Establishing Integrity with a New Client
Actionable Tip of the Week
Recently, we received a call from one of our coaching clients who was rather excited about something he had just experienced. We had been working with him on his process for conducting an initial meeting with prospective clients, and his breakthrough had come from insisting on having all of the prospective client’s assets as a prerequisite to working together. In the past, if a client had come to him with a tempting enough amount of investible assets, he took the client, and this was regardless of whether or not the client had additional assets with another advisor.
His philosophy was that he would always take the money that was on the table, and try to ‘chip away’ at the client’s resolve over time, eventually earning the right to have all of the assets down the road. Many of the advisors we work with adhere to this same approach. The fear of losing a ‘partial client’ outweighs the potential of the more lucrative stance of insisting on managing all the assets up front, and the vicious cycle continues. The clients call the shots, and it often turns into a ‘contest’ about which advisor’s investment returns are superior. Ironically, few will challenge this ill-conceived notion of diversity, even though the majority of advisors will state off the record that it is not in the client’s best interest to manage their money in this fashion.
This time was different. The potential client, who was a referral by the way, said that he would like to invest one-million dollars with the advisor, and announced that he had an additional million with another advisor, and that was what he was comfortable with. At this point in the meeting, the advisor stated the following:
I understand that many clients see safety and diversity from having their assets spread among two or more advisors; however, I respectfully disagree that this practice is in the client’s best interest, and I am not that kind of advisor.
For me to make educated decisions that will help clients achieve their goals and objectives in a reasonable amount of time, and to do the best job I can for a client, I need to have all the pieces of the puzzle, and that includes managing all of the assets.
When you have different advisors, making decisions independently on one client’s goals and objectives, it is my strong belief that the client is not being well-served.
All that said, I do understand where you are coming from; however, in order for a client to be a good fit for me, this is something I cannot compromise on, and the reason I cannot, is a reason that is all about the client. I will need to look after all the assets in order for us to work together.
What we find compelling about this approach and philosophy, is that it is in the client’s best interest. Does it benefit the advisor as well? Of course, but that is irrelevant to the larger picture. Almost everyone would agree that it would be craziness to have 2,3 or 4 dentists work on one set of teeth, so why the ‘advisor diversity’ when it comes to one set of goals and objectives? When advisors use the kind of language referenced above with a potential client, the potential client sees integrity in that advisor. They will contrast that stance with their prior experiences, and see other advisors who just ‘take the million’ as being less professional, and ultimately less attractive than the advisor with integrity.
Oh yes, and the excited phone call that we received from the advisor? He was calling to tell us that the prospective client had just called back and he and his wife were ‘all in’ and ‘looking forward to the relationship’.
For questions and comments join the Pareto Systems Group on LinkedIn and participate in the discussion.
Take action:
Visit our new and improved website at http://www.paretoplatform.com and watch the video describing the Pareto Platform powered by Microsoft Dynamics CRM.