In Practice September 5, 2007

Perspective: Don’t Confuse Sales Activities with Verifiable Advances

The fifth of seven ineffective habits of retirement plan advisers
Reported by

There are numerous sales-tracking tools and extensive literature available that address activity-based sales management. This material is on target when breaking down sales into activities and processes, but it is lacking in one critical area. These activity-based systems do not provide rigorous tracking of verifiable advances. It is critical that you track advances and see that a legitimate “next step” has been taken with a client or prospect.

If you mainly focus on sales activities, you run the risk of becoming a professional visitor, tracking things like phone calls, introductions, business cards handed out and meetings arranged.

Want the latest retirement plan adviser news and insights? Sign up for PLANADVISER newsletters.

A single verifiable advance can be far more valuable than many activities.

By focusing on advances, you also concentrate effort around aspects of your business that can help distinguish you in the marketplace, such as exceptional service and insight regarding relevant topics that are top of mind for plan sponsors.

There are four clear advances that turn prospects into clients. Your business will become more focused and efficient when you get very clear about these steps in the sales pipeline.

 

Verifiable Advance #1 – Qualified Prospects
Until you confirm that a prospective client fits your strategic focus and has needs that fit your deliverables, the prospect should not be in your pipeline, no matter how many activities have been performed around the potential client.

 

Verifiable Advance #2 – Completed Fact Finder
This is where you gain insight into what the client really wants plan participants to experience. You can also uncover the beliefs behind the plan sponsor’s goals and concerns. The purpose of this quantitative and qualitative assessment is not to provide a consultative sales course; you can, however, benefit by sharpening skills in this area. It is about asking good questions and letting the plan sponsor talk. You are then armed with the information necessary to address the plan sponsor’s needs with appropriate strategies and tactics.

 

Verifiable Advance #3 – Initial Proposal Delivered
In addition to completing the standard research and suggestions, you can further demonstrate your value by introducing a discovery agreement and the Client Engagement Road Map. A discovery agreement chronicles how well you understand the goals of the plan and demonstrates that you listened well enough to propose a customized solution. Using the Client Engagement Road Map can help the plan sponsor understand the value you bring over time, outlining the multiple considerations that your service and advice can address.

 

Verifiable Advance #4 – Signed Documents and Solution Implemented
There will certainly be a lot of sales activity up to this point, but not until this final advance will your activity be rewarded.

Ideally, you can track each step in such a way that you are alerted when progress toward the next advance stalls or is completed. At Russell, our practice management experts have built tools specifically for this purpose that can help you more efficiently manage your pipeline and analyze revenue opportunities.

The better handle you get on facilitating these verifiable advances, the less time you’ll have to spend looking for opportunities to perform an activity.

 

 

Previous articles in the Ineffective Habits of Retirement Plan Advisers series:
Seven Habits of Highly Ineffective Retirement Plan Advisers

Don’t Fall For the Experience and Intuition Trap

Do Your Best to Move Beyond “Doing Your Best’

Cast a Broader Net, Catch a lot of Suckerfish

Direct Marketing Often Fails the Viral Test

Matt Smith is managing director of retirement services with Russell Investment Group. He is responsible for DC research and strategic development of Russell’s defined contribution investment management business in the United States. Smith joined Russell in 2001. Over his 20+ year career, Matt’s experience spans the spectrum of the qualified plan business. Prior to joining Russell, Matt held the position of vice president and general manager of ADP’s west coast retirement services operations.

Copyright © Russell Investment Group 2007. All rights reserved.

Russell Investment Group is a Washington, USA corporation, which operates through subsidiaries worldwide and is a subsidiary of The Northwestern Mutual Life Insurance Company.

Nothing contained in this material is intended to constitute legal, tax, securities, or investment advice, nor an opinion regarding the appropriateness of any investment, nor a solicitation of any type. The general information contained in this publication should not be acted upon without obtaining specific legal, tax, and investment advice from a licensed professional.

Russell Fund Distributors, Inc., member NASD, part of Russell Investment Group.

RFD 07-6977. First used: September 2007

In Practice September 5, 2007

As Assets Grow, Investors Want More Advice

The greater the percentage of assets an investor has invested, the more likely he is to adopt the new solution-oriented products and services emerging from investment product providers and financial advisory firms.
Reported by

According to the study from Financial Research Corporation (FRC), “Evolution of the Solution: Investor Perceptions of Solution-Oriented Products & Services,” the larger the percentage of total investment assets held in employer-sponsored retirement plans, the more interested participants are in solutions like lifecycle funds. Likewise, those with larger percentages of assets held in personal accounts, including IRAs and taxable investment accounts, are more likely to use the services of an adviser.

However, even as people turn to advisers, views about the most important role of advisers are changing, FRC said. Just over one-half of investors (52%) thought that the relationship management skills of an adviser, such as the ability to assess investment goals or risk tolerance, were most important, while 48% thought that investment skills, such as the ability to identify strong-performing products or adjust portfolios to changing market conditions, were most important.

For more stories like this, sign up for the PLANADVISERdash daily newsletter.

A growing portion of investors are seeing the value in investment solutions created at the firm level. Greater than one-half of surveyed investors responded that model portfolios or short-lists of pre-researched investments created by manager research teams at financial advisory firms would result in the optimal portfolio, versus financial advisers choosing from all available options.

The research also found investors are most likely to be motivated to seek information about investment products and services by a desire to become more knowledgeable about their finances, the announcement said. However, the youngest investors (30-40) were the more likely to be motivated by fear or anxiety about their financial futures, and the oldest investors (70+) were the most likely to be motivated by a sense of opportunity.

FRC said its study was designed as a tool for investment product firms and financial advisory firms to develop and market solution-oriented products and services that appeal to their target audiences. It identifies factors that drive investors to take action by asking their preferences for investment products and services, versus how they feel about existing products and services. Investor preferences are analyzed by demographic characteristics, including age and wealth level, as well as behavioral factors, such as purchasing methods.

For more information, go to www.frcnet.com.

«