FNSSAM403 Prospecting for new clients

FNSSAM403 Prospecting for new clients
Learning guide V3.0 © AAMC Training Group 1
FNSSAM403 – Prospecting for New Clients

FNSSAM403 Prospecting for new clients
2 © AAMC Training Group Learning guide V3.0
Contents
Section 1 Create rapport with prospective client 3
Finding prospects and planning a prospecting strategy 4
Prospecting methods 5
Initial contact 7
Determine prospective client’s understanding of financial processes 8
Role of advisers and organisation 11
Section 2 Identify prospective client’s needs 13
Understanding prospects’ needs 13
Buying motives 15
Risk profiling 16
Marketing techniques 18
Section 3 Secure commitment 21
Sales resistance 21
Gather prospect’s personal, financial and business details and providing appropriate options 23
Next steps 28
Section 4 Manage prospective client information 29
Managing prospective customer and client information 29
Establishing a prospect database 32
Research range of options 34
Prepare for the next contact 34

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Section 1 Create rapport with prospective client
A prospect is a qualified person or organisation that has the potential to
buy your good or service. Prospecting is the lifeblood of sales because it
identifies potential customers. The salesperson must look constantly
look for new prospects for two reasons:
 To increase sales
 To replace customers that will be lost over time.
Prospects are often confused with leads. A lead is the name of the
person or organisation that might be a prospect. A lead can be referred
to as a person suspected of being a prospect. Before a lead can be
identified as a prospect it needs to be qualified. A qualified prospect is:
 A person with the money to buy
 A person with the authority to buy
 A person with the desire to buy.
A simple way to remember this qualifying process is to think of the word
MAD. A true prospect must have the financial resources, money or credit
to pay and the authority to make the buying decision. The prospect
should also desire the product or service. Sometimes though, an
individual may not recognise a need for the product or service.
Locating leads and qualifying prospects are important activities for
salespeople. According to Matt Suffoletto:
‘Prospecting is the process of acquiring basic demographic knowledge of
the potential customers for your product. Lists that are available from
many vendor's breakdown businesses in a given geography by industry,
revenue and number of employees. These tests can provide an approach to
mass-marketing, via either mailings or telephone canvassing. This
canvassing is either done by the salesperson or through an administrative
sales support person. No matter who performs a canvas or how it is done it
is an important element in increasing sales productivity. ‘
The next step of qualifying the potential customer is often included in
the prospective process. Qualification is a means of quickly determining
to facts:
 Firstly, is there a potential need for the product or service?
 Secondly, is the prospect capable of making a purchase decision and do
they have the decision authority as well is the financial ability to acquire
the product or service?
Obtaining new customers and selling more products to present
customers are another way to increase sales. All people lose a
percentage of sales or customers per year. Customers come in and go
out of the salesperson’s sales base.

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Finding prospects and planning a prospecting
strategy
Sources of prospects can be made in varied or few and similar depending
on the service or good at the salesperson sells. Naturally people selling
different services and goods might not use the same source of prospects.
For example the salesperson of plumbing supplies would make extensive
use of various industry directories in search of the names of plumbing
companies. On the other hand a life insurance salesperson would use
personal acquaintances and current customers as a source of prospects.
A pharmaceutical salesperson might scan the local newspaper looking
for announcements of new positions and hospital, medical office and
clinical laboratory are links, whereas the representative for a fast
consumer goods company might watch the announcements of
construction of new grocery stores and shopping centres.
Frequently sales people, particularly new ones have difficulty
prospecting. Meeting strangers and asking them to buy something can
be uncomfortable for some people. Many salespeople prefer to see
others who have similar characteristics to themselves. To be successful
prospecting requires a strategy and like other activities is a skill that can
be constantly improved by a dedicated salesperson.
Some salespeople charge themselves with finding a certain number of
prospects per week. Some companies such as Xerox, require its sales
force to allocate a portion of each business day to finding and contacting
several new prospects. A successful salesperson continually evaluates
prospecting methods, comparing results and records with the mode of
prospecting used in pursuit of a prospecting strategy that will result in
the most effective contact rate.
Developing a prospecting strategy
Before deciding on a method of prospecting, make a list of what the
ideal prospect looks like by asking the following questions:
 Who are my ideal prospects?
 Which economic brackets do they usually fall into?
 What kind of organisations do they belong to?
 What characteristics do most of my existing customers share?
 What is their social status (married, single, widowed or divorced)?
 Do they have children?
 Do they have particular political or social leanings?
 Do they have similar occupations, education, hobbies, illnesses,
transportation needs or family concerns?
 The key question, where am I most likely to find the greatest
conglomeration of people who fit my prospects profile?

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Prospecting methods
There are a number of prospecting methods which can be used including:
 Cold Calling
 Referrals
 Content Marketing
 Networking
 Email Marketing
 Seminars and Webinars
 Social Networking
Cold calling
Cold calling is traditionally an early stage in the selling process. Cold
calling typically refers to the first telephone call made to a prospective
customer. Cold calling has developed into a targeted communication
tool. Salespeople call from a list of potential customers that fit certain
parameters built to help increase the likelihood of a sale.
To successfully undertake cold calling, you must follow take note of the
following tips:
 Preparation - self, environment, knowledge, and who you represent
 Introduction - key phrases explaining and positioning yourself and your
purpose
 Questioning - help, facilitate and enable rather than assume, sell and
push
 Objectivity - the mark of an advisor - do not sell
 Listen and interpret - do not sell
 Inform and educate - do not sell
 Involve and coordinate - do not sell
 Keep in touch - keep notes and keep informed - keep ultimate
ownership (by now you will probably be selling)
Referrals
Asking for referrals is one of the most powerful ways to generate
qualified leads; in fact, leads obtained from satisfied customers are
almost always more qualified than leads generated from other
prospecting sources. The close ratio on a pre-qualified, referred lead is
invariably higher than a lead from any other source.

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Content marketing
Content marketing is a strategic marketing approach focused on
creating and distributing valuable, relevant, and consistent content to
attract and retain a clearly-defined audience — and, ultimately, to drive
profitable customer action.
Networking
Professional networking can involve anything from attending trade show
events to keeping in touch with past colleagues. Networking, like sales
prospecting, is a process and not an event. It takes time to develop a
network, especially if you’re new to the working world or still trying to
establish yourself in your industry.
Email marketing
Email marketing has taken the place of direct mail marketing for most
salespeople. Email is free, fast, and available to most anyone.
Seminars and webinars
Leading a seminar serves two important purposes: First, it establishes
you as a thought leader in your area of specialty; second, it puts you in
front of a group of prospects that have already expressed interest in
your product line. Webinars are a new option for the average sales
person. With more and more territory reps in the field, away from a
home office, webinars or web-seminars just make sense.
Social networking
Social networking refers to using sites such as Facebook, LinkedIn,
Instagram, Twitter, etc. in your everyday sales prospecting activities.
The main aspect to focus on with social networking is ENGAGEMENT.
Focus on a few social networks at a time and build your audience and
profiles from there as needed. Don’t spread yourself too thin and neglect
interested parties. Reply to blog comments, tweets, Facebook posts,
stories, LinkedIn messages, etc.

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Initial contact
As soon as contact has been made with the client, a credit guide,
including Advisor Profile, should be sent to the client.
Customer details need to be recorded on the Client Needs Review/Fact
Find (example attached on our website in the member’s area). Once you
have briefly reviewed the details, you will be in a position to decide on
whether or not you can help the client. Remember that the more
information you obtain at this point, the more accurate and more
professional and well prepared you will be in front of the client.
The initial important pieces of information to obtain prior to commencing
your main data collection are:
 Name and contact number. This is useful in the event that the phone call
is accidentally disconnected
 Seek permission to gather personal information from them.
Your first task on introducing yourself is to hand the client your Credit
Guide. If you have not already forwarded this document beforehand.
The Credit Guide provides the client with:
 The credit advisor’s name, registered number and qualifications
 The products and services the credit advisor is able to offer
 The method of remuneration to the principal and the credit advisor
 Other benefits, interests, associations or conflicts of interest
 The credit advisor’s best contact details
 Information about the complaints resolution scheme.
As you present the Credit Guide, you must ensure that your client also
understands:
 the process through which you will take them
 the total fees that will be involved
 any relationships that may exist between you, the organisation you
represent and any other financial service provider
 their privacy rights
Addressing the concerns of the client is the first stage in the development
of rapport or empathy. The Credit Advisor gathers information about the
client, their financial circumstances and their financial goals and objective.
The relationship between them should develop and strengthen.
The second stage involves the Credit Advisor asking questions, checking
that they understand what the client is saying, and summarising to ensure
that all parties agree on the matters being discussed. It means focusing
attention on the client (rather than on the Credit Advisor) in the discussion.

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Determine prospective client’s understanding
of financial processes
Prior to making recommendations to a client, it is necessary for you to gain
an understanding of the clients' financial situation at the outset. You should
then evaluate to what extent the client's financial goals, needs and
priorities can be met by the client's resources and current course of action.
Questioning techniques
When you ask the right questions in the right way, you can end up
getting your prospects to do all the selling for you! At the very least,
you'll learn a lot about what the prospect wants from your product -
which means you can laser-focus your presentation on just those points
that will sell most effectively.
Asking your prospect a series of open-ended questions during your
presentation serves three important purposes. First, it helps you to
confirm whether or not the prospect is a good fit for your product.
Second, it helps you to identify their hot-button benefits, which in turn
allows you to fine-tune your pitch. And third, by getting them to talk
about various benefits and what they think about them, you sneak the
information past the prospect’s “salesperson filter.”
Not every question listed here is a perfect fit for every prospect, but
these examples will give you a good place to start. Ideally, once you ask
a few questions, the prospect will launch into an in-depth speech and
you won’t need to do any more prompting at all.
Rapport-building questions
These questions get your prospect talking about himself and help you
develop some level of rapport with him (and also help you find out the
prospect’s likes and dislikes, which can help quite a bit).
 How long have you been with the company? (for business-to-business
or B2B sales)
 Where did you buy that beautiful sofa? (business-to-customer or B2C
sales)
 How old are your children? How many do you have? (If you see a photo)
 What would you like this [product type] to do for you?

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Buying history questions
By learning more about the prospect’s previous buying experiences, you’ll
get a glimpse of how his mind works and what his buying routines are.
A prospect's buying history has a major impact on how he feels about
salespeople and what he values most in a product.
 What experiences, good or bad, have you had with this [product type]
(e.g. “What experiences, good or bad, have you had with buying cars?”)
 When did you last buy a [product type]?
 What process have you gone through in the past to buy a [product
type]?
 Has that process worked well for you? How/how not?
 What have you already tried doing to fix the problem with your current
[product type]?
 What have you purchased from us before?
 How did that purchase go?
Purchase-specific questions
These questions relate to the specific transaction you’re hoping to
initiate. Purchase questions help you identify hot-button needs and
design your pitch around them.
 What prompted you to meet with me today?
 What qualities do you look for in a [product type]?
 Which quality is most important to you?
 What don’t you like to have in a [product type]?
 What is your timeline for buying a [product type]?
 What is your budget?
 Who else is involved in the purchasing decision?
Clarifying questions
If a prospect gives only a brief response to an important question, try
drawing out more information.
 Tell me more about that.
 Can you give me an example?
 Can you be more specific?
 How did that affect you?
Objection-seeking questions
Until your prospect voices his objections, you can’t do anything about
them. If a prospect hasn’t raised any objections then a little questioning
can draw them out.
 What are your thoughts so far?

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 Do you have any concerns? What are they?
 What other subjects should we discuss?
 Is there any reason we shouldn’t move forward?
Active listening
Active listening is "listening with all three ears". To be effective,
salespeople need to hear what is being said AND understand emotions.
Emotion is interpreted through tone, voice inflection, body language and
intuition (gut feeling).
Active listening covers:
 Words
 Tone of voice
 Body language (55 per cent of communication comes from body
language).
Here are some examples of using active listening to identify needs.
 A customer seems to be confused about the institution’s service options,
such as membership options, banking options, and so on. The need in
this scenario could be help which may be identified through body
language)
 A salesperson has been dealing with an upset customer over the phone.
The customer seemed happy but after hanging up the salesperson feels
like they may not be 100 per cent satisfied. The need in this scenario is
for further follow up, identified through intuition.
 A regular customer always wants to talk. He is always cheerful, uses
open gestures, smiles yet needs nothing specifically. He asks you a lot of
questions and is eager to share personally relevant information about
himself The need in this scenario is for the customer to be valued as a
person, identified by the body language, tone of voice AND words.
Effective communication
The key to communication is simple, clear, positive and enthusiastic.
Prospective customers may choose to use a particular business because
they have needs (that is, they need an answer, information, support or
advice, someone to talk to, a way of increasing their physical activity, a
pass or membership, financial security, and so on.). These needs can be
identified by asking and then actively listening to their response.
The goal is to understand three things:
 What they want
 When they want it
 How they plan to use it.

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Prospective customers are not always able to articulate what they need.
By asking key questions and probing for more information a salesperson
can define their need. Remember, ALL prospective customers as we
have already established need to feel valued.
Role of advisers and organisation
After building a rapport with the client the basic platform from which the
relationship is to be built needs to be set.
In particular, the following areas need to be addressed with your clients
and clearly understood. This information should form part of the Credit
Guide discussion.
The role of the Credit Advisor
A Credit Advisor include should divulge information about:
 the range of financial products and services provided
 licenses they hold and the training/qualifications they have
 all costs, fees, commissions etc. associated with the transaction
 the procedures for handling complaints and disputes
 responsible lending under the NCCP regulations
The role of the Credit Advisor’s organisation
A Credit Advisor include should divulge information about their Credit
Licence holder such as:
 their identity of and information about the licence holder
 compliance with NCCP regulation for advisers
 the complaints process offered by the organisation
 training and development of advisers
ensuring responsible lending for advisers.

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Section 2 Identify prospective client’s needs
Understanding prospects’ needs
It is vital that salespeople understand customers in the context in which
they are situated. For a prospective who is a potential personal
customer this includes:
 Lifestyle
 Place of work
 Types of work
 Income
 Future expectations
 Family status
 Residence.
For a prospect which is a potential corporate customer this includes:
 The economy in which it operates
 Legislation
 Competition
 Environmental considerations
 Technology
 Culture
 Finance
 Operations
 Sector specific issues
 Local or geographic issues
 Politics.
All of these are tempered by legislation which affects what they can do.
As we have already discovered financial services is heavily regulated and
subject to all manner of legal and other restraints which also need to be
understood such as financial services regulation, the National Consumer
Credit Code, Australian Consumer Law, privacy and so on.
There is also a key difference between prospective personal customers
and prospective corporate customers, the latter also have prospective
customers. If a financial institution can understand what it needs to do
for prospective customers and assist them in this aspect it will go a long
way towards giving them a service that is better than the competition
and assist them to help their customers.

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By working with prospective customers’ organisations can help them
improve what they do for their customers which has the capacity to
forge a stronger and tighter bond with them, increasing their loyalty and
making it that much harder for the competition to take them away.
A likely outcome is that they may introduce their customers as well as
they move towards being a supporter. For example in some letters of
credit there are provisions for prepayment for the customer’s customer
to assist them in preparing the goods for export.
Tangible and intangible needs
There is a need to recognise that prospective customers have both tangible
and intangible needs. It is the salesperson’s ability to recognise and meet
the INTANGIBLE need, which creates real value for the prospective
customer. Intangible needs should be regarded as customer motives. All
humans desire engagement at the human, versus business, level.
Here are some examples of intangible needs:
 Staff who are understanding, knowledgeable and helpful
 Feeling safe
 Feeling important (personally valued)
 Social opportunities and interaction
 Self-esteem
 Acknowledgment of urgency.
Establishing rapport
Earlier in this module we looked at the importance of establishing
rapport when dealing with customers. Dealing with prospective
customers is no different. As we stated the objective of building a
relationship and establishing rapport is to break any tension barrier,
relax the customer or client, relax the salesperson and begin to analyse
the buying characteristics of the customer or client.
Developing rapport means establishing common ground. People like to
be around people who are like them. Bringing out the shared similarities
with prospective customers or clients demonstrates that in many
respects the salesperson is just like them.
We also stated that many decisions made by people about others occur
in the first 10 seconds of meeting them for the first time. Therefore it is
important to find ways when meeting people for the first time, to help
them think that they made a good choice. They must immediately see
some benefit from investing their time with the salesperson. Therefore it
is important that salespeople learn how to maximise those first 10
seconds so that they give the impression they really want to give, so
that they can comfortably move forward in the selling sequence.

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Buying motives
Buyer motives refers to the thoughts, feelings, emotions and instincts,
which helps a buyer make decisions to purchase a product or service.
Profit or gain
Most of your prospects are going to have this as their primary motive
whether they measure the financial gain directly or indirectly. On a
personal level, an investment in real estate, mutual funds or other forms
of direct payback for personal gain or business profit can be a dominant
reason as a buying motive.
Fear of loss
In business, a prospect who feels they are losing their market share or
losing out on new opportunities may be motivated by a fear of loss. This
can lead to spending to better compete. For example, a company may
open a new distribution centre or increase training for customer service
or sales staff to defend market share.
Comfort and convenience
At an organisational level, the convenience of dealing with your company
can be seen as having you being a responsive representative. As the
prospect works with your company, though, the view can expand to include
dealing with other parts of your company with whom the client interacts:
delivery, billing, your assistant or any employee of the company.
Security and protection
In business, keep in mind security in choosing the source of a purchase
is important. Because of previous experience, recommendation by
others or brand reputation, your product or service needs to, ideally, be
established as the superior overall value for purchase. You need to be
viewed as the safest and best choice or the least risk decision. You need
to be the best overall choice of use and support vs. one particular
application being uniquely better but not offering as much total value.
Pride and prestige
Many buyers are proud of possessing certain products (i.e., they feel
that the possession of the product increases their social prestige or
status). In fact, many products are sold by the sellers by appealing to
the pride prestige of the buyers. For instance, diamond merchants sell
their products by suggesting to the buyers that the possession of
diamonds increases their prestige or social status.
Satisfaction of emotion
The buyer values family, social approval, beauty, admiration, security of
loved ones, loyalty, friendship, better public relations, and or better
employee relations.

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Risk profiling
In order to identify prospective client’s questions and concerns, and
respond appropriately, the client should be made aware of their risk
profile and the possible investment implications that may arise from the
outcome of the risk profiling process.
This process also enables you to identify suitable financial products to
recommend to your client having regard to your client's objectives,
financial situation and needs.
Risk profiling is a process for finding the optimum level of investment
risk for your clients. The following risk-related constructs should be
considered:
 Risk tolerance, which is the level of financial risk the client is comfortable
with; and
 Risk capacity, which is the level of financial risk the client can afford to
take.
Risk capacity represents an absolute, downside constraint on strategy
selection. Investors should not embark on a course of action where the
worst case scenario involves the possibility, no matter how remote, of a
loss greater than their risk capacity.
Risk tolerance is an attitude that is made up of a balance of different
components. It is the degree to which a client is willing and able to
accept the possibility of uncertain outcomes being associated with their
financial decisions. A measure of risk tolerance is an attitudinal
instrument that reveals the client's perception of the trade-off between
risk and the compensation required for bearing risk.
One way of determining risk profiles is to use risk tolerance
"questionnaires”:
 Questions should be directly related to attitudes, values, preferences,
emotions or behaviour with regard to situations that involve risk;
 Questions should address financial risk generally, as well as investment
risk;
 Questions should be in plain English and financial terminology or jargon
should be avoided;
 There should be at least 20 questions in the questionnaire in order to
obtain the statistical accuracy required;
 The results must be scored on a normally distributed scale; that is a
bell-curve scale; and
 The test’s publisher should be able to provide evidence that it meets
psychometric standards.

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You would need to understand the risk tolerance of clients because of
the following challenges:
 the difficulty in communicating to people, opinions about risk;
 the difficulty for clients to describe in their own words their attitudes
about risk;
 the lack of understanding that some clients might have about their
"financial selves"; and
 the investment risks that clients might be willing to accept.
The probable consequences of inadequate or poor risk profiling, are:
 a client making investments that are not suitable for their objectives,
financial situation and needs; and
 breaching your duty to have a reasonable basis for sales.
To establish your client's tolerance to risk you should:
 Not just view the risk profiling process as only being a means to
establish the suitability of investments they recommend; and
 Secure the client's informed consent to make the recommended
investments and/or employ the recommended investment strategy.
It is less likely that you breach your obligations if you demonstrate:
 the client's informed acceptance of the risk profile; and
 the possible investment implications that may arise from the outcome of
the risk profiling process.

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Marketing techniques
Cause marketing
Cause marketing is a cooperative effort between a for-profit business
and a non-profit organisation to mutually promote and benefit from
social and other charitable causes. Cause marketing is not to be
confused with corporate giving, which is tied to specific tax-deductible
donations made by an organisation. Cause marketing relationships are
“feel goods,” and assure your customers you share their desire to make
the world a better place.
Direct selling
Direct selling accomplishes exactly what the name suggests – marketing
and selling products directly to consumers. In this model, sales agents
build face-to-face relationships with individuals by demonstrating and
selling products away from retail settings, usually in an individual’s
home. The top three direct sellers in 2015 are Amway, Avon and
Herbalife.
Cobranding and affinity marketing
Co-branding is a marketing methodology in which at least two brands
join together to promote and sell a single product or service. The brands
lend their collective credibility to increase the perception of the product
or service’s value, so consumers are willing to pay more at retail.
Secondarily, co-branding may dissuade private label manufacturers from
copying the product or service.
Earned media/PR
Earned media (or “free media”) is publicity that is created through
efforts other than paid advertising. It can take a variety of forms – a
social media testimonial, word of mouth, a television or radio mention, a
newspaper article or editorial – but one thing is constant: earned media
is unsolicited and can only be gained organically. It cannot be bought or
owned like traditional advertising.
Paid media advertising
Paid Media Advertising media is a tool that companies use to grow their
website traffic through paid advertising. One of the most popular
methods is pay-per-click (PPC) links. Essentially, a company buys or
“sponsors” a link that appears as an ad in search engine results when
keywords related to their product or service are searched (this process
is commonly known as search engine marketing, or SEM). Every time
the ad is clicked, the company pays the search engine (or other third
party host site) a small fee for the visitor – a literal “pay per click.”

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Word of mouth advertising
A recommendation from a friend, colleague or family member has built-
in credibility, and can spur dozens of leads who anticipate positive
experiences with your brand. It’s important to note that word of mouth
isn’t strictly verbal. Leveraging online reviews and opinions are equally
effective at spreading the word.
Social networks and viral marketing
Social media marketing focuses on providing users with content they
find valuable and want to share across their social networks, resulting in
increased visibility and traffic. Social media shares of content, videos
and images also influence Search Engine Optimisation (SEO) efforts in
that they often increase relevancy in search results within social media
networks like Facebook, Twitter, YouTube and Instagram and search
engines like Google and Yahoo.
Storytelling
Brand storytelling uses a familiar communication format to engage
consumers at an emotional level. Rather than just spew facts and
figures, storytelling allows you to weave a memorable tale of who your
company is, what you do, how you solve problems, want you value and
how you engage and contribute to your community and the public in
general.

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Section 3 Secure commitment
Sales resistance
Sales resistance refers to a concern a prospect has regarding the product
(or company) and how it will work for their situation. In most cases the
resistance is expressed verbally (e.g., "I don't see how this can help us.")
but other times the resistance presents itself in a non-verbal fashion (e.g.,
prospect facial expression shows puzzlement).
While handling sales resistance may sound like a difficult part of selling,
most successful salespeople actually welcome and even encourage it as
part of the selling process. Why? Because it is an indication the prospect is
paying attention to the presentation and may even have an interest in the
product if the resistance can be effectively addressed.
To overcome resistance, salespeople are trained to make sure they clearly
understand the prospect's concern. Sometimes prospects say one thing
that appears to be an objection to the product but, in fact, they have
another issue that is preventing them from agreeing to a purchase.
Salespeople are rarely able to make the sale unless resistance is overcome.
Below are some examples of handling sales resistance:
Too busy
“I appreciate that you are a busy person. That is why I won’t take more
than 15 minutes of your time. You deserve the chance, based on your busy
schedule to evaluate what we have. I truly believe we may have something
to benefit you.”
Not interested
“I appreciate the fact that it is difficult to be interested in everything after a
short telephone call, however I truly believe you will benefit by evaluating
this first hand. All I need is 15 minutes. It’s a very small risk for a
potentially large return.”
Already using the competition
“…… there are many good products available. However, what we have is
very different from anything on the market, which is why we are the
number one company of our type in the UK. All I need is 15 minutes which
will allow you time to evaluate the potential benefits.”
No time
“You are exactly the type of person I like to see, as busy people like
yourself are always looking for ways to accomplish more in less time.
Perhaps, just perhaps, I can help you free up some valuable time. You
really have no risks involved.”

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Send me some information
“We have a lot of info that we could send and it usually results in more
questions from our customers. The best way is simply to take 15 minutes
for you to evaluate what we can offer you.”
No money – Can’t afford it
“I can understand you wanting to avoid unnecessary expenses. All I’m
asking is for you to evaluate what I have to offer. I really believe that once
you have done that, the benefits, not to mention the cost reduction within
your systems, will show you that we are not really talking about a cost but
rather a short term investment. We guarantee it.”
No need
“You will, of course, be the sole judge of whether or not we have something
that will benefit you. However, I would suggest that before you make a
final decision on whether we have a potential benefit for you let’s take 15
minutes so you can evaluate this first hand. I guarantee you I won’t waste
your time.”
You’re wasting your time
“I never consider meeting with a business professional a waste of time. I
believe once you have evaluated the potential benefits you may find what
we are offering very interesting. There is no risk for perhaps a large gain.”

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Gather prospect’s personal, financial and
business details and providing appropriate
options
As mentioned previously, there are stages in the data collection and
advice process which may be considered as part of the upfront
prospecting and sales process. You need to get to these stages in order
to gain commitment from your client to move forward as their credit
adviser. For those offering consumer credit loans/leases this
commitment would be a contract between yourself and the client
referred to as a Product Disclosure Proposal which is signed by yourself
and the client and allows you to proceed to making an application to the
lender/lessor on the clients behalf.
Client Needs Review/Fact Find
As part of the compliance regulations under the NCCP for Responsible
Lending, a Client Needs Review or Fact Find must be completed from
information supplied by the client. From July 1st 2011 when ASIC
became the Regulatory Authority the credit industry has had to change
and be more compliant when dealing with clients. Therefore there is a
need to demonstrate that we as Brokers have to the best of our ability
researched the clients’ needs and provided satisfactory solutions for
them to consider.
Following those changes Finance/Mortgage Brokers will be audited and
asked to justify their recommendations and decisions that are presented
to the clients. These changes now in fact match that of other Financial
Services, such as Investment Planning and Insurance.
While the client needs review is a compliance document it should be
utilised as a “Best Practice’ tool. It is essential to obtain a client’s short,
medium and long term goals in order to understand the client’s future
needs and then market to those needs.
The Client Needs Review/Fact Find also allows you to provide immediate
solutions to your clients, under the Duty of Care, by asking scripted
questions, such as “who pays the mortgage if there is a loss of income”?
You may not be directly selling insurance but raising the point of “what
can happen when an unforeseen accident or illness occurs”. Most clients
are apathetic about the future and because of this, there are often tragic
consequences.
You are deemed to be a professional in the eyes of the law and failure to
raise the points mentioned above could result in financial penalties
under the Duty of Care for ignoring a client’s needs.

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All you are doing is asking your clients for permission to refer them to a
professionally qualified person who can offer the advice they may be
seeking. This allows for income stream to grow, your clients are
protected and you have documentary evidence that you acted in their
best interests.
It is important to have your Client’s Needs Review in front of you when
you are on the telephone, as you need to ensure that all relevant
information is collected and you do not want to show your inexperience
by having to call them back.
Some of the details you may have to gather include:
Personal details
The basic personal details covered in the "fact find" should be:
 The clients' family situation;
 Family members details;
 Personal details;
 Dates of retirement and other important deadlines;
 Any financial structures being used (e.g. a discretionary trust or
company); and
 Details of other professional advisors (e.g. accountant or solicitor).
Statement of position
This should list the following of the client's financial status:
 Existing and future income streams;
 Current assets and liabilities;
 Anticipated additional assets (i.e. retirement lump sum, a pension or
inheritance);
 Significant long-term expenditures (i.e. children's education);
 Specific short-term expenditure (i.e. a world trip on retirement or the
purchase of a new car); and
 The client's level of lifestyle spending, the amount of money they spend
annually or wish to spend in the future on basic living.
Budget
Construct a suitable budget with the client, as this will assist both the
client and you in:
 Establishing the clients' spending patterns covering day-to-day
essentials and non-essentials, utilities and longer-term non-essentials;
 Identifying potential savings; and
 Identifying the different types of accounts the clients' use to cover these
items.

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Here is the ASIC website for budgeting
https://www.moneysmart.gov.au/tools-and-resources/calculators-and-
apps#budgeting
Researching appropriate products for the client
Costing analysis
The costing analysis will vary on whether the loan is a purchase,
refinance, lease, increase to an existing loan, debt consolidation etc. The
costs associated with a purchase may include any stamp duties and
government charges, build costs (if construction of a dwelling), fit out,
solicitors, additional builders fees etc. Whereas, a debt consolidation,
refinance, lease will present differing fee/cost considerations. You need
to understand the client’s ability to contribute to the loan facility via
deposit or savings.
This will provide a clear picture of what the loan amount required
against the value of the asset will be (or thereabouts). It is always good
to play it safe and add some other variable costs (if appropriate) to
avoid a shortfall. It is also important that your clients know to inform
you of any change to their funds and thus any foreseen shortfall.
Loan to Value Ratio (LVR)
It is important to understand your client’s financial position with regards
to the loan facility including the loan to value ratio (LVR). This will allow
you to research the most suitable product options for your client. If you
believe at any time the loan to value ratio may change it is good
practice to notify the lender and seek a change to the credit facility
approval. This may only be necessary where there is the likelihood of a
shortfall which can impact settlement.
Most lenders will only lend up to a certain percentage of the value of the
property or asset which is described as a Loan to Value Ratio (LVR). This
is expressed as a percentage. It calculates the borrower’s equity in the
property/asset.
The calculation is completed as follows:
Loan Amount ÷ Valuation (value of the asset) x 100 = LVR (%)
For example; the policy of the lenders on residential property is usually that
they will not lend above a 90% LVR for investment properties and 95%
LVR for owner occupied properties. In most cases the 5% equity in the
property must come from a genuine savings source of the borrower.
Be aware that in today’s competitive market, lenders are often changing
their policies to suit the buyers. To this end, you should constantly update
your knowledge of the different lenders products and policies.

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As the client’s credit adviser it is imperative that you keep in regular
contact with your client regarding their position i.e. contribution to the loan
plus costs. To protect yourself you should ask the client to
acknowledge/sign the costing analysis and keep adequate records of
communication. Two things you want to avoid come settlement is that your
client is short of funds and you did not appropriately keep records of your
agreement surrounding their ability to cover the required deposit and
additional costs.
Serviceability
Now that you have gathered the client’s information via the fact find,
completed relevant costings and determined the Loan to Value ratio,
(LVR) you must now understand whether the client has capacity to
service the loan/lease amount. This is done by completing a
serviceability calculation. Your licensee is obligated to have either their
own client serviceability calculator or may provide a link to an external
software provider. As a Finance Broker you will be required to
understand the clients total monthly living expenses and complete both
your own serviceability as well as completing the relevant lender/lessor
calculator.
All lenders/lessors will have their own serviceability calculator which you
will need to complete when submitting an application. The lender/lessor
will take their own living expenses into account when completing
serviceability, unless the living expenses that you have confirmed with
your client and used in your own calculator are higher. Remember each
client is different and have varying needs and standards of living. It is
not one size fits all!
Mr & Mrs Smith have their current home worth $300,000 and it has
an outstanding loan balance of $150,000 owing on it. They wish to
purchase a rental property worth $200,000 and for tax purposes, they
wish to borrow the full amount of the purchase price plus the $7,000
in fees that they will incur. The calculation would be as follows:
O/O home: Value $300,000
Debt $150,000
Rental home: Value $200,000
Debt $207,000
Total Loans - $150,000 + $207,000 = $357,000
Total Value - $300,000 + $200,000 = $500,000
$357,000 ÷ $500,000 = 71.4% LVR
The LVR is under 90% allowable for investment purposes and the
proposal will therefore be within LVR guidelines.

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Researching the products that are ‘not unsuitable’ or most
appropriate
According to the National Consumer Credit Protection Act (NCCP) a
contract will be ‘unsuitable’ for the consumer if, at the time of the
preliminary assessment, it is likely that:
a) the consumer will be unable to comply with the consumer’s
financial obligations under the contract, or could only comply
with substantial hardship, or
b) the contract will not meet the consumer’s requirements or
objectives; or
c) if the regulations prescribe circumstances in which a credit
contract is unsuitable—those circumstances will apply to the
contract;
Once you understand the client position and what loan amount is
required you should also consider other information they have provided
to determine the most suitable products (products that are not
unsuitable). This would include understanding their goals and objectives
from your client needs review/fact find.
The client would have disclosed a range of other features benefits and
preferences for the loan/lease facility and lender. You must take into
account these preferences so that when presenting the options to your
client you can reflect back on their needs and objectives. This evidences
to the client that you are providing sound options and listening to their
needs as a qualified and professional adviser.
For consumer loans these options will be documented in the preliminary
assessment and presented to the client for consideration and
negotiation.

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Next steps
After gathering the prospect’s personal, financial, and business details
and presenting appropriate options map out the next steps that will
occur. In a consumer residential property loan these will be the next
steps. These steps will differ for non-consumer property and asset
leases.
Client receives a phone call from Broker
confirming receipt of loan documents.
Broker to fax approval
to Real Estate Agent.
Real Estate Agent to
advise Settlement Agent.
Conditions met, e.g. Valuations,
Lenders Mortgage Insurance
(if applicable).
Bank to co-ordinate FHOG
(if applicable).
Client receives letter from Broker
confirming approval.
Broker notifies client
by phone.
Client receives loan documents
from bank.
Client to arrange
Building Insurance.
Client to return signed documents
with Building Insurance to Bank.
SETTLEMENT
Client to liaise with Settlement Agent
regarding settlement.
Credit Quote (if broker fees apply)
and Credit Proposal Disclosure
provided to client.
Loan options discussed/negotiated
with all costs to the loan
acknowledged by the client.
Broker collects any outstanding
supporting documents/information,
completes loan application with
clients and submits to lender.
Lender assesses loan application
Conditional approval
Unconditional approval

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Learning guide V3.0 © AAMC Training Group 29
Section 4 Manage prospective client information
Managing prospective customer and client
information
Salespeople keep records in a variety of forms. They might take notes in
diaries, keep index cards or notebooks or use complex Client Relationship
Management (CRM) databases. Some salespeople use a combination of
record keeping systems, both paper-based and computerised. Regardless
of the record keeping system a salesperson uses, each system does the
same thing: it records information for future access and use.
Records begin with names and contact details of contacts, leads and
prospects. Sources of names and contact details include:
 Networking and selling activities
 Business cards collected
 Accounts and sales representative lists
 Mailing lists.
It is important that salespeople are aware there is legislation regarding
holding and using people’s names and information for the purposes of sales
and marketing. These requirements are summarised in the following table.
Legislation Requirement
Privacy Act 1988
(Cwlth) and National
Privacy Principles
Collecting, using and disclosing data.
Data quality, security, openness, access and correction,
identifiers, anonymity and cross-border data flows.
Spam Act 2003
(Cwlth)
This Act makes spam illegal in Australia. It is illegal to
send, or cause to be sent, unsolicited commercial electronic
messages.
The Act classifies a commercial electronic message as
spam unless the initiator has:
 Obtained implied or express consent to receipt from the
recipient
 Provided accurate identifying information about their
business
 Include a functional ´unsubscribe´ facility
Do Not Call Register
Act 2006 and the Do
Not Call Register
(Consequential
Amendments) Act
2006
These provide the legal framework for a national Do Not
Call Register. At October 2006 this legislation, while
enacted, had not yet been put into operation. When this is
done, it will enable individuals to put their names on the
Register if they do not want to receive certain unsolicited
telemarketing calls.
In addition to names and contact details, salespeople record specific
types of data for future use. These may include information:
 About leads
 From prospecting
 From contact with prospects.

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Information about leads
As we have already indicated a lead is someone who satisfies an ideal
lead profile. Once salespeople identify that a contact satisfies this
profile, they usually record some information about them. It can include
any of the following:
 Address
 Age
 Gender
 Income
 Occupation
 Level of education
 Cultural background
 Household information
 Lifestyle
 Interests and activities
 Opinions
 Self-image
 Social group memberships.
Information from prospecting
A lead may not be a lead for very long. At some stage, salespeople ask
leads the questions on their qualifying list. They use the answers to
determine whether the lead is a prospect or, for the time being, a
contact. Whether they keep records in a notebook, on index cards or in
a database, they usually keep records of the lead´s responses to their
qualifying list.
When salespeople keep records of peoples changing status (contacts,
leads, prospects or clients), they:
 Ensure that their contact with people reflects their sales status (for
example, they ask qualifying questions only of leads)
 Are able to plan their time according to their purpose (qualifying leads,
prospecting or selling to existing clients)
 Tailor correspondence to status
 Ensure that they send information only once to each person.
Once salespeople qualify their leads and the leads become prospects,
they work to turn their prospects into customers or clients. They may
use a variety of strategies to do this, including different types of contact
at different times. One thing is for sure: however they contact them and
however often, they usually keep a record of each contact and any
strategies they use. Their records help them make sales.

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Salespeople may contact prospects by:
 Phone
 Email
 Direct mail
 Meeting in person.
When salespeople contact a prospect, they might be doing it to:
 Find out more specific information about the prospect´s needs and wants
 Build rapport
 Create awareness of the business´s products and services
 Assist the prospect to buy.
They also might provide the prospect with a variety of information, such
as:
 Product and service information sheets, catalogues or brochures such as
FSGs or PDS
 Price information
 Information about current or upcoming sales promotions.
The results of the contact could include:
 The prospect buys something and becomes a customer or client
 The salesperson realises the prospect no longer has a need, buying
authority or ability to buy and thus downgrades the prospect to a lead or
contact
 The prospect requests additional information
 The prospect requests the salesperson to contact them again later.
Salespeople usually record any or all of the following information about
a meeting:
 The date
 The salesperson
 How the contact was made (for example, phone or email)
 The purpose of the contact
 The information they provided the prospect
 The results of the contact.
By keeping these types of records, individual salespeople and teams of
salespeople keep track of people's purchasing status and make informed
decisions about strategies to make sales.

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Establishing a prospect database
A prospecting database can contain a lot of information that´s very
easily extracted in a variety of forms. Prospecting databases can also be
used to predict future buying behaviour. Geographic, demographic and
psychographic characteristics can inform salespeople who is most likely
to buy their products or services. These characteristics can also tell
them who is most likely to buy certain types of their products or
services. A lead or prospect´s buying history can also provide an
indication of possible future buying behaviour. This type of information
can be sourced from various websites including your local council
website and looking for their plan for the future.
A database makes it easy for salespeople to keep track of how often they
have contacted people and sent them marketing material. It also makes for
easy tracking of results of sales contact and other sales efforts. Salespeople
can use this information to plan for future strategies.
With a database salespeople can instantly change people's status, from lead
to prospect, for example, without the need to physically move the files.
Databases enable salespeople to easily assign priority ratings to leads
and prospects. For example, they might give those leads and prospects
with the greatest likelihood of high sales volume - their ´hot´ leads and
prospects - a higher rating. Databases keep an easily accessible record
of all kinds of data, including contact history and classification. This can
work to prevent duplicate or irrelevant correspondence.
Types of databases
Sources of databases include:
 Office or business software packages that include databases
 Customised databases (for prospecting and selling purposes) that you
can buy alone
 Databases available from open sources, where you can access database
source code under a copyright licence
 Databases that an organisation builds and customises itself.
Irrespective of origin, all databases have the capability to contain all of the
information mentioned in this subject. Most databases enable tailoring to
suit the business. The amount of adjusting needed to do varies from
database to database. Some databases and database generating software
need a lot of input and programming. Others are readily tailored to
prospecting and may need input of only a few pieces of information to
enable users to get the information from them that they want.
For example, if there is a need to be able to extract lists of which
prospects contacted in the past month, would need (at a minimum)

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fields for names, status and date of last contact. There may also be a
need for reports that would extract this specific information.
Other uses
The benefits of having a database don´t stop once salespeople have
finally achieved a sale and changed the prospect´s status to a client.
Using a database, salespeople can continue recording data about clients
and use it to get even more sales. If salespeople are using a
prospecting database, they will already have certain information on file
about their prospects. Once they change a prospect´s status to client,
they still will have this information on file. They can add to it as they
make sales, recording client:
 Preferences
 Needs
 Geographic information (address, environment)
 Demographic information (age, gender, income, occupation, level of
education, background and household information)
 Psychographic information (lifestyle, interests and activities, opinions,
memberships)
 Purchase history, including what they purchased and their intended use
of the product or service
 Contact history (including the date of the last contact, type of contact,
who made the last contact and the result).
Some suggested benefits are included in the following table.
Benefit Example
Matching product features and
benefits with client needs quickly
and accurately.
If sending marketing materials to clients,
material that highlights the specific benefits
of a product or service that appeal to those
clients.
Keeping an up-to-date record of
client needs and changing
preferences.
If a client purchases a product, salespeople
are aware of this and develop future sales
strategies accordingly.
Keeping track of clients´ purchase
history, which can help them
know when a client may be
running out of a product or again
be ready for a certain purchase.
If a business sells products that clients buy
regularly such as general insurance,
salespeople can keep track of when they are
due for renewal.
Keeping track of contact history
with each client to avoid duplicate
communications.
If salespeople are sending out postcards that
highlight an upcoming sales promotion, they
can keep track of the clients who have
already received it.

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Research range of options
Before arranging the next contact, you should have completed all your
research and have chosen a number of solutions and lenders that you
will present to the client.
In writing, have a number of options ready for them, but remember your
clients will be confused if you show them every available loan on the market.
By analysing collected data well and understanding what the client’s real
needs are, you will be able to present the different loan packages to them
and know that you are fulfilling the requirements for your client.
Prepare for the next contact
The next contact should be used to strengthen the relationship as well
as dealing with any concerns the client may have. Now that you have
researched the client’s needs, you are in a position to present your
recommendations to the client.
How to prepare for the next contact:
 Use a follow up schedule - Create a follow up schedule that outlines
when calls and email follow ups should be happening. Starting out, two
basic contact schedules should suffice, one for active leads and another
for passive leads. Active leads are responsive and ready to buy in the
near term. Passive leads are still qualified but are on a longer term
buying timeframe.
 Use different contact formats - Use more than one way reach out.
Email, snail mail, phone, text, social, it's all on the table. The goal is to
touch prospects in different ways in order to stay top of mind and stand
out from the competition.
 Leverage email templates - Email templates provide convenience
while still requiring the sales person to engage with the prospect and
their specific needs.
 Always get agreement on next steps - If someone genuinely wants
you to stop contacting them you should. Period. You can often avoid
getting to that point by establishing good rapport and clear expectations.
End each conversation, regardless of how motivated the prospect is, by
asking for permission to follow up with them in a certain period of time,
you're always going to be operating in the realm of mutual respect and
consideration when you follow up. If they say no, then you know where
you stand. If they say yes, then you've got an open door and clear
expectation that you will be following up.

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You should present the client with a product comparison report. Your
client will now be in a position to make a decision. At this stage, you will
prepare a credit quote (if you are charging for your services and a credit
proposal disclosure document. Once a decision is made by the client to
proceed with a particular option, you may complete the loan application
for the particular lender.
With the introduction of the NCCP Act (2009) loan applicant, clients are
required to sign a Credit Proposal Disclosure document which contains
information such as:
 The Authorised Credit Representative’s details
 Important information about the client’s needs
 The Authorised Credit Representative’s recommendations and whether
or not they are appropriate.
 It refers to the Credit Guide which the client should already have at this
stage of the process
 What commissions are receivable by the Authorised Credit
Representative
 What indicative costs the client may have to pay
 The authorisation of the client for the loan application to proceed as
presented.
If these forms are completed correctly and in their entirety, the Authorised
Credit Representative has performed in accordance with the Act.
Assessment
Now you have finished this section, you are required to download and
complete FNSSAM403 FMB Assessment.