5 Reasons Financial Advisors Fail and Ways To Avoid It

Reasons financial advisors fail

The reasons why financial advisors fail are not all inclusive but the common threading behind it. Begin to work towards mastering these and you will be on the right track for success. We don’t want to spend time on talking about the financial advisor failure rate, but more of how to avoid falling into it.

Being an advisor can be a very rewarding career as long as you understand what it entails. According to the Bureau of Labor and Statistics, the financial services are supposed to grow “faster than average“. Building a business is no easy undertaking and requires a trained mind to do so. The fear of rejection and failure triggers the mind to withdraw you from those situations and seek comfort. It is a basic human trait that is built upon our experiences and will to survive. 

The good news is that we can overcome this and succeed in the face of such a challenge. There are many opportunities to be had with the larger firms constantly losing massive amounts of assets.The 5 reasons why financial advisors fail are not all inclusive but the common threading behind it. Begin to work towards mastering these and you will be on the right track for success. 

1. Lack of Process

Process, process, process for everything. This is the number one reasons financial advisors fail! They become REACTIVE instead of PROACTIVE in their daily routine. Scalable, repeatable and flawless processes will give people the impression you have been in this industry since the beginning of time. 

Do you have a process for…

  • Prospecting?
  • Follow-ups with prospects?
  • On-boarding clients?
  • Serving your current base of clients?
  • Answering calls or emails?
  • Delegating work to others?
  • Training junior associates?
  • Someone taking over in the event you are traveling, vacation or in a meeting?

Think about what consumes the most of your time and build a process around dealing with it more efficiently. This helps create time for you to focus on the growth of your business. This also helps others in your team know exactly what they need to do in the event they need to step in for you. 

Create a PowerPoint and a sharable folder with your team that is Labeled “Process” or use a Documentation Process Creator such as StackdUp (super simple and inexpensive).

Number them with the most common being at the top of the list. On these power-points, explain the problem and how to handle it. 

This way your team runs on autopilot and also relinquishes responsibilities and duties to your team. 

2. Lack of Prospecting

The lifeblood for any business and can debatably be first of reasons financial advisors fail. This should always tilt towards the majority of your time. You have heard the passage a million times “you reap what you sow”. The actions you take today will be what dictates your future success. 

There is no sugar-coating this, prospecting is hard, can suck greatly depending how you train your mind and there are days you can come up completely empty.

Prospecting reasons why advisors fail

Beware of the “bull***” you see out on the internet today. Many of these people or companies know you will do anything to avoid picking up the phone and reaching out to someone cold.

This is truer with the emergence of social media.

While digital marketing is important and absolutely should be a part of your process, it is only a piece of the entire pie. 

You will see ads such as “cold calling is dead, do this instead”, “$150 per lead, looking for a financial advisor”, etc.

Many of your competitors will fall victim to this and end up failing out anyway. If you think you are going to drive business solely on digital or buying expensive leads, you will burn your marketing budget quicker than it takes to burn a piece of toast. 

We are not going to tell you to “make a game out of it” or tell you there is some “secret trick” to it. 

You know you better than anyone else and you are able to train your body and mind to gear up for prospecting. 

So in order to avoid failure, implement the following

5 Reasons Financial Advisors Fail
Block off time to prospect
  • Determine your most energetic time of the day. Know when you are most alert, have the most energy and focus.
  • Block that time off EVERYDAY. Let your support staff you CANNOT be reached during this time unless it is an dire emergency. Close your door or put up a sign that says “Do Not Disturb”
  • Make a call within 5 seconds. It takes approximately 5 seconds for the brain to turn you off to an uncomfortable task. Use this to your advantage by accomplishing the task before it has time to realize what you are doing.
  • Focus on the successes, at the least, get an e-mail from the person you speak to. This should help you build up an email list very quickly for the next steps of the prospecting process which we will go into with another post.
  • Repeat the process everyday. Expand the prospecting time so you can plant more seeds and ultimately convert prospects into clients.

3. Poor mentorship or lack there of

Being part of a larger firm’s training program once before, this is something that can help propel you or make it difficult to progress further and is also why this makes this list of reasons financial advisors fail.

A GREAT mentor in this field can be difficult to come across. Remember, they are in business for themselves. Their duty firstly is to grow their business and service their clients. 

Advisor training programs across the country vary from firm to firm and from office to office. A mentor program that is strong in one office under the same firm can be awful or poorly structured in another office less than 100 miles away.


It is your duty and responsibility to knock on the doors of other advisors in the office, introduce yourself and perhaps take them out for coffee. 

Research their bios before meeting with them!

Mentors are a reason why financial advisors fail

Know that you should be able to find out which advisor or team meshes up with your personality and if in fact they can help you succeed. 

Those that closely guard their secrets and markets are NOT TO BE PURSUED! 

The successful advisors willing to share how they prospect and what they come in with will most likely lead to mutual benefits when it comes to having a meeting or closing business. 

DO NOT affiliate yourself with one that has a family member on their team. This can truly be an ugly experience and best to just avoid.

DO NOT affiliate yourself that clearly has bad habits, unreliable and just goes through the motions.

DO NOT affiliate yourself with someone that will not share methods for success. This has a mutual benefit for both of you to do business.

DO NOT choose someone without speaking to all advisors. Ensure they know your name and what you’re about. At times, they will come to you with opportunities they may not be able to continue to handle or even want

DO make their time worth it. Only come up with good questions, relay your thoughts, pipeline numbers and opportunities you may need help with

DO ask if there is anything they can do to help them. Ensure there is adequate compensation or something in turn for your time.

DO be respectful, thankful and show gratitude for their mentor-ship. Be an asset, not a liability. 

4. Being too general 

Number 4 on “The Reasons Why Financial Advisors Fail” is not going after a target market. This one is such an easy fix and shouldn’t be on this list. Because there are so many generalists, it has valid reason to be on here.


Don’t know what to go after? Perfect…

Here is the process you undertake when deciding whether or not you should pursue it. Ask yourself these questions and only if they are all checked off, to proceed marketing to it.

  1. Do I care about this market? Obvious enough? Not to some… For example, do not go after physicians if you don’t like dealing with physicians or don’t want to talk medicine with them or care what they go through to become a physician
  2. Is there enough money in this market? This is the business you are in. If there is little to no money to target, then you need to pursue other opportunities.
  3. Is the market growing? Make sure you check to ensure that your target market will be meeting or exceeding growth. Take a quick look at Bureau of Labor and Statistics.
  4. Does my firm have the resources? Can you support this target market with different resources of your firm? Can you provide lending and banking advice? Speak to your specialists to discuss your ideas and see what they come up with.

5. Not knowing anything about your prospect

As the reasons financial advisors fail , the lack of knowledge or information about your prospect will kill a conversation before it gets going.

With the information age upon us, there is no reason to NOT know anything about the person you are prospecting. People openly divulge their life, careers, political stances, hobbies and everything else between on social media.

This helps you prospect by connecting with people with similar hobbies, careers, backgrounds, education, etc.

However, it may not be enough.

financial advisor failure rate
Know before you go!

Much of the information that YOU NEED is not listed in their social lives or is shared by them to the public.

This is what we do! Now you can combine the power of social media information with information that can help you find money in motion and many other opportunities!

The best part about this is that you save countless hours researching so you can get to prospecting and ultimately win more business!

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