5 Toughest Challenges Financial Advisors Face
As a financial advisor, you face challenges in growing your business.
Advising clients independently as an advisor can be lonely and also difficult task. In other professions, existing networks let new people quickly gain access to similar people, gaining valuable tips, insight and camaraderie. Whether your an advisor who is a young new face in the game, whether you have been around for a couple of years, or whether you have been an advisor for twenty years, it is important you don’t isolate yourself even while you are busy prospecting and building your book of business. Join associations like the FPA and go to conferences, developing your support system.
While you love numbers and the analytics part of your work, your clients may not. They make decisions often based on emotions. Hence talking less about generating money but what clients can do with it is a better approach.
Some of the toughest challenges that you will face include:
1. A solid plan to prospect
You got to have a plan for how you will get in new business. Referrals can be great but this alone should not constitute all your business. You need to know your target audience, what you offer them and then put together a cohesive marketing plan to execute.
2. Being held accountable
This is very important especially when you first start out to engender trust and prove that even though you are young, you do your due diligence and are trustworthy and reliable, thus becoming a safe investment and decision for your clients.
3. Being truthful
Honesty is essential. It is important that you do not over promise and then under deliver as that can be the worst thing you do for your client relationships and your business. Instead, you want to give your clients a realistic understanding of how their accounts with you are performing.
4. Managing expectations
Perhaps you get a new client who believes firmly that a particular stock is a winner and wants to put all their savings into it. Maybe you have got a client who heard good things about you and now is running full steam ahead without hearing your words of warning or reservations about any investment. It is essential that you manage expectations with your client so you are clearly communicating what to expect and not over promising or avoiding any issue because you are afraid of disappointing your client.
5. People taking you seriously because of lack of experience
You have prospected and reached the right people - the kind of people you want as clients. However, they are not taking you as seriously as you would like because you do not have ten years of experience or more like the other financial advisors they have met with or heard about. Instead of being disheartened by these opinions, you can choose to come up with a plan on how you will address these concerns. Being prepared will help alleviate your anxiety, frustration and stress in dealing with any questions about your performance ability or sufficient expertise. Your goal is to put your potential client at ease and demonstrate that you are prepared, thoughtful, responsible, trustworthy and professional - the kind of individual who can be trusted with their accounts. Many individuals are also risk-averse after the recession of 2008. Others rush to follow fads. Your ability to steer clients positively, demonstrating your knowledge of the market, your friendly demeanor, leadership skills and expertise can go a long way in overcoming any concerns people have with you as a new advisor.