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When Financial Professionals Should Reject a Prospect

Posted by Partners Advantage on Thu, Sep 08, 2016 @ 05:47 PM

Yes, you read it right - when you should reject a prospect. Many financial professionals 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 a financial professional like you 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 explain the comprehensive strategy 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) (if you have the proper securities registration to do so*) without first 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 financial professional, you want to conduct your due diligence. You tell them that you should not make any recommendations without a better understanding of their entire financial picture. You can then explain that you have a responsibility to properly prepare strategies for your clients and remind them of your comprehensive process, which may include best interest standards or suitability guidelines, or both, depending on your producer registration and/or license holdings. If the prospect is still unable to respect and accept your business model and 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 professional. In fact, financial professionals 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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Tags: prospecting, practice management, sales techniques



This content is for informational and educational purposes only and is not designed, or intended, to be applicable to any person's individual circumstances. It should not be considered as investment advice, nor does it constitute a recommendation that anyone engage in (or refrain from) a particular course of action.

*Please note that in order to provide a recommendation to a client about the liquidation of a securities product, including those within an IRA, 401(k) or other retirement plan, to purchase a fixed or variable annuity or for other similar purposes, you must hold the proper securities registration and be currently affiliated with a broker/dealer or registered investment adviser. If you are unsure whether or not the information you are providing to a client represents general guidance or a specific recommendation to liquidate a security, please contact the individual state securities department in the states in which you conduct business.