Getting Back to the Basics of Building Client Relationships

The American College of Financial Services
August 24, 2016

Building your client base, a mix of science and art, is at the core of every successful financial services practice. Even veteran financial advisors and insurance agents can benefit from revisiting and practicing basic client building principles from time to time.

An advisor communicating with a client

The American College of Financial Services has gathered expert insights and opinions from several modern advisors about the key pillars of effectively building a sustainable book of business and why they matter now more than ever.

You may not need a full-blown refresher course about prospecting, book-building, the One Card System (OCS) or the 10-3-1 principle. However, implementing just one of these practices can help you:

  • Retain existing clients by making a lasting impact
  • Make client building a more meaningful part of growing and managing your practice

In the Beginning, There Was Granum

The namesake of The American College of Financial Services’ Northwestern Mutual Granum Center for Financial Security, O. Alfred Granum, CLU®, passed away in January 2014, but not before making a mark in the life insurance industry with his One Card prospecting system (OCS) and 10-3-1 principle. Granum was uneasy during his years as an insurance agent over the fact that “everybody gave lip service to the desirability of getting referred leads, but there was no system for getting them.

So he developed the OCS and its keystone 10-3-1 principle based on the belief that the best way to get someone to listen is through a referred lead. The 10-3-1 ratio refers to the number of qualified suspects (10) it takes to get three fact-finders, from which one will become a new client. The significance of this principle was that it provided predictability in an unpredictable business by allowing advisors to use benchmarks and determine how much activity was needed to meet production goals.

Through his studies and research came the book, "Building a Financial Services Clientele," now in its 11th edition. The book is used to this day as a way of giving new agents and advisors a tool to expand their foundational understanding of client building.

Client Building Basics Every Advisor Should Revisit

Some things never change, and in the world of financial services and retirement planning, one of those things is a client's desire to know they’re receiving credible advice and that their advisor is trustworthy. By revisiting several of the fundamental principles of relationship and book-building listed below, you can instill trustworthiness in existing and prospective clients while reinforcing your own credibility.

  • Never Stop Learning. One element of Granum’s client building system that addresses this need for advisor credibility and trustworthiness is lifelong learning. Granum recommended that advisors earn their Chartered Life Underwriter® (CLU®) designation as early in their career as possible, begin practicing immediately and never stop building expertise. Today’s advisors agree. “Things change on a regular basis, and it’s really important for us to be one step ahead of those changes,” said AEP Managing Partner Matt Lueder, CLU®, ChFC®, CFP®, CASL.

    Lueder emphasized the importance of lifelong learning not only for an advisor’s confidence but because clients demand new information, new concepts, and they require purpose in what they’re doing with their retirement planning. “They want to make sure that they’re working with somebody that’s a confident advisor.”
  • Build Relationships Through Fact-finding. Granum believed thorough fact-finding conversations were key to understanding a prospect’s hopes and dreams, and being able to make the right recommendations. He also believed advisors could ensure a healthy practice and stay motivated by talking to a new factfinder every day. Katie Messer, a financial advisor with CLU® and ChFC® designations, offers one way to build long-term, credible client relationships through comprehensive fact-finding:

    Advisors who have completed a full fact finder should know everything that they need to about their clients for current and future planning. “If you’re asking the right questions then you should be able to do the full financial plan for your client,” said Messer. “They may not need anything that year, but two or three years from now, if you're doing the fact finder correctly, you’ll be aware of that.”
  • Client Building, Not Policy Pedaling. At the foundation of everything Granum stood for was a client-first philosophy. He believed in developing relationships, not pushing products. Advisor Ryan Kramer, CLU® agrees, “One of the things that I never want to be is somebody that pushes products down a client’s throat.”

    Instead, Kramer recognizes that every client is different and has different needs, which is why he recommends adapting to a client’s unique communication styles and needs, always figuring out what’s most important to them and their families.
  • Make “Posting and Planning” a Top Priority. Granum was a firm believer in advisors capturing their daily activities (posting) and then organizing, evaluating, and using the results to evaluate the next day and beyond (planning). “Posting and planning is one of the most important business activities of the day,” said Granum.
    • After every day, it’s recommended advisors post:
      • Prospecting results
      • Telephoning results
      • Cases open
      • Sales made
      • Business expenses
    • Before each new day, it’s recommended advisors plan by:
      • Determining a list of names to call the next day
      • Scheduling case prep as needed
      • Looking at the next day’s calendar to asses how to best use one’s time

Whether you’re new to the financial services industry, or you’ve been building a client base for decades, brushing up on Granum’s client building fundamentals will help realign and rejuvenate your practice. If you’re curious to see how your client building skills stack up and want an actionable plan for strengthening your skills and approach, please download our “Client Building Assessment Quiz and Action Plan Worksheet.”