The Dos and Don’ts of Adding New Clients

By Jane Wollman Rusoff
January 23, 2025
https://www.thinkadvisor.com/2025/01/23/the-dos-and-donts-of-adding-new-clients/

David Scranton, a sales coach who has helped hundreds of financial advisors find success, is also an authority on investing for income.

And he’s not afraid to buck conventional wisdom.

“The best time to pull all your money out of growth and put it into high-income investments … is 10 years prior to retirement,” Scranton, founder and CEO of Sound Income Strategies, an RIA, maintains in an interview with ThinkAdvisor.

His Sound Income Group includes, along with his own practice, three companies that support financial advisors with coaching, marketing and more.

Scranton’s new book, “Attract & Grow: The Financial Advisor’s Blueprint for Attracting $50 Million in Annual Assets,” is designed just as much for advisors getting started as those ready to scale their business.

In the interview, Scranton touches on an array of topics, ranging from why advisors fear having a niche practice to gaining referrals by treating female clients and their friends to manicures and pedicures. He also breaks down four Scranton “Do’s” and one “Don’t” for advisor business growth.

Here are highlights of our conversation:

THINKADVISOR: This is a “Do” so effective that you call it a “Double-Barreled Bazooka”: “The mathematical advantage of transitioning to income-generating investments a decade before retirement.” Please elaborate.

DAVID SCRANTON: It’s the higher-dividend value approach. The best time to pull all your money out of growth and put it into high-income investments — whether higher dividend stocks, bonds or preferreds — is 10 years prior to retirement.

If value stocks are reinvested, it’s another form of dollar-cost averaging. So when the market drops and then recovers, you’ll be ahead of the game.

This strategy seems quite unorthodox. Is it? 

When I show it to financial advisors, it turns their world upside-down because it goes counter to all the training they’ve had for [decades].

But what people want in retirement is to generate income to replace their paycheck. You can prove to clients that they’re mathematically better off if they significantly reduce their growth [investments] and put [the money] in income-generating [investments] as much as 10 years before retirement.

Another “Do”: Make prospects realize they have problems with their investing and strategies. But wouldn’t they already know?

Most of the time, not until it’s too late. The key is being able to see into the future. The average advisor can see only a few years ahead with their investments.

But a good professional income specialist can see a small problem now and, if it continues to grow, the implications many, many years ahead.

The point is to fix it before it becomes a major problem.

How does an advisor broach such an issue with a prospect?

We paint a picture of how a problem might grow and become a cancer in their life down the road and that they should therefore consider a change.

That’s the key to the sales process because more people are motivated to make a change if they have a problem than to just find a better solution.

A third “Do” is finding a niche to distinguish yourself from the competition. Is this a challenge?

Some advisors don’t know what their specialty should be. They came into financial services as a generalist, doing everything for everybody, and think that’s the only way.

But they’re aware that legal-world and medical-world specialists make more money than generalists.

And they know that it’s better for their clients if they specialize, but they don’t know what their specialty should be, and they’re afraid to have one.

What do they fear?

They realize that they’ll have to turn away people that don’t fit. So they need to have the confidence that they’ll get more business than they’ll lose by having the courage to specialize.

How does an advisor decide on a niche?

The first thing is to find something you’re passionate about and make sure it’s in the “Goldilocks Zone” — not too broad, not too narrow. If it’s too wide, it puts you in the realm of a generalist. If it’s too narrow, you won’t get enough clients.

The sweet spot is right in the middle — something that will set you apart from your competitors but sufficiently wide to attract enough prospects.

Once you’ve determined your specialty, have the courage to [market it].

Another “Do” stems from your belief that “marketing is an art, not a science.” One unusual way that you use to get referrals is getting female clients a manicure and a pedicure. Please explain.

The whole idea is to diversify your marketing. Too many advisors get stuck on one lead-generation system, and if it starts to fizzle, they don’t know what to do.

Just as we tell clients to diversify their investments, financial advisors need to diversify their marketing efforts.

Tell me about the manis and pedis.

Having a fun event for women clients is a great way for them to bring a friend — a referral. First, I’ll do lunch and presentation at a restaurant that’s close to a salon or spa.

At the end of the presentation, clients’ friends can book an appointment with me. Then all the women walk down the street to the salon.

How is the spa treatment beneficial to you?

It makes it fun and easier for clients to sell me to their friends.

OK, now for the big “Don’t”: “Avoid product breath at all costs,” you write. “When preparing to close a deal, avoid discussing products before prospects become clients.” What’s behind that?

It confuses the prospect’s thinking process. They’re trying to make a lot of decisions at once. One decision is if they want to hire you as an advisor.

Second: If they want to buy a particular product from you.

Third: If they do, it means they’re also having to decide about leaving their current advisor.

Fourth: If they do want to buy a product, they have to decide about liquidating an existing investment.

So you’re asking someone to make four decisions at one time. That’s more than the human mind can handle.

Advisors in the field that make this mistake get the most common sales objection: “I want to think about it.”

But once a prospect [is sold on] the advisor, they can then invest some time educating them about the various financial options that can solve their problem and help the prospect build a plan.

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