Sales Coaching for Investment Advisors Can Increase AUM

Sales coaching for investment advisors can be a positive experience, but you need to tread carefully before making the critical decision about the coach you will entrust with this assignment.

There’s no magic bullet that will increase your AUM, but the right kind of sales coaching for investment advisors can help. 

Sales coaching vs sales training

 Sales coaching shouldn’t be confused with sales training.   As one website noted, [T]hink of training as a science, and sales coaching as an art. 

Sales training provides generalized information applicable to a group of sales representatives  

Sales coaching focus on individual advisors.  A competent sales coach will learn as much as possible about how the advisor approaches the sales process and will tailor coaching advice to the particular needs of that advisor.

Think of sales training as a group endeavor and sales coaching as a one-one-one process.  It can (and often should) be quite intensive.  In my practice, I routinely confer with clients before they have a meeting with a prospect.  Our discussions are broad based and include where they will be meeting, details about the prospect, what the advisor should wear, where the advisor and the prospect should sit, how to greet the prospect, the differences between an in-person meeting and a videoconference, how the advisor should begin the meeting, how the meeting should be conducted and how the meeting should end.

After the meeting, we’ll have a debriefing session so I can understand how the meeting went and what can we can learn from that experience.

Sales coaching and sales training aren’t entirely unrelated.  Good sales coaches reinforce the lessons learned in sales training.  This combination can be very effective in improving performance over time.

Does sales coaching work?

There’s compelling evidence that the right sales coaching can benefit organizations, including advisory firms.

One meta-analysis assessed whether coaching had an effect on performance/skills, well-being, coping, work attitudes, and goal-directed self-regulation.  It found “significant positive effects on all outcomes” and concluded that coaching is “an effective intervention in organizations. 

Metrics to measure effectiveness

According to an article in Training Industry by Nick Kane, there are key metrics you can use to measure the effectiveness of sales coaching:

  1. ROI:  While it may be difficult to determine if an increase in sales resulted from sales coaching, ROI remains the “simplest and easiest” way to determine effectiveness.
  2. Self-Reporting: Seek feedback from the employee and supervisors.  Ask them to rate the quality and effectiveness of the sales coaching.
  3. Awareness of problems: Did the sales coaching experience aid the salesperson in recognizing situations where improvement is required?
  4. Check metrics: Investment advisors are understandably focused on key metrics, like the number of inquiries, the number of meetings, the conversion rate and whether AUM increased.  If all or some of these metrics increased after coaching, that would be a good indicator of the effectiveness of the process.  

    Lower turnover: 

    Another positive sign is whether turnover – especially with high performing advisors – is reduced over time.

  5. Culture: Effective coaching should result in happier employees, less stress and fewer sick days.

How to choose a sales coach for investment advisors

Here are some tips for hiring a sales coach for investment advisors.

  1. Background:

    The investment advisory business is specialized, highly regulated and technically complex.  It would be very difficult for someone who has never been an investment advisor to be an effective sales coach.  

Just being an investment advisor may not be enough.  It would be optimal if the sales coach had been a very successful advisor.  The knowledge such a coach would have learned from being at the top of her game as advisor would add meaningful value to the coaching experience.

If you are an advisor who is running your own advisory firm, it might also be beneficial for you to find a sales coach with experience being in charge of a successful business.  You have unique stressors (like meeting payroll, generating profits and managing others) that your sales coach needs to understand.

  1. References:

    Any sales coach you are considering should be able to provide references who can attest to the results achieved through coaching.

  2. Network:

    An article in Inc. suggested asking members of your network for a referral to a great coach.  You can also ask for referrals from groups on social media.

  3. Chemistry:

    The relationship between a sales coach and a financial advisor is both intense and highly collaborative.  It requires mutual respect and trust.  Ask the sales coach you are considering to speak with you without charge for a basic interview to determine whether the chemistry between you is positive.

  4. Questions: 

    A good coach is a good listener.  A great coach is a great listener.  In the initial interview, assess whether the coach dominated the conversation or elicited information from you by asking questions and then followed up by requesting more information.

The converse is also true.  You need to ask the coach questions intended to determine if you’re a good fit.  Here are some suggestions, which aren’t intended to be all-inclusive:

Would you be willing to provide references to other financial advisors you’ve coached?

Who is your ideal client, and why?

When a coaching relationship didn’t work out, what was the primary reason?

When a coaching relationship was successful, what was the primary reason?

What metrics would you use to determine whether our relationship was successful?

How much do you charge?

What do you need to know to determine if I’m likely to see a positive ROI on my investment in your services?

  1. Broaden your search:       

    Most coaches use videoconferencing to provide services to advisors located all over the world.  Don’t limit your search to your local area.  You may be surprised to find a better qualified coach in a distant location who is more cost-effective than someone who lives nearby.

  2. Evidence:  

    While coaching is somewhat of an art, there should be solid evidence supporting the guidance imparted by a sales coach.  Ask about that evidence.  Are there peer reviewed studies supporting the approach of the coach?  Can the coach provide citations to them?  Has the coach authored books, papers or articles?

Sales coaching for investment advisors can be a positive experience, but you need to tread carefully before making the critical decision about the coach you will entrust with this assignment.