If you are an investment advisor, using the Checkup Tool in this way will help you determine how much room for improvement there is in your investment recommendations.
It will also let you know how vulnerable you may be to losing clients to competing advisors with better recommendations.
While that’s a purely defensive use of the free Checkup Tool, it can also be used “on offense” to recruit new clients, including the clients of your competitors. In fact, that was one of our original goals in developing the ProRRT℠.
Here’s how it’s done:
- Simply contact the prospective client and arrange to meet; anywhere will do – e.g., a coffee shop.
- Ask him or her to bring their most recent brokerage statement or quarterly investment report with them, explaining that you have something important that you’d like to show them.
- When you meet (and after buying them a cup of coffee, etc.), ask him or her to pull out their brokerage statement or investment report and tell you what their single biggest investment holdings are (you don’t need to see their report or how much money they’ve invested),
- Then open your laptop or pull out your iPad and log onto the free ProRRT℠ Checkup Tool and explain to the prospect how the technology works as he or she watches you score and rank what they are holding against all other available choices within that asset class.
- It is important to show them the factors that can be used, and to ask which ones are most important to them and how much weight should be placed on them. Involving them in the process is very important, since they will have never experienced anything like this – the transparency, objectivity, and most importantly, the feeling of empowerment in now being included in the review and selection process.
- When he or she is happy with the factors and weightings, compare the multi-period returns and multi-period volatility of theirs against the top scorers.
In most instances, the top ranked choices will have produced substantially higher average annual returns with often less volatility – in other words, they’ll often see significant return premiums with no equivalent risk premiums . . . and the return premiums can often be quite large.
After performing this same comparative analysis for a few more of their holdings, say this:
“I can do this for all of your investment choices and we’ll likely get similar results. But, at this point, one thing is looking pretty clear . . . it looks like ‘you’re leaving a lot of money on the table.’ Do you want to stay where you are (with your current advisor) or would you like to come over to us, where we’ll use this new technology to help keep your investment choices optimized and help you make more money?”
We know from experience that this will get you new clients.
You don’t need the full ProRRT℠ to do this, and the prospective client doesn’t need to see the names of the fund choices to see that there are much better choices possible. Try it and see the value for yourself.
One advisor recently said this: “If you let me use the tool to make enough money to pay for it, then I’ll sign up.”
Well, that’s exactly what the free “Checkup” version enables you to do. Use it to successfully recruit clients and, when they’ve committed to come to you, then get the paid version so you can deliver on your service promises.
If you recruit just one new client, with $500,000 of investment assets during the course of an entire year using this unique client recruitment strategy, at a 1% fee you will have more than paid for the full ProRRT℠ license.
But there is no reason you cannot recruit many more clients and AUM, generate much more revenue, and better protect your clients from being “poached” by competitors.