In financial services, every firm has a process for making decisions about investments. The process is usually designed to ensure that there is due deliberation about decisions, and that no money manager is allowed to invest without periodic oversight from a board or committee.
This is sensible, since one person, left to his own devices, might occasionally make an error that could be caught if only a group of experienced people looked over his shoulder.
The Investment Committee, as they might be called, serve as editors to prune and shape the creative ideas of the money managers, whether they might have a tendency to swing for the fences, be too cautious, or drift too far from the declared strategy.
The problem arises when a board, a family, or an individual goes shopping for a money manager, and has to listen to five potential firms describe their investment process. They all sound the same.
Those making the pitch try hard to differentiate their process, but as the old saying goes, most of us are interested in sausage, but few want to know how it’s made. Let’s face it, process is boring.
Nevertheless, the financial professional has to have a process, and she has to demonstrate to a prospect how it works and why it’s good. After all, if she doesn’t mention it, the prospect might assume that she doesn’t have one, and exclude her as a preferred candidate.
So how can a financial services presenter make the investment process interesting and a source of differentiation?
The first step is to answer the question, “Why should they care about the process?” This is often the most forgotten component of informal, sit down meetings conducted using a pitch book.
One way to bring an investment process to life is to lead the prospect through a series of questions to determine what he knows about the process, and why he thinks it’s important. If he knows little, and if he’s unclear about its value, you have opened what psychologists call a “knowledge gap” which creates curiosity.
Another approach is to confess aloud that everyone has a process, for good reason, and then paint the picture of what can happen without it. Given the recent collapse of several well-known firms due to lack of oversight, it should not be hard to tell a story that will capture the prospect’s attention.
You may fear bringing fear into the conversation, but fear not. Your brief depiction of what happens when money is invested without due diligence can make your process all the more attractive and interesting.
Another way to draw attention to your process is to FLAG it. FLAGGING is a verbal technique that professors use when they say, “What I’m about to present to you will be on the test.” Students wake up and take notes at that moment.
You can use the same technique to encourage prospects to focus on what otherwise might be a dry recitation of a complex diagram or set of bullet points.
For example, you could say, “What I’m about to tell you may seem boring and routine–you may think you’ve heard it all before–but it is the most important and powerful thing we do to protect your assets and ultimately your purchasing power.”
And then off you go, with the prospect leaning forward intent on understanding how you protect and preserve his hard-earned wealth.