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How would you successfully close a prospect who has a better growth of wealth than your recommendation?

Yesterday, I read this review of a topic that came up at a conference covering finance, technology and geopolitics.

In one of the sessions, they discussed that the financial planning industry may not be able to attract a large proportion of prospects in a generational wealth transfer brought about by crypto investing.

These were the perspectives shared during the panel:

  1. This segment of people do not fit their niche, it does not fit their principles, not what they built their business around, or their business is not the millennial generation.
  2. There is a place for digital assets. You people feel it is important enough for them. It is critical for young investors to realize that some wealth managers cannot analyze crypto the way they analyze other assets.
  3. It is not an area of confidence for some of them.
  4. If you tell them crypto has no cash flow, and that you cannot have a conversation about cryptos with them, then you will not be a candidate of their wealth, or their recovered wealth, or their future wealth.

So this made me reflect a little about some of the experiences shared with me with some of the client cases that I was part of at work, and how I look at the wealth advisory business, shaping the story and configuring the business model.

What is your value proposition for prospects that grow their wealth better than you?

I think examples like the wealth from cryptos is not new.

We can find examples of people growing their wealth at a much faster pace than traditional managed investments:

  1. A successful businessman’s wealth growth rate.
  2. Tech engineer who just happens to join a company that eventually IPO with share options.
  3. A C-suite working in a listed company that grew well over time. The majority of his or her net wealth (in some cases 90%) is concentrated in their company shares or options.
  4. A fund manager whose day-to-day job… is to manage a unit trust like the one you are recommending them.
  5. Someone working in a quant fund.
  6. Someone working in private equity.

The commonality here is that in their world, their rate of return is so good that their reference point is essentially broken.

People with broken investing reference point is not new.

The question you have to ask yourself is what is your value proposition?

Do you have a value proposition at all?

If your value proposition is to sell them an investment product, an investment strategy, something that can have a high rate of return, then wouldn’t anything look dubious to them?

In this regard, I think it would not be. Most of us do not understand the spectrum of returns available. If your prospect has a 20% rate of return, he or she will think that there is something legit that can consistently give a 20% rate of return.

So if the value proposition is to snook them and sell them a good story, that could work.. perhaps for a limited time. If they eventually find out, they would be rather disgusted about it.

So maybe misdirecting them is not a good strategic business direction.

For many, selling them wealth protection solutions is an option. Most often, they need help hedging their health risks and disaster risks to prevent their money from behind impaired.

For most financial planners, you will have some value proposition. But could you move beyond that?

But if you are like Providend, whose value proposition is not mainly wealth protection, then how would you fare?

Something to think about.

Can you identify the insecurities in their existing wealth strategy? Do you have a solution to address those insecurities?

No matter how great an investment or wealth strategy, you will have insecurities about it.

Some people openly discuss these ‘flaws’ or discomfort of the strategy.

Some do not but keep them suppressed inside. They just felt that “something” isn’t very right.

And so that is why they wanna speak to someone who does wealth management on a professional level.

So they contact you.

There will be prospects coming in with 80% of their net wealth in Salesforce. You do not need to aggressively sell to them that this is not always a good idea going forward.

They will have some insecurities about it.

If you are able to identify these insecurities, you could connect better with them.

If you are able to touch them on that level, then you will look like an authority on the subject to them.

If you know the problem, then surely you have the solution right?

It will be better for them to go with you than someone else.

A wealth adviser will need to be authoritative enough on wealth strategies

Remember that I said every wealth strategy has its flaws?

How do you detect the real flaws?

Imagine you tell this prospect that their Ethereum is not diversified enough and that they should diversify into some unit trust or structural products.

So why not just diversify into Cardano, Aave, Chainlink, Bitcoin, Solana, Luna?

Diversification may not be the real flaw in the strategy. Perhaps it is that cryptos at this point are just speculation.

But they just came to you because they built 90% of their net worth on it, and you are going to tell them they build their wealth on a house of cards.

If you are a good enough wealth adviser, you would be able to pinpoint the flaws in the strategy that crypto is scammy enough.

Or the foundation of their thesis is not so strong as they think.

The uncomfortable solution to this problem is that you have to dive deep enough. People who dive deep enough know the real flaws.

And if you discuss the real flaws with them, there is a connection, there is room to discuss other potential solutions.

But it is practically impossible for you as a wealth adviser to know everything. We cannot be an expert to know everything.

So what are the viable solutions? Here are three of them.

Work with people that are authorities in these different fields of wealth. Or you have an investment team supporting you at the backend. Rely on them to do the groundwork to go deep enough so that you know enough of how these strategies work. This means you have to develop a good network.

Practice good coaching by asking them. You cannot be an expert at business building, private equity, or the biomedical field all at the same time. And I think the real good clients that you would eventually want to work with (not the less than ideal ones) will understand that it is not possible for people out of the industry to know more than them. But if you ask them, and pay attention, you could suss out the weaknesses.

In order to help them, you would need to know a general set of strengths and weaknesses that most investment strategies exhibit. If you don’t even know these investment truisms, then even if they tell you, you will not be able to help much.

Be the authority or recognise this is not your main value proposition. If you wanna advise on wealth, and if those two solutions above don’t work for you, then you just got to get good enough. If not, it would be better for you to avoid this field altogether.

Don’t Disrespect How Your Prospect Build Their Wealth

There is a very strong product culture in Singapore.

Whichever, way you look at it, you are trying to influence prospects to switch to your stuff… at the expense of what they have currently.

How you go about doing it is the art of selling and framing.

There are some potential eggshells that you may want to prevent.

I think the biggest one is to de-prioritizing their investments and reallocating more of their investments to your recommendation, without properly addressing their decision to make their current investments in the first place.

Some of us felt we are sophisticated enough to make good decisions in life. To immediately recommend without properly addressing the previous decisions may rub some of us the wrong way.

Far too often, this is what I felt when a banker tries to recommend me something.

It is like whatever I share with him or her fell on deaf ears. They will just go into their usual sales pitch.

I would think asking for their thought process in making those investments help to identify whether they have structure or lack of structure, have the sophistication or lack of sophistication in their plan.

Then request permission to make comments about their investments.

If the flaws of their strategies can be agreed upon by both adviser and client, I think the recommendation would be more successful.

Finally, a big one is to frame aggressive investments as play money.

I nearly flipped when I heard that.

Some of us build our wealth by implementing these investments. Now you are telling me it’s for play only?

I think there are better ways to frame the role of aggressive investments like very concentrated bets, cryptos than telling your clients they have been playing around (read here).

Discussing the weaknesses of these investments may allow the prospect or client to understand why they cannot use these investments for the goals that are most dear to them.


I think what hamper financial firms in colonizing these new frontiers is mainly the compliance involve.

If compliance is not ready, there may be just too many liabilities involve that wealth advice cannot be provided for the area of crypto.

Aside from that, I think where firms struggle is having a framework to think about investment products, strategies that are nascent.

This is why most of us do not make a comment about it, or the comment is so high level that I would typically roll my eyes.

If you do not have a good framework to think about these things, then you may struggle to have a coherent stance on tokenized ownership of the real estate, owning virtual real estate, owning a digital business such as an online e-commerce store.

If your value proposition is that you are a great wealth allocator, then how can you say you are one when you can only have high-level, superficial views about these nascent areas?

Ok time to sleep.

Let me know your thoughts.

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Sunday 19th of September 2021

As you said, there needs to be a common understanding of "something that doesn't feel right" and the availability of some solutions.

FAs & RMs in S'pore are like hammer salesmen trying to sell hammers to anyone & everyone. Even when the prospect already has much bigger & better hammers. Or when the prospect's problem has nothing to do with nails.

Some solutions are not product-based, but more of process-based or mentality-based. For this, almost 100% of finance advisory biz in S'pore cannot make it. Prospects will need to DIY, trial-and-error & tap on networks to gain competency.


Sunday 19th of September 2021

Hi Sinkie, have to agree with that. In the end it makes the DIY model more appealing. But DIYers suffer from the problem of search costs, lack of expertise.

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