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The Practice Doctor is IN

Best Practices in the Real World: DOL Fiduciary Rule Edition

by Al Depman, CLU, ChFC, CMFC, BH
Practice Management Consultant

Al Depman photoI've been teaching best practices to advisors for over 20 years. Every so often a challenge comes along that causes me to revisit the integrity of my material. The most recent challenge is the DOL Fiduciary Rule, which is in its transition period for the remainder of 2017. I thought it would be interesting to reach out to a senior advisor and see how the theory of a rigorous client acquisition structure was playing out in this new reality.

Ketul Mody, an advisor with the Diamond State Financial Group, and I recently met for a best-practices refresher course. His primary market is a particular niche—the mid-Atlantic Indian community—which would provide a bilingual perspective on how his process has evolved over the eight years since our first meeting.

Ketul and I dissected his current process and pitted it against my best practices model for turning a prospect into a new client.

Step 1 - Initial Contact

Before actually meeting the prospect, the advisor needs to set the stage effectively. Many articles suggest that consumers do some due diligence about the advisor they are going to meet with. While Ketul works mostly from referrals, he encourages prospects to visit the firm's website and his CFP™ profile therein. He also maintains a LinkedIn presence and says, "It's all about telling the prospect consistent, honest stories about who you really are." Some in the media even recommend accessing BrokerCheck to see what problems there might be. In addition, Ketul gives the prospect "mental homework. I ask them to think about their top financial priorities. This helps us get down to business more quickly."

Step 2 - Initial Meeting

Where does Ketul like to meet the prospect? "I let the client choose where they would be most comfortable—a neutral coffee shop, their workplace or home, in my office."

This first meeting has these best practice elements:

  • It's truly a dialogue.
  • The advisor shares his/her value proposition and draws out the prospect's issues.
  • Compensation is discussed. The media has been particularly focused on making sure you have full disclosure and transparency on how the advisor is paid. He uses the "3-ways we can engage" piece described in an earlier newsletter.
  • The prospect agrees to work together.

For this initial meeting, Ketul uses his firm's (Diamond State) presentation on paper or tablet. This is a deck of slides/pages that includes information about his firm and broker/dealer as well as an "iconic image." This is a visual representation of the value Ketul can bring to a client over time and is reused many times during meetings to maintain consistency and perspective. The DOL ruling is particularly interested in ongoing suitability after the initial transaction, so the ongoing nature of the iconic image concept is particularly appropriate.

Step 3 - Discovery Period

Best practices here include:

  • Use a consistent fact/feeling-finding tool. Ketul defaults to the eMoney discovery document as a financial planning tool.
  • Gather all necessary information and documents. Ketul uses a document checklist on which he can choose the statements and materials he'd like to study.
  • Uncover the key people in the prospect's fiscal life. Who is their executor, trustee, guardian, powers-of-attorney, beneficiary, attorney, accountant, business associates? Ketul also asks if the prospect is in any fiscal role for someone else. From a fiduciary standpoint, annually determining if these players change is important for proving ongoing suitability.

Step 4 - Education

Often, a prospect or client needs to comprehend a new financial concept. Ketul has a suite of compliant presentations he uses. Common examples include the three tax buckets and term vs. perm differences.

Step 5 - Communication

Ketul will send the prospect an email update after each meeting to ensure they're on the same wavelength. Again, this provides fiduciary continuity in the process.

Step 6 - Presentation and Close

This step begins with recapping the updates Ketul has been sending all along.

  • He prepares a crisp, clear, uncomplicated executive summary.
  • A well-documented, more-detailed, solution is also made available to the prospect, if he or she wants more specifics.
  • Any new presentation ideas are rehearsed beforehand to anticipate questions.
  • He knows when to ask for the sale. Ketul uses the "assumed close" to move into the implementation phase. "This is hardly ever a problem," he says. "Just keep what you are doing clean and clear."

Step 7 - Underwriting and Issue

This step is mostly outsourced to the firm and his shared assistant.

Step 8 - Delivery

Ketul feels strongly that this step is critical. The prospect is now a client and will be treated as one going forward. In this transitional meeting, he:

  • Reinforces what was done and why via the iconic image.
  • Plants seeds for any next opportunity.
  • Covers service expectations.
  • Bridges into a referral discussion.

Step 9 - Ongoing Reviews

Once the client has been secured, the advisor's responsibility is to regularly check in and ensure that the suitability of the plan or product continues to be appropriate for the client over time. Planning clients are on a quarterly contact schedule. Simpler need-only clients are contacted at least annually. I have a best-practices review agenda available upon request.

Well done, Ketul! Because his marketing is mostly referrals, there's a tendency to assume the referral is already "sold" on working with him. Thus, he sees there might be a tendency to shortcut some of the early trust-building steps in the sales process. He resists this temptation because Ketul wants to ensure every new client has a similar experience from the start. It makes maintaining suitability that much easier.

After all, it's the fiduciary way.

The Doctor is OUT

© 2017 Al Depman

Al Depman, CLU, ChFC, CMFC, BH, a.k.a. "The Practice Doctor", is a contributor to The Wall Street Journal, has authored numerous articles in professional publications on practice management, and is the author of the book, How to Build Your Financial Advisory Business and Sell It at a Profit, available from McGraw Hill. Al combined his Liberal Arts studies with 10 years of management experience with McDonald's Corporation to enter the financial services world 25 years ago. Since then, Al has evolved from an MDRT-level sales rep into a full-time consultant specializing in helping others engineer their business practices to the next level. Contact him at

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