This is a good time to examine your attitude about money. You need to understand how you feel about it before you can help your clients and prospects with their financial goals. Once you come to terms with your attitude about money then you need to understand how your clients and prospects feel about it. Send an email to me for a detailed article by Darren Hardy, “What’s in Your Head Determines What’s in Your Wallet” that will help you work through this concept.

 Here is the gist, how you feel about money will determine your financial success. As Darren’s article points out, some people actually repel money! If you view money as an opponent i.e. something you struggle with on a daily basis then you are probably limiting your ability to attract money for your own personal needs. “Money will meet you where you are” is a great quote from this article. Stated another way, “Your net worth will equal your self-worth”. If you have an attitude of abundance you will attract money.

 Take some time to examine your personal attitude towards money. The same hold true for your clients and prospects. Do you understand what money means to them? Do they have a negative or positive attitude when it comes to money? Doesn’t it make sense to find out? If you blindly make recommendations without this knowledge you are playing with fire. You could end up going down two separate paths; never to meet again. With all of the negativity out there let’s not lose sight of the tremendous opportunity we have to help people understand the power of money and put it to work in the best possible way. We need to help our members come to terms with the power of money. But first, we need to do the same. Our members need us. Let’s grab hold of the opportunity and adopt an attitude of abundance. If you do, the money will flow to you!

One of the most common problems I address when coaching financial advisors is that of disorganization. I have had top sales persons become paralyzed with disorganization rendering themselves useless to help people during the day. Why? Because they are “majoring in minors” as Zig Ziglar would say. They are getting bogged down in small matters that, left unattended, grow into large crises.

If you are struggling with organization skills then the first thing you need to do is read “Getting Things Done”by David Allen. I have used David’s organization model since it was first introduced in 1981 by business consultant Dean Acheson. It works. One of the tenets of GTD, as it is know by its practitioners, is the “two minute rule”. If an action or something takes less than two minutes to do, do it now while you are thinkingh about it rather than put it off. Some critics state that if they followed this rule they would fill their day with small stuff. The reality is that if it’s important enough to demand your attention then it should be addressed right now provided it takes two minutes or less. Many of your important projects have two-minute tasks associated with them.

David states that things become urgent fires when we ignore the little things that are left unattended. Had we addressed them right away we would have avoided the current crisis we are facing. It’s like the old AAMCO Transmission television ads from years ago, “You can pay me now or pay me later.”

So you have some appointments with members and you are having a difficult time getting them to make a decision about moving money into the market. First, it is always good to remind your clients and prospects that making no decision is in fact a decision. The question is, is it the best decision for the member? Maybe, but more often than not the decision to do nothing is a way of telling you that they are not feeling the pain of that non-decision yet so it is still pretty comfortable to just stay in the CD or in cash. That is where you come into play. Your job is to help them understand first and foremost just what their goal is with that money. You accomplish this by asking the right “problem” questions. Secondly, you have to help them understand the suitable solutions. That’s right, solutions; plural.

 You see, people want choices. So if you want your client/prospect to make a decision you have to help them. The “Need/Payoff questions accomplish this. Read SPIN Selling for more information on Problem and Need/Payoff questions. As trusted financial advisors we have to realize that there is no “right” answer or solution. There is a good, better and best solution. So for each member you need to provide them with the good, better and best solution. Then by using Need/Payoff questions the member will make the right decision. At the end of the day a “no decision” is in fact a decision. The Need/Payoff may be that the member continues down the path of financial ruin. Although I have a feeling that if you have done a good job of defining the current situation, helped the member feel the pain, offered a good, better and best solution, used Need/Payoff questions to get the member to sell themselves on the solution they feel comfortable with, then you will face the “no decision” situation fewer times than you do now.

Individual commitment to a group effort – that is what makes a team work, a company work, a society work, a civilization work. — Vince Lombardi

Everyone on the branch team has to commit to the team success.

Sports teams coaches at every level have their own language. The title to this blog post was inspired by Yogi Berra, that famous former Yankee catcher and king of the malaprop. My high school football coach use to brag about the “student-pupil ratio” that coaches enjoy over their classroom teacher counterparts. I think he meant student-teacher ratio. Do you think? Anyway it reminds me that Fall will soon be upon us which means the air will be filled with the sounds and smell of football season. Along with the usual pre-season predictions we are subjected to an overabundance of so-called experts providing us with the minutia of each and every team.

There is even a new “reality” show that takes the viewers through pro football training camp of all things. Anyone who has played football at a high level knows that there is nothing exciting about training camp. Imagine a bunch of 20 and 30-something guys living together for three weeks in a college dorm reliving their frat life days. Not a pretty sight believe me.

The real challenge that exists in professional sports, which unfortunately doesn’t play well on TV, is the leadership challenge. The best football coaches are the ones who can embody the above quote from Vince Lombardi; the ones who can develop a sense of commitment to the cause of winning a championship. That is no small task in this day of selfish, me-first professional athletes. Lombardi had it easy compared to the challenge coaches today have to face. Players may be with the team this season and then off to another team next year when their contract comes up for renewal and money becomes the primary motivator instead of team success and commitment.

What about your leadership challenge? Is there a sense of commitment within your branch teams? What do you do to rally your team around the cause of helping members reach their financial goals? Do you have a written plan that your branch manager partners have signed off on?

If you answered “yes” then I congratulate you. You probably have more referrals than you can handle. If you answered no to any of these questions take heart, it’s not too late. As the financial consultant in your branch offices you have to see yourself as the sales leader in the branch. No one else in the branch has your sales skills so if the referral activity is going to pick up then you have to take charge. It won’t happen by itself. Here are some action steps you can take to get the ship moving in the right direction.

1. Sit down with you branch manager(s) and review your plan as it relates to investments. If you don’t have a plan then use this meeting as the starting point of your planning process.
   1. What is your production goal?
   2. What are the branch product goals?
      1. How can you help your branch manager partner achieve his/her goals?
      2. Learn the products so you can cross-sell at every opportunity.
   3. Take a “how can I help you?” approach. It’s amazing how much you will get if you help your partners get what they want.
2. Develop an education component to your plan.
   1. Educate your branch team about what you do
   2. Educate your members through seminars and workshops.
3. Develop a referral goal for the branch.
   1. It should tie in to your overall production goal
      1. X% will come from your book
      2. Y% will come from your marketing i.e. seminars
      3. Z% will come from referrals
4. Become the best coach that you can be. Your referral and GDC success will be in direct proportion to your ability to be a coach and mentor to your branch team. Need help here? Give me a call or email and I will send you 10 Ways to Better Coaching Skills.
5. Get creative. Mix up the incentive portion of your referral and cross-selling efforts. It doesn’t have to be expensive but it does have to be fun. Enlist your team to help you think of fun ways to celebrate your team success.

Remember, regardless of how good of a salesperson you are, when you work in a branch environment you need the support of your branch team to achieve your production goals. Subscribe to the Zig Ziglar philosophy of success which is, “you will get exactly what you want if you help enough people get what they want.”

Sales leaders focus on value and avoid objections altogether

Now more than ever financial professionals need to be experts at uncovering clients’ and prospects’ financial problems. The economy makes our job tougher but the reality is those problems are still there whether it’s retirement planning, college planning, buying a house or planning for long-term care needs. The destination is still there but the road they take to get there will be a lot different than it was 18 months ago.

The true sales professionals are still doing business because they have learned how to avoid objections. That’s right, they are not trying to “handle” objections they are avoiding them. As a result they are spending more of their time solving problems for their clients and prospective clients.

How many times have you been told in your sales career that objections are a sign of interest by the client or prospect? I know I have heard that logic in a number of sales training classes that I attended early in my sales career. When I looked around the training room at that time I noticed that most of the attendees were “newbies” just like me. The reason? Seasoned and successful salespeople get fewer objections. Why is that? One reason is that newer salespeople tend to focus on talking about features versus listening for signs of problems and offering value.

Skilled sales professionals have mastered the art of objection prevention versus objection handling. Newer sales professionals tend to spit out features with little regard for the benefit of the prospect or client. Seeing little or no benefit upon hearing these features clients and prospects offer  logical responses such as “no” or “let me think about it” or “send me some information.” Why would they respond differently? The salesperson has done nothing to uncover a problem that the product or service will solve. One way to think of objections is to view handling them as treating symptoms versus finding a cure. By developing your probing skills to the point where you are building value in addressing your client’s or prospect’s concerns you can actually prevent objections from occurring in the first place.

In Neil Rackham’s excellent book, SPIN Selling, he introduces four types of questions that successful sales pros use when they interview clients and prospects. The “N” of the SPIN acronym stands for “Need-Payoff” questions. This type of question focuses on the value of your proposed solution. When you hear an objection you respond with a value statement that focuses the client on how your solution will solve their problem and make them feel good about it in the process. Here is an example of how such an interview might unfold:

Mary Member: I’m not happy with these CD rates.

Financial Consultant: (Situation Question) Mrs. Member what is this money earmarked for?

Mary Member: (Implied Need) This is our emergency money, in case we have to go into a nursing home.

Financial Consultant: (Problem Question) Are you concerned that this $100,000 CD won’t be enough to cover the costs?

Mary Member: Well, yes but it’s all we can spare for such an emergency….

Financial Consultant: (Problem Question) Mrs. Member, as we discussed, your $100,000 CD is there as your “emergency fund” as you described it. You told me that if you or your husband had to go into a nursing home that money would cover the cost.” We also discussed how the costs of long-term care continues to rise and that $100,000 would not last long based on the average annual cost of long-term care facilities. Is that correct?

Mary Member: (Objection) Yes that’s right. But I just don’t know if I want to spend my CD on long-term care insurance right now.

Financial Consultant: (Need Payoff) I understand your concern. As I explained to you and Mr. Member, we can use that $100,000 CD and purchase a single premium long-term care policy that will provide sufficient coverage for both of you. That will give you both the peace of mind that you are concerned with, right?

Mary Member: You’re right. We need to do this before it gets more expensive. It’s just a big decision for us.

Financial Consultant: (Advantage) I understand completely. Let’s go over the specifics of the policy again, so you will see how this will help you and Mr. Member better than keeping your CD.

In this example the financial consultant uncovered the problem (long-term care needs) by probing for the reason the member kept rolling over their CD. In this case he simply asked, “What is this money for?” He then proceeded to find a solution that would give the member peace of mind that rolling over their CD and coming up short on the cost to cover long-term care would not.

Here are some ways that you can keep selling in a down market:

1. Focus on uncovering problems that you clients or prospects have. Their financial problems did not go away with the economic downturn.
2. Don’t be too anxious to offer up a product solution – listen!
3. Instead of throwing out features, focus on value statements that reinforce the solution and the benefit to you client or prospect.
4. An objection should bring you right back to the value that you have already gained agreement on – reinforce it.
5. If you can’t find the problems then there is no sale to be made. Get better at asking the right type of questions.
6. Buy a copy of SPIN Selling by Neil Rackham.

“If you follow your bliss, you put yourself on a kind of track that has been there all the while, waiting for you, and the life that you ought to be living is the one you are living. Wherever you are – if you are following your bliss, you are enjoying that refreshment, that life within you, all of the time.” – Joseph Campbell, American philosopher

Seeking perfection in our work is a full-time job

I was recently asked if there is such a thing as a perfect job. I suppose there is. Perhaps it is one where you can leverage all of your strengths and minimize your weaknesses. It would certainly be one that you are passionate about. How do you know if you have the “perfect job”? Joseph Campbell’s insight above is one of the best indicators that I have seen. Too often I have witnessed people leave a job after experiencing some distasteful aspect of the job and get on an endless merry-go-round of job search never finding the “right fit” because some aspect of the job was always either too difficult or they didn’t like the people they worked with, etc.

I have always believed that each of us has a responsibility to not necessarily make our job perfect but to do our best to frame our job in terms of our bliss. This isn’t the 1950′s where one entered the workforce and the mindset was that the company would take care of you for life and that was more important than whether or not you liked your job. People entering the work force today can plan on making a t least nine career moves, according to latest labor statistics, during their working years. Yes, even in spite of the challenging economic times that we are experiencing we have choices. Getting back to our bliss question… the question I have always asked myself is, “Can I frame this job in terms of my passion and strengths?” For example, I am creative and want to be an agent of change. Will this job (hypothetically) allow me to express that creativity and can I have a positive impact on the direction of this company? Can I take ownership of my job and throw myself into it with passion? If the answers are yes, then I should be in the right place. If the answer is no then I need to consider whether or not I can change that situation and if I can’t then it’s time to look elsewhere. Otherwise I will grow disenchanted and it will start to show in my performance. This is one of the reasons I have become a fan of personality testing as it relates to the work that we do such as Meyers-Briggs and DISC. They are not perfect predictors; if there is such a thing, but they definitely can help of avoid the square peg in a round hole syndrome that many people take years to discover.

As our pursuit for the perfect job relates to “hard work”, I offer some wonderful insight from Kevin Elko, PhD. Kevin is a teacher and motivational speaker having worked with professional and college athletic teams. In his excellent article he describes the contrast between the million dollar lottery winner and the man who is paralyzed following an accident. The lottery winner took a “life will be easy from now on” approach and suffered as a result whereas the paralyzed man expected life to be difficult and approached it as such. Kevin comments, “Wherever we get the notion that life is supposed to be easy, I don’t know, because it is not. And the more we believe it is easy, the harder it is. Coming to terms with the reality that life is hard makes it “easy” because then we do not keep judging life and events or life as hard, and so we go about the business of living.”

The same holds true in our pursuit of the “perfect job”. If we hold the belief that the perfect job is supposed to be easy then we will never be satisfied because every job has its challenges. We need to have a big picture attitude and look for our bliss. Even the most blissful endeavor will have challenges. I’m sure Bill Gates and Steve Jobs have had their, “What did I get myself into?” moments as they built their technology giants even though they obviously found their bliss in doing so. Bill Walsh, the great coach of the San Francisco 49ers had to tackle a disorganized front office before he could start coaching when he took over as Head Coach. I’m sure that never factored into his “perfect job” scenario. Here are some steps you can take today to get you on the path to your bliss:

1. Take the Meyers-Briggs and/or DISC personality assessment tests. It will open your eyes, guaranteed.
2. Be realistic about your strengths and weaknesses then assess your current job. Is it a good match?
3. If not, can you frame your job duties in terms of your “perfect job?
4. Seek out a mentor, friend or loved one and ask them to give you their opinion on your strengths and weaknesses.
5. Make a list of jobs that you see yourself doing. How is the list different than what you are currently doing? What are the similarities? Can you incorporate elements of your wish list into your current job?
6. If you are still pessimistic about where your future lies with your work, make a change as soon as possible.

Sir Henry Royce had a performance standard that "good enough" never was.

Howard Shultz, the founder of Starbuck’s thinks like an athlete. I think I would have enjoyed having him on any one of my teams. “You have to have a great tolerance for pain!” he says in reference to the qualities that make a successful entrepreneur. “You have to work so hard and have so much enthusiasm for one thing that most other things in your life have to be sacrificed.”

Shultz was turned down by 217 of the 242 investors that he initially talked to. In addition to the pain endurance Shultz also says that the key to running a successful business is maintaining balance in life – something he says he learned while playing sports in college. He says he has learned discipline to not travel on weekends and by trying to be home for dinner most nights. “I’ve learned a balanced personal life makes for a more productive business life. Feeling great about your family life adds value to your company.”

“I’ve heard that some coaches face a curious dilemma, says Shultz, “The world class athletes on their teams – the players with the best skills and experience – sometimes falter when it comes to crunch time. Occasionally, though, there’s a player on the team, a blue-collar guy whose skills are not quite world-class. Yet at crunch time, he’s the one the coach sends out to the field. He’s so driven and so hungry that he can outperform the top athletes when it really matters.”

Shultz considers himself that guy in the business world. Walter Payton would respect Howard Shultz and every business owner who says that good enough never is.

There’s the story of legendary Rolls Royce founder, Henry Royce, walking through the factory one day and overhearing a couple of employees discussing a particular problem when one of them said, “it’s good enough” whereupon Royce broke into the conversation and said, “no, it’s never good enough. That’s why our cars are the best in the world. We never say it’s good enough.”

How about you? Do you have that discipline now that it’s crunch time? Can you make the necessary sacrifices to adhere to your performance standard and still maintain balance in your life? It won’t happen by accident. You need a plan and a commitment. You may not create the next Starbuck’s but you just might become the best financial advisor that you can be and if you are making progress each day towards that goal then you are just as successful as Howard Shultz.

Here are some action steps that you can take to develop the quality of discipline as a business owner:

1. Decide what skills you need to develop to make your “better” best.
2. Develop a self-improvement plan for those skills and put a time horizon on addressing the improvement of those skills.
3. Write down what are you willing to sacrifice to attain the goals for your business.
4. Decide how you will maintain balance in your life while making the necessary sacrifices.
5. Hire a business coach to hold you accountable for the achievement of your goals and objectives.

Lt. Dan Has His Epiphany With Change Aboard Forrest Gump's Shrimp Boat

Six Ways to Embrace Change and Build Your Business

One of my favorite movies of all time is Forrest Gump. Yes, it’s not the most intellectual movie ever made but when I see a movie I don’t want to have to work that hard. For our entertainment value it’s hard to beat. For those of you who have seen it, which I am going to guess is most if not all of you, there’s a great scene where the character played so well by the actor Gary Sinise, Lt. Dan, is out on the shrimping boat with Forrest and they are caught in the middle of a torrential downpour. Lt. Dan, no legs and all, is up in the “crows nest” as the rain is pouring down and the thunder and lightning are crashing all around him. In an epiphanal moment Lt. Dan shakes his fist at the sky and shouts, “it’s just you and me God, we’re going to settle this once and for all.” After another bolt of lightning nearly misses him he shouts, “Is that all you’ve got? Come on bring it on!” It was a pivotal moment for Lt. Dan. He had been through the ringer having served in Viet Nam, lost his legs in a battle and wanted to die in combat as his ancestors had only to survive as a paraplegic. He truly felt he had no reason to go on.

I always remember those words, “Is that all you’ve got?” when I think about how we embrace or run away from change in our personal and professional lives. Many of us probably feel like Lt. Dan with all of the changes we have faced in the past couple of years. Maybe it has been loss or change of a job, a change of careers, illness, and loss of a loved one or a combination of several of these. Change is a constant yet people have different ways of responding to change.

Some people when confronted with change fall apart. They become depressed and lose their fight and succumb to the emotional strain that comes with change. If they don’t develop physical ailments as a result of their reaction to change they develop a negative attitude and a “the whole world is against me” feeling. This response to change leads to a downward spiral that usually has an unhappy ending.

Others take a Lt. Dan approach. They have their obligatory moment of “why me?” then they shake it off and adopt a “Is that all you’ve got?” attitude. These champions don’t necessarily like change but they embrace it with a “bring it on” approach. They put on their armor against self-pity and negative attitudes and ask the question, “What’s the next step I need to take to move forward?” Then they go about putting a plan together to get the answers. If it’s a new job, then they develop a plan to find one. If it’s rebounding from the economic downturn they look for ways to serve their clients in a better and different way but look they must and look they do. And more often than not they find the answers.

These champions break their year down into days. They know that great years start with great months. Great months start with great weeks and great weeks start with great days. Here are some ways that you can adopt Lt. Dan’s “Is that all you’ve got” attitude and start embracing change.

1. Hang out with positive people. You don’t need to rehash the bad news there’s enough on TV for all of us. Change the subject if your cohorts have a case of the “negs”.
2. Take a sheet of paper. Across the top write down you current challenge. Take 20 minutes each morning and write down possible solutions. Don’t worry about judging each one, just write.
3. Develop a plan to get from where you are to where you want to be. Put it in writing.
4. Find a mentor, someone you admire and schedule time each week to discuss possibilities and share your frustrations with. It may only be ten minutes but it will prove invaluable.
5. Get a copy of “The Strangest Secret” by Earl Nightingale and read/listen to it at least three times.
6. Listen to my Fourth and Long message each Monday for inspiration.

We all have to develop a more positive approach to change because it will be a constant for years to come. More than ever. So bring it on. We’re ready and willing to find the good in the change that will shape our future and what a great future it will be because we will make it so!

I have written frequently about the correlation between member participation in the credit union investment and insurance sales program and increased revenue. While that may seem intuitive the question remains, “why don’t more credit unions make the effort to increase member participation in this time of increased need for revenue?”

According to the recent Ken Kehrer and Callahan Credit Union Investment Program Benchmark Reports, the average credit union member penetration is around 5% compared to 10% for banks. According to Ken Kehrer, one of the reasons for the discrepancy between banks and credit unions could be that banks have offered investment services for about four years longer on average than credit unions. So they have had a head start on developing household participation in their programs. Another useful benchmark for determining how much attention credit unions should pay to their investment programs is profitability. Many credit union CEOs state that it doesn’t make sense to throw more resources at the Program if it isn’t profitable. My response is, “well, then let’s make it more profitable.” Before we can do that we have to gauge the profitability of the program. Let’s look at two ways to gauge profitability.

Revenue Margin

This is one of the more universal ways to gauge profitability in the brokerage business. It takes into account gross revenue minus direct and allocated expenses before corporate overhead allocation and taxes as a percent of gross revenue. This is sometimes called contribution to overhead. Since allocations for the investment program vary so much throughout the industry this measurement has become somewhat standard versus comparing income. In the recent Kehrer report the average credit union Program contributed 19% of its gross revenue to the overhead of the credit union.

Brokerage is a volume business which is another reason credit unions need to increase participation to enjoy higher revenue margins. The more the credit union can spread fixed costs over a larger sales force and revenue base the more contribution it can make to the credit union’s bottom line.

Profit Penetration

This is perhaps a better way to measure the profitability of the Program. According to the Kehrer report, the average credit union Program contributed $444 of pre-tax profit per million of share deposits.

What are the key drivers that will help grow the profitability of credit union Programs? As I have discussed in my previous articles and White Papers there are two factors, credibility and awareness. Ken Kehrer has broken those factors down into four drivers that credit unions need to constantly address to achieve and surpass the 10% member participation threshold.

Key Drivers

Financial Advisor Coverage – this benchmark has been debated for many years. There is no one standard for every Program since geographic and socioeconomic factors of the credit union must be taken into account when determining how many advisors a Program needs to provide optimum service. The numbers range from $150 million in deposits to $350 million. The average credit union in the Kehrer study had one advisor for every $313 million in member deposits. Again, I would not recommend using that as the standard for your credit union. That figure tells me that there is room to increase coverage by adding more advisors and still increase revenue and profitability. Most advisors will resist splitting territories but the Program management has to constantly consider the question, “are our members being optimally served with the current coverage?”

Referrals- This is a good gauge for the effectiveness of the Program. If the branch teams are fully engaged in a robust referral Program then that is a sign that the Program is well integrated into the credit union; a key determinant of Program success. It is difficult to establish a benchmark for this since every Program seems to have a different definition of what counts as a referral. This has to be determined by such things as closing ratios of referrals submitted and cross-sell success i.e. is the credit union receiving referrals from the financial advisors?

Product Mix – What is the mix of products that the Program is selling to its members? Credit unions typically sell less fixed annuities, individual securities and managed money products than their bank counterparts. According to the Kehrer study the difference in fixed annuity sales can be attributed to the fact that credit unions are still struggling to embrace Platform Programs where licensed credit union employees are trained to sell fixed annuities and mutual funds. The Platform reps tend to focus on selling fixed annuities. Credit union advisors have also been somewhat slow to the game of managed money. Historically credit union advisors have been more transaction focused. This is a result of a lack of training and a lack of hiring advisors who are knowledgeable about managed money products and less transaction oriented. This mindset is slowly changing as members become more concerned with commissions and fees.

Sales Assistants – The proper use of sales assistants can make the Program run more efficiently and profitably. Unfortunately there has been no universal benchmark to determine when a Program needs to add an advisor. Much depends on the individual advisor’s organizational skills. I have managed programs where as soon as an advisor reaches $200,000 in GDC they request an assistant while I have had advisors doing over $500,000 in GDC without the benefit of an assistant. As with most situations there is a happy medium. According to the Kehrer study credit unions have been more generous than their bank counterparts on average using one sales assistant for every 2.6 advisors while banks have an assistant cover an average of 3.6 advisors. Again, there are differences in advisor organizational skills but credit union Program managers should be looking to spread the cost of an assistant over as many advisors as makes sense. The process can also be used as a training opportunity. If the assistant is supporting 2 advisors then those advisors should be doing in excess of $500,000 each or you are not getting your money’s worth. Perhaps spending time to develop organizational skills may be a better investment.

What Next?

Increasing awareness of the Program and establishing credibility will move the investment and insurance sales program closer to and beyond the hallowed 10% member penetration benchmark. Credit union CEOs tend to focus on the revenue number and then decide whether or not there is merit in throwing more support behind the Program. I contend more attention needs to be placed on the revenue margin and profitability potential of the Program. Sometimes this can be achieved by simply determining what meaningful revenue does the credit union need from the Program? Once that is determined then the credit union should engage outside expertise to help determine if that goal is achievable and how. Once there is agreement of the viability of the Program then it needs to receive a seat at the management table of the credit union, become a core product and receive all the support that any other core product receives. Then and only then will the Program become a significant contributor to the credit union’s non- deposit income. As stated earlier, this is a volume business so we need to find ways to pump up the volume!

What percentage of your members are taking advantage of this important member service? Is it 10% or more? If not, then why not? Your members deserve to know.

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Have you noticed that when you go to see your doctor the nurse always places your file in that file holder on the door to the treatment room where you will cool your heels for the next half hour until the doctor comes to see you? There’s a good reason. That file, if completed properly, will give the doctor your medical history which will help him/her understand what may have caused your current malady or at least what medicines you are allergic to, etc. The more complete the file, the better the doctor is able to help you.

Your client file should be no less sacrosanct. The more details you place in your client files the better you can help your clients achieve their financial goals. That’s great offense. On the defensive side, if you are ever hauled in front of an arbitration panel your client file could be your salvation or your downfall. Here’s a perfect example. Several years ago a very competent financial advisor of ours had a loyal client who was a school teacher. She was 70 years old and still teaching school, god love her. Historically she was a conservative investor and the financial advisor documented her file as such including a separate risk tolerance questionnaire. One day the client came into the branch and told the financial advisor that she wanted to be a little more aggressive with her portfolio. Given that she was close to retiring the financial advisor strongly recommended against making such a change. Nonetheless the client told the advisor to put some of her money in a more aggressive mutual fund. The advisor followed the client’s instructions and promptly made a note in the client file of the conversation and the instructions and the change in risk tolerance.

You can probably guess what happened shortly thereafter. Yep, the value of the aggressive fund went down whereupon the client hired an attorney and took the financial advisor and the bank broker dealer to arbitration. You can imagine what a sympathetic figure this elderly school teacher presented to the arbitration panel. Under normal circumstances the financial advisor would not have had a prayer of winning except…she kept immaculate client files. That’s right, when it came time to present her defense to the arbitration panel her attorney pulled out the client file and the notes on the change in risk tolerance and investment strategy that the client had acknowledged in writing. Not only did the financial advisor win the arbitration case but the former client had to pay all court costs for the bank and the financial advisor. Of course there are really no winners in arbitration cases. A once productive, congenial relationship was destroyed and the former client walked away financially damaged through her own greed or through bad advice that she received from family or so-called friends.

No one expects to be sued by a client or former client but it can happen even years later when even the best memory can forget important details. I was contacted by a former financial advisor who used to work for me three years ago. He recently received a Statement of Claim from FINRA that the family of a now deceased former client is suing him over a transaction he completed three years ago! He is no longer licensed but remembers the client as one of his favorites. Apparently she adored him. She is gone and the family doesn’t know him from Adam. All they know is the investment has lost value and they are looking for someone to blame.

Your client files are no less important than a doctor’s. The few minutes it will take to document a transaction could save you thousands of dollars in legal fees and arbitration costs not to mention a verdict that could go against you. It will also force you to sort out the transaction in your mind and make sure it is a suitable transaction. Invest the time today or pay the penalty tomorrow. Even the “best” clients can become your worst nightmare when money is on the table.

1. Use a detailed risk tolerance questionnaire with every client. Have the client sign and date it.
2. Document any changes to the risk profile or complete a new one with the new date.
3. Make notes to the file about why the transaction makes sense.
4. Complete a financial plan for your clients so you have a complete picture of their financial lives versus just investing $50,000 from a CD.
5. Ask your client and yourself, “What is this money for?”
6. Don’t short change required disclosures. If you are afraid the disclosures will “kill” the deal then you really don’t have a deal.
7. Read “Storyselling” by Scoot West and Mitch Anthony, especially if you work with seniors on a regular basis.

Taking these precautions doesn’t mean you’re a fatalist or negative thinker, it means you are a professional. I’m sure Paul McCartney didn’t think his last marriage would end in acrimony. Now he is several million dollars poorer. An expensive lesson on preparation that most of us can’t afford to learn the way he did.