How many questions do you answer for a new client for free?

[K-t-F]

I have run into a few CFPs who pick my brain on behalf of a "potential" client only to find that all the free advice got me nothing. What do people do to prevent this scenario... how do others handle these situations? Or is it the cost of doing business?

[Belgarath]

It really depends on a lot of factors. If the person asking the question is referred by a CPA or attorney who does business with us, then I'd generally answer, up to a certain point. But I also generally keep them on a mighty short leash, and cut them off earlier rather than later.

[Guest b2kates]

When I feel the questions are becoming "abusive" without a real client, I have suggested a small monthly retainer.

[GBurns]

The reason why you did not get the business might very well be that the CFP had no power to give you the client's business in the first place. Have you ever looked to see who the client used and why? Or better yet, What was the selection process used by the client?

Many Salesmen have the habit of engaging in puffery and over preparation.

I have seen many reps evaluating TPAs when the product provider that is eventually selected has a pre-approved short list that must be used. Why they wasted the time was just because they did not read first even when it is a provider that they use often. I heard questions related to this everytime I attend a Nationwide seminar as if any TPA could be used and as if the rep can dictate which TPA.

While in reality you do have to answer questions in order to get business, you should have your own questionaire with questions with which to find out who they normally use and whether they are authorized to place this particular case with you. Then based on the responses you can qualify each case to see how far you want to go.

[K-t-F]

ok, what you are saying is that if the CFP wanted to sell the client "ABC Funds", ABC may require that one of thier approved TPAs must be used? That would make sense if the client used ABC's plan document maybe, but if the doc used was the TPA's non-proprietary doc that shouldnt make a diff.

Do you think it would be beneficial to come on a little STRONG... before going through any "hoops" answering questions for the potential new client and request that a small questionaire be answered to get a feeling of their desires and intentions? Maybe make the CFP answer the one page quetionaire.... make him do some work. Of course you dont want to make it too difficult and scare them away.

I think being a TPA who only has their service to sell you dont want to look arogant. People dont like that and when you are competing for business in todays business world I dont think arogance is the way to be.

[GBurns]

Many providers dictate the TPA. Many "packagers" dictate the TPA. Many "packagers" and investment sources will only accept their own documents. It does not matter whose documents are used, the investment provider usually dictates the TPA. I am referring to small plans which therefore are the majority e.g Principal, ADP, Manulife, Nationwide, Paychex, Standard, Lincoln, Vanguard, Fidelity etc etc.

Is it really normal for a TPA to have services only? I cannot imagine that any meaningful number would leave themselves at the mercy of others.

A short (not too short) questionnaire is very much in order and needed.

Have you quantified how much business you have lost by not getting the business from CFPs etc who behaved as you posted? Have you evaluated why you have whatever business that you have?

It could very well be that being agressive will not cause you to lose anything. It might only get rid of a habit that was only wasting your time.

Even though you wish to do administrative work, your services still have to be marketed and sold. Just like the bigger CPA firms have marketing and sales people so should you. You cannot wait for people to walk through your door. You cannot be at the mercy of others.