety of common concerns and objections that may arise. Here are some examples with potential responses:
I already have a financial advisor
- I understand, many clients work with someone already. I’d be happy to learn more about your current situation in case there are gaps I may be able to fill.
- I appreciate that relationship. Would you be open to a quick second opinion of your plan just to provide some reassurance that everything is on track?
- If you’re completely satisfied that’s great. I’m happy to be a resource down the road if things ever change or if you have someone else looking for help.
I’m not ready to change advisors right now
- No problem, reaching out to a new advisor is a big decision, I understand. Feel free to keep my information on file for the future.
- That makes sense. I’m always happy to answer any specific questions you have in the meantime with no obligations.
- Let’s stay connected via [LinkedIn, newsletter etc] and I can provide you with some valuable content over time. Feel free to reach back out whenever you’re ready.
I just don’t have enough assets to warrant an advisor
- Many of my clients start planning with a smaller portfolio, you’d be surprised at how much value can still be added.
- Assets will build over time. My goal is helping you maximize growth. I’m happy to start with whatever you have today.
- I work with a range of portfolio sizes and my fees scale accordingly. I don’t turn clients away based on assets.
I have simple finances and don’t think I need help
- Even with a straightforward financial situation, having aligned goals and utilizing the right financial strategies can really maximize outcomes.
- An outside professional perspective is useful even for basic planning needs. I may see opportunities you aren’t aware of.
- Things often get more complicated over time with assets, family etc. Proactive planning helps you stay ahead of the curve.
The key is addressing concerns directly but keeping an open, educational tone. With practice, responding to objections will get easier.
Conclusion
Prospecting effectively takes work, but is a critical investment for any financial advisor building their book of business. Define your target clients, develop organized systems and messages, leverage supporting technology, execute a mix of outbound and inbound activities consistently over time, and continually refine your approach based on results. With patience and persistence, an effective prospecting strategy can produce regular new opportunities and drive growth. Consistency and dedication over the long-term are the keys to prospecting success.