Many of you may be uncomfortable talking about your compensation with clients. That’s fair. Up until now, you haven’t had to do that. But the market is shifting toward more transparency and commoditization. Consumers want more for less.
If you want to simply remain relevant in this business, you have to add value. Beyond that, if you want to increase your compensation, you have to increase the number of people you serve. That’s the secret.
In Bob Burg’s book, “The Go-Giver,” the Five Laws of Stratospheric Success are laid out through a story about a sales person who is focused on taking instead of giving. He expects people to buy from him because of his quota.
Too often, we think of driving our compensation through earning more from every client or transaction. That’s another way of taking vs. giving. Instead, you need to focus on how many people you can serve. The Law of Compensation states that your income is determined by how many people you serve and how well you serve them. So, let’s concentrate on increasing the number of people we serve.
One way to uncover more prospective clients is to meet people in a larger group setting. You might immediately think of hosting seminars. However, seminars are expensive and time-consuming, and they don’t necessarily create influence or interest.
We’ve been helping advisors find groups of prospective clients another way – through pension risk transfers. In these situations, you can not only provide assistance to a business, but you could also gain access to all the employees. Wouldn’t we all like to be introduced to hundreds of people at the request of their employer? You’re using the business’s influence to serve more people.
A typical transfer includes a period where employees may elect to take a lump sum and roll over their retirement savings. You can provide valuable information to help them make those decisions and win them as clients. By doing so, you have successfully followed the Law of Compensation: Your income is determined by how many people you serve and how well you serve them.
Don’t concentrate on how much you earn by each transaction. Focus on how you can help more people. Increase your value proposition and the number of people you serve, and I’m confident you’ll see results.
Mike McGlothlin is a team leader, retirement industry activist and disciple of Indiana Hoosier basketball. In addition to being EVP of retirement at Ash Brokerage, he is a sought-after writer and speaker. His web series, “Winning Strategies,” provides insight and motivation for financial advisors in many forms – blogs, books, videos, podcasts and more. You can get his latest book, “Winning Strategies: The New Rules of Retirement Planning,” on Amazon.
The “Law of Compensation” states that your income is directly related to number of people you serve and how well you serve them.1 Notice that the law does not claim one business model is better than the next. In fact, business model, e.g., fee-based, commission, etc., is irrelevant to how much compensation you earn.
The key to your success or failure isn’t your compensation. The key is focus. It’s about your focus on your clients, and prospective clients.
No matter your business model, you will dramatically increase your compensation by focusing on the number of people you serve and how well you serve them.
Let’s look at the first part: the number of people you serve. Common practice will tell you that less is more. You need to work with a smaller number of clients with high net worths. That’s a business model. That model can be scaled to new heights through the investment of para-planners, support staff, and additional planners (which makes a great succession plan for the firm). By reinvesting in your business, you can serve more and increase your compensation.
The next part is about maintaining value in your service. As you increase your number of clients, it’s important not to lose sight of their individual needs, desires and planning objectives. Again, investments in technology, people, and infrastructure can make a huge difference.
Your clients hire you to look them in the eye and solve their most complex issues – retirement and longevity. The level of service you provide is more important than the model you use. In fact, rarely do clients ask about your business model. They care about your expertise, how well they will be served, and how much they feel their goals and objectives are a priority.
It’s inappropriate to choose a solution for a client based on your business model. You have to change your mindset to focus on your clients and what risks concern them the most. If their concerns are longevity and income, you owe it to them to look at guaranteed income options, even if that is against your business model.
Maximize your compensation and revenue by looking at how you can help more people and increase the level of service you provide. Both will elevate your business.
Mike McGlothlin is a tireless advocate for the retirement planning industry. As executive vice president of retirement at Ash Brokerage, he heads a team providing income planning solutions focused on longevity and efficiency. He’s also a thought leader who provides guidance and assistance for advisors and broker-dealers navigating marketplace and regulatory changes. You can find a collection of his blog posts in his book, “Above the Clouds … Winning Strategies from 30,000 Feet.”
1Bob Burg and John David Mann, “The Go-Giver: A Little Story About a Powerful Business Idea”: https://thegogiver.com/
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