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What is the 72 rule in wealth management? Client Acquisition for Financial Advisors
In this installment of a series on client acquisition for financial advisors, Mark Little emphasizes the importance of never missing opportunities to convert everyday conversations into potential business interactions. He shares his approach of engaging actively with non-clients, listening for subtle cues that could indicate a need for financial advice, and skillfully navigating these interactions to offer his services.
Video Transcription
hi I’m Mark little I’m going to continue
the series on client acquisition as a
skill for financial advisors and I’ve
mentioned in previous videos there’s
four skills around client acquisition
that you must master and the fourth
skill is never missing an opportunity so
what does that mean what does it mean to
never miss an opportunity when it comes
to client acquisition well it depends on
your client acquisition methodology now
the methodology that I teach the
methodology that I’ve always used is
just getting out there and rubbing
elbows with uh friends and acquaintances
and just just making sure I’m
interacting and rubbing elbows with
enough non-clients every week um to to
make to be able
to acquire clients all right so I know
the question I know the question around
all this is Mark how do you how do you
ever convert a just friend into a client
well we’re getting ahead of ourselves
let’s get back to never missing an
opportunity so if if you’re interacting
with someone just having a conversation
you know just being a nice person you
you sit down with somebody and you grab
coffee and you say what’s what’s been
going on in your life and and then at
some point they ask you so what’s been
going on in your life Mark and so you’re
you’re it’s it’s a human conversation
and it somewhere in there what I’m
saying is if if somewhere in there they
mention something that might represent
an
opportunity to do
business I’m saying you can never miss
that and I’ve listened to lots of
recordings over the years lots of
advisors send me their recordings for
coaching and the number one thing that I
notice is how many opportunities are
being missed that the client says
something is uh benign as oh yeah my my
wife and I always argue about that hahaa
and it’s just normal conversation yet
the advisor doesn’t have the skill to
slow down the
conversation and see if what they’re
actually intending to do in that moment
is to reach out to you for help
in your role as a financial advisor so
you’re in a normal conversation they say
something it might be a a call for help
or cry for help it may be they’re
sending out a Lifeline just to see if
you know anything about this topic and
if so maybe you can help them but the
point is the responsibility is on you
you don’t just yuck it up and and then
when you’re finished with the
conversation you just say hey it’s been
great catching up with you you know see
you next time you know I’m saying you
need to never miss an opportunity and
I’m not saying that every time somebody
says something that might obliquely lead
to business that that’s exactly what
they’re intending to do no I’m saying
you don’t know and therefore you can’t
miss any of those opportunities you have
to be able to skillfully slow down the
conversation back it up to the comment
that they made ask them say that sounds
like significant financial issue to me
is it and they say yeah yeah yeah when
we my spouse and I argue it’s it’s often
about money
ha really well I have a process for
helping couples get on the same page
financially if that’s a problem that
something you’d like to resolve I’d
happy be happy to help you if that’s
something you’d like me to do and they
say no no no I was just commenting about
what you said about something and and I
was just making a joke okay fine so now
we know that’s not was the purpose of
why they brought it up but can you see
what I’m saying what if it had gone the
other way what if they were to said
really so so how would that work and and
then you could explain how your process
works in my case you know we would sit
down with both of you and takes about an
hour anyway you get the point I will
never miss the opportunity my question
to you is do you now that comes to the
question for this video what is the rule
of
72 okay so financial advisers are on
YouTube hunting around for things to
make them better financial advisors and
I know that when people are Googling you
know what is the the rule of 72 or what
is the 72 rule uh it may be that if they
don’t know that rule uh you know they’re
seeking to learn it so they can be a
better financial advisor
so my Niche is not so much newer
advisers who don’t know what the rule of
72 is my Niche is more skilled
experienced I would call them frustrated
veterans who know what the rule of 72 is
I just want to make sure that you are
capable and skillful at being able to
deploy the rule of 72 and things like
that that you know if you have above
average technical competence you know
I’m I’m not a fan of you giving free
advice to your friends in these
interactions where you’re just catching
up with friends no I think that’s
unprofessional but that’s my opinion you
know if if it’s more professional to be
able to spot when someone needs
Financial advice and then offer to help
them but to shift over into the formal
environment you know that well if if
that’s a serious issue then let’s get
schedule an appointment in my office for
both of you bring all your financial
documents and we will res we will work
to resolve this issue okay so I think
that’s the only professional approach so
I’m telling you my
biases but I want to get back to how you
never miss an opportunity so how on
Earth would you use the rule of
72 to never miss an opportunity well in
I’ll give you an example in this day and
age you know what are the topics that
just come up in regular conversation if
you if you’re sitting down with a friend
or you’re sitting down with an
acquaintance and you’re just catching up
and you’re talking about non-b buus
things you’re just developing a
relationship with a with another human
being and you’re just talking
about miscellaneous stuff how often does
the subject of inflation come up and and
not so much the topic of inflation
itself but the topic of how prices are
rising so I bring bring this up because
I just saw an article in one of the New
York newspapers about this guy who
walked into a McDonald’s all right he
ordered french fries and a shake I kid
you not just those two items he ordered
french fries and he ordered chocolate
shake and it cost $17 and it literally
knocked his socks off I mean he was like
holy macaroni when did something flip
and all of a sudden a french fries and a
shake or $17
but do you see that’s what I’m talking
about um maybe maybe you’re talking with
an acquaintance and and maybe just in on
the news that morning it said hey the
Department of Labor just released uh the
Consumer Price Index and it looks like
good news inflation is down it’s 3% you
know and last year it was 9% and they
make it sound like prices are going down
to which one of somebody in the group
says 3 % are you kidding me have you
never filled up your car lately I mean
the price of gas is
doubled you know in recent memory or
eggs or milk or you know that’s the
whole thing it’s like like like how how
fast does your income have to be rising
just to stay even so if you know the
rule of 72 you know that the the the
math hack is if you take 72 and you
divide it into the the number it’s it’s
how long it takes that number to double
so I’ll give you an example let’s say
let’s say that uh you know they released
the inflation number and it’s three so
you take 72 divided by three and you get
24 okay so that’s your hack and and you
could sit there and do that on your
phone and say great well if if costs are
going up 3% per year well that in my
business that that makes things a little
bit easier that means that you know if
you’re if you’re living off $10,000 a
month now or $30,000 a month now
whatever you’re living off of now you
know it has to double in how many years
24 years so you gotta you know let’s say
you’re living on 10,000 now well you got
24 years to raise your income every year
so that 24 years from now you’re making
$20,000 because at 3% that’s what we’re
talking about in other words you use the
rule of 72 to kind of use deploy our
skills as financial advisers into the
conversation and then they say but but
it’s not
3% it’s it’s closer to well like
gasoline and eggs and milk and so many
things I buy are like double and you say
well that that’s because in the in the
government number they don’t include
everything for example in that 3% number
they don’t include energy they don’t
include food prices they don’t include
housing prices so yeah the things that
you’re noticing um which are up closer
to 20% you know year-over-year many of
these things um they’re not included and
so then the question would be well what
if what if on the things that I buy
things are going up 20% so I take my 72
divided by 20 well well if the things
you buy are going up 20% per year and
you’re living off $10,000 a year now you
better have a plan to have $20,000 a
year 3.6 years from now because at
20% prices double every 3.6 years now do
you see how this conversation could kind
of merge what we know as financial
advisers into just a normal
conversation and and at let’s say at
this point the uh the non-client says
well I’m glad inflation’s to back down
to 3% cu you know my my income doesn’t
double every four years and and you say
well you know unfortunately it doesn’t
really work that way inflation goes up
and down but prices just go up so you
know they might go up slower now like
instead of last year they went up 20%
maybe this year they go up 3% but it’s
like a ratchet it always goes up it
never comes back down you know and so so
then they say well what have things gone
up in the last let’s say three years
instead of of just one year or all these
games they’re playing you know and you
say well even the government number when
you take out things we buy like energy
and food and housing costs even their
number if you go back three years
instead of one year it’s up like 20% or
whatever the number is that say I’m
recording this it’s about 20% over the
last three years but do you see now how
now we’re back to needing to double your
income every 3.6 years but at that point
they’re like wow I have a problem that
is not something that’s in my plan I you
know and my financial advisers never
talked about stuff like this and then at
that point you have not missed the
opportunity if you slow it down and say
well you say that’s a problem is that a
uh how big of a problem is that in your
situation like if things did start
doubling every four five 10 years like
shorter periods of time how much of a
problem would that be for you oh that
would be a disaster I was thinking about
you know I was hoping to sell my
business and have Financial Independence
three years from now but I guess I need
to sit down with my financial advisor
and then you could say well I we have a
process
for dealing with issues like that and uh
if if if and we help people that are
struggling with a significant financial
issue it’s okay if you have a financial
advisor uh we could schedule a meeting
if that’s something that you’d like to
do and maybe you could take this
information back to your financial
advisor and and then deal with this
issue really how would that work and now
you’re on the your way all I’m trying to
make a point is I’m not trying to train
you into what to say I’m trying to give
you examples of how you could just turn
normal
conversations into a problem because at
the end of the day what do we do
as a as a bottom line skill we take our
clients financial problems and we create
a strategy to eliminate or overcome
these problems so that the client can
while addressing all the problems
nevertheless still achieve their
financial goals so you get what I’m
saying and that’s what I mean I wanted
to give you and I’ll probably do several
videos on this it just occurred to me
today because of this article about
French fries and a Shake being
$17 and I had a a younger financial
adviser asked me about the rule of 72
and I thought I wonder if skilled
financial advisers are thinking about
how do you use basic skills from our
profession like the rule of 72 how do
you deploy that out in the world when
you’re in client acquisition mode
talking with non-clients how do you use
that to never miss an opportunity if it
arises where client or a potential
client a non-client
is presenting a problem maybe a
financial problem that you can help them
resolve so that’s all I had for today uh
I I tell you it’s all about mindset and
when you come to uh client acquisition
skills this whole idea of never missing
an opportunity is a mindset issue uh I’m
going to put it as a client acquisition
topic for today uh in our YouTube
channel but I can tell you if you have a
mindset that I’m going to go into every
conversation with every non-client with
my antenna and my radar up and I’m going
to deploy my skills just to do nothing
more than see if anybody that in my
Orbit has any financial problem that
they are any way trying to describe to
me even obliquely I’m never missing that
opportunity that’s the mindset issue so
take care
the series on client acquisition as a
skill for financial advisors and I’ve
mentioned in previous videos there’s
four skills around client acquisition
that you must master and the fourth
skill is never missing an opportunity so
what does that mean what does it mean to
never miss an opportunity when it comes
to client acquisition well it depends on
your client acquisition methodology now
the methodology that I teach the
methodology that I’ve always used is
just getting out there and rubbing
elbows with uh friends and acquaintances
and just just making sure I’m
interacting and rubbing elbows with
enough non-clients every week um to to
make to be able
to acquire clients all right so I know
the question I know the question around
all this is Mark how do you how do you
ever convert a just friend into a client
well we’re getting ahead of ourselves
let’s get back to never missing an
opportunity so if if you’re interacting
with someone just having a conversation
you know just being a nice person you
you sit down with somebody and you grab
coffee and you say what’s what’s been
going on in your life and and then at
some point they ask you so what’s been
going on in your life Mark and so you’re
you’re it’s it’s a human conversation
and it somewhere in there what I’m
saying is if if somewhere in there they
mention something that might represent
an
opportunity to do
business I’m saying you can never miss
that and I’ve listened to lots of
recordings over the years lots of
advisors send me their recordings for
coaching and the number one thing that I
notice is how many opportunities are
being missed that the client says
something is uh benign as oh yeah my my
wife and I always argue about that hahaa
and it’s just normal conversation yet
the advisor doesn’t have the skill to
slow down the
conversation and see if what they’re
actually intending to do in that moment
is to reach out to you for help
in your role as a financial advisor so
you’re in a normal conversation they say
something it might be a a call for help
or cry for help it may be they’re
sending out a Lifeline just to see if
you know anything about this topic and
if so maybe you can help them but the
point is the responsibility is on you
you don’t just yuck it up and and then
when you’re finished with the
conversation you just say hey it’s been
great catching up with you you know see
you next time you know I’m saying you
need to never miss an opportunity and
I’m not saying that every time somebody
says something that might obliquely lead
to business that that’s exactly what
they’re intending to do no I’m saying
you don’t know and therefore you can’t
miss any of those opportunities you have
to be able to skillfully slow down the
conversation back it up to the comment
that they made ask them say that sounds
like significant financial issue to me
is it and they say yeah yeah yeah when
we my spouse and I argue it’s it’s often
about money
ha really well I have a process for
helping couples get on the same page
financially if that’s a problem that
something you’d like to resolve I’d
happy be happy to help you if that’s
something you’d like me to do and they
say no no no I was just commenting about
what you said about something and and I
was just making a joke okay fine so now
we know that’s not was the purpose of
why they brought it up but can you see
what I’m saying what if it had gone the
other way what if they were to said
really so so how would that work and and
then you could explain how your process
works in my case you know we would sit
down with both of you and takes about an
hour anyway you get the point I will
never miss the opportunity my question
to you is do you now that comes to the
question for this video what is the rule
of
72 okay so financial advisers are on
YouTube hunting around for things to
make them better financial advisors and
I know that when people are Googling you
know what is the the rule of 72 or what
is the 72 rule uh it may be that if they
don’t know that rule uh you know they’re
seeking to learn it so they can be a
better financial advisor
so my Niche is not so much newer
advisers who don’t know what the rule of
72 is my Niche is more skilled
experienced I would call them frustrated
veterans who know what the rule of 72 is
I just want to make sure that you are
capable and skillful at being able to
deploy the rule of 72 and things like
that that you know if you have above
average technical competence you know
I’m I’m not a fan of you giving free
advice to your friends in these
interactions where you’re just catching
up with friends no I think that’s
unprofessional but that’s my opinion you
know if if it’s more professional to be
able to spot when someone needs
Financial advice and then offer to help
them but to shift over into the formal
environment you know that well if if
that’s a serious issue then let’s get
schedule an appointment in my office for
both of you bring all your financial
documents and we will res we will work
to resolve this issue okay so I think
that’s the only professional approach so
I’m telling you my
biases but I want to get back to how you
never miss an opportunity so how on
Earth would you use the rule of
72 to never miss an opportunity well in
I’ll give you an example in this day and
age you know what are the topics that
just come up in regular conversation if
you if you’re sitting down with a friend
or you’re sitting down with an
acquaintance and you’re just catching up
and you’re talking about non-b buus
things you’re just developing a
relationship with a with another human
being and you’re just talking
about miscellaneous stuff how often does
the subject of inflation come up and and
not so much the topic of inflation
itself but the topic of how prices are
rising so I bring bring this up because
I just saw an article in one of the New
York newspapers about this guy who
walked into a McDonald’s all right he
ordered french fries and a shake I kid
you not just those two items he ordered
french fries and he ordered chocolate
shake and it cost $17 and it literally
knocked his socks off I mean he was like
holy macaroni when did something flip
and all of a sudden a french fries and a
shake or $17
but do you see that’s what I’m talking
about um maybe maybe you’re talking with
an acquaintance and and maybe just in on
the news that morning it said hey the
Department of Labor just released uh the
Consumer Price Index and it looks like
good news inflation is down it’s 3% you
know and last year it was 9% and they
make it sound like prices are going down
to which one of somebody in the group
says 3 % are you kidding me have you
never filled up your car lately I mean
the price of gas is
doubled you know in recent memory or
eggs or milk or you know that’s the
whole thing it’s like like like how how
fast does your income have to be rising
just to stay even so if you know the
rule of 72 you know that the the the
math hack is if you take 72 and you
divide it into the the number it’s it’s
how long it takes that number to double
so I’ll give you an example let’s say
let’s say that uh you know they released
the inflation number and it’s three so
you take 72 divided by three and you get
24 okay so that’s your hack and and you
could sit there and do that on your
phone and say great well if if costs are
going up 3% per year well that in my
business that that makes things a little
bit easier that means that you know if
you’re if you’re living off $10,000 a
month now or $30,000 a month now
whatever you’re living off of now you
know it has to double in how many years
24 years so you gotta you know let’s say
you’re living on 10,000 now well you got
24 years to raise your income every year
so that 24 years from now you’re making
$20,000 because at 3% that’s what we’re
talking about in other words you use the
rule of 72 to kind of use deploy our
skills as financial advisers into the
conversation and then they say but but
it’s not
3% it’s it’s closer to well like
gasoline and eggs and milk and so many
things I buy are like double and you say
well that that’s because in the in the
government number they don’t include
everything for example in that 3% number
they don’t include energy they don’t
include food prices they don’t include
housing prices so yeah the things that
you’re noticing um which are up closer
to 20% you know year-over-year many of
these things um they’re not included and
so then the question would be well what
if what if on the things that I buy
things are going up 20% so I take my 72
divided by 20 well well if the things
you buy are going up 20% per year and
you’re living off $10,000 a year now you
better have a plan to have $20,000 a
year 3.6 years from now because at
20% prices double every 3.6 years now do
you see how this conversation could kind
of merge what we know as financial
advisers into just a normal
conversation and and at let’s say at
this point the uh the non-client says
well I’m glad inflation’s to back down
to 3% cu you know my my income doesn’t
double every four years and and you say
well you know unfortunately it doesn’t
really work that way inflation goes up
and down but prices just go up so you
know they might go up slower now like
instead of last year they went up 20%
maybe this year they go up 3% but it’s
like a ratchet it always goes up it
never comes back down you know and so so
then they say well what have things gone
up in the last let’s say three years
instead of of just one year or all these
games they’re playing you know and you
say well even the government number when
you take out things we buy like energy
and food and housing costs even their
number if you go back three years
instead of one year it’s up like 20% or
whatever the number is that say I’m
recording this it’s about 20% over the
last three years but do you see now how
now we’re back to needing to double your
income every 3.6 years but at that point
they’re like wow I have a problem that
is not something that’s in my plan I you
know and my financial advisers never
talked about stuff like this and then at
that point you have not missed the
opportunity if you slow it down and say
well you say that’s a problem is that a
uh how big of a problem is that in your
situation like if things did start
doubling every four five 10 years like
shorter periods of time how much of a
problem would that be for you oh that
would be a disaster I was thinking about
you know I was hoping to sell my
business and have Financial Independence
three years from now but I guess I need
to sit down with my financial advisor
and then you could say well I we have a
process
for dealing with issues like that and uh
if if if and we help people that are
struggling with a significant financial
issue it’s okay if you have a financial
advisor uh we could schedule a meeting
if that’s something that you’d like to
do and maybe you could take this
information back to your financial
advisor and and then deal with this
issue really how would that work and now
you’re on the your way all I’m trying to
make a point is I’m not trying to train
you into what to say I’m trying to give
you examples of how you could just turn
normal
conversations into a problem because at
the end of the day what do we do
as a as a bottom line skill we take our
clients financial problems and we create
a strategy to eliminate or overcome
these problems so that the client can
while addressing all the problems
nevertheless still achieve their
financial goals so you get what I’m
saying and that’s what I mean I wanted
to give you and I’ll probably do several
videos on this it just occurred to me
today because of this article about
French fries and a Shake being
$17 and I had a a younger financial
adviser asked me about the rule of 72
and I thought I wonder if skilled
financial advisers are thinking about
how do you use basic skills from our
profession like the rule of 72 how do
you deploy that out in the world when
you’re in client acquisition mode
talking with non-clients how do you use
that to never miss an opportunity if it
arises where client or a potential
client a non-client
is presenting a problem maybe a
financial problem that you can help them
resolve so that’s all I had for today uh
I I tell you it’s all about mindset and
when you come to uh client acquisition
skills this whole idea of never missing
an opportunity is a mindset issue uh I’m
going to put it as a client acquisition
topic for today uh in our YouTube
channel but I can tell you if you have a
mindset that I’m going to go into every
conversation with every non-client with
my antenna and my radar up and I’m going
to deploy my skills just to do nothing
more than see if anybody that in my
Orbit has any financial problem that
they are any way trying to describe to
me even obliquely I’m never missing that
opportunity that’s the mindset issue so
take care
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