Put that DIY client in their place!

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DIY, or Do It Yourself, clients are a spectrum but no matter where they lie on the spectrum it is bad. You will torture you if you let them. Don’t get used like the office coffee machine. Financial advisors need to know how to handle do-it-yourself clients and that means putting them in their place.

Here are 3 things to do if you want to avoid being regarded as the personal butler by your DIY client.

But first…

For those of you who are new to my blog/podcast, my name is Sara. I am a CFA® charterholder and I used to be a financial advisor. I have a weekly newsletter in which I talk about financial advisor lead generation topics which is best described as “fun and irreverent.” So please subscribe!

How financial advisors should handle a DIYer

DIY is a spectrum and no matter where they lie on the spectrum they need to be put in their freaking place. There are ways to handle a do-it-yourself client but first you need to know how to identify them.

Some are true DIYers who will go so far as to unwind trades that you did and want to dictate how you manage the money. Others are mere back seat drivers who have someone advising them like a CFA who is their brother or something, and they just want to have a say in everything you do.

Either way it’s bad. Let me be clear: these are bad clients. These are the hardest clients to get and to keep happy. So you have to rule these clients with an iron fist in the beginning to establish that you are the dominant player, that you are the driver of the car and they are the passenger. That you are the alpha and they are the beta.

Financial advisors need to learn to recognize the signs of a potential DIY clients. High likelihood of DIY client:

  • CFA charterholder
  • Has a CFP in the family
  • Works at a high tech company such as Intel, Cisco, Microsoft
  • Former or current  employee of a financial firm of any type in any capacity, or of a bank
  • Reads seeking alpha
  • Have more than 1M but have been managing it themselves for 2 years plus

If your prospects or clients are any of these people, you have to be hard. And I mean hard. Clients must respect you. This is very important. If you let them walk all over you, you will get used and abused, chewed up and spit out.

They will:

  • Blow you off
  • Argue with everything you say
  • Constantly be creating more work for you
  • Expect you to be their servant
  • Fault you for bad performance when they were the ones messing things up all the time
  • Give away all your trade secrets to their DIY friends but never introduce you to any of them

Stand up for yourself! You have to respect yourself and not tolerate this BS. You have to stand up to them and call them out on their BS. Act like you are good enough, and they’ll believe you. Act like you are not, and they’ll believe that too.

So I’m going to tell you the specific things you need to do. 

3 ways to handle a do-it-yourself client

Now this is going to be hard for many of you to do, beause youv’e been brainwashed by ths industry and all these nicey nicey management consultants or whoever that just want to sell you a yoga retreat. I’ll save you the $6k and tell you right now how to act. It’s very simple.

3 things.

You are going to have to be willing to cut the bad DIY clients lose. This will mean you have to be able to attract prospects to yourself easily. Having other options that you know you can go to is the only way you will be able to cut out this “pleaser” or “butler” behavior. You will have to exercise self control and hold your fears in check.

Want to learn how to get new leads? Check out this video below.

#1 Make the DIY client chase you

During the prospecting phase, you have to let them do 70-75% of the calling, texting, and emailing. You can not pursue these clients heavily because then they will view you as the butler.

During the meeting, establish multiple points of value not just one or two, and it shouldn’t just be that you have access to awesome private equity funds that they can’t get on their own.

Make a chart or diagram to illustrate to them what they need you for. You really have to spell it out. Get a white board and write it all down. For example if you are talking about financial planning, give them a sample financial plan to look over in the meeting, but then take it back before they leave as you recall they are DIYers and will copy it. Tell them what every single component of the plan will be.

If they ask for references, blatantly say no. mystery creates obsession. It will make them more intrigued. Tell them that you only open up references after the person signs up and ACATs the money over.

Also restrict any marketing content. Don’t be sending the DIY client your quarterly economic outlook piece. That is playing right into their hands.

Tell them that you only have a few spots left. Limited time offer.

Then do not follow up with this prospect.

#2 State the DIY declaration

There is no beating around the bush with a DIY client. You have to crush them right away before they get the chance to surge up.

In the beginning of the relationship, you should say these words:

I look forward to working with you, but I’m not going to be your personal butler. We are not co-managers of this portfolio. If this isn’t what you want, then I’m prepared to sever all ties, walk away and forget this conversation ever happened. Let me know what you want to do.

You almost have to dare them to say no, and then when you do that they will say yes.

#3 Implement DIY pricing

Now I know you advisors aren’t creative with anything and especially pricing has to be the same. But its just not fair to the good clients if you are spending so much time on a DIY relationship that it become unprofitable. In that case the profitable, good clients are paying for the bad clients.

Tell them this:

Now, we have two options for working together. One is the typical model in which I am the portfolio manager and financial advisor. The normal fee schedule on my website applies.

However, if you want to co-manage the portfolio and be involved with every tradesy wadesy I make, then we can work together differently. You can ask me unlimited questions and we can research the trades together. I will simply charge you $30k per month because that is the cost of my firm’s time and the expenses associated with taking on an engagement of this type.

Which option would you choose?

You’ll have to amend your ADV if you are offering option #2.

Also tell them that if the sign up for the normal service and then start treating you like their personal butler, then you’ll be in touch with them about transferring them to model #2 which will cost them $30k per month.

Summary of how to handle a DIY client

What’d ya think of my blog on how to handle a do-it-yourself client? Was this helpful?

If yes…

Learn what to say to prospects on social media messenger apps without sounding like a washing machine salesperson. This e-book contains 47 financial advisor LinkedIn messages, sequences, and scripts, and they are all two sentences or less.

This is a book about financial advisor LinkedIn messages which contains scripts you can use to get new prospects.

You could also consider my financial advisor social media membership which teaches financial advisors how to get new clients and leads from LinkedIn.

The Sara Grillo membership is a social media program for financial advisors - but only the cool ones.

Thanks for reading. I hope you’ll at least join my weekly newsletter about financial advisor lead generation.

See you in the next one!

-Sara G

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