401(k) Specialist Issue 3 - 2020 - 52

401(k) STREET SMARTS
The Psychology of the 401(k) Close
By Steve Savant
THERE ARE FAR too many carnival barkers
pushing the art of the sale.
Their pithy one-liners and high-powered
adjectives coupled with their command of
the English language can create an overwhelming
impression that they're in the
know and live a successful lifestyle.
Successful selling is an art form, and part
and parcel of your practice as long as it's
not manipulative. Often the word " manipulation "
is found in the transcripts of arbitration
and court documents in disputes with
older clients ... so, heads up.
Manipulation could devolve into steering,
especially in proprietary product lines.
All too often, the field sales force sells predominately
proprietary products, like a career
agent for a specific insurance company
or a broker of a wirehouse favoring mutual
funds of their parent organization.
When the vast majority of sales occur
in connection with a proprietary product
line, they have the potential to inevitably
be manipulative, and could be defined as
a form of steering. The decision process
to buy can be inherently fraught with bias
by the presenter. Doing what's right for
the client always supersedes proprietary
product selling.
Even though it applies to sales in general
and not necessarily 401(k)s, can closing
on the first interview ever be considered
a best practice?
Back in the 1980s, there were so-called
financial professionals who were revered as
one-interview closers. The skill sets or sales
pressure to convince a new client to act on
the first interview was sales nirvana.
But pressing people to sign documents
and draft a check also created a lot of NTOs
(not taken offers). As security and insurance
products merged into planning models, it
became clear that the single appointment
couldn't support a " one and done " sales
practice.
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ISSUE 3 2020 | 401kSpecialist.com
There are also too many " side effects " to
single-appointment sales that are generally
not reviewed at the close of the product
purchase. Will this sale cause a taxable event
or illiquidity? Did you establish (and how
could you) the risk tolerance and product
suitability in one interview?
To accommodate a first-interview close,
the appointment would need several hours
to cover the due diligence issues of the client
alone, not to mention the product offering.
Closing a case on the first appointment is
so 1980s and not in keeping with the strategic
and tactical planning of the 21st century
advisor.
How can you keep a concept simple
and still be compliant?
The marketing mantra is " less is more. "
Don't complicate the sale. An elementary,
entry-level pitch best serves the client or
prospect. " Keep it simple, stupid " is the sales
mantra of the day ... maybe.
Concept selling is craft in and of itself. Can
you sell an idea? After all, concept thinking is
more like vapor on paper until you scribble
your thoughts on a yellow pad. Compliance
requires proper vetting of the client, so one
size can never fit all.
It further requires the proper caveats, disclosures
and disclaimers. A wordsmith might
be able to hammer out a little ditty over the
anvil of FINRA, but most of the field force
isn't that creative, nor do they have the skill
sets to economize a warning statement.
Generally speaking, concept selling is the
bridge from a prospect's imagination to the
decision-making process. No offer yet has
been made, just a simple confirmation or
rejection is necessary to move forward.
Either your prospect buys your idea, or
they don't. But when you do move forward,
the front and back end of the conversation
better have established suitability protocols,
as well as any required caveats, disclosures
or disclaimers.
These take a little time to develop so that
it becomes second nature, but it's worth it.
Qualifying your statements can put your prospects
at ease and keep you out of trouble.
Steve Savant is a syndicated financial columnist,
talk show host and a popular platform speaker.
Steve is a co-contributor to Advisys, Insmark and
LifeSpecs. His videos and content are distributed to
over 280 media outlets and 200,000 Twitter users. To
contact him visit www.lifesizesolutions.com, email
steve@lifesizesolutions.com or call (520) 261-4599.
http://www.lifesizesolutions.com http://www.401kSpecialist.com
401(k) Specialist Issue 3 - 2020

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