David J. Murphy

“I would love to live like a river flows, carried by the surprise of its own unfolding.” —John O’Donohue

I like this quote for its poetry and sentimentality; however, as much as surprises can be delightful–they can also be devastating, depending on what life brings.

Imagine a conversation like this:
Claims Processor: “Good afternoon. How can I help you?”

Female Caller: “I am calling about my husband’s life insurance policy and claim.”

(Claims Processor collects the caller’s name, the deceased’s name, date of death, and the policy number.)

Claims Processor: “Thank you. Now, how can I be of assistance?”

Female Caller: “Well, I sent the Death Certificate and Claims form to your company over a month ago and have not heard anything from you since.”

Claims Processor: Typing… “Our records indicate that we did receive the Death Certificate and Claims form. I also see here that we remitted the check for the death proceeds ten days ago.”

Female Caller: “You did? What address did you use?”

Claims Processor: Typing… “Oh, I am sorry. We do not show you as the rightful beneficiary.”

Female Caller: “What? What do you mean? Who did you send the money to?”

Claims Processor: “I am sorry Maam, but you are not entitled to that information.”

Female Caller: “Hold on. Just wait. Don’t tell me you sent the money to his ex-wife!”

This is the kind of surprise life can bring when care is not taken.

The above conversation is fictitious only in the sense that the situation is merely representative. The harsh reality is that very similar conversations take place regularly. Nothing about the conversation is imaginary.

Question: When was the last time you systematically updated your clients’ beneficiary designations?

Sadly, a tremendous number of people still have prior spouses or deceased relatives named as the current beneficiary on a retirement account, or on a life insurance policy purchased years ago.

It is imperative that independent financial professionals stay current with their clients. Marriages, divorces, births, deaths and other major life events generally require policy holders and account holders to review and, if necessary, update beneficiary designations.

Negligence in reviewing beneficiary designations can lead to one of the most common and potentially costly insurance, retirement and estate planning errors that clients can make. In cases like the one described, in which a divorce occurred followed by negligence to update the beneficiary designation, the ex-wife or husband receives the proceeds.

Point #1: All independent financial professionals owe it to their clients to be intentional and consistent in helping them maintain up-to-date beneficiary designations.

Building a Bridge to Beneficiary Satisfaction
“I learned that a long walk and calm conversation are an incredible combination if you want to build a bridge.” —Seth Godin

Getting the most out of your clientele means building relationships. Strong relationships are built by providing practical and periodic reviews that can help your clients stay informed and organized in order to make better decisions. Things that are important take time and thought, which is why they are often overlooked. Would your clients know where in their life insurance policies the beneficiaries are named or what the carriers have on record?

Clients are exceedingly satisfied when their financial advisors surpass their expectations, even slightly. One simple step to achieve client satisfaction is to automate an annual review of coverages, types of policies owned, status of the policies and the named beneficiaries.

• This simple review can:
• Keep them out of a bind
• Help them make decisions
• Prevent negative surprises
• Enhance their trust in the relationship

The basic participants in a life insurance contract are:

1. Contract Owner: The person who owns the life insurance policy.
2. Insurance Company: The company that issued the policy.
3. The Insured: The person whose life is being insured by the life insurance policy.
4. The Primary Beneficiary: The person who will receive the death benefit when the insured person dies.

Question: Which of these four participants receives the least amount of attention from the independent financial professional?

Typically, the primary beneficiary is someone the independent financial professionals do not know well.

It is possible to build a bridge to beneficiaries that will lead to future revenue.

Important Reminder: As you design the bridge think about the people who will cross it.

Beneficiary Designations Supersede the Will
People often think an updated will is all they need. However, the clients will or trust will not override what is named in the beneficiary designation on a life insurance policy, annuity, or retirement account (like an IRA or 401(k) plan). Beneficiary designations take precedence.

Regardless of the client’s current relationship status with the beneficiary on record, and regardless of how the client’s current will reads, the proceeds from the life insurance policy will be paid to the latest person named in the beneficiary designation.

Point #2: The beneficiary is the key to the client’s decision to purchase life insurance in the first place. It is because the client loves the beneficiary that there was even a policy at all.

Best Practices for Reviewing Beneficiary Designations
The process for building bridges with beneficiaries is as follows:

1. Help your clients make a chart of three columns.
2. In the first column, encourage clients to make a list of each one of their retirement accounts, life insurance policies, and annuities.
3. In the second column record the primary beneficiary for each account or policy. (If there are contingent beneficiaries, consider adding an additional column.)
4. In the third column record the date the beneficiary designation was last updated.
5. Save a copy of each client’s list in a file folder. Label these files by the date.
6. Open this folder every month and contact all clients whose annual review is due that month.
7. If a client needs to update a beneficiary, help them contact the respective company or companies.
8. Seek to build a relationship with each new beneficiary by learning what they mean to the clients. Get introduced to each one.
9. Make sure each beneficiary has your name and contact information saved on their phone for quick access should something happen to your client.

Summary:
All independent financial professionals owe it to their clients to be intentional and consistent in helping them maintain up-to-date beneficiary designations. You can achieve high client satisfaction by automating an annual review of coverages, types of policies owned, status of the policies and the named beneficiaries. You might just keep your client’s loved ones from experiencing a horrible surprise. In addition, a strong process can help you serve your clients and build a bridge to beneficiaries that will lead to future revenue.

If the people who your clients love are the very reasons they sought your help, imagine what your clients will think about you if your business model is designed to keep these people (beneficiaries) front of mind.

I am a voracious reader, but I can’t keep up. Seems like every week someone announces a new book that is appealing to me to read. “So many books, so little time,” right? One benefit of my limited capacity is a forced sorting-out that takes place just by the passing of time. What seemed like a great book when first announced soon fades under the weight of severe criticism or dies from lack of general support. Titles that intrigued me initially lose their attraction as soon as something else appears. This is the same principle at work with items in the salad bar. How many times have I begun to spoon some garbanzo beans onto my salad plate when green peas, black olives or chopped eggs caught my attention instead?

It is eminently clear that writing a book and having it read are very different things.

Question: Have you read one or more of the variations of the “Chicken Soup for the Soul” books? Apparently, many people have. According to www.chickensoup.com:

• The Chicken Soup for the Soul book series of over 250 titles has sold more than 110 million copies in the U.S. and Canada.
• Chicken Soup for the Soul books have been translated into 43 languages, have been published in over 100 countries, and have sold more than 500 million copies worldwide.

The first book must have been an immediate best seller, right? Wrong.

Mark Victor Hansen and Jack Canfield had the idea in 1993 that “People could help each other by sharing stories about their lives.”¹ As motivational speakers, they came across myriad stories and shared these in their talks. So they compiled the best 101 stories they’d been told in a book. Instinctively, they knew they had a best seller on their hands! Not a chance. It was a huge struggle. They took the book to New York, hoping to sell it to one of the big publishers, but every single one turned them down.¹

Publishers were not breaking down their doors for the opportunity to get “Chicken Soup for the Soul” to market. Then, when the book was in print, they had a tough time getting anyone to buy it.²

What happened? What led to the above-mentioned success?

Every day they did five specific things that would move them closer to their dream of selling books.²

Mark Victor Hansen and Jack Canfield believed their book served a great purpose. They worked hard, and innovatively, to promote it. They were motivated more by their belief that people would benefit from reading their book than by their hope to earn millions of dollars.

Example: “One day we sent copies of the book to all the jurors in the O.J. Simpson trial. A week later, we received a nice letter from Judge Lance Ito thanking us for thinking of the jurors, who were sequestered and not allowed to watch television or read the newspapers. The next day, four of the jurors were spotted reading the book by the press, and that led to some valuable public relations for the book.”³

Point #1: If you have something valuable that you believe will benefit people, it is imperative to promote it and get it into as many people’s lives as possible.

Point #2: You have goals for 2020. You have long-term dreams. Challenge yourself to do five specific things every day that would move you closer to your objectives.

Life Insurance for the Soul
From the very first day I began selling life insurance I have been a believer in its intrinsic value to families and businesses. How do we know life insurance serves a valuable purpose?

• If it did not serve a public good, why would Congress have granted life insurance its amazing tax advantages in the very first Federal Tax Code?
• The very founding and history of life insurance reveals legal and economic structures created out of the simple intention to protect families from the death of the income providers.
• Even my faith informed my enthusiasm for life insurance. The New Testament contains this instruction: “Religion that is pure and undefiled before God the Father is this: to visit orphans and widows in their affliction.”4 Life insurance is expressly designed to benefit orphans and widows.

Sitting in my cubicle in the captive agent office where my career began, bubbling over with enthusiastic belief in the great importance and value of life insurance, was essentially equivalent to me writing a book that nobody wanted to read. I needed to get launched and there were two critical steps required:

1. Establish Credibility
2. Make Connections and build Social Capital

Credibility
Credibility is an asset when building a financial services practice.

There are many ways to develop credibility, including:

• Gain success through hard work (success really does beget success).
• Maintain customer-focus.
• Earn credentials and designations.
• Volunteer in community service organizations.
• Study and learn.
• Prepare well for every appointment.
• Keep commitments.
• Follow-up efficiently and punctually.

As a young agent, I needed to establish credibility.

I pursued and earned designations (CLU, ChFC), joined the American Red Cross Planned Giving Committee and learned the “Consultative Selling” approach, which put the customer first. Still, I needed something more in order to overcome my young age, especially in the small business market.

One Idea
I decided to write an article based on the financial applications inherent in the “law of the cumulative effect of little things over a long period of time.” (This is a phrase I discovered in the books by Ron Blue, including Master Your Money). I went to the Public Library and looked up the names of the editors and publishers of magazines serving the various industries represented by small businesses in my city. Every industry had its own publications. Tool and Die. Electrical Supply. Heating and Air Conditioning. Printing. Machine Tool. Packaging. I sent off my article to dozens of them. Lo and behold, ten or so magazines published it. Not only did these magazines notify me as to the future issue in which my article would appear, they subsequently sent a copy of the volume that contained it.

Armed with the magazine containing my article, I cold-called small business owners in each of these industries. It was simple to get past the receptionist because often the issue containing my article was there on a table in the lobby and I only had to open the magazine and point to my photo and name.

My article as door-opener worked so well that I sent the article to the “Cincinnati Business Courier.” The publisher at the time was named Scott Bemis. (Scott was the publisher of business journals in Indianapolis and Rochester, NY, and the Cincinnati Business Courier, before going to Denver in 1996 to become president and publisher of the Denver Business Journal).

Scott liked it and wanted to meet. His offices were on the 45th floor of one of Cincinnati’s tallest buildings. We discovered a shared faith and a similar sense of humor. We hit it off instantly.

Connection—“Can I Come?”
If every new customer does not lead to more customers, then all customers are, in a sense, nothing but individual dead-end streets. The quickest way for a person to give up as a young life insurance agent is to continually wander down one dead end after another.

Connecting with people involves both deep one-on-one relationships and broad social capital based on active referral-gathering and networking.

Scott Bemis said he was in a Bible study group with other business owners.

At that time, I was inspired to be courageous by the great book, Swim with the Sharks Without Being Eaten Alive by Harvey Mackay. I was focused on getting appointments with people who absolutely, positively did not want to see me. One way to get in front of successful people is to be introduced to them personally by other successful people.

So, when Scott mentioned his Bible study group, I asked, “Next time you go, can I come?” Scott was pleased to have me attend. At that first event I was introduced to multiple business owners. For example, Bob owned a customer-driven manufacturer of products for niche vinyl coated markets; Mike owned an executive search firm; another Mike owned a metal re-surfacing company. These men eventually introduced me to many other business owners.

(Note: It is difficult to operate without self-interest. My intentions for attending Scott’s group, or any other function I sought invitations to, were clearly driven by the desire to meet new people. The behavior I had to avoid was to use these occasions as pure prospecting opportunities. In each instance, I stated clearly what I did for a living, and that I was curious to meet people. That being said, it was also imperative that I not approach any person until we had become acquainted over the course of many encounters.)

Point #3: Asking “Can I come” is the easiest, best way to connect with successful people through other successful people.

Summary and Application

• Life insurance is something that has tremendous utility for solving the real-life concerns of real people. Because it is valuable, it must be promoted.
• To earn the right to tell the story of life insurance to others, the independent financial professional must establish credibility.
• Credibility is earned through hard work and innovation.
• Credibility is only important if your life intersects with others.
• Connections with other people and social capital are the key to success.
• Simply asking, “Can I come?” is a proven method for making sure each relationship is not a dead end.
• Success draws nearer when we commit to doing five specific things every day that will move us closer to our goals.

Many independent financial professionals believe as strongly as I do in the intrinsic value of life insurance. Some of them face a seemingly high wall between themselves and people needing their services. To get out into the market and change lives requires both credibility and connection. It is my hope that the above anecdotes from my story will prove useful. 

References:

1. https://www.chickensoup.com/about/history.
2. https://www.thinke.org/blog/2009/6/24/the-rule-of-five-swings.html.
3. Put Your Dream to the Test, John Maxwell.
4. James 1:27 (ESV).

“Letting go is the natural release that always follows the realization that holding on hurts.”¹ —Guy Finely

In my Freshman year at Miami University in Oxford, OH, I came under the influence of the Resident Adviser (RA). A slight, intense upper classman, Don converted me to two of his hobbies: Pipe smoking and sky diving. (When my wife and I got married, she disabused me of the idea that these could be life-long habits.)

I remember the first time we drove out to Green County Parachute Club (now known as “Skydive Greene County”). Don brought a bunch of people that day to experience the thrill for the first time. We all stood and received instructions regarding how to leave the plane, prepare for landing and what to do in case the main parachute did not open. We were instructed about the things that can go wrong. We were also informed as to what we could wear or have on our bodies. Then, divided into small groups, we took turns climbing into a small plane for a spiral rise up to 3,500 feet.

I was blessed to have Don along on my plane. He was known to me and I trusted him. The plan was to move over to the door. I was connected by a static line to the aircraft. This meant that on my first jump I did not actually have to pull the cord in order to deploy the chute. It would be done for me as soon as I left the plane. All I had to do was place my left foot on a small step (about the size of a door stop), push off when instructed, and reach for the wing strut. Wing struts, in those days, were tubular members on the airplane that acted as support structures. They connected the wing to the fuselage. By leaping out and reaching forward I would be horizontally positioned perfectly for the chute to deploy.

As you can imagine, on the first jump from an airplane 3,500 feet above ground, moving at airspeeds of up to 125 miles per hour, adrenaline floods the system, the reflexes are on high alert and everything is happening at a fever pitch. When Don yelled into my ear “Jump!” I obeyed. A little too vigorously. My hands not only reached for the wing strut, the force of my push off the step caused me to actually reach the metal bar. Next thing that happened was unintended. I clenched the strut with both hands.

It is one thing to sit and ponder a jump into space, and quite another to release your grip on the only thing keeping you from falling 3,500 feet. All of a sudden the whole notion of trusting in a static line to deploy my chute seemed incredulous. So, I held on. Within a split second, Don was adding further instructions to the initial command to jump. Things like, “Let go!” and something that sounded like “another trucker” kept pouring from his lips at high decibels.

Letting go was hard to do. I eventually did and ended up having a long walk back to the Green County Parachute Club Quonset hut. The jumpmaster recorded my actions on my first jump in my logbook.

Letting Go Is Sometimes Hard
“Real life is not static.”² Rarely does anything tether us to certainty. Instead, letting go means leaving one level of confidence before we can enter a new level. For the independent financial advisor (IFP), certainty is a good thing. The typical IFP invests significant time and practice in creating a proven process for discovering and realizing the client’s needs and dreams. Service is everything when creating differentiation. To the extent it is humanly possible, IFPs attempt to control the process from beginning to end to ensure a positive client experience. Does that sound like you?

Discovering Success by Letting Go
Letting go begins with the realization that you have limited capacity. I can juggle, but only using three juggling balls. I know people who can juggle five. I do not believe anyone can juggle, say, twenty. Our focus, our attention, our time and our energy are finite. When we face our limitations, we find our freedom. The freedom to become everything we can become starts by letting go of whatever holds us back. Success is the ability to achieve our best by releasing everything that is not critical.

#1 Let Go of Relationships
The typical IFP collects relationships with clients, BGAs, carriers, wholesalers and other advisors. IFPs tend to be people who like people, and are friendly and outgoing. The successful IFP knows when a relationship is contributing to success or simply tangential. The difference between essential and tangential relationships is found on either side of a divide created by these factors:

• Loyalty
• Reciprocity
• Shared vision
• Proven history
• Efficient time usage
• Contributions to personal growth

Some clients contribute to the IFP’s personal satisfaction and sense of professional accomplishment. The IFP simply needs to hear the client’s name and immediately the sense of achievement rises inside. “I remember when we first started working together and now look at the difference our relationship has developed!”

Other clients are nice people, even enjoyable, but little progress can be attributed to the relationship. Perhaps they need to be let go.

Similarly, most IFPs work with more than one BGA. The average is between two and three. Each BGA requires time and effort to keep a relationship productive. The successful IFP will select the best relationship and let the others go.

More carrier relationships are not always better. Representing a product now should mean representing that carrier into the future in order to properly service the business. To maintain an active appointment with multiple carriers is difficult. The successful IFP will let go any carrier relationship that will not be core to the model the IFP is building.

One BGA told me he and his team receive as many as 20 visits per month from wholesalers. These wholesalers spend as much as two hours in the office. That is one week of work (40 hours) each month spent by the team. When pressed, the BGA could not attribute measurable results from these visits. My advice? Let them go. When they call to schedule a visit tell them “no.” Of course, the wholesalers representing just the core partner companies should be allowed to visit, but only if their visit will generate results.

#2 Let Go Control
To be trusted, a leader must be followed. To be followed a leader must have character. To have character the leader must have purpose and vision. A leader’s trust is earned by having a clear purpose/vision, and by demonstrating true character. The same is true of you. As an IFP, you have an idea for your practice, and a preference for the type of client you are meant to serve. You know what it is that you do best. Anything that you do that is outside of your core purpose and competitive advantage dilutes your effectiveness.

No matter how hard we try, we cannot control everything that our business does. The successful IFP knows what she can do that no one else can do as well. She will make these decisions:

• Delegate any task that others can do as effectively
• Place complete trust in the person assigned each task
• Ask for minimal reporting from these team members
• Make sure that each person sharing in the responsibilities is clear about two things:
  • The IFP’s vision
  • The individual’s personal role in achieving that vision

When all tasks in the business process and service model are evaluated, most can be delegated. The successful IFP will simply let go and trust others to accomplish their assigned responsibilities.

#3 Let Go of False Comparisons
Most IFPs I have met are competitive. They like beating the averages, but what they truly enjoy is outperforming other IFPs. This often leads to IFPs making comparisons between their own practices and the business model of other IFPs. This, in turn, causes the individual IFP to embrace activities and business practices that are unnecessary, even contradictory, to his practice.

The only comparison required to grow your own business is contrasting your business model and success you have achieved to date against the ideal business model and ideal success you desire to achieve in five years. No successful IFP achieves her best potential by trying to be someone else.

The successful IFP will look into the future and envision the level of success that is possible to achieve. This will create the vision. The vision creates the priorities. The priorities reveal what needs to be measured. Everything else must be let go.

Next Steps
Whether you are a BGA, a wholesaler, an independent financial professional or have some other role in financial services, please consider taking these next steps:

Evaluate your business relationships. Who are the people who are likeable, but not likely to help you achieve your vision? You can stay friends, but you need to let them go when it comes to building your business.

Ask yourself, “What am I doing that others can do as well?” What tasks take your time but do not maximize your skills? Let them go. Delegate. Transfer responsibility to people who share your vision and embrace their individual role in helping achieve it. Trust them. Your trust in them will increase their commitment to you.

Review your vision and examine whether what you are doing was designed to achieve your purpose or is merely copied from the business model of another person attempting to accomplish her vision. Get your eyes off other IFPs. Focus your attention on your business model and how you will measure success in five years. Then, you will be able to identify your priorities. These will tell you what to measure.

Summary
Back to my first sky-diving experience. When I finally let go, and found myself quickly under canopy, gliding down to earth, I could hear everything on the ground. A woman far below was listening to music. I heard a dog barking. I saw the plane from which I had disembarked now circling down to collect the next group of skydivers. I found peace and wonder. I was free to soak in what it was I came to do and see.
Letting go is sometimes the best way to experience success.

References:

1. Read more at https://www.beliefnet.com/inspiration/galleries/7-secrets-of-letting-go.aspx#igSU2JDf98EiPUcg.99.
2. Ibid.

“Look, all I’m asking is for you to just have the tiniest bit of vision. You know, to just sit back for one minute and look at the big picture.”*

On July 11, 1997, Warner Bros released the movie Contact. The film opened with a scale view shot of the entire universe, beginning with a view of Earth from high in the atmosphere. The camera started zooming backward, first passing the Moon, then Mars, asteroids and other features of our solar system, then into interstellar space, through the Milky Way, and receded through other galaxies into deep space. While the scene pulled the viewer further and further from earth the movie-goer heard sounds of pop songs, TV show themes and famous speeches carried by radio waves of broadcast programming emitting from earth. The music and news broadcasts began with the present and retreated into the past.

This opening scale pan of Contact broke the record for the longest unbroken shot comprised entirely of computer-generated visual effects. Movie critics continue to hail this sequence as one of the best examples of what the movie industry calls the “Establishing Shot.” People sat in the theaters transfixed and silent for the full three minutes that the opening scene lasted. View the Establishing Shot from Contact here

The Establishing Shot
According to MediaCollege.com, “Establishing Shot” is defined as “the first shot of a new scene, designed to show the audience where the action is taking place. It is usually a very wide shot or extreme wide shot.”**

The Establishing Shot provides context and overview.

The most memorable Establishing Shots are often visually iconic or technically intricate and complex. The goal is to provide viewers with information about the story’s setting, time frame and perspective.

Clients Often Lack Perspective

“Everywhere is walking distance if you have the time.”—Steven Wright

The nature of humans is to self-deceive. “I have time enough.” “That won’t be a problem.” “Somehow it will all work out.” These can all be true statements—eventually. To face the facts, to embrace reality, requires courage. Or… assistance.

The role of the independent financial professional is to create the Establishing Shot for each client. Someone must show clients where they are in time and in life. Someone needs to give context, create urgency and drive decision-making. There is no better time than at the end of one year and the beginning of the next.

If you are an independent financial professional, I urge you to begin thinking of yourself as the “Big Picture” advisor. It is easy for clients to think too confidently, or, conversely, to lose hope. It is often the case that the clients find financial matters altogether confusing and decide that doing nothing is therefore the best strategy for now. We all know that procrastination never leads to success.

Impact of the Big Picture Advisor
For clients to properly think about problems they need to know how all the pieces fit together. Just like in the movies, where a well-done Establishing Shot can create context, you, as a Big Picture advisor, can help your clients to:

• Know not just how and what to do, but to know why.
• View the whole and not just its parts.
• See a vision and gain a sense of the bigger picture.
• Appreciate the full context of any situation.
• Have the ability to see beyond the obvious.
• Accurately assess the true consequence of putting off decisions.
• Avoid great swings of mood and emotion they go through when their desires and expectations are not met.
• Not be swept away by feelings that are based on an incomplete piece of the picture.
• Respond to the underlying conditions that have given rise to the problems they face, rather than simply reacting to the symptoms generated by those problems.
• Respond with patience gained by seeing with a broader perspective.
• Grow in confidence by establishing plans more likely to bring about the long term wellbeing that they desire.
• Understand that it is possible to create a legacy that will live on, whether in wealth or in the impact made on other people.

Your Job If You Choose to Accept It
The independent financial professional who desires to serve as the Big Picture advisor must know how to create the Establishing Shot for clients. Say for example that you will be meeting with a client at 2:00 pm tomorrow afternoon. You have allocated 60 minutes for the appointment. As Big Picture advisor you need to begin setting the scene. In the opening five minutes you need to pre-lap. In screenwriting, “Dialogue spoken over an establishing shot leading into the scene is called a ‘pre-lap.’”***

Pre-lapping is when dialogue begins before the director cuts to the scene in which the dialogue will be spoken.

This is what you might say to your client and what your pre-lapping might look like:

• You are someone who desires to have a more successful financial life.
• You have an open mind and are willing to creatively brainstorm and engage in a constructive dialogue about the goals that drive your life values.
• You understand that there are many alternatives and are open to exploring an array of choices.
• You are willing to make changes in behavior if doing so will serve your long term goals.
• You are open to viewing me as your Big Picture advisor for your financial life.
• You recognize that I don’t have all the answers, and that financial planning is not an exact science.
• You are willing to commit to providing me with applicable financial information and to respond to requests for information in a timely manner.
• You recognize that big goals can be achieved by making small changes consistently over time.

Through these table-setting comments, you establish the context of the dialogue about to take place and provide an apt description of the work you do on behalf of your clients.

Summary
Serving as the Big Picture advisor:

• Allows you to lead your clients in prudent decision-making.
• Enables you to keep your clients on track.
• Avails you the opportunity to help your clients see what others are doing successfully.
• Elevates you to the position of quarterback who can create teamwork among all the client’s advisors.
• Keeps your clients from stagnation and from wasting valuable years.
• Positions you to help clients find lessons in every experience, good or bad.
• Equips you with the ability to share insights from many different people.
• You can open your client’s eyes to an expanded world.

In Contact an alien (played by David Morse) says this about human beings:
“You’re an interesting species. An interesting mix. You’re capable of such beautiful dreams, and such horrible nightmares. You feel so lost, so cut off, so alone, only you’re not. See, in all our searching, the only thing we’ve found that makes the emptiness bearable, is each other.”****

Bottom line: people truly need a Big Picture advisor. Are you taking new clients?

References:

* Line spoken by Jodie Foster as Dr. Eleanor “Ellie” Ann Arroway in “Contact”
**https://www.mediacollege.com/video/shots/establishing.html
***https://screenwriting.io/what-is-an-establishing-shot/
****https://www.moviequotes.com/s-movie/contact/

Maybe at this moment you are sitting at a desk, or in a comfortable chair, motionless. At least you seem to not be moving when you look around at your surroundings. Or, maybe you are on a plane traveling at 500 Miles Per Hour. You know you are moving, even though you are comfortably seated. You can look down and see land passing beneath you. You are clearly in motion.

All speeds are relative. To measure speed you must measure the motion of other objects relative to an object at rest.

At the latitude where I live (36.3437 ° N) the earth is rotating around its axis at 800 MPH. That is crazy fast! Yet, I do not feel it. Then again, since the earth will complete one revolution in orbit around the sun in 365 days, a trip of 93,000,000 miles, I am on a spaceship moving at the speed of 66,000 MPH! Once more, I do not feel it.

The Sun revolves around the center of our Milky Way Galaxy, pulling along the orbiting planets with it (including earth) at the speed of 550,000 MPH. Mindblowingly (is that a word?) the Milky Way Galaxy is also moving, at the rate of 2,237,000 MPH.

Time to reach for the airsick bag. Time to hold onto something!

Speaking of time, it is integral to measuring velocity, as in, Speed = Distance/Time. Speed is also a factor in calculating time, as follows: Time = Distance/Speed.

Like our obtuseness toward speed, we are mostly oblivious to the passing of time.

Time always seems to flow perfectly normally for us, until we see the effects of aging and the changes in the society around us. When we attend a High School Reunion, it becomes clear to us that time is not uniform in its effects. We are occasionally jolted by the changes we see in others and in ourselves, but generally unperturbed by the incessant passing of time.

In a similar way, we are individually oblivious to the velocity of our money.

The Velocity of Money
The Velocity of Money is the rate at which money moves from one transaction to another. It refers to the rate at which people spend money. In day-to-day life, money moves at different speeds. For example, now that digital currencies are becoming more popular, the speed of that money transaction is quicker than anything we have known prior to its introduction. Appliances such as the Goldshell ck5 (goldshell ck5 buy now) allow cryptocurrency users to source more money, so transactions like this are of fast velocity – money is being passed between people and digital objects very quickly. It is used on a macroeconomic basis to refer to the money supply and its turnover in the national economy. It is a measure of how long people actually hold onto their money. Say for example you go into a poker room in a physical or Online Casino. You lose a bet of $10 to another person, then that person lost that money to another person, ect. The velocity of this little bit of money is going at an incredibly high speed because it has passed between several people in a short amount of time. Another example is if we are fearful for our jobs and thus hold onto our savings, this would mean that less money is circulating and thus the velocity of money is much slower. When we feel optimistic and confident in spending, the velocity of money will grow again. If we fear inflation coming on the horizon, and sense that the value of our money may begin depreciating quickly, we will increase spending now.

Therefore, the velocity of money simply means the movement and multiple uses of the same dollar. Just as it applies to the national economy, velocity of money is also the business model of banks. When we deposit money in the bank, the bank uses our dollars as leverage in order to borrow more money from the Federal Reserve. The bank utilizes our dollars, as well as leveraged dollars from the Fed, to extend loans to other people seeking credit or mortgages. As banks receive loan payments, they again borrow more from the Fed and consequently extend loans to more people. The banks are using the same dollars in multiple ways and making profits on the velocity of money.

Personal Money Velocity
Just as speed is relative, and time does not seem to impact everyone uniformly, so also do some people achieve greater financial success than others. Personal Money Velocity is one of the secrets behind wealth accumulation. The velocity of money concept that banks rely on can also be a valuable concept for us as individuals. We can make repeated use of our dollars to meet multiple needs.

It takes the assistance of a trained independent financial professional equipped with the right questions for most people to put the Velocity of Money concept to work for themselves.

According to Garrett Gunderson, the Money Velocity Equation* is simply our output divided by our input. Input is the hours people work in their careers, and the money they manage to set aside in savings and investments. Output is what people earn from their jobs and the returns on their financial accounts.

Money Velocity = Output ÷ Input
The goal is to increase the numerator (Output) faster than increasing the denominator (Input).

Helpful Questions for Use by Independent Financial Professionals
If you are an independent financial professional, your ability to help your clients improve their Personal Money Velocity is dependent on your skill in discovering opportunities by using right questions. Consider the following questions:

• Are you paying unnecessarily high interest on indebtedness? Is it time to restructure your debt? Should you cash out low-performing investments in order to pay off high-interest loans? Any reduction in interest owed goes straight to Output, thereby increasing the client’s personal Money Velocity.
• Are you paying too much in taxes? Who prepares your taxes for you? Have you ever sought a “second opinion?” Reducing a client’s tax burden moves money straight to Output, without increasing the client’s Input.
• What financial vehicles have you selected for your retirement accounts? Will every dollar of income be taxable? What will happen to your “nest egg” during market corrections? Guiding clients to alternative investments and savings tools can help them earn a much higher return and still provide liquidity. Not surprisingly, permanent life insurance can be a great fit if set up properly. Utilizing tax-free strategies to supplement taxable income sources increases Output without increasing the client’s Input.
• How long are you planning on being retired? Have you considered that you might run out of money? Utilizing deferred income annuity (DIA) products also known as “longevity annuities” extends the Output for life without requiring more Input.
• Do you have money sitting idle in an account getting .01 percent interest? Or is it moving? Maintaining emergency funds equal to at least six months’ worth of income is prudent. More than that amount means that resources are not producing income and are exposed to unnecessary taxation. Reallocating idle assets to tax-deferred products capable of producing tax-free income later increases the client’s personal Money Velocity.
• Are you contemplating purchasing a costly item (boat, luxury car, second home, etc.) that will, based on the principle of opportunity cost, take money out of circulation? Do you realize that once your money is spent, you’re missing out on the opportunity for that money to be invested elsewhere? Deciding not to spend on high-cost temptations frees up money to be invested for greater returns and increases the client’s personal Money Velocity.

Summary
We know that “it’s not what you make, it’s what you keep.” We are also all aware that it’s how much cash flow goes into our personal savings and investment accounts (after taxes) which develops wealth. Independent financial professionals can help their clients increase their personal Money Velocity by asking the right questions.

Reference:
*https://www.forbes.com/sites/garrettgunderson/2015/11/28/new-wealth-equation-reveals-3-ways-to-grow-richer-without-working-harder/#5f14a2dc640f

The April/May Issue of Hillsdale College’s Imprimis featured the text from a speech delivered by Senator Tom Cotton from Tennessee. The title was “Sacred Duty: A Soldier’s Tour at Arlington Cemetery.”

The 3rd United States Infantry Regiment is known as “The Old Guard.” In 1948 The Old Guard became the Army’s ceremonial unit. It this capacity, The Old Guard holds mission responsibility for performing military honor funerals in Arlington Cemetery.

Honorable Mr. Cotton served tours of duty in Iraq and Afghanistan. In 2007, between these tours, he served with The Old Guard. “While we often performed more than 20 funerals a day, we knew that—for the fallen and the family—each funeral was a once-in-a-lifetime moment, a lifetime in the making.”

Consequently, there is tremendous pressure to perform everything with precision and excellence.

“Each morning, casket teams practice folding the flag, even though they had folded thousands of them.” Also, “We talked through the key sequences and cues before each funeral, sometimes conducting the same talk-through six times in a day. Nothing was taken for granted.”

Question: In the work that we do, helping people prepare for the unexpected, should we give our work any less attention?

“Practice does not make perfect. Only perfect practice makes perfect.” (Attributed to Vince Lombardi)

Our Brains and Practice
In order to perform any kind of task, we must activate various portions of our brain. The brain develops a processing efficiency when specific actions and behaviors are repeated.

The human brain functions in a spectacular fashion. According to neuroscientists, neurons are the key to the brain’s power. A neuron is made up of:

1. Dendrites which receive signals from other neurons
2. The Brain Cell itself which processes those signals
3. Axons which are like long cables that reach out and interact with other neurons’ dendrites

Communication between neuron cells happens when they send nerve impulses (electrical charges) down the axon of one neuron to the dendrites of the next neuron in the chain. This process is repeated neuron to neuron, and eventually the nerve signals reach the intended destination. The whole process happens at an incredibly rapid speed.

When we practice skills over and over, we cause those neural pathways to work more effectively. The physiological process is called “myelination.” Myelination allows nerve impulses to move more quickly.

This effectiveness can be unfortunate and detrimental. Practicing the wrong behavior makes the brain’s process of performing the wrong behavior more effective. We can become really good at performing very badly.

The lesson of neuroscience? Repetition is important, but repeating the right behaviors is critical.

Applications for Your Business
If you are an independent financial professional, this brain functionality has many important implications for your success. You only have so much time to speak face-to-face with clients or potential clients. In every client appointment you have a brief opportunity to present your concerns, recommend solutions and urge action. A great presentation should include context, drama, conflict, humor, and entertainment. A first-rate performance cannot be achieved without rehearsing.

Five Ways to Engage in Perfect Practice
First, you may not know how good or bad you currently perform. To improve, you first need to know what needs improving. The best tool for self-evaluation is to give a presentation or practice an actual client interview and have it videotaped. Things to look for:

• Purpose. Did you provide an agenda? Did you provide a preview of the topics that will be discussed? Did you introduce the purpose of the presentation, and then share why the presentation is important by reviewing implications and possible outcomes?
• Physical cues. Do you have proper posture? Are you slouching, folding your arms or making yourself appear smaller than you are? Do you maintain eye contact?
• Facial expression. Are you inviting to watch? Patronizing? Do you smile? Does your expression seem forced?
• Voice inflection. Are you sounding credible? Confident? Compassionate? Others-focused
• Hand gestures. Are your hands distracting? Do they accentuate your points?
• Content. Are you boring? Do you unnecessarily repeat words? Do you use humor effectively? Are you good at telling stories?
• Unintended communication. Did you sigh or yawn at any time? Did you look at your phone when it buzzed on the desk? Did you otherwise indicate that you wished to be somewhere else?
• Emphasis. Ask others to view the video. Can they correctly identify the points you were attempting to emphasize?
• Personality. Are you projecting the real you, authentically?

Practice your ability to speak enthusiastically, respectfully, with sincerity and conviction.

Second, choose a strong vocabulary. Words are not all equal in terms of impact. Words are cues. Words are triggers. The right words are capable of transforming an absolute “no” into an almost “yes” and a “perhaps” into “definitely!”

Practice using impactful, purposeful words. Words that engender an emotional response.

Examples:

• New
• You
• Proven
• Seize
• Limited
• Discount
• Profitable
• Authentic
• Reliable
• Assured
• Triumphant
• Admiration
• Authority

Start and end with key points and be certain to use the most impactful words in doing so.

Third, time yourself. It takes practice to communicate information succinctly without the fluff. Use shorter sentences. Pause with effectiveness. Trim your presentation so that you are neither repetitive nor superfluous.

Fourth, take notes. Whenever you notice that you stumble over your words, misstate something, make a mistake or have an uncomfortable moment, take note of the issue and consider how you will improve. After all, this is why you’re practicing in the first place. You can write down things like what you can cut out, ways to better emphasize certain parts, learning to enunciate important words or use better inflection. It will surprise you to discover a wide range of opportunities for you to become more effective when you take the time to look at yourself closely.

Fifth, seek feedback from existing clients. Ask them to rate you on these points:

• Are you relatable?
• Do you have a good sense of humor?
• Are you an active listener?
• Do you use effective analogies, metaphors or illustrations?
• Do you come across as fully “present” when with them?
• Do they feel talked “with” or talked “at?”

Practicing anything perfectly means seeing each skill as something new. At first, most things we do seem like old friends, familiar and comfortable. That feeling will never lead to improvement. Practicing perfectly means treating everything we do as if it is a new skill. Initially, it might feel stiff and awkward. But as we practice, our communication gets smoother and our presentations feel more natural and comfortable. What practice is actually doing is helping the brain optimize for this improved set of coordinated behaviors. Through the process of myelination our brains gain increased efficiency as behaviors are repeated. Practicing the right behaviors perfectly will cause us to perform perfectly.

We owe it to others to be effective in communicating and presenting. Through practice we can:

• Engage purposefully
• Listen patiently
• Communicate clearly
• Use stories effectively
• Create a warm atmosphere
• Speak in our own natural voice
• Properly use body gestures

Do clients deserve anything less?

Independent financial professionals have the power to exert a far greater impact on other people’s lives than any smartphone App or any device for the wrist. We shall soon see how.
Where my wife and I live there is a narrow mountain chain called “Big Ridge” that is part of the Appalachian Ridge and Valley range of East Tennessee. My morning routine involves a brisk walk up the ridge to about 160 feet below the top of the tallest kuppen. Now that we have brought new Fitbit accessories from sites like Mobile Mob to go with our Fitbit watches, we thought we might as well start using it properly this time and try and lead healthier lives.

From my driveway, which sits at approximately 1040 feet above sea level, the course takes me to an elevation of nearly 1340 feet. This is the equivalent of climbing the stairs of a 27-story building. Given that stairs usually are built for each step equaling 6.85 inches at the riser, and assuming 10 feet per floor, it takes me approximately 1850 steps to reach my goal. (Then, of course, there is the walk back down.)

You may know that the world’s longest stairway runs alongside the Niesen mountain railway in Switzerland. According to redbull.com (https://www.redbull.com/us-en/worlds-longest-steps), “There are 11,674 steps in all, and it’s only possible to hike them one day a year during the Niesen Run. It’s only a two-mile run but there’s 5,475 feet of altitude to climb!”

My simple exercise course is miniscule compared with that!

10,000 Step Craze
People all around me continue to look at their wrists to see what their device records as their daily progress toward 10,000 steps.

In Japan, in 1965, an inventor created a pedometer called a “manpo-kei.” The Japanese word means “10,000 steps meter.” The 10,000-step count caught on and these days everyone is talking about getting in 10,000 steps daily.

According to Fitbit.com (https://blog.fitbit.com/should-you-really-take-10000-steps-a-day/), “Fitbit starts everyone off with a 10,000-step goal, and here’s why: It adds up to about five miles each day for most people, which includes about 30 minutes of daily exercise—satisfying the Center for Disease Control’s recommendation of at least 150 minutes of moderate exercise per week.”

There Are Many Benefits of Taking 10,000 Steps a Day

• Improved heart efficiency and aerobic capacity
• Less fat accumulates
• Lowers the blood glucose and insulin response after every meal
• Better brain health
• Improved discipline helps to form better habits
• Reduced stress
• Better sleep
• Improved balance
• Increased endurance

Steps to Financial Fitness
Question: Is it possible that something like 10,000 steps per day can be applied to a person’s finances to create a successful future?

Answer: Yes, there are simple strategies that will achieve positive results. Like 10,000 daily steps, the financial strategies that achieve predictable success all depend on the same principle: The cumulative effect of little things over a long period of time. This law, this universal principle, applies to all areas of life including physical, relational and even financial health.

For clients: Everybody needs to pay attention to universal principles. People need to know how to leverage the law of the cumulative effect of little things over a long period of time for their retirement planning, college planning and other financial goals.

For independent financial professionals: Properly presented, universal principles cause clients to make wise financial decisions. You need to help your clients make use of this law and, in so doing, build your success as they build theirs.

Step #1: Capture the power of time. Time is one tool most people neglect to use. When does it make sense to start a child’s college fund? At birth! When does it make sense to start saving for retirement? When earning the very first paycheck.

Example: Person A and Person B
Person A is 21 and starting her first job. She begins contributing $2,000 annually to a retirement fund. She does this for the next 40 years, never missing an annual contribution and makes a modest four percent rate of return over her working life until she turns 61. After 40 years, she has a tidy sum of $190,051.

Person B, also 21, delays setting aside money for old age until he turns 41. Knowing he needs to make up for lost years, he contributes $4,000 per year. After 20 years, again without skipping a year, and assuming a four percent return, he builds a retirement fund by age 61 equal to $119,112.

They each contributed $80,000 into their retirement accounts. What caused the $70,000 difference? It comes from starting early. The average person needs an independent financial professional to get them started before they feel the pinch.

Step #2: Leverage the power of the aggregation of marginal gains. I enjoy the writing and thought leadership of James Clear. His recent book, Atomic Habits, is something I would recommend to everyone to read, especially anyone who wants to make improvements in every aspect of his/her life.

Mr. Clear wrote:
“In 2010, Dave Brailsford faced a tough job. No British cyclist had ever won the Tour de France, but as the new General Manager and Performance Director for Team Sky (Great Britain’s professional cycling team), that’s what Brailsford was asked to do. His approach was simple: Brailsford believed in a concept that he referred to as the ‘aggregation of marginal gains.’

He explained it as the ‘one percent margin for improvement in everything you do.’ His belief was that if you improved every area related to cycling by just one percent, then those small gains would add up to remarkable improvement. They started by optimizing the things you might expect: The nutrition of riders, their weekly training program, the ergonomics of the bike seat, and the weight of the tires.”

If you are an independent financial professional, how can you put this concept to work for your clients?

1. Encourage clients to slightly increase the principal in every monthly payment they make on their mortgage. This will save future interest payments and shorten the term of the loan. Assume you have a client who asks, “What if I pay $100 extra on my 30-year mortgage beginning with the first payment?” Assume a mortgage of $200,000, a loan rate of 3.5 percent and an extra $100 each month. The client will reduce the payments by 58 months and save $22,368 in interest.
2. Help clients achieve slightly greater returns on their savings. Consider the difference that one percent can make:
   • A lump sum of $10,000 earning four percent over 40 years yields $48,010.21.
   • A lump sum of $10,000 earning five percent over 40 years yields $70,399.89.
3. The timing of taxation can make a huge difference. Help clients take advantage of tax-deferral as one tool for bolstering returns. For example, if your client contributed $2,000 to a traditional IRA each year for 30 years and averaged a seven percent annual rate of return, assuming a 25 percent income tax rate, their traditional IRA would be worth $244,692 versus just $183,519 if the same amount was taxed along the way. (Of course, since a traditional IRA was used, your client will eventually pay taxes on the income deferred.) Tax-deferral and compound interest work magic over time.
4. Show clients how to eliminate the down years (those years when their accounts actually lose money). By utilizing indexed life insurance and indexed annuity products, independent financial professionals help their clients discover the value of missing the worst-performing days in the markets. True, these same clients will also miss the best-performing days. The trouble is, a worst-performing day that yields a 50 percent loss requires a best-performing day of 100 percent gain just to get back to even. There is comfort in knowing that the negative days can be eliminated altogether!

The average person needs an independent financial professional to leverage the aggregation of marginal gains.

Summary
People are attracted by the idea of improving their overall health by taking 10,000 steps per day. By keeping active, do you know what will happen? They will extend their lives.

Question: How are they going to afford all the steps ahead?

People seek these outcomes in their financial futures:

• Financial self-sufficiency
• Never running out of money
• Effective loan strategies
• Greater returns on savings
• Tax-advantaged growth
• Security
• Predictability

As an independent financial professional you can help your clients take advantage of core principles in order to make sound financial plans for their future. This includes capturing the power of time and leveraging the power of the aggregation of marginal gains.

Without your influence and coaching most people will not take these wise actions. Without you they will lack a proper plan, be less prepared, and may not be positioned to afford all the steps ahead.

You very well may prove to be more valuable to your clients than a device on their wrists!

Next steps:
Identify three clients you know who are not making use of the law of the cumulative effect of little things over a long period of time for their financial planning. Tell them you have been thinking about them, have a concern you want to address with them and need only 30 minutes of their time. Meet with those three, put the above concepts to work for them and then ask them to help identify three more people who are similarly ill-prepared for all the steps ahead.

“All ballplayers should quit when it starts to feel as if
all the baselines run uphill.”—Babe Ruth

I am a simple man. My exercise program for over forty years has consisted of jumping rope, doing push-ups, pull-ups, dips and stretches. I always jump rope outside, wherever I am. I throw the rope in the bag, get on a plane and go.

I do not encounter much of anything that prevents me from exercising. Snow, cold, rain, heat, wind, traffic noise, people staring, smokers using the same space outside the hotel…nothing changes what I do or how long it takes.

Now…if I was a runner, that would be another blister altogether.

According to what I have read, a person’s running performance is impacted greatly by such things as dew point, temperature, altitude, incline and even posture. Take temperature for instance. At 60 degrees, a person’s running pace suffers a two to three percent increase, meaning that someone who averages an eight-minute mile pace experiences an increase of about twelve seconds per mile. At 80 degrees, the runner’s pace slows by 12 to 15 percent, so that a mile pace becomes more like 9:06. (There is actually a temperature calculator at Runners Connect, found here: https://runnersconnect.net/training/tools/temperature-calculator/)

Or consider altitude. High altitudes decrease the amount of oxygen getting to the muscles, and for runners there is the added risk of dehydration. Table 1 is helpful.¹

Point: Runners are impacted by the physics of the environment, but they can make adjustments based on measurements and calculations.

Independent financial services professionals face an ever-more challenging environment. What should they measure in order to stay on pace, or even achieve improved performance?

Critical Success Factors
It is critical that independent financial services professionals measure the right things. The reason? They only have so much time.

“Time is the scarcest resource and unless it is managed, nothing else can be managed.”²—Peter F. Drucker

To improve time efficiency and business success, begin measuring these Critical Success Factors (CSFs):

• Time invested by you per client
• Revenue per client
• The 20 percent of your clients who give you 80 percent of your revenue
• Clients who provide you with referrals
• Clients who provide repeat sales

The remainder of this article will address each of these CSFs.

CSF #1 Time Invested by You per Client
Like running the baselines in baseball, the progression from prospect to client is divisible into clear phases. There are at least these seven:

• Uncovering a potential client through Prospecting
• Pre-appointment communication
• Scheduling the first appointment
• The Fact-Finding appointment
• The Closing appointment
• Product Delivery
• Annual Review

According to H. James Harrington, “Measurement is the first step that leads to control and eventually to improvement. If you can’t measure something, you can’t understand it. If you can’t understand it, you can’t control it. If you can’t control it, you can’t improve it.”

Measure » Understanding » Control » Improvement

Most independent financial services professionals I have met do not measure how much time is invested in each phase of the sales cycle. Here is a tool that I hope proves helpful. (Exhibit A)

What can be learned from analyzing the results in Exhibit A?

• An average of eight hours is spent per client from prospecting through review.
• The large disparity between clients in the amount of time involved in prospecting begs investigation. What controls could be implemented to improve efficiency?
• Scheduling takes half an hour and should be delegated to an assistant.
• Is the pre-appointment process well-understood? Can the process be improved through tighter controls?
• A fair question is, “How long should product delivery take?” Is there a set process?
• Should fact-finding take nearly as long as closing? Perhaps a well-designed agenda can be applied to both kinds of appointments to make the process more efficient.
• What is the correlation between total time spent per client and the revenue earned per client?

CSF #2: Revenue per Client
Even for the independent financial services professionals who work specific markets and have well-honed client profiles, there is always a disparity in revenue earned per client. It is important to measure revenue per client—not because it makes one client more important than another, but because it provides insight into how efficient the sales process is. First, we will look at Exhibit B.

These five clients returned an average of $4,870 in revenue. How does the revenue earned per client compare with the amount of time invested in each phase leading up to product placement?

Allocating revenue to each phase in proportion (Exhibit A) to the total time spent per client is found in Exhibit C.1.

A quick look at the chart reveals that the two most revenue-intensive activities are prospecting and closing.

Revenue per client is best measured against time spent resolving the financial concerns of the client. To truly understand efficiency in the process, it is important to measure revenue in terms of income per hour. Only then can controls be applied to generate efficiency improvements.

Observations and questions:

• There are only two ways to improve revenue earned per hour:
• Keep total time static but increase total revenue.
• Keep revenue static but decrease time required to make sales.
• To earn a higher rate per hour the independent financial services professional must work with a higher revenue generating client, or, become more efficient in allocating valuable time.
• The hourly rate for an independent financial services professional does not change by the activity, but by the client.
• A fair question is, “Why should revenue from smaller income-generating clients be held hostage to the same process that the independent financial services professional uses with every client?” The process must be adjusted as soon as the revenue can be estimated.

Example: If the only activities involved in serving Client B were fact-finding and closing, then the revenue per hour would be $375, a respectable rate according to the chart.

CSF #3: 20 Percent of Clients Generate 80 Percent of Revenue
I meet with many people in our industry who feel much like the aging Babe Ruth. Every step in the process seems to be uphill. I remind them that exertion is minimized through efficiency.

Efficiency is achieved in any business by innovating to the point where the process generates a maximum return. The most important innovation is to identify the ideal prospect and design the process to best serve that type of prospect.

In our example, Client C returned the highest revenue in the measured period. However, Clients C, D and E combined for 84 percent of the total revenue in our sample of five clients. Not quite the 80/20 Rule; however, the point can be made that by knowing the commonalities and similarities of the top three revenue-producing clients we could establish the profile of the ideal prospect.

Shared Threads to Discover:

• Industry
• Occupation
• Position
• Age
• Referral Source
• Affinity Groups
• Financial Needs Resolved
• Objectives and Dreams

Armed with an understanding of the kind of client that returns the highest revenue per hour invested, the independent financial professional can begin to control the referral process and improve the kind of prospect generated. For instance, instead of asking, “Who do you know that may need my kind of services?” ask, “Do you know any computer software and systems software engineers, between 35 and 45 years old, married with children, who enjoy the outdoors, especially golfing?”

CSF #4: Clients Providing Referrals
This leads naturally to something many independent financial professionals fail to measure. Not all clients provide good referrals. The ones who do should be rewarded. In addition, there was a reason that they were willing to make introductions to new prospects. It is important to understand their motivation and learn how to control the process of asking for referrals in order to improve overall results.

The fact is, most independent financial professionals simply lack good tools and processes to ask for and collect referrals. The best tool in my experience is a simple survey presented to new clients at product placement.

Have you heard the phrase, “Happy customers make happy customers?” Clients who are satisfied with the process and the acquired products will refer more people. Therefore, whenever independent financial professionals meet or exceed the expectations of the client, and receive affirmation to that effect (perhaps through a survey), that is the exact moment when the request for referrals should be made.

CSF #5: Clients Providing Repeat Sales
F.J. Raymond said, “Next to being shot at and missed, nothing is really quite as satisfying as an income tax refund.” Similarly, better than receiving referrals from existing clients is getting repeat sales from them. Yet many independent financial professionals do not measure the frequency of this occurrence, nor the circumstances.

Repeat sales can be measured by calculating a repeat purchase rate, which is the percentage of clients who make another purchase. There is never a better time than right now to begin calculating a repeat purchase rate.

It’s equally important to measure and understand how receptive existing clients are to subsequent appointments to discuss additional financial needs. The most important factor is time between purchases.

Time between purchases shows how long a typical client goes before making a repeat purchase. This is a good metric to know because it aids in tailoring the optimal client review process to their behaviors.

Time between purchases and the repeat purchase rate are critical metrics for increasing purchase frequency among existing clients.

Practical Tips:

• Always send “Thank You” notes after each sale and each referral.
• Take great notes during every appointment and send them out in a summary email that includes “Next Steps.” These should always include the areas of planning that remain unaddressed.
• Use a survey to secure a client’s written satisfaction with the process and product.
• Send articles addressing the needs that are yet to be resolved.
• Conduct annual reviews if only via Skype or FaceTime.

Summary:
Every independent financial professional requires a defined process to turn prospects into clients. For those experiencing “uphill” climbs along each phase of the process, the answer is not to quit or slow down. The answer is to measure in order to understand, and in understanding eventually to control and improve the process.

References:
1. https://www.runtothefinish.com/sea-level-to-high-altitude-running-how-it-impacts-running/
2. “The Effective Executive,” New York: Harper Business, 2006, p 51.