Yes, you read it right - when you should reject a prospect. Many advisors would probably scratch their head and ask themselves, “Why would I turn away potential business and a potential client?” Believe it or not, there are several situations where an advisor should reject a prospect.
A Common Scenario
Imagine if you will, a brand new prospect comes into your office for your first appointment with them. The conversation starts out well and you have explained the comprehensive planning process you follow with every prospect. Unfortunately, the prospect has not brought any of the financial documents you kindly reminded them to bring. The prospect doesn’t want to talk much about their financial situation. They just want you to tell them where to move their old 401(k) without providing you any background on their financial situation, their retirement objectives, or anything else about their other retirement assets. There could be an E&O claim coming when this individual is unhappy with what you’ve sold them later down the road.
Explain Your Process
You explain to them that as their advisor, you must conduct your due diligence. Unfortunately, you cannot and will not make any recommendations without a better understanding of their entire financial picture. You then explain that you have a fiduciary responsibility and remind them of your comprehensive planning process. If the prospect is still unable to respect and accept your business model and planning process, you should probably part ways.
Rejecting Unfit Prospects
At this point in time, you have to let the prospect know that unfortunately you just are not a fit to work with each other. Not every prospect is a fit for every financial advisor. In fact, advisors cannot be everything to everyone and they have to stick to their business model and do what they do best. You will save yourself headaches, frustrations and time by quickly ending a relationship with an unfit prospect -- before they become a client.
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