If Failure Is An Option

By: John Steuernol

Business man sitting at table in office, side viewA few years ago, I coined the phrase “if failure is an option, you’ve got too many options”. The drop out rate on the fully commissioned side of the investment advisor business is exceptionally high, being around 80% over 10 years and close to 50% in the first four. Those are big numbers and speak to a lot of lives thrown into turmoil, financial disappointment and unfulfilled dreams.

I worked for one of the largest firms in the investment industry for 15 years and trained most of their new entrants for close to ten of those years. This gave me a chance to see the rise and fall of many new advisors up close and personal. About every ten days I would hear a story of another one that had been asked to go or decided to leave on their own.

Just the other day, I’m doing a little skiing at Alpine near Collingwood when I run into someone I used to work with. He is a very successful advisor running an excellent business in Toronto who a year ago hired a ‘junior’ advisor to join his practice. As we are riding up the ski lift he tells me that he had to let the ‘junior’ advisor go. After a year in the business his results were dismal. He could not close.

Yesterday morning I sent a note to an advisor to see how he was doing. His response to my note was typical of many I receive: “Well to be honest about it, it has been a struggle. I'm about 1/3 of where I'd like to be for the year, which means the next couple of months need to be huge. Moving to a new community to start this career may not have been the best choice; it's proved to be difficult. On a positive note, I'm in the process of buying assets from another IA.”

After nine months in the business this advisor had only about $3 million in assets. His firm expects each new advisor to bring in $10 million in assets each year for the first five years. Fortunately, his manager really liked him and tossed him a life-line and allowed him to purchase some assets from a senior advisor who was cleaning up his practice. This doesn’t happen all that often for an advisor in his first year.

There are many reasons why advisors do not make the cut and are asked to leave. The principle issues I have seen are as follows:

  1. They never should have been hired in the first place. It takes a unique breed to handle the risk, the liability, the rejection and the constant unrelenting pressure associated with this business. Many simply do not have the unique blend of drive, ambition, empathy, conviction, courage and staying power to survive. Hiring the right people is challenging and even with all my experience my success rate is only about 60%.
  2. There are ‘the glass is half empty people’ and then ‘the glass is half full ones’. The ones that see the world as half empty all the time often do not succeed. You know the type; they typically see all the reasons why something won’t work, rather than the reasons why it could. I spoke with just such a person yesterday. He’s an experienced advisor with 7-8 years in the business who is stalled. We were discussing several ideas to help him move his business forward and with each idea he found a reason why my coaching recommendation would not work. I’m considered by some to be one of the best sales coaches in Canada. I know what I’m talking about. This was a preliminary discussion to see if we should enter into a coaching relationship and at the end of our discussion I told him that I was not sure if I wanted to take him on as a client. I usually don’t work well with people who constantly see the world as ‘half empty.'
  3. They simply are not willing to work hard enough. When I’m recruiting someone I describe things as they are. There is absolutely no sugar coating. For those new to the business, the 60 hour work week should be the norm. This is not a 9-5 job and anyone who thinks they can get away with working 35-40 hours a week and become successful is delusional. I was speaking with a successful new entrant out west last week and he told me that a typical week for him is around 65-70 hours. This is a business that requires a tremendous amount of energy and effort up front to learn the skills and build the business the proper way.
  4. They are not willing to make the dials. Last week I was assisting a manager evaluate a potential new hire who told me point blank she did not like the phone. The first thought that went through my mind was ‘next.' If you do not like the phone, how in the world are you going to reach out to enough people to make this business work. I suggested to the recruiting manager to pass on this candidate. You need to treat the phone as one of your best friends. Those who do a lot of cold calling will make on average 70-80 dials a day and speak to about 20-25 people and potentially qualify 3-5 leads. This is a business that requires ‘intelligent’ persistence to prevail. The #1 cause of failure in the first 4 years is the unwillingness to speak to enough people!
  5. They are not coachable. Frankly I enjoy someone who has a little attitude. A little attitude is ok and probably necessary to handle the rigors of the job. The problem comes when there is a lot of attitude. I cannot tell you how many times a manager has said to me: “he just won’t listen; the lights are on but nobody is home”. It’s like we are talking to a blank wall. I have over 35 years of experience and many of the managers I work with have close to 20 years or more. There is a lot of experience out there and a lot of lessons that could be learned if the new entrant would simply be willing to listen and follow some good advice.
  6. They don’t want this job bad enough. Some people will tell you they want to be in this business because they want to ‘help’ people. I suppose that is true on a certain level but those who truly succeed are not ‘financial social workers’. They may practice a lot of financial therapy with their clients, but at the end of the day they get stoked by the mental challenges of the business, about the opportunity to go out there and do something big and by the chance to make a lot of money. This is a business where regardless of your social background if you are willing to work hard enough and smart enough you can and will become a multi-millionaire in your own right. Those who succeed in this business like the trappings that come with that success and the things that money can buy. They really want it and are prepared to work hard to go out and get it.

So there you are, the six primary reasons why failure becomes an option for too many.

That’s it! Hopefully none of these conditions are holding you back. If they are make whatever changes are required and then go for it!

John Steuernol
Your ‘At The Moment Coach’
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