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Financial Planning > Trusts and Estates > Trust Planning

Becoming Trustworthy

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Trust is a prerequisite for success with every client. Yet, if you do a search of the Web or advisor trade magazines, nobody in the financial advisor space has spent much time talking about it. Perhaps it’s because trust is often viewed as a personality trait, something you have or don’t have. That”s untrue. Engendering trust is a skill, something you can learn to do or learn to do better. And it doesn’t have to feel contrived to use trust-building techniques in your relationships. Which is where David Maister comes in.

Maister is an expert on managing professional services firms. He holds degrees from the University of Birmingham, the London School of Economics, and the Harvard Business School, where he was a professor for seven years. For two decades, he has advised law, accounting, and consulting firms around the world on strategic and managerial issues. While most of these firms are larger than the typical independent financial advisor business, his ideas for success certainly apply when you’re talking about becoming a trusted advisor.

Maister’s books include Managing the Professional Service Firm, True Professionalism, Practice What You Preach, and First Among Equals. But it was his book, The Trusted Advisor, published in 2000, that caught my attention. Maister, a 56-year-old native of Britain, has given great thought to how to make people trust you, and he explained some of his ideas to me.

Gaining trust would seem to be an intuitive skill, not something that you acquire. How can you teach people to gain trust and have personality qualities they do not now have? You can avoid the things that lead to distrust and develop certain habits, if you are willing to put in the effort.

Let me give you an example of a bad habit I used to have. When someone, say, a client, described a situation to me, I would often recognize the issue and, in my eagerness to please, would interrupt his narration and start to answer. My hope was that I impressed the client by proving how smart I am. But this habit had the exact opposite effect. By interrupting and trying to prove I have an answer, I prove two things: I’m not really listening, and I’m overeager to treat the problem generically, instead of in a unique fashion. Over the years, I learned to suppress my enthusiasm, and to let people finish their description before I reply.

You’re probably talking about most people. It is pretty common to interrupt and not listen well. It’s very common, and goes to the heart of what my co-authors and I write about in the book. Unfortunately, because we are all wound up in ourselves, our mental focus is always on me, me, me. When someone else is talking rather than really listening, we are sort of mentally rehearsing: “Well, what am I going to say in response to that?” And the essence of trust is convincing the other person that you are sincerely trying to help them rather than get what you want. This is not a new thought. It is as old as Dale Carnegie, who wrote back in the 1920s and ’30s that you have more fun and success if you help other people achieve their goals than you will by focusing on your own goals. When I first heard that, it struck me as either communism or some kind of inspirational religion. Over time, I have learned that everything you want in the world has to be given to you by other people–whether it is your riches, fame, or respect. To get another human being to give you what you want, you must first give them what they want. If all you do is say, “me, me, me–please give me what I want,” you get less. If you spend more time focusing on giving people what they want, you get more of what you want. It is a basic human paradox.

Is it fair to say that in your view, being an expert, a technician, is not the main thing that you need to be successful? Finding somebody who can solve your problem is not that difficult. But finding somebody that you want to work with, somebody that you can trust with your problem, is in fact difficult. It is scarce in the marketplace. I in no way want to minimize the importance of being skilled at what you do. But the technical content is not that scarce in the marketplace. Finding a lawyer who can write a brief is not difficult. Finding a doctor who can do the operation is not difficult. That does not minimize the importance of the technical skill of the financial planner who can prepare a discounted cash flow statement. You need to have the skill. But you can’t make yourself special on what is common. You can’t earn a high income differentiating yourself on things that everybody can do. The skill is an entry fee. You have got to be smart and skilled at what you do. But that by itself it is not a sufficient condition for success.

So having the extra little bit of skill and knowledge is not what makes you successful. But don’t you need that specialty skill for the really complicated situations? The percentage of people who need true brain surgery is probably less than 5% of the population. Most of the rest of the populace is trying to buy financial advice rather than trying to buy brain surgery. All they need is an aspirin. They’ve got a headache and their financial circumstances are like millions of other people’s. The actual service is needed but it is not customized. Or sometimes they are trying to buy a nursing service, someone to go through the process with, hold their hand, answer questions, and understand the pros and cons of the choices. That process of discussion with helping people understand choices is an essential part of the value that is rendered. But it is not mostly a technical skill. It is a conversational skill.

You say in your book that it is like teaching. Right? There is very big difference in being the expert and being someone’s advisor. I started off in my consulting career after many years as a university professor and by thinking I would earn my income by being the expert. What I discovered very quickly amongst my clients is that they did not like me coming in and saying, “Here is what you are doing wrong.” My clients felt as though I was being pompous, patronizing, and condescending. As smart people themselves, clients don’t want advisors to tell them what to do. They want you to tell them their choices so they can make their own decisions. “Help me understand my options. Help me understand the pros and cons. Give me a recommendation. Help me reason through to a decision.” That is very much like being a teacher and it is very much different than knowing the answer yourself.

It’s making the client find the answers? And it changes the focus of attention, which means those of us who have ego needs, which includes me, sometimes find it hard to remember to do this. It’s so much more fun for your ego to show off and prove that you have the answer and say to people, “Aren’t I smart?” However, the client wants to focus not on your smarts, but on his problems. The issue on the table here is not your ego.

But aren’t there times when you do want to be forceful? If you try and say to the client, “I’m the expert here. Shut up and I will tell you what you should do,” you can only get away with that if your client fundamentally trusts your motives. Notice, there is a very big difference between trusting your confidence and trusting your motives. Let me give you a short story from the book. My dentist tells me I have to have root canal work in three parts of my mouth, and this is very disruptive and very expensive, and the question becomes under what circumstance do I accept his recommendation. If I think that he is being an honorable, caring person, and that he is trying to help me with what is in my best interests independent of his financial interest in the issue, then the odds that he gets my money go up. If, on the other hand, I don’t believe that his motives are honorable, the odds he gets the work and my money go down. The point is, you can be more insistent when a client believes that you are truly trying to help and not after their money.

How do you know when you have that privilege? You can never know for sure. So you must earn your relationships. You need to spend time and make occasional gestures earning your clients’ trust, proving that you are truly trying to help. And you must do it without asking for anything in return. If you do this three or four times, I put that in the “trust bank” and you can draw down on it later. If you try and insist that what you have to say is the right answer before you have made gestures of good will, you are too early in the relationship and it will backfire on you.

Talk about some of the core skills of a good advisor. One is giving advice. There are certain language skills about the way in which you try to frame what you have to offer. We have already hinted at this. It’s the difference between saying, “You have got to do this,” and “Have you considered the following alternatives?” This may sound like a small detail and playing with words, but whenever anyone is thinking of using a financial planner, they are in a high state of nervousness. Their savings, their money is at stake. This not a comfortable, easy conversation. If you work hard to put people at ease, it is appreciated. So, work very hard to say, “How can I give my advice in a way that it comes across as being supportive?” The second set of skills is earning trust. Let me give a real story that happened to me only two weeks ago. My wife and I are redecorating our house. I have not historically been a fan of decorators. The woman we are currently using, however, was a genius in earning my confidence. We were choosing wallpaper, curtains, and carpet for a room and at the end of the discussion, when we made our decisions, we were having a cup of tea and it was mentioned that my wife’s sister was coming in from out of town to visit. The lady finished her tea and left as appropriate. Three hours later, the doorbell rang, and there she was with a window frame in her hands with swatches for the curtains, wallpaper, and carpet. She handed it to my wife and said, “I heard you say your sister is coming, and I’m sure you will want to discuss with her what the room is going to look like, so I thought you would like to have this.” Then she left. Now you decide how much impact that would have on you, but it had a lot of impact on us. It was thoughtful and supportive. This woman was trying to earn our goodwill by making a substantive gesture. It was a related issue–she didn’t show up with flowers and chocolates and try and make friends. So there is an example of earning trust with a gesture. It as acting as if you care.

You cite rules for relationship building. One of the things that all people in business have difficulty with is realizing that every interaction they have with a client or a potential client always has two consequences. One is the result that comes from the transaction itself, and the other is what have you just done to affect your long-term relationship. You need to understand which game you are playing. There is a difference in what works between being good at a one-night stand and being good at building long-term relationships. Many salespeople become skilled at the one-night stand, but it is a different set of activities and a different set of talents from building mutually beneficial, mutually supportive long-term relationships. Relationships in life are drawn on the same principles, whether they are personal or business. The way you build relationships with your spouse or children is to spend time with each other, especially when there is nothing to talk about. If your spouse or child has something substantive to say, then you better get together and talk and deal with the substance. But you won’t be building your relationship. The way you build a relationship is when you find the opportunity for 15 minutes to go for a walk together or have a cup of coffee and catch up with each other’s lives. The same is true in business. That’s when you build relationships with your clients.

What do you mean, spending time together with clients when you are not doing business? When the business is finished, instead of dashing off, say, “Let’s go for a cup of coffee.” Take the opportunity, if it is presented, to find out a little bit more about the person as a person, not just as a source of business.

Then aren’t you trying to make your business relationships friendships? No. There is a difference between being friendly and turning people into friends. Let me use my own experience to illustrate. For 20 years, much of my business has been global and many clients at the end of a day’s work have said, “How about coming to dinner with us, David, just to chat.” And I’ve been foolish enough for 20 years to say, “I’m tired” or tell them I was busy, and I’ve tended to turn down those opportunities to have dinner. I now realize that I have been making a very big mistake– that whilst I have had successful transactions, what I failed to do is turn that transaction into a relationship because I was not willing to socialize. My clients were not trying to turn me into a friend, but they were being gracious enough to be friendly. I now understand that business is about human beings and if you are not willing to show a little interest in the human being behind the transaction, you will do less well.

You say that earning trust requires action. If you want another human being to give you what you want, what do you do? Other human beings will give you what you want if you give them what they want first. In other words, you earn your relationships by making small gestures. My wife is a genius at doing this. When we were first dating 22 years ago, she found out that I had some work in Egypt, and she really wanted to be invited on the trip. But we only had been dating for three dates or so. Now, there are stages in a relationship, and you can’t push too far or too fast. So how did she get invited on that trip? Well, she invited me to dinner at her home. When I showed up, there was Egyptian music playing. She had cooked a full Middle Eastern meal served in traditional style on the carpet, and there were guidebooks to Cairo scattered around the floor. The sale was made. Because what she had done was to say, “I will earn your goodwill by demonstrating to you in advance that I’m a fun person to be with, and will be an interesting companion.”

You encourage advisors to make a gesture or share personal information about themselves even before a client does it. That’s risky. It is. It’s like dating in high school. You have to pick up the phone, and it may sound silly. And the way you build relationships is you make the first move. If you are unwilling to make the first move in business, you will be sitting home alone on a lot of Saturday nights.

How can advisors get into the right mindset to behave in ways that will encourage trust? If you are not sure that something you do would work when you’re the supplier, ask yourself, “Would it work on me if I were a buyer?” The key to doing well in business is to understand that clients are us. They are not them. Thinking about clients in the abstract, almost like aliens, will slow down your ability to understand them. “Clients are us” is a very simple rule when you are in doubt about any selling tactic. Let me tell you a story about what happened to me when I had to choose a lawyer to probate my aunt’s will in Brooklyn. The first lawyer I called tried to get my business by saying his firm was founded in 1927. My reaction: I don’t care. The second lawyer tried to get my business by saying he had 15 offices in the tri-state area. My reaction: I really don’t care. I thought to myself, “When are you going to stop talking about your firm and start showing an interest in me?” Finally. I got through to a lawyer who was a genius. He said to me, “Before we go any further, let me ask you a question. Have you ever been involved in processing a will in Brooklyn?” To which, I said I had not. He said, “Do you know what is involved?” I said I did not have a clue. He said, “Forgive me, but I don’t think you are in a position to choose an advisor if you don’t know what you are getting into. So let me send you a three-page booklet that describes exactly what you are getting into.” The booklet was the most valuable thing I could have received at that point. It was all I needed to know about the process. It told me what was urgent, which documents I needed to find among my aunt’s affairs. And the last paragraph really got me. It said, “Even though it has nothing to do with our legal services or fees, you are required by law to notify the following city, state, federal agencies, and here are all of their phone numbers.” That guy had my business because he earned my trust by going straight to being helpful, as opposed to promising to be helpful if I pay.

You say there are four components of trust. The first is credibility. You can’t be trusted if you are not credible. But credibility doesn’t just mean capable. It means you can take what you know and apply it to my world. That is usually not badly done in the world. Next is reliability or dependability. Some think you can earn trust by one clever, sexy gesture. Most of us see beyond that. We trust people who can be depended upon to behave in the way that they show us. My dentist calls me at home, for instance, to see how I’m feeling after a procedure. The fact that he does it every time, that builds trust. You don’t have to do everything for a client. But what you say you are going to do, you must do. It is not about doing more. It is about being absolutely reliable and dependable. This way, I can go about my business and forget about a task because I know you are going to deliver what you said you would deliver. That sounds small, but not a lot of people live up to that.

What are the other components of trust? Intimacy, a fancy word for saying that from time to time, you will switch your role and start to know the person as a human being. It’s the willingness to drop your role and relate to the other person as an individual human being, not as a salesperson. A lot of people never credibly drop their sales role, never successfully relate to the client as a human being. While these three components build trust, the last one reduces trust. It is self-orientation. If I think you’re only in this for you, and that you will sell me whatever you want to make a good commission, and that you don’t really care about me, then very obviously I don’t trust you. So what I’m really looking for is a person who can suppress self-orientation and focus on me.

A lot of financial advisors get paid on commissions. Is that inherently bad for trust-building? It is a huge barrier. Not because people necessarily are acting unethically, but just because it builds a suspicion. Many financial advisors face a really difficult time because, from the time they walk in the door, people feel they’d better watch this guy because his incentives are structured in such a way that he is not interested in them. At a minimum, the principal of full disclosure must be applied. That goes a long way. The professionals I have talked about–my dentist, lawyers, and others–get paid on the consequence of their advice. Conflicts are everywhere, and financial advisors are not unique. What builds the trust is complete open disclosure. Tell the client he needs to know how you get paid. Anyone who does that would have my trust.

What are the steps to gaining trust? First, you must be sure the client wants to talk about the issues. That’s the engage phase. You can’t move forward with a client unless the client has clearly signaled that he or she wants to talk about this topic with you. Once engaged, and before telling a client what you know, you should spend a lot of time encouraging the client to talk. You listen and understand more and more about his or her preferences, risk profile, what they have tried before. Don’t show off what you know. Stop talking until you know the client’s preferences. Otherwise, you risk coming across as being insensitive and a client will lose trust because you are showing off too early. The third and best way to help clients is to help them think in ways they never thought about their problem before. You help them frame their issue. A large amount of the value you add is when you can say, “I bet you never thought about it this way, but . . . .” You cement relationships this way. But you must listen well before you can frame an issue.

You talk about “envisioning.” It is an old concept that entails getting the client to imagine what it would be like in the future state that you are trying to get him to. You can’t get anyone to do anything unless they desire the outcome. Unless I really want the benefits of a diet, then the diet will be rejected by me. It is the ideal. And the fourth step goes to the opposite extreme. You must discuss all the barriers that might get in the way or reaching the ideal. It’s getting a commitment. It is saying what the client must do, the choices he must make, the money he must come up with. It is making sure you don’t have a false agreement by wanting the dream without having understood what it takes to get there. No minimization of these issues should be made. This way, clients are not disappointed with all of the things they have to do to get to the ideal. And you must get them to agree to doing their part.

You make the point that every client meeting must have a stated goal. Why? We all have too many meetings where we don’t know why we are meeting, and we waste a lot of time. The key is to have a clear understanding of the goal of each meeting.

You say advisors should be like Columbo, the television detective. What do you mean? Columbo was incredibly smart and he always knew the answers. But he knew the trick in life was getting the other person to say it. The way you get the other person to say it is that you play dumb. The trick is saying, “Could you please explain this to me?” In both sales and advisory situations, if the advisor says it, you may doubt it. If I can get you to say it, it is true.

Many advisors feel uncomfortable with the touchy-feely family issues, with dealing with clients’ personal problems. Do you have ideas on this? Don’t invade the client’s private life. But also recognize that business is about people. If you are not comfortable with people’s issues and emotions, and all you are comfortable with are numbers, you will fail. Giving financial advice is about people, people making scary, risky decisions. If you can’t deal with emotions, you are dead. Truth is, there is not a more emotion-filled business than financial planning. If you are not comfortable with emotions, you won’t get on very well.


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