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Portfolio > Portfolio Construction

In Your Clients' Eyes

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In these challenging times, wirehouse firms aren’t eager to retain smaller producers, many of whom are heading to more hospitable indie firms or just looking for a different line of work. Despite the big firms’ harsh focus on production, financial success may — paradoxically — more likely result from an advisor’s willingness to empathize than monetize.

That seems to be the premise of a new book by Bob Burg and John David Mann called Go-Givers Sell More (see Jane Wollman Rusoff’s interview with Burg, “What Goes Around Comes Around.) The authors argue that a salesman’s true success is measured by the value he gives rather than the payment he takes. In this worldview, there is no “pitching” — just opening a relationship; no “closing” either — since you are dealing with folks who trust you and believe you have an answer to their needs, and a purchase is just a natural consequence of the relationship you have.

Burg and Mann are onto something — something that is evident in all walks of life. Think of someone you know who bears great authority, be it a parent, teacher, author, clergyman, friend. Such a person carries great influence with you. You see through his or her eyes. You’re different because of the difference that person has made in your life. The question is what kind of difference are you making in the lives of your clients?

An advisor recently had a situation in which his stewardship of his client’s portfolio was endangered by the client’s constantly yielding to the emergency financial needs of her children. The advisor cautioned the client that her rate of withdrawals would make it all but certain that her wealth could not be sustained throughout her retirement. If she could not say no to her kids, he advised her to annuitize her entire portfolio. That way she could not outlive her resources, and any entreaties from her children could only be answered out of current income rather than principal.

For the advisor, the paramount issue was that his client achieve her goal of a financially independent retirement. For this, he was willing to switch to Plan B, which offered her more income security, though reduced income for the advisor.

I don’t know how that situation will ultimately be resolved, but there is no doubt about the esteem in which the client holds her advisor or the intensity of referrals that will go to the advisor when opportunities arise. That is because the moral commitment to his client was so powerfully demonstrated.

How committed are you to your clients, and conversely, how committed are they to you? Take a good look at your clients and ask yourself whether you’re an authority in their eyes. For just as surely as a person can see his reflection in a stream of water, so too can it be seen in a person’s face. If you look carefully enough, you’ll see if you are a giver or a taker, an advisor or a closer, an authority or just a regular guy.

Robert Tyndall
Publisher Emeritus
[email protected]


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