Treat Every Client Like a Celebrity

Celebrity infers celebration. That’s the idea. Celebrate every client. When prospective clients come up that elevator for the first time, they are often scared half to death. They have amassed a certain amount of wealth, yes, but to them it is their life savings. They are facing the prospect of retirement, which means no more paycheck. Whatever they have saved and invested up till now is going to have to last them the rest of their lives. It’s a scary prospect for most. For one reason or other, they have taken the step of coming to see me. They deserve my gratitude and respect, no matter how large or small is their life savings. Some advisors take the approach that every prospect falls into one of three categories: planning trail, product sale, or garbage pail. What a crass, insensitive, and selfish approach to labeling clients. No client is fit for the garbage pail.

These are people made in God’s image and they should be given every courtesy. When someone new sees me for the first time, she is going to get three 90 minute meetings in which I will undertake a review of her financial life, give her my personal assessment of the problems and concerns in her portfolio, and then present our financial world view. That’s a minimum of 4.5 hours over a couple of weeks’ time and represents a considerable value. We do this with every client, every time. No matter the size of the potential account. It’s the right thing to do. There is no charge for this work, and there is no demand for a commitment.

What About Minimum Account Sizes?

Uh-uh. Some advisors require a minimum account size before they will agree to work with a client. We don’t. Practice growth consultants routinely suggest that advisors establish minimum account sizes in order to grow their practices to “the next level,” whatever that means. We have never done this. In addition to questions of morality, little clients become big ones, and little ones refer big ones. True, it can be inefficient for me personally to give the same amount of time to both small and large accounts throughout the life of the relationship, but they deserve it nonetheless. This is why I have trained, experienced, professional associate financial advisors in my office who can help me ensure that every client of the firm gets the full program when it comes to service.

We Spoil Them Rotten

We want each client to feel like a million bucks, like a celebrity, like family. We adore our clients, every one. They are solid gold. Each member of our staff warmly welcomes every guest and offers a refreshment. Our tenured clients have adapted to our culture of hospitality and know what to expect. But, new clients are sometimes timid, often distracted, and usually under some degree of stress. So, it is not surprising if they refuse offers of refreshments. We want every staff member to drop in on each guest, physically touch them, and offer them something soothing and comfortable to brighten their spirits. No alcohol, of course, but a fresh ground cup of StarBucks coffee, a hot savory cup of premium herbal tea, or an icy Diet Coke can go a long way toward making our guests feel welcome and at ease. Everything is served on our finest crystal and china. It may take 3 or 4 tries, but we eventually break down the walls and are allowed to serve. Our staff are trained to get up from their desks, greet each visitor, introduce themselves, and offer a beverage and a pastry or dessert item. We bake cookies, danishes, quiches, and muffins every day. And, not just once at the beginning of the day either. We bake something fresh for every guest, every visit. Whatever it is we are baking gets popped into the oven just a few minutes before the guest arrives so that what is delivered to their conference room is aromatic, steaming, and fresh. It’s nice to be loved. Love and celebrate them.

Change is Hard

The first step in navigating change for anyone in any circumstance is disengagement. Before you will embrace the new idea, solution, color, neighborhood, or hairdo, you’ll have to let go of the old [insert whatever]. Before a prospective client, even one who is disgusted with his present situation and sought you out on his own, will embrace you, your investments, and your financial plan, he will first have to let go of his old advisor, investments, and financial plan. I learned this from my first controller and CPA, Catherine Carroll.

Disengagement is part of the financial planning process. If I can’t help my client disengage, I will not be able to help her engage. The proven method for initiating the disengagement process is exposing the problems in the client’s financial life, including inappropriate risk, unsuitable investments, lack of diversification, excessive taxes, too much cash, too little cash, outdated estate documents, whatever. Once the problems are laid bare, the next step is obvious: disengagement.

You Can’t Overdo This

But, it is not just a matter of merely exposing problems by simply bringing them to the client’s attention. The client must take ownership of the problems, or disengagement will not occur. We all procrastinate. We all fall into denial. You must exhaustively expose the problems in the client’s financial life until there is recognition, acceptance, and ownership. Don’t short change this process. And, don’t proceed in the relationship until this step is accomplished. Be patient. Be systematic. Be thorough. Be persistent. Like the doctor who must convince her patient that his illness is serious enough to warrant the surgery, you too must convince your clients that their problems are significant enough to warrant the change. Show them the blood work, the EKG report, and the x-rays. Give them the full diagnosis. Then, give them the prognosis. The diagnosis is what is wrong. The prognosis is where it will lead if nothing is done. If you don’t do this, and well, you won’t help many folks.

When a prospective client comes in for her first visit, she usually has an idea of what she wants to accomplish – find a new advisor, get the portfolio in order, make a good return, retire. Something like that. Where she’s in the dark is in how to make good investment decisions, and she probably doesn’t know how she has been making them up till now.  If she had a handle on that, she wouldn’t be coming to see me.  She has likely spent her life investing in a career or caring for a family. In either case, she became an expert at something, just not investing. No shame here. I don’t know anything about music theory, or chiropracty, or engineering, or delivering babies, or whatever she devoted her life to. Since I am a reputable trained professional in my field, she has rightly decided to give me a test drive.

Her portfolio is often simply the result of several poor advisor relationships, some self-doctoring, a little neglect, and a whole lot of happenstance. My best chance of helping her lies in teaching her to become a more sophisticated investor and walking with her down a proven financial planning path. I can never let the cart get before the horse. There is a process.  Her natural inclination may be to unknowingly try to circumvent that process by misdirecting the relationship or asking for things out of order, because that’s how she’s done it in the past. I must break that cycle to really help her. I must stay the course. Step 1, step 2…etc. If I let her fly the plane, we may never get it landed.

Never Make a Proposal

Plenty of prospective clients come through the door looking for a proposal. They say things like, “Why don’t you work up some suggestions for me to consider?” Or, “Before I bring my accounts to you, I want to know what you are going to do with my money.” Honestly, I can’t blame them. They’ve lost money elsewhere, or they’ve been neglected, or they’ve been burned. In any case they’re cautious, and they should be. But, I don’t want to propose something that gets an up or down vote. I want to get hired. Products, proposals, and plans come and go, but I want to be their advisor 10 years from now.

When someone makes a proposal request, I have a standard reply. “The reallocation of your portfolio will be a collegial process that will take several meetings over the next few weeks. We will work together to put your accounts in order. I won’t pat you on the head and send you home while I make all the decisions. We’ll do it together. There will be material for you to review and many discussions that will need to take place concerning your specific goals, investment risks, and product features. I am your coach, but you will be the quarterback, making the final decisions on the field. At the end of this process, you will be pleased with the result.”

The point here is that clients can develop the skills to become good investors, and thereby, good clients. But, you must have a well thought out decision-making track and the willpower and self discipline to keep everyone on the track, the client and yourself.  Quality client relationships take time, invest it.

When it comes to winning new clients, Elvis got it right: “Wise men say only fools rush in.” I actually know people who pride themselves on what they call the “One-Call Close.”  The One-Call Close method of selling seeks to make a product sale to a client in the very first meeting. It is also called “Low-Hanging Fruit Selling.” The idea is to get in, get what you can, and get out. These amateurs are nothing more than cheap salespeople, not financial advisors. They give our industry a bad name. The very idea is arrogant beyond description. I have heard some of these people boast of getting one over on the client, manipulating them into a snap decision. It’s a form of conartistry. Back in the day, they were called confidence men, because their stock in trade was their ability to convince people to trust them long enough to be fleeced by them. These people remind me of those young men we’ve seen on the news lately who walk up to people and punch them in the head, trying to knock them out cold. It is some kind of barbarous game to them. One-Call Closing is not a game, and it is not financial planning. We are dealing with people’s life savings, and they deserve our care and respect. ‘Fools rush in’ works both ways: advisors and clients should take their time before they jump into a relationship.

Don’t Kiss on the First Date

The shorter the process for winning new accounts, the more it’s about the advisor.  The longer the process, the more it’s about the client. Longer is better. New prospective clients have to meet with me at least 3 times before I will agree to take on their accounts. They can walk into Merrill Lynch or Fidelity Investments and open up a million-dollar account on the very first visit. But, I don’t kiss on the first date, or the second, or the third. In the first meeting, I simply gather information and book a second.  In the second meeting, I identify the problems in the portfolio and book a third.  In the third meeting, I explain my investment philosophy.  That’s it. If they want to hire me anywhere along the way, I demur. Even after the third appointment, if the prospective clients have decided to hire me, I send them home to think it over. If they still love me in the morning, they may call the office and book a visit (not with me) to meet with the staff to complete the paperwork to open their new accounts and bring over their assets. This is a hard rule in our firm. We may discuss a decision in a particular meeting, but we may not execute the decision in the same meeting. Clients, for their own good and for ours, need time to consider their options in order to make the best decision.  I don’t want my practice built on manipulation.  If I deliver in the first three meetings, there is a good likelihood that they will want to work with me. If they decide not to, it was probably my fault. I don’t want to sell products; I want to win accounts.

Winning New Clients

People like buying, but they don’t like being sold. Don’t manipulate them into a decision they may later regret. Instead, win their minds and hearts with a thoughtful and substantive process. Create anticipation and desire. Take the time to show prospective clients that you’re not just another pretty face. Showcase your planning skills, your knowledge of the markets and the economy, and your sincere interest in their future before doing business with them. How many advisors has the average investor ever met who requires 4-6 hours of meetings over 3-4 visits before accepting an account? An average of none. Want to land a big a account? Slow down. Want to win the whole account? Take your time.