Harvard Business School's Gerald Zaltman reveals that 95% of purchasing decisions are made subconsciously, driven more by emotion than rational thought. Despite this, sales strategies often focus on overwhelming buyers with data, causing decision paralysis.
Our subconscious adeptly processes information using learned experiences, supporting the notion of "trusting your gut." Studies like the Iowa Gambling Task show that emotional intuition identifies patterns faster than rational logic.
For complex sales or considered purchases (such as hiring a wealth manager), appealing to the intuitive mind through storytelling and experiential selling can be more effective than relying solely on facts and figures.
You are advanced enough and honest enough not to be pitching market-beating returns, of course.
But let’s really zero in on the angle that appeals to successful, smart, busy people who know a good deal about investing or have had solid performance but they:
Don’t want to deal with managing a portfolio.
Had a liquidity event or inheritance and find themselves in over their heads.
DIY’d it (perhaps with a robo-advisor) and have 7 figures sitting in Wealthfront or Betterment. (While robo investors can be less desirable FA clients attitude-wise, keep an open mind). This is a legit TAM and a lot of HENRYs hang out there.
Dollar cost averaged into the S&P for fifteen years, and have a chunk of money sitting in Schwab that could benefit from some hygiene, attention, and peace of mind that they’re not overpaying in taxes.
Insights from an actual prospect to RIA client conversion:
"As a client of an advisor myself, I’m giving you the scoop on why, despite great performance DIY’ing my investments for 15 years, I decided to hire an expert to manage my investments and financial plan.” - Emily Binder (video below)
Takeaway: The reduced energy expenditure and peace of mind was worth the fee.
But there’s more nuance to the emotional aspect of this decision.
Positioning your value:
A great messaging strategy speaks to the fact that time (energy) IS money.
It will land well with people who:
value their time (most precious non-renewable resource)
understand the payoff from delegation (business owners especially get this because delegation is a prerequisite for scaling anything)
have intellectual humility and pragmatism about their unpredictable future behavior or lack of detailed knowledge about investing, estate, taxes, retirement, etc.
How do you harness psychology to improve RIA marketing?
Find a way to tactfully show prospects this universal truth:
"You don't know what you don't know."
More on that: The Dunning-Kruger Effect explains how people with limited knowledge often overestimate their expertise. By tactfully addressing this bias, financial advisors can help HNW prospects see the value of delegation and expertise—especially in navigating complex financial decisions they may not even realize they’re unprepared for.
This is an emotional unlock: you are selling peace of mind and time and energy savings. How do you even quantify that? You really can’t. Don’t try. A percentage of AUM is a steal for sleeping well and unemotionally managed diversification.
Sell benefits, not features. Here’s the difference (watch YouTube Short: “Sell benefits, not features.”).
Read more in the blog and video podcast from Emily Binder:
ROI of Transparent Pricing + Marketing (AUM)
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