Insurance Agent Forum

[BiggitySwat]

I am a fully licensed financial planner that gets most of my leads from seminars and referrals. I have great clients, but I feel that something is going against me when dealing with some interested prospects.

I work from home. I have a home office that looks VERY much like a humming office inside, with its own separate door, ramp, walkway, railing, etc. leading to the entryway. However, it is part of a wing of my house. I have seen a few clients in the home office before and it was okay, but I have a little problem with some of my prospects.

Some of my prospects from seminars are medium to high net worth folks who currently have a financial advisor with a wirehouse. Though they would like to make a change from their advisor for a variety of reasons, I feel embarrassed that I work out of a home office while the wirehousers work in supertowers plated in mahogany. I have an itching feeling that being a solo practitioner with a part time secretary from home hurts my credibility.....

I have thought about leasing my own office, but I don't want to since my practice is fairly new and the expense to lease is insane (in my area). I love the flexibility, convenience, and afforadability of a home office environment, but nonetheless feel kind of embarrassed to invite prospects to my home to talk about retirement planning!

For those of you in my position, did you just bite the bullet and get an office, or did you somehow make the home office thing work while not looking like a small-time amateur to your prospects?

***PS: So far, I have been meeting my prospects at local banks whom I have relationships with, coffee shops, their homes (most common), etc, but I get asked MANY MANY times where my "office" is.....and I get tonguetied.

[GetInsurance]

You need an office. My brother is in the same business as you and was also working out of the home when he first started. He was introduced to a wealthy prospect by a happy client or customer, whatever you guys call it, and didn't get the guy to invest. He was told later by the guy sending him the business that the wealthy guy didn't feel right about writing a huge check to somebody who wasn't in a credible office. My bro got a nice office the following week and never looked back. The same guy who didn't go through my bro ended up with him a year later, transferring all assets for management. I work from home and in my line of work it's great, but I wouldn't hire a financial planner who worked from home and you probably wouldn't either.

[Ranger]

In our area we have a couple of businesses that make a business of providing office space. I can get an office with internet connection for $275 per month. Included in this price is a receptionist up front and a couple of conference rooms to use for meeting clients. I don't have to sign lease, I don't have to clean the rest rooms, and I don't have to pay any utilities (unless I want my own phone line). Plus I don't have to bothered by the city zoning board for running a business out of my home.

You might want to look around for a place like this.

[insuranceexec]

Originally Posted by BiggitySwat

I am a fully licensed financial planner that gets most of my leads from seminars and referrals. I have great clients, but I feel that something is going against me when dealing with some interested prospects.

I work from home. I have a home office that looks VERY much like a humming office inside, with its own separate door, ramp, walkway, railing, etc. leading to the entryway. However, it is part of a wing of my house. I have seen a few clients in the home office before and it was okay, but I have a little problem with some of my prospects.

Some of my prospects from seminars are medium to high net worth folks who currently have a financial advisor with a wirehouse. Though they would like to make a change from their advisor for a variety of reasons, I feel embarrassed that I work out of a home office while the wirehousers work in supertowers plated in mahogany. I have an itching feeling that being a solo practitioner with a part time secretary from home hurts my credibility.....

I have thought about leasing my own office, but I don't want to since my practice is fairly new and the expense to lease is insane (in my area). I love the flexibility, convenience, and afforadability of a home office environment, but nonetheless feel kind of embarrassed to invite prospects to my home to talk about retirement planning!

For those of you in my position, did you just bite the bullet and get an office, or did you somehow make the home office thing work while not looking like a small-time amateur to your prospects?

***PS: So far, I have been meeting my prospects at local banks whom I have relationships with, coffee shops, their homes (most common), etc, but I get asked MANY MANY times where my "office" is.....and I get tonguetied.

The problem you are experiencing is all to common. I can not tell you how many people feel more comfortable having a professional with his or her own office. I can also understand your point of view; assuming you do not have kids crying and dogs barking.

I have had an office since I started my practice many years back. I picked up a guy this week for this very reason.

A guy walked in to my office and asked my secretary if someone was available to meet with him for a few moments, and apologized for not having an appointment. To make a long story short; the guy was uncomfortable that his broker was working form his home, even though the broker was doing a good job. I transferred the account in "like kind", for inquiring minds, and picked up a 600K account.

With all this being said; go get an office. BTW where are you located?

[Bob_The_Insurance_Guy]

There are a great many Financial Planners, Insurance Agents, Consultants, etc. who work out of their house and rent space in a leased building (as stated earlier). It's done all the time.

They all have clientele who meet them either at a restaurant, their offices or at the meeting room at the leased space building.

[Winter]

I think the key here is that we are talking about a financial planning scenario. If you are out pounding the turf every day doing business to business or FE, it is probably helpful to not have an office to be hanging out in (provided that you are self-motivate). Will you lose some sales for not having an office in that type of business? Yes. But you will lose some sales if you wear a tie and some if you dont. But I am agreeing that with a financial planning versus transaction based businesses where a sit-down analytical session is more critical that a proper environment should lead to a payback of office expenses at a minimum.

[djs]

Lots of variables, though lets start with most broker dealers require true office space. Once you get past that, there is perception.

There is nothing wrong with working out of your house, as long as your house is on the upper end of your target market. If you have a $250,000 house and are trying to attract clients in $750,000 homes, forget it, it won't work. If you have a $1,000,000 home, trying to attract clients in $500-750K homes, it will work.

People want to know you are successful. The office creates this illusion. The home requires it to not be an illusion, but reality. Most of the time, reality is much harder than the illusion.

The other part of this is the office has to be an office, not a spare room in the house. Sounds like you have this setup.

However you do it, you will lose a few clients due to working out of the house. This is probably more true today than previously with all of the scams that are coming out, people feel a bit more uneasy about things that appear less secure.

If the loss of those few clients is greater than the expense of renting an office, then its time to get the office. Pretty simple really.

Personally, the office I have in my home is far nicer (even in a clients eyes, much less mine) than my official office. Of course, I can't do broker/dealer client work at home, since it's not an official registered address, but my office is less than a mile away.

My investment clients are always welcome to come to my house. Friday afternoons in the summer, we'll sit out back and drink a nice glass of a local winery's product.

Dan

[arnguy]

I think "Ranger's" suggestion is on the money. In most large metropolitan areas renting the office space on an "as needed" basis that is shared, with a receptionist, works great. There are quite a few of these deals in the Philly area and there probably are some where you live.

[saieddie]

Bite the bullet and get an office, even if it is small.
Unless I was dealing with a friend, I'd be leery of any financial planner working out of their home - I don't care how nice the home is.

[BiggitySwat]

Originally Posted by djs

Lots of variables, though lets start with most broker dealers require true office space. Once you get past that, there is perception.

There is nothing wrong with working out of your house, as long as your house is on the upper end of your target market. If you have a $250,000 house and are trying to attract clients in $750,000 homes, forget it, it won't work. If you have a $1,000,000 home, trying to attract clients in $500-750K homes, it will work.

People want to know you are successful. The office creates this illusion. The home requires it to not be an illusion, but reality. Most of the time, reality is much harder than the illusion.

The other part of this is the office has to be an office, not a spare room in the house. Sounds like you have this setup.

However you do it, you will lose a few clients due to working out of the house. This is probably more true today than previously with all of the scams that are coming out, people feel a bit more uneasy about things that appear less secure.

If the loss of those few clients is greater than the expense of renting an office, then its time to get the office. Pretty simple really.

Personally, the office I have in my home is far nicer (even in a clients eyes, much less mine) than my official office. Of course, I can't do broker/dealer client work at home, since it's not an official registered address, but my office is less than a mile away.

My investment clients are always welcome to come to my house. Friday afternoons in the summer, we'll sit out back and drink a nice glass of a local winery's product.

Dan

I do have a nice home, but it's still a home (lol). My home office is nicer than many wirehouse brokers' cubicles, yes, but the nose crinkling still occurs when talking to prospects about where I work.

My broker dealer allows me to work from home and send all of my correspondence to my house.

I have been thinking about possibly talking to my CPA and/or mortgage broker about paying them a stipend to use their spare office space as my client consultation cave, and in addition to paying a small fee, refer them clients that need their services. Have you heard of this working before?
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Originally Posted by Ranger

In our area we have a couple of businesses that make a business of providing office space. I can get an office with internet connection for $275 per month. Included in this price is a receptionist up front and a couple of conference rooms to use for meeting clients. I don't have to sign lease, I don't have to clean the rest rooms, and I don't have to pay any utilities (unless I want my own phone line). Plus I don't have to bothered by the city zoning board for running a business out of my home.

You might want to look around for a place like this.

I was recommended by a friend from LPL to look into joining a private club downtown. I've seen it, and it is very swanky and classy, and they'll allow you to use their conference rooms for clients. However, I may get in trouble if I tell prospects my office is in a private club - not sure if I can truly say that office space "is THE office?"

[padthaiforlunch]

Many executive suites are in class A space. Some will let you rent offices and conferences by the hour ($30 in my neck of the woods).

Some of these suites will let you go virtual -- you pay $75/mo. and you get a mailbox. You use the address on your card. If a client drops by, the receptionist will say you are out of the office and take a message.

[bluemarlin08]

Office space is priced very reasonable, check around, especially look for subleases from failed businesses. I have a home office and a regular office, work about half and half, had clients come to my home, although rare, most all meetings at regular office, especially with higher net worth clients. Perception supercedes reality in the beginning.

[LGilmore]

So if the issue is preception and the client asks you about your "office" while you're in a $30 an hour rent a room, what do you tell them? Or do you hope they're stupid?

I had an office for 19 of my 20 years in this business. I moved my office home last year.... Here's the simplest words I use when this comes up with a client. "OVERHEAD Sucks." So far, they all nod and smile, because overhead does indeed suck. They know it from their own business. I then tell them why I made the move. Am I a smart FP if I pay high square footage costs to impress a client? What happens when the client figures out who really is paying for the footage?

As winter said, you may lose somebody cause they want a guy in a tie. I would be more concerned about trust with my clients. If I am doing all these "things" to appear to be something I'm not, to basically fool them, What else am I doing? The reason people move their funds is they stop "trusting" their advisor, not because his desk isn't big enough or because it's brown cherry instead of oak.

Treat em like you would want to be treated.

[bluemarlin08]

I think the rent an office is misleading, LGilmore is right the client will see through the ruse. I tell my clients I work alot from home but go to the office usually between 10 and 2. Fortunately, my overhead is very low.

[sman]

I'm with LGilmore. I've done it both ways (office and home office that is), and quite frankly, I prefer working from home. I use the same terminology as LGilmore. I got tired of spending $2k+ a month on overhead. Especially when half of my time was spent meeting with clients away from the office.

Honesty goes a long way. People want authenticity. If I don't get an account because the potential client has some hang up about where my office is, then I really don't care to have them as a client.

[LGilmore]

"I got tired of spending $2k+ a month on overhead."

Ditto.

My defining momment was driving back from dropping my youngest at college. During the five hour drive back, when not missing my kids, I started doing what all financial folks do, I started counting my savings...

The first one I came up with? Milk. With both kids gone, $55 a month less in milk purchases.... My first savings....

The next morning I walk into my office and there's a note under the door. It's a notice of a rent increase and month to month contract instead of the usual 3-5 year deal... Guess how much the increase was????

I saw it as a sign from above to review my situation and expenses. Where was I spending money and were those purchases "really" having an impact on my sales?

I began to look for a new office and simply felt the landlords in my area were huffing glue with the footage prices they were asking.

The other benefit of this switch was it began to move me more into the modern side of this business. I didn't need an extra office to hold papers because I could store the information found in 6 file cabinets in a textbook sized HD that could upon request, pull up information immediately. I also began to look at different ways to market because of this move.

So far, so good.

[djs]

You could always add the line:

"Since I work from home, you know where I live. I have to do a better job, or you really know where to find me!"

I've used that a few times, clients get a chuckle out of it, not everyone will appreciate it though...

Dan

[sman]

Originally Posted by LGilmore

"I got tired of spending $2k+ a month on overhead."

Ditto.

My defining momment was driving back from dropping my youngest at college. During the five hour drive back, when not missing my kids, I started doing what all financial folks do, I started counting my savings...

The first one I came up with? Milk. With both kids gone, $55 a month less in milk purchases.... My first savings....

The next morning I walk into my office and there's a note under the door. It's a notice of a rent increase and month to month contract instead of the usual 3-5 year deal... Guess how much the increase was????

I saw it as a sign from above to review my situation and expenses. Where was I spending money and were those purchases "really" having an impact on my sales?

I began to look for a new office and simply felt the landlords in my area were huffing glue with the footage prices they were asking.

The other benefit of this switch was it began to move me more into the modern side of this business. I didn't need an extra office to hold papers because I could store the information found in 6 file cabinets in a textbook sized HD that could upon request, pull up information immediately. I also began to look at different ways to market because of this move.

So far, so good.

Yep, I have a soon to be 19 year old son who commutes to college and drinks a TON of milk (he works out and drinks 9 million protein drinks a day which require milk). Not that I'm wishing my children would grow up and move out anytime soon, but man will I have a lot of money when they do.

I really don't have a problem letting people know my office is in my home. I think if the rep "thinks" people will have a problem with it, then his/her response to the question, "Where is your office?" is a smattering of insecure and unsure remarks. If you are ok with it, then your answer is usually enough because it will be a confident response to that question.

I completely understand the original posters concerns. We've been told we have to present an image to the potential client. Most of my business comes by referral these days and I really can't remember ever having a problem with a potential client because I didn't have a retail office space. And maybe that's because I don't deal with a huge amount of high net worth clients. I have some, but they have never expressed any concern. They are pleased with the service and advice I provide. And when it's a managed account, I can charge less and still be as profitable as when I had a retail office space. I just find life is much simpler working from my home.

Just goes to show that we can all make a living doing it different than the next guy.