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What’s holding you back from achieving your business goals? You might think it’s a lack of experience, tough competition or not enough time. 

But for most financial advisors, their own biased thinking holds them back more than anything else. If biases dominate your thinking, your business goals will stay out of reach forever. 

But if you can clear up your thinking and leverage it for your success, you’ll reach your goals without even trying. 

In this episode, you’ll find out how to de-bias your thinking to make your wildest dreams come true. 

Want to create success on autopilot by removing your biases? Listen now!

Show highlights include: 

  • The simple strategy that could add 3 clients every month (even if all of your marketing underperforms) (1:03)
  • How “Overconfidence bias” makes you expect unrealistic results (and kills your happiness when you don’t achieve them) (4:03)
  • Why doubling, tripling or quadrupling your income is possible by next year (unless “anchoring bias” is holding you back) (8:58)
  • The insidious way the “Ostrich Effect” keeps you from seeing your business in a realistic way (13:51)

If you’re looking for a way to set more appointments with qualified prospects, sign up for James’ brand new webinar about how financial advisors can get more clients with email marketing. 

Go to https://TheAdvisorCoach.com/webinar to register today. 

Go to https://TheAdvisorCoach.com/Coaching and pick up your free 90 minute download called “5 Keys to Success for Financial Advisors” when you join The James Pollard Inner Circle.

Discover how to get even better at marketing yourself with these resources:




Read Full Transcript

You're listening to Financial Advisor Marketing, the best show on the planet for financial advisers who want to get more clients without all the stress. You're about to get the real scoop on everything from lead generation to closing the deal. James is the founder of TheAdvisorCoach.com, where you can find an entire suite of products designed to help financial advisers grow their businesses more rapidly than ever before. Now, here is your host, James Pollard. [00:31.7]

James: What's going on financial advisors? I want to kick off this show by saying thank you for listening. I don't express my gratitude nearly enough, and I want to let you know that I appreciate you. I am so blessed to be able to help financial advisors through all the channels I have email, obviously being the biggest, because that's what I'm good at. So, thank you. Thank you. Thank you. And speaking of email, I posted on LinkedIn, not too long ago, about, how financial advisors can add another million dollars to their businesses with email marketing. Let me explain this to you. I've got the status update in front of me. I'm going to read it to you. [01:02.8]

Let's say you start building an email list and you add a mere 10 email subscribers per day. That's it nothing crazy. This is totally achievable with a few pieces of content, online ads, etc. If you have a blog on your website, you can put your email opt-in on the blog and if you get a couple of visitors every single day and your opt in is anything even relatively close to good, you can probably get your 10 from there. If you're running online ads on Facebook, it, you can definitely get 10. If you're running online ads for something like Google or LinkedIn, you can still get something like 10 or more. LinkedIn is going to be a little bit more expensive, but if you have an occupational niche, they're going to be extremely qualified. I don't want to get into all the nuts and bolts behind this, but that's it. 10 per day, this means you will get 300 subscribers per month. [01:46.8]

Now let's say you have an email autoresponder sequence that only converts 1% of subscribers into clients. And I'm keeping things very conservative here. Just 1%. That means you will get three new clients per month, which adds up to 36 per year. We'll assume you're a financial advisor with a fee-based model and you make $5,000 per year from each of these clients. That's $180,000 per year recurring. If you keep those clients for 5.5 years, you will have generated an additional $1 million in revenue. And that's assuming you literally never do email marketing again. After your first year, you just do it that one year and you're done. I'm also assuming that your numbers don't grow at all during that first year. This means you will have completely ignored any metrics to give you clues on how to improve. You don't split test your opt-in. You don't split. Test your subject lines. You don't try anything new. You don't tweak your auto responder. You don't improve your call to action. You stop email after the first year, you might be thinking, oh, well, I don't make $5,000 per client. It's like, yes, but I'm also keeping every other metric, extremely conservative. [02:53.0]

It is not that difficult to make this work. I cannot stress this enough. I even have appointments on autopilot, which comes with a 100% money back guarantee, because if I can help you get more clients, I don't deserve to keep your money. It is that simple. But think about the example I just gave you, that's your million dollars. Even if you got 1% of that, you would five extra investment in appointments on autopilot. Candidly, I'm able to offer that money back guarantee because it works. Period. Of course, this episode is not going to be about email marketing. It's going to be about some of the psychological biases that sabotage financial advisors. And I got the idea for this episode because I, well, I read a lot and I was reviewing the highlights and notes from my books. And I realized that I went on a bit of a behavioral finance binge. I read like 10 books in a row about behavioral finance and I kept seeing the same biases come up over and over. And these biases are great when dealing with money and it makes a lot of sense and they can help regular investors. But because I view the world through a marketing lens, I'm taking these biases and applying them to business. [04:01.5]

So, let's get started. The very first one is over confidence bias. This is exactly what it sounds like. This is the tendency for people to overestimate their own abilities. It leads people to believe that they can consistently beat the market. They have too much confidence in their own abilities. That's what it is. And I've seen it applied to spending and savings. So, people may foolishly take on a large mortgage payment because they believe they can pay for it in the future. They might have one good income year and try to extrapolate that out in the marketing world. This is believing that a marketing campaign will do extremely well. You're overconfident about your marketing results. And at the beginning of the show, I gave the example of the email marketing. I want you to notice how I use conservative projections. I do that on purpose to avoid the overconfidence bias. I'm not going to say, oh, you're going to get a 15% conversion rate on your email marketing campaigns. And you're going to get a 50% open rate and just use these numbers that while they may happen are littered with overconfidence bias. And sometimes financial advisors will say, why are, if you're so good at email? Why are you only assuming a 1% conversion rate? If you're so darn good, you should do better than that. It's like, dude, do you understand what I'm telling you? [05:16.3]

I'm telling you that even if you only get 1%, you can make this much money. You can get these many clients. This is what can happen for you. So, I am being extremely conservative. Of course, you know, if it's not that conservative, you're going to get better results. But in the example, I'm trying to be very, very conservative to show you that in somewhat of a worst-case scenario, it's still ridiculously powerful. Let's switch gears to another style of marketing. Let's say you're interested in running a direct mail campaign. And you think your conversion rate will be 2%, which is decent, depending on the list you have. I want you to run the numbers with 1% or even lower. Do they still work? Can you still make money? And if you know me, you know that I am a very conservative investor. I live by Warren Buffett's quote, which is the two rules of investing are one, never lose money. And two never forget rule number one. [06:08.7]

My wealth, my personal wealth expands because I don't trick myself into believing that I'm smarter than I really am. There are a lot of things that I am good at. And there are a lot of things that I am not good at. It just so happens that my gift to the world is running marketing campaigns for financial advisors. I'm really, really, really good at that. I'm a complete idiot at a lot of other stuff. And I also want to mention how important it is to get a second opinion on a lot of things. And this is, this helps you avoid the overconfidence bias as well. But make sure that the person you're talking with knows what he or she is doing. You can't get money advice from broke people, or well, you can, but you shouldn't, you shouldn't get money advice from broke people and you shouldn't get diet advice from fat people. I'm actually running these campaigns every day. I can back up what I'm saying. And the cool thing about a lot of digital advertising campaigns is they come with metrics, which means you can log in and you can see if it's working or not, because it's based on real numbers. It's not getting your name out there. It's not branding. It's not something out in the ether somewhere. They literally come attached with numbers. Woo..hoo, yay. And sometimes getting a second opinion can help you see blind spots that you didn't even know you had. You can get a fresh perspective on your business. There have been times where an inner circle member has asked me something and the answer is dropped dead obvious to me, but it's a mystery to him or her. That stuff is valuable because I helped the inner circle member get over those blind spots. [07:33.8]

Let's move on to the second bias here. The second psychological bias is anchoring bias. And boy does this affect a lot of people. Let's play a guessing game. Do you think the tallest tree in the world is taller or shorter than 1000 feet? Seriously answer this question in your head. Do you think it's taller or shorter than 1000 feet? What do you think it is? Get the answer in your head. Got it? Good. The tallest tree in the world is actually only 379 feet, but your answer was probably influenced by the 1000 anchor I put in your head. This cost you money because it leads you to value an item based on the last price you saw. And I do this when I'm marketing my newsletter. When I'm marketing the inner circle newsletter, I'm just going to tell you like it is. There's a reason why I talk about my consulting fees on the inner circle sales page. I'm just being honest with you. I bring up my fees because they are way higher than a newsletter subscription. I want my consulting fees to serve as an anchor. So, visitors look at the newsletter price, which is $99 per month and think, wow, that's a steal. And it is by the way, like it's totally a steal. [08:45.3]

And the way I see this impacting people in business is when people anchor their income goals based on their previous income, or they believe they can only increase their incomes by a little bit, because of that anchor, if you're making $100,000 this year, you do not have to convince yourself that a good income next year is $120,000. Set your sights higher. Get rid of the anchor, holding you back. Start thinking about how you can triple, quadruple, or even 10X your income. Anchoring leads to a lot of linear thinking and it's everywhere in life, but especially in business. People might be running a LinkedIn campaign that's getting one client every two weeks and think that if they scale that up a little bit, they can get one client every 10 days. That's not bad thinking per se, but what if you refresh the entire campaign? What if you just got rid of whatever you're doing, try something completely new. You got someone to examine your blind spots, so on and so forth, and you realize you could get one client per week. It involves getting rid of the anchor in your mind. I want you to be aware of how the anchoring bias influences you when setting goals, it will change your life. [09:52.9]

Hey, financial advisors – if you’d like even more help building your business, I invite you to subscribe to James’ monthly paper-and-ink newsletter, The James Pollard Inner Circle.
When you join today, you’ll get more than one thousand dollars’ worth of bonuses, including exclusive interviews that aren’t available anywhere else.

Head on over to TheAdvisorCoach.com/coaching to learn more. [10:15.5]

The third bias is the bandwagon effect. This means going along with what everyone else is doing. This can lead you to buy things just because they're popular. I want you to ask yourself, are people buying index funds just because they're popular. Hmm… it's something to think about. Is it possible that Vanguard is such an incredible marketing machine that it has convinced the population that the way to invest is through index funds? Oh, and their index funds. I'm not going to voice my opinion either way. You don't know if I hate Vanguard. You don't know if I love Vanguard. So don't come at me. I just want you to think about that. This bias runs rampant in financial services. I thought it was bad in 2019, then I saw 2020. I thought it was bad in 2020, then I saw 2021. Holy moly, financial advisors are copying each other like you wouldn't believe, but you cannot. I repeat. You cannot copy your way to success. [11:15.6]

Think about this logically when you copy your ceiling becomes whoever it is your copying. If you're copying someone who copied someone else who copied another person, you are placing a ceiling on your success and you don't even know it. And it's even worse than that. Because a lot of these strategies, they just, they get tweaked and morphed and warped through copying. Did you ever play the game telephone as a kid? It's the game where someone whispers a message to the next person and that person has to pass it down the line. And it goes through 5, 6, 10 people. And at the end, the message of something like I love blueberry muffins turns into say hello to the aliens. The message gets scrambled beyond all recognition. And you start to think where the heck did say hello to the aliens come from? The original message was, I love blueberry muffins out. How does this happen? Well, a lot of copying is like this. It just, it scrambles it. Somebody might say, oh, I do email marketing like this. And then a financial advisor copies and then someone sees a financial advisor like, oh, that financial advisor does email like that. And then they copy and they put their little own twist on it. And once you get through 5, 6, 10 financial advisors, it's just, it's nothing like what it should be in the first place. [12:29.6]

And you also need to realize this. You cannot get top 1% results by doing bottom 99% stuff. People may flex on social media and everything, but you can't know for sure if people are crushing it in business until you see bank statements and brokerage statements, like show me that paper. Someone I'm trying to get in touch with as I speak to you right now does a lot of short-term rentals. Think vacation homes, Airbnb, stuff like that. He's making something like $60,000 per month from these houses. And a lot of people think he's full of crap. People are not discouraging him, but they just, they don't think that he's doing it, but I've seen the statements I've asked for them. He showed me, he showed me screenshots where he's refreshing the page. I know he's the real deal I've asked for expenses because a lot of people can say, oh, I make $60,000 in revenue. Woo…hoo. And my expenses are $59,999, but I'm going to leave that back out. I'm going to conveniently leave it out. But I've seen his expenses as well. He gave me a charge card statement. I know for sure that he's telling me the truth. So, I want to do something similar. See, I'm not like a lot of these coaches who do nothing, but coach and have no income from any other sources. I am an investor. It just so happens that most of the time, the best investment that I can make is in myself and I do that. Get off the bandwagon. [13:49.4]

The fourth bias is called the ostrich effect. This is named after ostriches, of course. And they stick their heads in the ground. Get this so. Why do you think they stick their heads in the ground? Just think about it, think about it. Why do they do it? It's actually to mess with their nest. So, they're tending to their nest when they stick their heads in the ground. So, people saw them sticking their heads in there and they thought that it was because they were afraid and that's not true. It's actually because of the nest. So pretty cool. You learned something today, didn't you? However, the bias, the ostrich bias, the ostrich effect is when people stop looking at the problems. When people stop opening the credit card statements, they're afraid to look, they shred the documents. They don't even address their problems. This is dangerous. You cannot do this. Part of being an entrepreneur is being truly courageous. And that involves having the courage to see your situation. As it truly is lots of entrepreneurs, not just financial advisors, they could benefit a reality check. I talked about this a little bit ago, just a fresh pair of eyes to look at their businesses and to show them where their blind spots are. And I've talked about this before, but there have been times where inner circle members have emailed me with questions. They think is a complex problem that they have. I'm able to solve it with one or two emails. [15:09.7]

It's not that I'm some genius or anything. It's because I'm able to see things that they cannot see. This is worth more than $99 per month. I guarantee it for the, for the financial advisors who were using it, they actually have real businesses with real problems. They're not just playing business. They have stuff to do and they just want the things salt. As I've networked with other business owners, and I've talked to people who have access to other business owners, sometimes hundreds, sometimes thousands. I'm amazed at how many of these people ignore the metrics. They just, they just don't look. They stick their heads in the metaphorical sand and they ignore what's going on in their businesses. It's it's crazy. Like I didn't think that was the thing. I thought if you were in business, you were supposed to be focused on the numbers. That's how I am. I'm like, show me the numbers. Show me the money, show me the statements. Let me see what it is. Let me see the money, the money, the money, the money, the numbers. That's just how I'm wired. [15:59.6]

A lot of people aren't. They just want to be creative and they want to follow their passion. Nobody wants to, nobody cares about those numbers James. Nobody cares. What's money for anyway? Like I'm just not that way. I'm the opposite you know, I want to know the numbers so I can improve. Numbers are great. I love numbers because numbers give you a clear view of how you're doing. How much money do you have in the bank right now? that's a number. You can improve that number, but if you don't know, you're flying blind. What's your heart rate right now? Is your heart rate higher than average resting heart rate? Can you get that down through exercise? Sure, you can. What's your cholesterol right now? That's a number. Can you improve that? You sure can. What's your weight right now? What is your current income from dividend investments? Can you make more investments to get more dividends? There are so many numbers in your life that you can improve, but I'll leave you with this. [16:47.3]

A bad situation does not go away because you ignore it. And the final bias I want to talk about is ambiguity aversion. In finance, this leads investors to bet more on what they know than what they do not know. Investors are drawn to avoid ambiguity. This is what happens with investors who have a ton of money in their company stock. They're like, oh, I know my company. I know what we're doing. I'm super confident. So, I'm going to put my human capital and my actual money dollars into the same company, which you and I both know is pretty darn risky, but they are just being blinded by the ambiguity aversion. The technical definition of this aversion also called the uncertainty aversion. It is a preference for known risk over unknown risk. And this concept was first introduced with something called the Ellsberg paradox, which found that people prefer to bet on a known outcome. I keep repeating myself and try and tell you this in different ways. The specific example that was used in that paradox of choice was that people preferred to bet on the outcome of an earn would 50 red and 50 black balls, rather than to bet on the one with 100 total balls, but not for which the number black versus red was unknown. [18:03.8]

So, they would take their chances if they knew it was 50 50, but if it was unknown, they wouldn't take their chances on it. Even if in reality, there were 99 reds and one black and they had to get a red. Like you really need to think about this. In the business world, this is clearly about staying in your comfort zone. People would rather stick with the devil they know, instead of the devil, they don't. I see this with financial advisors who try to stick with referral marketing strategies, even though referrals are unpredictable and studies have found that younger people don't rely as much on referrals and referral marketing isn't as effective overall as it used to be. In my opinion, referrals should be the icing on top of your marketing cake. They should happen in addition to the clients you get from other marketing. Another example is when financial advisors hesitate to do email marketing, even when it's been proven again and again, to be the number one best appointment, sending strategy for financial advisors, they would rather make cold calls or network or whatever it is they're currently doing to set appointments because the devil they know is better than the devil they don't, the ambiguity aversion keeps people from taking risk in their businesses. [19:14.1]

Now I am not saying that you should go wild and bet everything on an uncertain outcome. I must admit that I like to play it safe as well. I've already talked about how I'm an extremely conservative investor. I take a lot of risk in business. I don't take that much risk with my investments, but think of it like mad money or fund money, sometimes personal finance books will recommend taking a small percentage of your portfolio, say 10% or so. And using that to scratch the speculation itch, you can take 10% and put it into a stock that you think could go to the moon and see what happens. I think that same concept could help a lot of business owners. I think the world would be a better place if we just took 10% of our time and our resources and purposefully went outside of our comfort zones to try something new. So those are the five psychological biases that I see sabotaging financial advisors. There are several more, but I leave you with those five for this week. To recap, they are overconfidence, anchoring the bandwagon effect, the ostrich effect and ambiguity aversion. [20:20.2]

So, thank you so much for listening. I appreciate you. If you haven't left a review yet, make sure you do that. And if you haven't subscribed to the inner circle newsletter yet, make sure you do so over at TheAdvisorCoach.com/coaching. I will catch you next week. [20:33.7]

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