Yes, they are among the world’s most prosperous advisors, but MDRT members still get back to sales basics to overcome obstacles. Michael Morrow banks on building a loyal clientele who gladly refer him to qualified prospects.
Members of the Million Dollar Round Table (MDRT) shared their vision of success with The Insurance and Investment Journal on the sidelines of the MDRT annual meeting, held in Toronto on June 8-11. Financial advisor Michael Morrow explained the philosophy behind his enduring success. In business for 25 years and a seven-year MDRT member, he built his clientele by cultivating referrals. Morrow is also an author: his works include Leading Marketing Strategies and The Picture Sells the Story. In addition to giving many MDRT conferences, he also spoke at the 2013 Canada Sales Congress, an annual event organized in Toronto by The Insurance and Investment Journal and For Advisors Only.
While the business has been good to him, Morrow admits that he has lived through slumps like everyone else. The trick is knowing how to emerge from a downturn. His approach is to leverage his value proposition for clients to obtain referrals. Don’t be afraid to ask for referrals, Morrow advises. It will be easier for a client who knows your added value very well to refer you to a friend or family member. The referred person will also gain from your advice.
“The biggest challenge is getting referrals. The more value you provide, the easier it is to get referrals. Value can be just an offering to provide value. I can sit with you and do a financial need analysis that suggests you have a financial plan at retirement. I have provided you value just by doing that. Once I actually make the plan, I provide you with more value,” Morrow explains.
If you’re going through a dry spell and have no appointments on your agenda, don’t get discouraged. “That might be the very last slump of your career, why don’t you enjoy it? Make as many calls as you need to get one appointment today. If you get an appointment with your very first call, you don’t have to make any more calls today. If it takes you ten calls, you have to make ten calls. Eventually, you will have one appointment every day and you will work your way out of the slump. When you’re discouraged, you have to go back to the basic things,” he says.
Morrow realized that advisors eventually hit the wall for two reasons. Either they aren’t working in the right market, or they are not talking to enough prospects. A wise man told him to keep two proverbial questions in mind: “Are you asking enough people, and are you asking enough of the right people to buy enough [insurance or investment products]?”
Retain more, prospect less
Morrow urges advisors to always give unparalleled service to boost their retention rate. This does not mean aiming for perfection: you can’t hold onto everyone, he says. But if you serve them well, they will stay with you longer. He gave the example of a client who recently left after two decades. If he had made less of an effort at retention, the client would have left three years earlier, he explains. By pushing back this departure and building the loyalty of most of his other clients, Morrow managed to constantly raise his retention rate, which is almost 100%.
Fighting for better retention can make all the difference, he adds. “I work on small incremental changes. If I get 1% better on persistency, I’ll have 15% more income. If I get 2% better on persistency, I’ll have 30% more income. Everybody knows that it’s easier to keep clients than to get clients. What I do is I try not to lose them.”
He has no qualms about granting a client who brings him $1,000 in annual income a welcome gift of $200. After 10 years, the cost of the gift comes to 2% of cumulative income, he points out. Another loyal client who is leaving after 20 years also received a gift from Morrow. The client moved $800,000 in individual savings to a securities broker with a large bank, without realizing that he had to pay transfer fees. Morrow decided to pay the $850 in fees to spare his client the expense.
“I just thought it was the right thing to do. I don’t want these clients to also move their pension money away,” Michael Morrow says. This gesture also helped him hold his head high while distinguishing himself from his rival, who neglected to absorb these costs for his new client, Morrow points out.
Morrow practises in the Thunder Bay area; his clientele reflects this small community. He serves teachers, electricians and other professionals and tradespeople whose cumulative savings average between $200,000 and $250,000.
His investment portfolio is divided equally between individual and group savings, with emphasis on employee benefits. This means his client list is fairly short. These days, he is grappling with a trying transition phase. Morrow partnered with another firm to stimulate new business development in the employee benefits sector. Each firm retained its existing clientele. Since the partner succumbed to an illness, Morrow has been doing double duty to keep the deceased partner’s clients onboard.
