The Blueprint Training Program

The Blueprint Training ProgramJeff MountRegional Vice PresidentAdvisors Capital Management

All of you are here because you have achieved an exceptional sales level. Congratulations. Now, if I asked you to describe a more perfect world that directly addresses your current challenges, what would that sound like? 1

What is the perfect book of business?Is it 100 or 1000 clients?Is it middle class clients or wealthy clients?Are these clients in accumulation phase or distribution phase?Executives or business owners?Cross-selling opportunities or focus on a specialty?

What is the perfect book of business? This is clearly a subjective discussion. However, when I have asked this question to successful advisors over the last 20 years, I consistently hear, I wish I could have 100 clients who had $1 million or more in investable assets. So, can we all accomplish this? It is really not as hard as you think. Over the last 8 years, I have coached a couple hundred financial advisors on how to achieve this goal. The most successful case, was a young, very motivated financial advisor in Connecticut who grew his book from $50 million to $350 million in four years by following the Blueprint model. Although his success level was unusually high, it is not uncommon to see growth of assets under management in the $28-30 million range per year.2

If Time is your biggest challenge, then where should you spend it?

In 2005, an industry survey found that 45% of all advisors spend 20% of their time face to face with clients and prospects. These advisors averaged $165,000 in gross production. These advisors are represented by the blue bar. Another 45% of advisors spent, on average 40% of their time face to face with clients and prospects. These advisors averaged $650,000 in gross production and are represented by the red bar. The last 10% of advisors, represented by the green bar, averaged 60% of their time face to face with clients and prospects. These financial advisors averaged $2.2 million in gross production on an annual basis! Clearly, time management is not only a key challenge, but prioritization of that time is critical. Too much of a financial advisors time is spent dealing with compliance, shuffling papers, researching portfolio managers past performance, and sitting with wholesalers who want to take you out to lunch to discuss a hot feature on a product. I am here to help you effectively increase your profitable time. 3

So, if we see new people, how do we deal with this guy???

If we target market people who have over $1 million in investable assets, we have to be prepared to deal with this guy. Many of these people did NOT inherit their wealth. They made it by being successful as key executives at major corporations or as successful business owners. Because they earned this with no help, they are slow to adopt new ideas, new professional relationships and show their distrust on their sleeve. If we understood how to communicate with them in language that will motivate them to uncross the arms and be open and honest with us, we might have the opportunity to provide a strong value proposition that will gain their interest.4

What about this person?

Many financial advisors get frustrated with the person who exudes the analytic persona. They lose their patience with them because they want to analyze things far longer than we expect. The result, is often, the advisor walks away from the opportunity to avoid the anticipated delays that come with this prospect. But if you knew how to craft language that would motivate them to be clear and honest about their thought process and set realistic expectations for completion of their analysis, would the advisor spend more time trying to gain the confidence of this person?5

What kind of value proposition would intrigue someone with more than $1 million???I protect your wealth in three ways:

I protect your wealth from significant loss due to significant market downturns, from excessive taxation like capital gains and wealth transfer taxes, and from the consequences of frivolous and/or fraudulent lawsuits.I restore your most precious commodity: time. By doing due diligence on the advisors who help with challenging events that involve tax, legal, property and casualty risk management, real estate property management, and personal security when traveling abroad, I free up your time to focus on the activities that brought you this level of success.Privacy and discretion. Nobody on this team will ever disclose that you are a client and your information will never make its way to a list service as a result of their relationship with you.

So, where do these people do business as it relates to their investments? Generally, it is at the major wirehouses. I challenge you to find a wirehouse advisor who delivers a value proposition that rivals this one.6

What is a traditional family office?A private company that manages investments and trusts for a single wealthy family. The companys financial capital is the familys own wealth, often accumulated over many family generations. Traditional family offices provide personal services such as managing household staff and making travel arrangements. Other services include property management, day-to-day accounting and payroll activities, and management of legal affairs. A family office can cost well over $1 million to operate, so the familys net worth usually exceeds $500 million.

As defined by the President of the Family Office Association, February 2010.

Single family offices have become very popular with people who have over $500 million in investable assets. Some of the investment products you already use are run by these same single family offices. Guggenheim Partners and James Alpha are two examples. People who have just $100 million are able to combine their resources and create traditional multi family offices. There really is no service that exists for people who have between $1-20 million. The Blueprint shows you how to deliver a virtual family office replica for people in the $1-20 million market.7

Verbal tennisWhen someone casually asks, What do you do? How do you respond?What is an elevator speech supposed to accomplish?Consider a challengeable, questionable elevator speech. Consider it the first serve in verbal tennis.

Do you think these two guys ever answer a question directly? When asked what they do, they dont say, We play tennis. They say, We entertain people in multiple ways. In case you dont follow tennis, this is Luke and Murphy Jensen. They were one of the top professional doubles teams of the 1990s. They won the U.S. Open, Wimbledon, and the French Open. I am also a former professional tennis player and am friendly with Luke. Recently, I took my family to Sea Island, GA for a family vacation. I was pleasantly surprised to see the Jensens running the tennis program there, considering it is really a world famous golf destination. After my kids enjoyed a one hour lesson with Luke, I asked his brother Murphy, What are you guys doing here? His answer, Trying to maintain relevance. Now, I thought I was the inventor of verbal tennis, but he just hit a hard first serve right at me. It was my job to return. You two are world famous. What are you talking about? He went on to remind me how short peoples memories are and then began to sell me on his tennis program at Sea Island. I was very impressed!

We have this situation occur all the time. We are at a cocktail party and the guy who drove the Porsche to the party asks, What do you do? You answer: Im a financial advisor. Game, set, match: YOU LOSE. The purpose of an elevator speech isnt to summarize what you do in 30 seconds or less. It is to beg for another question. This is a popular elevator speech among the virtual family offices: I replicate a family office service for wealthy people who cant afford one. Think of how many parts of this statement could be challenged. What is a family office? Why cant these people afford it? You said they were wealthy! What do you mean, you REPLICATE a family office? All of this is designed to get the person to ask the question that continues the verbal tennis match. By the way, it is critically important you dont try to answer them, rather, give them two value assumptions. For example, I might divert the conversation this way, For example, a lot of wealthy people walk through my door asking how they are going to protect the safest portion of their portfolios (bonds) from loss due to rising interest rates. We use alternative strategies and asset classes to keep this portion of their portfolio safe. Additionally, we all recognize that we have an obligation to pay our taxes each year. However, nobody should have to pay one penny more than they are legally obligated to. We have the investment professionals work closely with the accounting people to minimize the eroding effects of capital gains taxes on their investments, by using a strategy called tax harvesting.

I might go for a close like this: Does any of this resonate with you? Would you like to meet in a more private setting another time? Exchange business cards and walk away.8

The Co-Branded Selling ProcessIn order to gain the respect of wealthier investors, we have to abandon the weak selling systems of the past!Consider a process that involves all of the family office partners.Discovery.Constructive criticism.Co-Brand.Ongoing oversight.

Im hoping we can move past the days of doing pre-constructed fact finders that have leading questions; running proposals for multiple products, only to ask the prospect to pick a card, any card! This selling system is objective, transparent and we even send the prospect a letter that describes our process, so that they understand the value of our advice.

The Discovery process will include intelligent questions from each of the family office partners that should uncover opportunities to deliver the highest level of value possible. How may times have you met with a good prospect who had no idea they had a significant need for one of your services? This Discovery process will be extensive, thoughtful, and will not focus on selling product!

The four steps are: Discovery, Constructive criticism, Co-branding, and Ongoing Oversight.9

Discovery Questions (Investments)1.What is your plan to battle rising interest rate risk?2.Have you considered how to deal with liquidity risk as it relates to the bond bubble?3.Do you prefer to buy stocks at a discount or are you only concerned about consistent earnings growth? Would you like both?4.How do you manage tax consequences of your equity based investments?5.Would a professional, working relationship with your portfolio manager help keep you committed through challenging times?6.How do you evaluate success or failure? Is it based on benchmarking or volatility management?7.What key themes do YOU think will drive equities higher? Would you like to hear ours?

Here are some examples of some of the discovery questions that should be asked to provoke important conversations that address expectation management and the potentially poisonous emotions that are experienced by most investors.10

Case Study Example:The end of the day will focus on learning how to manage all of these skills that have been learned by tailoring your language to their social style and by directing the issues in question to the resources available to you (accounting, legal, risk management, etc.). Identifying the right discovery questions will be critical to your success.

The Challenge90 days to a new YOU.

It took one day to teach you the Blueprint to the perfect book of business. It will take 90 days to change your habits. Are you ready???

Find and open professional relationships with wealthier prospects. (I will show you where they are and how to engage in verbal tennis.)

The production opportunity: $48 million in assets under management in the first year!

The math on $48 million. 12 verbal tennis matches per week during the 90 day Challenge. From those 12 verbal tennis matches, it has been experienced that the advisor will average 8 conversations, either by phone or face to face. Assuming they follow the co-branding sales model as they were trained, they should expect 4 of these prospects to become family office clients. If the clients are at the minimum $1 million amount x 4 per week = $48 million in new assets under management in the first year. (It usually takes more than a few weeks to close a family office client). The other consideration is that not all advisors successfully complete the Challenge. Those who do, finish with really impressive results!

So, you have taken the opportunity to learn the Blueprint. Congratulations. The amount of information you have taken in during this all day session is overwhelming. However, by taking the next ninety days to change your daily habits to make your time more profitable time (not shuffling papers, not building mutual fund based portfolios, and not whining about compliance), you have the opportunity to realize your most profitable potential. Are you up for the Challenge?

This is why I exist: To help you be more efficient and profitable! How would your life change if over the next four years your assets under management increased by $100 million? How would your family benefit from the time that you would now be able to dedicate to them as a result of this newfound efficiency?

Are you ready?12