Giving investment and insurance clients a lot of choices sounds like a good strategy, but it may backfire, leading to clients not making any decisions.
While it is important to acknowledge clients’ needs and preferences, offering too many choices can create confusion. Consider this scenario that can easily happen to any financial advisor who offers both insurance and investing products.
The prospect says, “I recently received an inheritance, and I need to convert it to a steady income. What do you think I should do?”
Because you want to show you are a skilled professional, you say, “You have plenty of options.” You suggest, “Many people buy bonds.” Then you explain the options:
- They come in three types: government, corporate and, in places like the United States, municipal bonds that are tax-exempt.
- You can buy individual bonds. You can buy them packed in mutual funds, exchange-traded funds, unit investment trusts and closed-end funds.
- People wanting income sometimes buy certificates of deposits.
- Stocks, like utility stocks and real estate investment trusts, are also considered income-producing investments.
- Within the insurance world, people wanting income often purchase annuities.
Whew! “Those are your choices. Which option do you want?” you say to the prospect.
The prospect gives you a blank look. They’re now thoroughly confused. They lost you after “three types of bonds.” They don’t know what to choose, so they don’t decide.
A better strategy is to hear what they say differently. When asked, “What do you think I should do?” think of this as having a singular answer. You have now heard this as, “What is your best suggestion based on my situation?” You come back with your one best recommendation. You might mention you considered a dozen alternatives, but the one you are presenting is ideal for their situation, in your opinion.
You can adapt your recommendation if they add additional requirements. For example, if they say, “I forgot to add that I want a monthly income,” you might say, “In that case, I would recommend …”
You are the professional. You are offering your best advice consistent with their situation. After all, if you visited your family doctor, they would not list a range of possible treatments and ask you to choose.
Bryce Sanders is president of Perceptive Business Solutions Inc. His book, “Captivating the Wealthy Investor,” is available on Amazon.
For more tips about why clients aren’t closing and how to overcome it, read
- “Moving clients from no to yes”
- “Cracking the code of client indecisiveness” (MDRT member-exclusive content)
