Building the trusted advisor

SMA: What kind of cues can you pick up from hearing about grandkids, from hearing about their worries?
BB: You can probably pick up a lot. But what we teach is more of a direct conversational approach, instead of just asking open-ended questions that get people talking, and then trying to figure out what is relevant and what is not relevant. When you ask very direct but appropriate questions of the people you are meeting with, you don’t have to spend a lot of time sifting through all the talk to find the nuggets. You get the nuggets very directly communicated to you. When you are having a conversation with someone you can trust, it’s always a very direct, very candid, very easy conversation. So we recommend that you just ask what it is you want to know and ask what it is you need to know in order to determine if you are really going to be able to help these people. It comes down to trusting them. If you don’t trust them, they won’t trust you.

SMA: How can trust be measured?
BB: It’s by behavior. Clients who trust their advisor follow the advisor’s advice. There are a lot of people who call themselves financial advisors and I laugh and say, “Well, do your clients do whatever you tell them to do?” And they’ll say, “Some of them.” And I’ll say, “Those are the people who you really are their advisor, because the nature of being an advisor is people follow your advice. If they are not following your advice, I’ve got news for you: You are not their advisor. If you were, they would be following your advice.”

We have five very clear behavioral measurements of whether or not a client really trusts you as their advisor. The first thing is that they will hire you to write a plan. Real financial advisors create plans and then implement from the plans. Salespeople tend to match products to needs. So the first thing you do, if you have a high-trust relationship, is say, “We need to create a plan.” Whether you charge a fee for the plan or not, I’m not hung up on that. The point is that a real financial advisor will first do a plan. If your clients trust you, they will agree that a plan should be created.

The second thing they’ll do is they will give you all of their money. They will consolidate all their stuff with you. I hear this all the time: “Bill, seniors with a lot of money, they don’t do that. They have it in three or four places.” I say, “That’s because they don’t trust any one of the places enough to consolidate it. If they really trusted any of you, they would consolidate it.”

The third thing they’ll do is, we call it, ignore financial pornography. What that means is that they are not coming to you saying, “I read this in Money magazine. What do you think about that?” “My buddy who I played golf with last Tuesday said annuities are terrible and that nobody should ever be in annuities because of some reason.” When your clients really trust you, they don’t question your advice. I’m not saying they don’t have an occasional question about it, but I mean questioning it like, “I don’t know if that’s really right” or “I read this article.” They are not influenced by Suze Orman on TV; they are not influenced by what they read in the Wall Street Journal. They may hear it and they may ask a question, but they are not influenced enough to say, “Hey, I read an article in Money magazine that contradicts what you said, so maybe you are full of it.”

SMA: The fourth thing?
BB: So the fourth thing that they’ll do is – I mentioned this earlier, but I prefer it in this sequence – they’ll follow your advice. When you tell them that they need to change their asset allocation, when you tell them that their estate planning needs to be adjusted this way, when you tell them that they need to meet with their estate planning attorney and get their trust updated or get their wills changed to get medical directives, they do what you tell them to do. There is an accountability element to the relationship. There is a leadership element to the relationship. If you are dealing with seniors, chances are your clients are older than you. One of the reasons I believe I was successful at an early age is because I expected people to do what I told them to do. I didn’t care if you were 70 and I didn’t care if you had hundreds of millions or tens of millions. All of my clients had more life experience and more money than I had. I didn’t see any point in giving any advice if it wasn’t going to be followed, and I told them that. My point for financial advisors is this: If you don’t have the kind of conviction where you expect people to follow your advice, get out of the business.

The fifth thing is they’ll refer you, if they really trust you. I think it actually takes a higher level of trust to refer somebody to their friends than it does to do business with you directly.

SMA: Is there anything that can be mistaken for trust?
BB: People often refer to trust and rapport as though they are synonymous. There is a big difference between being liked and being trusted. Just because you’ve got these friendly relationships with your clients, that doesn’t mean they trust you. When we coach and train advisors, the first thing we have them do is apply the values of the financial planning method to their existing clients. Often, they’ll give us a little push back about that. The advisors will say, “I already have great relationships with all these people.” We say, “Fine, consider it practice. You have good relationships, consider it practice.” If you go to our Web site or talk to one of our accountability coaches and read all the testimonials about the work we do, it is amazing how frequently they say, “You know, I thought I knew where all the money was. Not only did I not know where all the money was, but I had the small chunk. I had $500,000 and they had $3 million five other places. I could’ve sworn I knew where it all was.” It’s this thinking that we have a nice relationship and we’re friendly and we’re buddies, and it is confusing rapport with trust. If they really trust you, you will discover maybe the relationship wasn’t quite what you thought. Not that it was bad. It’s just not trust. SMA: Is there anything you’d like to close with?
BB: What we didn’t talk about is how it is all about them [the clients].

SMA: That’s the theme of your latest book, correct?
BB: It’s a book that I wrote specifically about listening. That’s why I called it that. It’s an important theme. I kind of alluded to it. Whenever you go into a meeting, the objective has to be, before you go into the meeting, to suspend your own agenda. No matter how broke you are, no matter how desperate you are for a client, no matter how huge this client might be, it’s remembering that no single client will ever make or break your career. It just won’t. You’ve got to go in and say that the purpose of this meeting isn’t to get a client. That’s the problem with a lot of sales techniques. It forces you to think about your own objective. The purpose of this meeting is to help somebody. It’s to make a difference. If it turns out that the two of you can do business together, fine. If it turns out the two of you can’t, or shouldn’t, for whatever reason, that’s OK, too. It’s really getting into the mindset that it’s all about them. The beauty of that mindset is that people with that mindset do a lot more business than people with the mindset that says, “Boy, I really need to close a sale here today.” In the aggregate, more of the people you meet will trust you. They will give you all their money. They will refer you. It will be a much better relationship when you truly suspend your own agenda, and I am fully aware of how difficult that is to do. But that’s still my advice.