How to Lose a Client in 1 Easy Step
This week, I had a lovely conversation with a woman (let's call her Joy) who's looking for a new financial advisor. Over the phone, she explained to me how she's had a great relationship with her current advisor for years, but she felt she wasn't getting the attention she craved. The feelings lingered for a little while, but were brought to light after a big miscommunication.
You see, last year, her mother passed away and she inherited around $90,000. After spending a good chunk of it on a European vacation, she decided to save the rest of it by transferring it to her investment account. Without having a discussion over the new money, her current advisor immediately invested the account into the same mix of stocks and bonds; the same mix that made perfect sense for Joy’s situation two years prior.
The only problem was: things had changed and she had different plans for this money now. So, to Joy, the 'investment plan' they were using was wrong.
Also important for context: I'm writing this piece as of January 2019, and the past few months in the stock markets have been really ugly. The S&P 500 has dropped nearly 20% from its highs just a few months ago. So not only did Joy feel like a potentially wrong decision was made, but her accounts have steadily lost money when she feels like something could have been done about it.
Why did this happen? Because the advisor didn't ask.
Being fair though, I realize that even if Joy and her advisor had discussed it first, maybe the same conclusions would have been made and implemented. But the simple fact is, a relatively large decision was made without her and she wanted to be included.
Listening is Everything
I like helping people, so I always figured I would grow up to be some sort of Salesperson. I've since learned I can't stand traditional sales processes, and I'd rather just help out whoever I can wherever possible.
With Joy, I simply repeated her main goals aloud to make sure I heard them correctly. I do this because I'm guilty of sometimes missing the forest for the trees.
"If I'm hearing you right, it sounds like you want...
to know and understand what you're invested in
to be apart of every decision before they're decided on
to make sure your overall situation is looked after too, and perhaps learn if you really need to sell your home or not
...does that seem correct to you? Is there anything we haven't covered yet?
Summarizing a new person's goals and objectives on the fly is one of the greatest parts of this job. Not only did a stranger just divulge their (very) personal situation to you, but you just showed that you care enough to listen and show that you want to help.
Different Strokes for Different Folks
Another major point I've learned is that clients will (usually) tell you exactly what they want. That is, if you know how to ask for it.
Advisors tend to wear their 'counselor hats' most days of the week, which is awesome if you're into that stuff like I am. This is where you get into the meat and potatoes of who a person really is, what they want to do with their life and how they want you to help them.
On the last point, never forget that different people want and need different types of help.
Some of our clients want to completely delegate all money-related issues to us. Seriously, they hate thinking about money; which is perfect, because we love it.
On the other side, many of our clients prefer a Partner with their financial lives. With these people, much of our time is spent coaching and educating clients about their money decisions, then everyone comes up with the best way to move forward together. This is equally as satisfying because we still get to talk about money, and everyone leaves the meeting feeling smart.
The point is, everyone is different and has different interests and attitudes towards money. Our job as advisors and planners is to put on our 'counselor hats,' ask the right questions, and create something that everyone can be proud of.