Financial Planning > Behavioral Finance

The High Performance Coach: Building, and Restoring, Trust

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All the world’s a stage,

And all the men and women merely players

In this oft-quoted soliloquy from his comedy “As You Like It,” Shakespeare shows the strength of metaphor. In 2010, the phrase “Wall Street” has become the operative metaphor for avarice and greed, and therein lies a challenge–and an opportunity–for advisors. As the leader of a coaching organization that works with hundreds of advisors, large and small, captive and independent, I have had an interesting vantage point during and after the Great Meltdown of 2008-2009. In speaking to our coaches and advisor clients, two themes have continued to come up again and again.

o First, trust has never been a more salient feature within the advisor-client relationship. What has been so striking is that this notion of trust has completely transcended the interpersonal dynamic between advisor and client, and extended to the feelings that clients have about the institutions themselves.

o Second, the need for meaningful engagement between advisor and client has never been greater.

These two statements are based not solely on whatever insight I might have from my own years of sales, advisory, and coaching experience, but on the hard data we gather in every coaching session with every advisor. In this monthly column, supplemented by live online events throughout the year, I will share with you what that data shows, and deliver to you actionable steps you can take to emulate the successes–and avoid the missteps–of real-life advisor clients whom you will meet in these pages and online.

To explore these issues, let’s start with the salient findings of some third-party research. A group of 650 individual investors surveyed recently by Lightspeed Research was asked to list words that came to mind to describe financial institutions. Of those surveyed, 32% called such institutions “greedy” and “impersonal,” while 26% selected “opportunistic,” and 22% reported they felt that financial institutions were “distant from me.”

In contrast, just 3% settled on the words “sympathetic” or “transparent,” 5% said “ethical,” and 10% described financial institutions as “honest.” Tellingly, 66% of respondents said they didn’t believe that the financial services industry will help them regain the wealth they lost in the recent economic downturn.

Harris Interactive polled 2,276 adults in December 2009 and asked, “How much do you blame each of the following groups for your personal financial situation?” The answers: 72% cited Congress; 71% blamed Wall Street; 63% said “large corporations;” and 39% blamed themselves. Nothing like investors taking ownership of their own role, is there?

You’ve Been Framed!

Have you ever been described by someone you don’t know well or at all, and the picture they paint is little more than a caricature? Sadly, this happens to financial advisors all of the time. You know the scene. You’re at a social function and you’re asked what you do for a living. You respond with a stock description that includes “financial” and “advisor” in the same sentence, and your listeners react by asking, “What do you like?” Or even worse, they quickly drop their interest in your career choice and start searching desperately for the hors d’oeuvres.

Last year didn’t help. Bernie Madoff rips off his friends and charities to the tune of multiple billions. “Sir” Alan Stanford attempts to buy off an island nation (after buying himself a title) while selling phony certificates of deposit. Dozens of other Charles Ponzi wannabes crawled, like insects, out of the woodwork. The Wall Street investment banks allowed themselves to be commandeered by a culture of greed merchants who did their best to take down the U.S. economy.

The net result is that you’ve been framed. Whether you like it or not, millions of investors have imbibed more than a year’s worth of bad headlines, and in their hangover state have crayoned financial advisors into a cartoonish image.

Building High-Trust Partnerships

For advisors, this is all a toxic brew. Not only do many clients view financial institutions and “Wall Street” as greedy and impersonal, but they also see those ill-defined establishments as being culpable for their own personal financial failings. The good news, if there is any, is that this indictment is directed toward institutions as amorphous entities as opposed to advisors personally. However, for the advisory community, this hardly constitutes cause for celebration.

So is there anything that individual advisors can do to counteract this widespread feeling that financial institutions are the villains, and not to be trusted?

From our experience coaching advisors, the answer is an unequivocal yes.

Through observation, we believe that building trust begins at home. Advisors need not wait until the trust in the national institutions is restored to build or restore confidence among your clients both in you personally and in your practice. Here is a three-step process that can begin to strengthen your client relationships immediately:

Step One: Interview Your Clients and Listen With Empathy. We all want to be heard. Top-performing advisors know that if you are a good listener, clients will confide in you and relationships will deepen. Listening is a compliment and a commitment. It is a compliment because by listening you show how much you value the speaker. It is a commitment because you are displaying an ongoing trait to understand how other people feel, and how they see the world. Active listening means putting aside one’s own prejudices, beliefs, anxieties, and self-interest. The key to real listening is wanting to do so. For top-performing advisors, listening is a secret weapon.

Step Two: Ask Good Questions. If listening is the secret weapon of the top-performing advisor, asking good questions is a close second. Questions should be of two general categories. The first uncovers the goals and core values of your clients, and compels your client to thoughtfully consider their response. An example of a compelling question might be, “As you look at your life, what brings you meaning? Would an improvement in your financial situation lead to an even more meaningful life?” Once knowing how your client feels in this regard, an interesting follow-up might be, “When you consider your entire financial picture today, where are the gaps?” or, “When you visualize your financial future, what concerns you?” The second type of question is part of what we call the ClientWise Conversation.

Step Three: If Needed, Re-Frame Yourself. First, decide what you stand for; understand what separates you from others in your field and be able to articulate that to clients and prospective clients; then re-engage every client relationship as if you were beginning over; do so by conducting your own research by asking the five questions that we call the Discovery Challenge.

Take the Challenge

As a coach who has worked with thousands of advisors, I’d like to share an observation with you. All of the advisors we have worked with who have asked the five questions below of their existing clients have been astonished at the responses they have received. One of our clients who has had that experience is Geri Pell, a Barron’s Top 1000 Advisor, who leads a private wealth advisory practice for Ameriprise Financial Services, Inc. We challenge you to ask these questions of at least five of your best clients:

o What is the one thing you value most about how my firm, and how I serve you?

o What is the one thing you would like us to change, or improve, about my firm and how I serve you?

o If you were to describe the services that my firm and I offer you to someone else, what would you say?

o How would you describe to someone else what we’ve achieved together?

o Among your other trusted advisors, whom do you trust the most, and why?

In asking these questions, Geri has observed that by voicing their thoughts out loud, her clients are reinforcing what’s been in their heads but not publicly stated. She also notes that virtually all of her clients are proud of her accomplishments as an advisor, and are interested in her continued success. Her clients have seen how hard she has worked for them and, when given the opportunity to reciprocate and give something back, they willingly do so.

No Trust = No Clients

It is self-evident that trust is the glue that bonds advisors in strong relationships to their clients. No trust means no clients. Regaining the trust of American investors is job number 1 for our industry.

It is likely that, if you are an advisor who has been in the industry for any length of time, you have heard suggestions like this before. Listen to your clients (Right!) Ask good questions. (Sure!) Build trust. (You bet!)

The key is intention and execution. Top-performing advisors will not wait for the collective consciousness to turn. For these advisors the campaign to re-frame themselves in the eyes of a wary, disbelieving public has already begun.

Ray Sclafani is founder and president of ClientWise LLC (, a full-service executive coaching firm that helps its clients optimize growth, maximize revenue, and manage risk. He can be reached at [email protected].

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