Advisor or Confidant?

While on a late summer afternoon outing with my children, we suddenly came across an Apple Store in all its technological seduction and splendor. Upon entering this modern-day wonderland and playing with all the latest gadgets, I found the atmosphere and environment quite disconcerting. Perhaps the best way I can describe it is like being amongst a crowd that suffers severely from attention-deficit disorder and at the same time is very high on caffeine! It was a frenzy of people running from one piece of Apple wizardry to the next, attempting to experience all without mastering any; entirely focused on the technology with little acknowledgement or even awareness of people around. It suddenly dawned on me with a stark clarity that technology with all its glitz and glamour has insidiously robbed us of authentic, genuine, rich and meaningful human connectivity and interaction.

The financial services industry at its core is a relationship-based industry. To remain competitive, we must restore the very crucial human component to a technological world. As professionals in the field it is imperative that we are equipped and armed with the techniques and skills to establish, manage and sustain our client relationships effectively.

In this month’s column I will address the contracting phase of engaging with a new client. It is in this phase, long before any services contract is presented, that the client relationship is initially negotiated, crafted and established. Done well, it can build a firm foundation and set the tone for a strong working relationship. Done poorly or not at all will deem you a commodity in the financial services space, and will result in weak client relationships with serious threats from competitors.

Engage the Client

We tend to see a first-time meeting with a potential client as an opportunity to “sell” ourselves and “pitch” our services. We allow ourselves to launch into a monotonous monologue about our expertise, successes and how our products are sure to realize their every dream. We become so absorbed in our enthusiastic rhetoric that we fail to notice the visual cues that convey utter boredom and lack of interest on the part of our prospective clients. We are quite oblivious to the fact that we have, in all probability, already lost them.

The first principle in contracting is that when a person feels imposed upon and pressured, he will likely push back and resist with an equal and opposite force. To avoid this we need to, figuratively speaking, walk alongside them rather than face them so that they have nothing to push back against. They should feel like collaborative partners and joint problem-solvers rather than suspicious adversaries.

To achieve this we must engage them in productive dialogue. This means asking well-crafted questions and listening skillfully, rather than talking incessantly. The more we can get them to talk about their fears, concerns, dreams and expectations, the more information we will have and the more effectively we can respond. In addition, the potential client will feel like an equal partner rather than an inferior subordinate — an active participant in the process with a sense of ownership over the outcome.

Good opening questions to ask are: “Talk to me about your perceptions with regards to financial advisors in general and their roles in particular.” “How specifically do you see my role?” “What do you see as the client’s responsibilities?”

Other very useful opening questions are: “In engaging the services of a financial advisor, what might be your greatest concerns?” and “What kind of working relationship do you envisage?” Or: “If you could design the perfect client-advisor relationship, what would be some of the key components?”