How to Shorten the Sales Cycle for Financial Advisors and Insurance Agents

There is a big challenge that every financial advisor and insurance agent is likely to face in building a practice. It's a challenge that few people in the industry talk about yet it is one of the most significant factors contributing to the high washout rates for new professionals entering the financial services field.

The sales cycles for financial advisors and insurance agents is very long.

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It is not uncommon for it to take several months or even a few years to convert a prospect to a client. To a person who has never been a financial advisor or an agent this may seem absurd but the reality is there are real fundamental reasons for why it takes so long to bring on new client relationships. Some of these reasons are structural in nature and beyond the control of the advisor or agent but others are easily manageable by employing new processes and leveraging the wealth of digital solutions available to modern financial professionals.

The goal of this post is to help financial professionals (and the broker-dealers, wire houses, and insurance carriers who rely on these individuals) dramatically shorten the time it takes to create a profitable and sustainable book of business.

To get a better idea of what an advisor or agent can do to speed things up let's break down some of the factors contributing to the long sales cycle for new financial clients.

Structural Reasons for Long Sales Cycles - Limited Control Items

  • Booking the Initial Meeting - Oh for the good old days where rooms full of stockbrokers where making cold calls to sell prospects on the latest hot stock that they just had to get in on before it skyrockets. Things were much easier then. No need to schedule a meeting to talk to the prospect about his goals and risk tolerance and so on. Build a relationship?! Relationships were built on picking good stocks. The world is different now. Advisors and agents need to meet with a prospect first to explore their needs. To make matters worse, affluent and wealthy prospects are typically very busy and it can take weeks to get on their calendar.
  • Developing a Plan - Once the initial meeting has taken place the financial professional needs to plug everything he's learned into the system and craft a plan that fits the prospect's needs and goals. Technology has already made this process pretty quick but you can still expect it to take a few days and revisions.
  • Booking the Follow Up Meeting - Ideally this meeting was scheduled at the conclusion of the initial meeting. Remember this phrase "book a meeting from the meeting" never leave the prospect without knowing when you'll see him or her next. Like the initial meeting, this can take weeks and it isn't uncommon for it to be rescheduled.
  • Booking a Second Follow Up Meeting -This happens more often than any financial professional would like to admit. The prospect wants to explore adjusting the plan or has also met with a competing advisor or any number of other reasons. The best thing to do in this situation is learn from it. Pay close attention to why this meeting is happening at all. If it is something fixable in the process be sure to fix it.
  • Application Processing Time - This is getting shorter but there is still an insane amount of paperwork required to establish a new account, initiate a transfer or assets (TOA) or rollover request, set up electronic bank transfers and then comes the waiting for funds to clear once the dust settles. If you are lucky and there's a reasonable amount of electronic exchange of information you might see the relationship established within 10 days. Of course if there is a form returned as NIGO (not in good order) or there is a 401(k) rollover that needs to be processed it could be over a month.
  • Underwriting Time - New life insurance policies or long-term care coverage? Wow! That's going to take a couple of months.

Process Reasons for Long Sales Cycles - Controllable Items

  • Life Events Dictate Timing - Not everyone an advisor or agents meets is in the market for his services right now. Eventually many people will be. Unfortunately, there's really no way of know when "eventually" will happen. The affluent Senior Vice President an advisor meets today may stay at her at her current company for another five years. That means she won't be ready to rollover her $1 million dollar 401k account until then. If she could she certainly give the advisor her business but at the moment she has relatively little in the way of investible assets. There are few things to do here to improve the overall sales cycle:
    1. Increase Your Pool of Prospects - Think of this process as being similar to creating a bond ladder. Only this ladder is a bit random in nature. Not every prospect is going to mature into a client at the same time. So, the trick is to have a lot of prospects in the mix.
    2. Stay Connected - Losing touch with a quality prospect is like losing touch with tens of thousands of dollars. It should never happen. Staying connect means you will always be at the top of the prospect's consideration set for their business in the future. It also means you aren't leaving things to chance. You should know when that SVP you met five years ago changes jobs.
    3. Take Their Small Business Now - If you have identified a high potential prospect find a way to make them a client now. Why leave the future up to chance? Aren't client relationships supposed to be lifelong? If you think this client is going to grow over the years why not lock them up now? Many firms have asset minimums and that makes sense on an ongoing basis but if there is a case where you have a high degree of confidence that a prospect will grow into the asset minimum in the not too distant future...bring the client on.
  • Lack of a Target Market - The first course we produced on finservMarketing is focused on the importance of having a target market. Every business in the world needs to be able to answer the question "Who is your customer?" and yet the majority of financial advisors and insurance agents have given the notion little thought. As a result their marketing efforts are random and generalist in nature. The most successful financial professionals know exactly who they are looking for and their entire business is designed to serve that client niche. Having a well defined target market makes everything about your business more efficient. Including your sales cycle.

The most important things a financial professional can do to shorten the sales cycle in his practice are to develop a target market, spend a lot of time developing prospects within that target market, and get really good at managing the meeting and onboarding process. As his practice matures it will develop a momentum of its own and sales cycle time will be less of a concern. But until then, every effort should be made to speed things up.