Whatever happened to all the cowboy stockbrokers who relied on chutzpah and grit to lasso clients? Their stories made us laugh even as we cringed at the shameless antics.<\/p>\n
Like Prospector Cat: Years ago, a broker drove to posh neighborhoods and released his cat to roam the streets. Its collar ID said, \u201cCall this number if you find me.\u201d<\/p>\n
Inevitably, a good Samaritan with deep pockets would comfort the stray and contact the owner at work. The stockbroker feigned relief, gushed gratitude, and began the steady push for a new account.<\/p>\n
His compliance department sometimes got nervous about his technique, according to an industry executive who remembers him. Relax, the broker would say. \u201cMy cat has a Series 7.\u201d
\nA true story, the executive insists, although he doesn\u2019t want his name attached to it.<\/p>\n
Then there was \u201cRichard,\u201d the Funeral Crasher. Pam Krueger, the creator of MoneyTrack on PBS and co-founder of a service that matches up clients and advisers called WealthRamp, says the broker scanned local obituaries and attended funeral services for \u201csuper wealthy\u201d patriarchs. Whether he knew them or not.<\/p>\n
He worked grief-stricken rooms and paid especial attention to widows, sisters, and adult daughters. \u201cThe guy was like a piranha on the women,\u201d according to Ms. Krueger.<\/p>\n
Cowboy stockbrokers like Richard are vanishing, though. Slowly, steadily, they are losing the war to technology, to teams that employ hard-core business skills and harvest the deeply personal information that is available on the Internet.<\/p>\n
\u201cProspecting with a fintech tool is not nearly as fun as the old days, but it is a helluva lot smarter and more efficient,\u201d says April Rudin. Her firm specializes in branding and communication strategies for the financial-services industry.<\/p>\n
Companies that curate online information and create customized reports on prospects or clients, such as Wealth-X and WealthEngine, \u201ccan help you plan and pinpoint targets,\u201d she adds. Ms. Krueger also stresses the importance of the Internet, but from a different perspective: \u201cThe really successful prospectors know how to use their own websites to sell themselves personally.\u201d<\/p>\n
Technology is one reason cowboy stockbrokers are disappearing. Another is the surging dependence on referrals. Zany tactics aren\u2019t necessary to grow a business. And, if anything, they are a liability with existing clients.<\/p>\n
\u201cMost advisers grow 80% of their business through referrals,\u201d says John Anderson, a managing director at SEI Investments .
\nHe suggests they can do even more, citing a study that showed only 16% of clients actually remember being asked for a referral in the past 12 months.<\/p>\n
Ed Friedman, the director of strategic relationships at Dynasty Financial Partners, says client dossiers, which include known associates and board affiliations, have changed the way advisers ask for referrals.<\/p>\n
The old way: Advisers used carefully engineered, open-ended requests. \u201cI\u2019m always looking to add clients like you. Who do you know that I could be of service to?\u201d This approach put clients on the spot and often yielded no referrals.<\/p>\n
Mr. Friedman says advisers can now put together a list of, say, 10 names and mention them to clients. Today\u2019s open-ended phrase is, \u201cHow would somebody like me go about meeting them?\u201d Cowboys are also disappearing because of the shift from product to process sales. The cycles are longer and dependent on proven expertise in clearly defined market niches.<\/p>\n
More skill. Less serendipity.<\/p>\n
Mitch Martin is the chief executive of Stonebridge Investment Counsel, a registered investment adviser that offers family-office services to celebrity clients, primarily professional athletes. Stonebridge emphasizes behavioral coaching for young athletes, who experience sudden wealth. Which, to me, sounds like a long lead-time and lots of education before the first revenue event.
\n\u201cWe create a vision for life that extends beyond sports,\u201d says Mr. Martin, adding that Stonebridge helps clients make tough decisions<\/p>\n
about their career earnings. How much money should they allocate to current lifestyle, savings, charity, and their parents and family?
\nCan you imagine Prospector Cat\u2019s two-legged partner competing against his company?<\/p>\n
Let\u2019s go one step further. If you can\u2019t define your unique expertise, maybe you are Prospector Cat. These days, the cowboys are loping off into the sunset. But they aren\u2019t completely gone. Recently, I ran across a two-man team that offers an \u201ceducational course for adults\u201d about finance at a New Jersey university. The school\u2019s name appears big and bold on the marketing material and seems to legitimize the course fee of $69. What is so unusual?<\/p>\n
Students are paying to be prospected by instructors, who offer one-on- one meetings. \u201cThis will be your chance to ask specific questions about your personal situation.\u201d<\/p>\n
But like Prospector Cat\u2019s partner and the Funeral Crasher, the Jersey Boys are starting a relationship under false pretenses. And at the end of the day, that is never a winning strategy.<\/p>\n
Mr. Anderson advises anyone building his or her practice: \u201cDo your business. Do it right. You\u2019ll get the referrals.\u201d<\/p>\n
Giddy up, Cowboy.<\/p>\n
Norb Vonnegut built his wealth management career in New York City, and now is an author who writes thrillers about financial malfeasance, and he can be found at norbvonnegut.com. Or write him at norbert.vonnegut@dowjones.com. <\/em><\/p>\n","protected":false},"excerpt":{"rendered":" Industry veterans tell of an adviser who used his cat, while another frequented funerals Whatever happened to all the cowboy stockbrokers who relied on chutzpah and [\u2026]<\/span><\/p>\n","protected":false},"author":2,"featured_media":124,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[1],"tags":[],"yoast_head":"\n