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Hello, and welcome back to Business English Pod for today's lesson, the fifth in our series on Financial English.
In this lesson, we'll focus on selling a client on a new investment opportunity.
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Some people would say that selling is all about convincing someone that they want or need what you've got.
But that's just half of it.
A car salesman might convince you that you want a new car, but then he has to show you why his car is better than the others and that it's worth the money he's asking.
Things get a little trickier when it comes to selling financial services.
Investing isn't just about the current value, but about how that value will grow in the future.
So compared to selling a car, there's a lot more at stake.
In this situation, you'll need to do a good job of assessing risk and comparing an opportunity to other opportunities.
You'll also need to work with clients who've done some research.
That means warning them against bad information and showing them alternatives.
It also means reducing pressure on the client so that you don't scare them off.
In today's dialogue, we'll rejoin a conversation between Robert, an investment advisor, and his client Jessica.
Robert is attempting to sell an opportunity to Jessica and steer her away from bad information.
As you listen to the dialogue, try to answer the following questions.
1. What does Robert say is the difference in risk between a classic and an alternative hedge fund?
2. What does Robert say about corporate bonds after Jessica mentions that she's read about them?
3. What does Robert suggest is an alternative to corporate bonds?
Well, there is another opportunity that might be more appealing.
OK, I'm listening. So, that's the classic hedge fund.
High risk, high reward.
But I wonder if you'd be interested in a newer product, a different kind of hedge fund, more distributed risk, longer play.
But still, I'd need at least 250k.
Not with this one. It's just 25 ,000.
And this is like a fund of hedge funds.
It's more of a long -term strategy that beats the stock market over time.
Much lower risk than a classic hedge fund and registered with the SEC.
And get this, it's a 1 % management fee with no performance incentive.
That's interesting.
In a few different ways.
But I wanted to ask about something else I've been reading about.
Corporate bonds. I've seen some pretty good numbers, like returns of over 10%.
That sounds pretty good to me.
Yeah, corporate bonds.
There's a ton of stuff online about those.
But not everything is 100 % reliable, just as a note of caution.
Kind of depends on the source.
Sure, I get that. I looked at several sites that touted the benefits.
So I was just curious if that was part of the strategy.
Well, here's the thing about corporate bonds.
It's a big investment in a single entity.
Which is pretty much the same risk as a classic hedge fund, if you see what I'm saying.
We'll have to think that through some more.
You know, rather than corporate bonds, you might consider REITs or real estate investment trusts, basically a company with diverse real estate holdings that pays dividends on a regular basis.
Pretty stable, and pretty attractive returns.
Stability and returns.
Something to think about.
So that different kind of hedge fund you mentioned.
The one with the low fees.
Fund of funds, did you say?
That might be appealing, too.
You know, there's absolutely no need to rush on this.
Your investments are doing fine for the time being.
Just looking for some ways to dial up earnings without taking on too much risk.
Anyway, I'll send you some things to read, and we can circle back on it later.
Great. I'd appreciate that.
I need to give it some thought.
Now let's go through the dialogue again and look at the language and techniques Robert used.
When we rejoined the conversation, Robert has just finished talking about the classic type of hedge fund.
Now he's introducing an alternative hedge fund.
Okay. I'm listening.
So, that's the classic hedge fund.
High risk, high reward.
But, I wonder if you'd be interested in a newer product.
A different kind of hedge fund.
A more distributed risk.
Longer play. Notice how softly Robert introduces the new opportunity when he says, I wonder if you'd be interested.
He's not getting too pushy about it.
He's just introducing an opportunity for Jessica to think about.
And he is comparing it to the opportunity he pitched in the last conversation.
He says that this alternative hedge fund has more distributed risk.
That just means the risk is spread out across different investments, and it's a longer play, meaning it's more about long -term gain rather than short -term profits.
What are some other ways we can compare opportunities when selling financial services?
Let's run through some more examples.
The first opportunity has steady growth, but the second has potentially higher returns.
This new fund concentrates more on startups than our traditional fund.
Compared to the emerging market investments, this is a much safer choice.
The risk on this is much higher than what you are in right now.
Getting back to the dialogue, you may recall that the classic hedge fund Robert introduced in our last lesson has a minimum investment of $250 ,000.
How about the alternative fund?
But still, I'd need at least $250k.
Not with this one. It's just $25 ,000.
And this is like a fund of hedge funds.
It's more of a long -term strategy that beats the stock market over time.
Much lower risk than a classic hedge fund and registered with the SEC.
And get this, it's a 1 % management fee with no performance incentive.
In his ongoing comparison of the classic hedge fund and this alternative, Robert is discussing risk.
This is a critical consideration in investing.
Jessica has already said she's willing to take some risk, but the classic hedge fund seemed too risky.
So now Robert is telling her directly that this alternative is a lower risk.
He emphasizes this idea by saying it's a long -term strategy or one that pays off over a longer time.
And it's registered with the SEC or U .S.
Securities and Exchange Commission.
This means it's carefully regulated and therefore lower risk than an investment not registered with the SEC.
You can't unpack every element of risk when selling an opportunity, but it's important to give a general risk assessment, as Robert has done.
So let's practice some more examples.
With a focus on government bonds, this investment is very low risk.
I would say this carries a medium risk with a mix of stocks and bonds.
While the returns here are potentially high, there's also a pretty high risk level.
If you're after safety and certainty, this hedge fund probably isn't for you.
Now let's hear how Jessica responds to the idea of an alternative hedge fund.
That's interesting in a few different ways.
But I wanted to ask about something else I've been reading about.
Corporate bonds. I've seen some pretty good numbers, like returns of over 10%.
That sounds pretty good to me.
Yeah, corporate bonds.
There's a ton of stuff online about those.
But not everything is 100 % reliable, just as a note of caution.
Kind of depends on the source.
Jessica expresses some interest in the new opportunity, but she's keen to explore another opportunity.
Corporate bonds. These are bonds issued by companies to fund expansions or mergers or other activities.
As Jessica says, she has read about these particular investments.
Sales has changed, now that everyone has access to information online.
Customers may have a very good understanding of what we're trying to sell them, or they might think they do.
But the Internet is full of bad information, and when selling, you'll have to gently warn customers about bad or misleading information.
Robert warns Jessica gently, giving her a note of caution or telling her to be careful.
He doesn't tell her directly that she has bad information, just that it depends on the source or the particular website.
Let's try some more ways to gently warn customers against bad or misleading information.
Well, you need to be a bit careful where you find information online.
There are some advisers who tend to exaggerate their success.
Maybe check with me when you see information that you're unsure about.
I wouldn't believe everything I read online about these kind of investments.
Now let's listen, as Robert needs to address Jessica's comments more directly.
Sure, I get that. I looked at several sites that touted the benefits, so I was just curious if that was part of the strategy.
Well, here's the thing about corporate bonds.
It's a big investment in a single entity, which is pretty much the same risk as a classic hedge fund, if you see what I'm saying.
Hmm, we'll have to think that through some more.
Robert is trying to show Jessica that investing in corporate bonds has the same drawback as a classic hedge fund.
It's putting a lot of money into a single entity or just one company.
So does Robert just dismiss corporate bonds and then move back to the topic of hedge funds?
Not exactly. Let's listen.
You know, rather than corporate bonds, you might consider REITs or real estate investment trusts.
Basically a company with diverse real estate holdings that pays dividends on a regular basis, pretty stable, and pretty attractive returns.
You want your client to know that you're listening to them.
So if you tell them one of their ideas isn't wise, then it's best to give them an alternative.
In this case, Robert wants to suggest an investment that is more stable or safer than corporate bonds, and it's more diverse, which means it's made up of many different investments.
These features of real estate investment trusts, or REITs, make them a good alternative to Jessica's idea of investing in corporate bonds.
What are some other ways we can pitch an alternative to what a client suggests?
Let's run through some more examples.
Instead of short -term bonds, we could look at real estate investment trusts.
Foreign stocks are an option.
You could also consider corporate bonds.
Another possibility would be a mutual fund with a focus on ethical investing.
Well, rather than commodities, you could consider high -yield bonds.
As you can hear next, it's Jessica herself who brings a conversation back to the alternative hedge fund.
She does this because Robert has dealt adequately with her little sidetrack on corporate bonds.
Stability and returns.
Something to think about.
So that different kind of hedge fund you mentioned.
The one with the low fees.
Fund of funds, did you say?
That might be appealing, too.
You know, there's absolutely no need to rush on this.
Your investments are doing fine for the time being.
Just looking for some ways to dial up earnings without taking on too much risk.
Anyway, I'll send you some things to read, and we can circle back on it later.
At this point, Robert can sense that Jessica isn't even close to making a decision on any new investments.
She's using expressions like something to think about, and might be appealing.
And this is a good time for Robert to ease off, to not apply too much pressure.
Sometimes if a customer is confused or hesitant, pushing too hard can push them completely away.
In easing pressure, Robert says there's no rush or hurry.
He reminds her that her current investments are doing fine at the moment, or for the time being, and sensing her need to consider things, he says he'll send her more information.
Let's try some more ways of easing pressure when your customer is confused or hesitant.
Listen, there's really no need to make a quick decision on this.
There's lots to consider, so please, just take your time with it all.
Maybe it's best to read up on these things and postpone making a decision.
This is just information for now.
Take all the time you need to think this over.
So how does Jessica respond when Robert eases the pressure?
Great. I'd appreciate that.
I need to give it some thought.
Jessica responds positively to Robert's carefulness.
She shows appreciation, and says she'll do some more thinking.
And later, Robert can provide more information and comparisons as he connects his client with the right opportunities.
Now let's practice some of the language we learned in today's lesson.
Imagine you work as an investment advisor.
You're talking to a client about a new opportunity and responding to an opportunity the client has read about online.
You'll hear a cue by the client.
Then I'll give you a suggestion for what you can say in response.
We'll guide you through each step in the practice and provide an example answer for each response.
Ready? Let's give it a go.
So the domestic fund seems like a pretty good option, I guess.
Start by saying there's an international mutual fund with possibly higher returns.
Answer. Well, there's also an international fund with potentially higher returns.
I see. And is it as safe as this other fund?
Now say that in terms of risk, it's slightly higher than the regional fund.
Answer. In terms of risk, it's slightly higher than the domestic fund.
You know, I've also been reading about how profitable I bonds are.
Next, say that unfortunately not all the information online about those is very reliable.
Answer. Unfortunately, not all the information online about those is very reliable.
Oh, well, it seems like a pretty good website, but I'm not sure.
Next, say that if she wants something really safe, there's a savings account.
Answer. You know, if you're looking for something really safe, there's also a savings account.
That's probably a bit too safe, but I'm not sure there are so many options.
Finally, say that there's no rush, so she should take time to think about it.
Answer. There's really no rush, so take your time to think about it.
Now let's practice some of the vocabulary we've covered in this lesson.
In a moment, you'll hear a series of sentences with a word replaced with a beep.
Repeat each sentence, including the missing word.
For example, if you hear...
This fund provides earnings on a regular...
You can say... This fund provides earnings on a regular basis.
After each response, we'll provide the correct answer.
Let's begin. How big is the management on this type of investment?
Answer. How big is the management fee on this type of investment?
I think I'm pretty happy with my situation for the time...
Answer. I think I'm pretty happy with my situation for the time being.
Let's take our time and think about a long -term...
For the business. Answer.
Let's take our time and think about a long -term strategy for the business.
We've seen a lot of ups and downs in the stock...
This year. Answer. We've seen a lot of ups and downs in the stock market this year.
We've reached the end of this lesson on selling new opportunities in financial services.
We've looked at making comparisons and giving a general risk assessment.
We've also learned how to warn clients against bad information and pitch alternatives to their ideas.
Finally, we've covered how to ease the pressure when a client is confused or hesitant.
For more practice, premium members can access the online quizzes and PDF transcripts for this and other lessons on the BEP website.
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Thanks for listening, and see you again soon.
