I get annoyed when I go to step out of an elevator and two or three people try to rush in before I can get out. It’s the rudest thing. Their mothers are to blame. The proper etiquette is to allow the other folks out first and then enter. It’s a simple courtesy that everyone should practice. When you are standing outside an elevator waiting for it to open, show a little respect and take one step back instead of two steps forward. It will reflect well on your mother.

Managing Discontent

Something similar is going on when a client expresses discontent about the performance of an investment. Don’t interrupt with seven reasons why they are wrong. Don’t rush into a defense. Let them get it all out, or frustration will turn to vitriol. Stopping the flow of vitriol only backs up the toilet. You want to get a good clean flush. Instead of defending, say, “Tell me more. I’d probably feel the same way. What else is on your heart?” Keep probing until you are confident the client has got it all out of his system.

Keep the Plumbing in Good Working Order

Now, here’s how to properly flush. Go back to the original decision and thoroughly re-explain the merits, risks, and features of the investment. Make sure the client fully understands how it works, how it intends to make money, and what could go wrong. Next, discuss in detail the due diligence you and your firm conducted before adding the security to your platform. You took a product course, you did a site visit with the sponsor, you read the prospectus, whatever. Be thorough. Then, discuss why the investment was selected for the client’s portfolio and how it fits into the over all plan. Review the criteria used to make the decision to move forward with it. Finally, give your own assessment of it. It’s okay if you agree with the client, and it’s okay if you don’t.

Never Defend Performance

Remember, you never have to defend performance. The structure of the investment, the quality of the management, and the ever-changing market forces and economic conditions determine return, not you. These things are out of your control, and you are not responsible for them. There are only three things you have to defend: 1. whether or not you did proper due diligence on the fund before offering it to your client; 2. whether or not you fully disclosed the details of the investment, including its merits, features, and risks; and 3. whether or not the product was both suitable to meet the client’s objectives and in the client’s best interests at the time. If you did these three things right and the investment still did not turn out, then that is just how risk shows up in a portfolio. The client will have to accept that, this time, things didn’t go his way. If he isn’t up for the risk, then change his risk profile and reorganize the portfolio accordingly.

No, You First!

When a client comes in for a quarterly review, I have to remind myself that she hasn’t seen me for three months, and she probably has questions, things to discuss, a need perhaps, or something she wants to accomplish in the meeting. Let the client get off the elevator first before you rush in. After a half hour of pleasantries (no kidding), I open my notebook and take out a pen. “I have a number of things I’d like to cover today. Is there anything you’d like to do? Let’s cover your list first.” This always meets with approval. I carefully take notes, ask questions to make sure I understand her thoughts and concerns, and then initiate any action items. After we have thoroughly worked through the client’s list, then we turn to mine. The client is always eager to get to my list, and will listen attentively once her list has been put to bed.  It’s a small but effective courtesy.  Extend it every time.

Divorce Attorneys

Your little sister just called while you were driving in your car. For years she has been beaten, cheated on, and has now at last been abandoned by her loser, jobless, alcoholic husband. She has asked you to recommend an attorney. You knew this day would come. She and her husband are constantly moving from rental to rental, they are always blowing up at family gatherings, and they are raising a couple of brats (your nieces). Just then you pass a billboard that reads: Call Lawyers Dewey, Cheatham, and Howe – Bankruptcy, Speeding Tickets, Criminal Defense, Wills and Trusts, Personal Injury, Tax Planning, and Divorce. You think to yourself, well, I suppose they could handle things.  Then, you pass another billboard that reads: Colleen N. Army, Divorce Attorney – A Pit Bull in High Heels and Lipstick. Who are you going to check out? The lesson here is that a jack-of-all-trades is a master-of-none. When people are hiring a financial advisor, they want a trained specialist, not someone who can’t focus.

Branding your Practice

The name of our practice is Senior Partners, LLC. Our tagline is: Planning for Mature Investors. Prospective clients immediately know who we are and what we do.  Don’t name your practice something tired and nebulous like The Amalgamated Diversified Financial Planning Company or the one-size-fits-all Investments Are Us. Instead, use your own name in the name of the business, or allude to your target client, like my good friend Megan Phelps, whose practice is named Empress Investment Group. Yep, you guessed it. She works with women and wants them to feel like royalty.

Our value proposition is: Innovative financial planning for mature investors who value alternative investments, comprehensive wealth management, and a personal and intimate relationship with their advisor. We arrange our clients’ portfolios and affairs so they can generate robust income, ignore the stock market, live life again, and leave an enduring legacy. Don’t use terms like integrity, honesty, and loyalty to describe your attributes (yawn). Everybody expects and demands those kinds of things. Instead, lay out for your prospective clients exactly what you plan to do if they call you. Set an expectation in your branding and then proceed to deliver it with verve and aplomb. You need to be known for something. Now, I know that some of you are thinking, “He’s crazy. That will never work. He is leaving all kinds of business on the table because he is alienating everyone outside his client profile.” People who say something cannot be done should not interrupt those who are doing it.

Kids and their Toys

We’ve all seen kids playing together. Things start to fall apart when one kid picks up a toy and another kid realizes he has just lost the option of playing with that toy. Often, a fight ensues. The second kid snatches the toy from the first kid, and the first kid fights to get it back. We all want what we can’t have; it’s human nature. Being exclusive means setting some limits and narrowing your focus. But, it doesn’t mean you can’t take on other clients and work. Here’s a common conversation in my conference room.

Client: Noel, we love what you do for us. You have changed our lives.

Me: Thank you. You are very kind. I love working with you. I am pleased to be of some value.

Client: Say, we were wondering. Do you only work with retirees with a lot of money?

Me: Tell me what you’re getting at.

Client: Well, my brother could sure use your help.  But, he isn’t retired yet. Would you be willing to meet with him?

Me: Certainly.

Client: But, he doesn’t have as much money as we do.

Me: If he is important to you, then he is important to me. I always accept every referral from my clients.

Client: Will you call him? We can give you his contact information.

Me: When he is ready, ask him to give me a call. We will take good care of him.

Being exclusive raises your stock, identifies you as an expert or specialist, and makes you desirable. Being exclusive helps you build a unique brand. Being exclusive puts you in the position of picking and choosing which prospects you’d like to work with and what sort of work you’d like to do. Don’t be a general practitioner. Carve out a niche for yourself, and go for it!

We are Proud of our Best Relationships

Jesus warned us not to brag on ourselves, and He, of course, was right. But, it is perfectly acceptable to brag on others. We all brag on our kids, and especially our grandkids (I have only observed this truism with grandkids since I don’t have any grandkids of my own, yet.). We do this because we are simply crazy about them. We love to spend time with them. We love to watch them play sports, achieve things, and graduate from anything. It is not just because they are cute and sweet (they may not be).  It isn’t even necessarily because they are our blood relations. Lot’s of families have adopted kids and grandkids. We enjoy the time we spend with them because they are our kids. We have built great relationships with them, and being with them is just fun. We have cheered their triumphs, and we have walked with them through tough times. We’ve been there when they’ve needed us (and sometimes the other way round).

The kid next door could be smarter, prettier, handsomer, funnier, whatever. But, we don’t have the relationship with him. He has never crawled up in our laps for the sheer joy of just being in our presence. He has never wanted our opinions on anything. He has never tackled us around the legs when we’ve walked in the door. He has never, well…you fill in the blank. The point here is, we brag on those with whom we have great relationships. We’re proud of them and we want others to know it. Your objective is to build relationships of such quality that your clients are crazy about you and proud of you. So crazy about you that they can’t wait to see you. So proud of you that they can’t wait to tell their friends and family about you.

The Cocktail Party: Field of Prey or Hunting Ground?

Now, I don’t attend cocktail parties, but a lot of my clients do. Some of them have weekly golf outings with their favorite foursome, or play bridge with their best girlfriends. Some have other regular get togethers with family and friends. In these intimate affairs, people let their hair down. They complain about their spouses, their golf game, their taxes, and their neighbor’s dog. What you don’t want them complaining about is you.

When my clients are in those intimate social settings, I am not worried that their dissatisfaction with me will be aroused, even if there is a pretty good reason. I am not concerned that their friends or colleagues will woo them away to another advisor. I am confident that my clients will proudly boast of their relationship with me because I have built substantive and lasting relationships with them by investing extra personal time with them, in every meeting, EVERY SINGLE TIME! When they attend that gathering and investments come up, I am not concerned that my clients are walking into a dangerous field of prey with wolves lurking about, but rather a fertile hunting ground where they will bag my next referral.

Certainly, relationships aren’t the only reason clients stay with you. But, they are the main reason they stay with you long term and send you great referrals. The longevity of your client relationships and the frequency and quality of the referrals they send you are in direct proportion to the quality of the relationships you build with them. Of course, you need to give good advice, produce a reasonable return, run a well-staffed operation, and so on. But, a healthy, growing, and sustainable practice will require your very best work in the relationship department.

Clients Aren’t Cattle

And, if you treat them like cattle, they’ll treat you like a cattle prod or an electrified fence. They will simply avoid you. They will not want to come in for reviews. They won’t call you when they receive an inheritance or need to rollover their 401k. They’ll second guess you and resist your advice. They won’t send you referrals. You’ll be reduced to product selling, peddling your wares like a door-to-door salesman. Wait. Maybe product selling is what you do now, and you feel like you’re on a runaway train: you can’t jump off or you’ll surely die, so you hang on and hope for a miracle. I am here to tell you that you can escape the certain disaster of mediocrity. You can turn it around and develop the practice you’ve always dreamed of, if you will just start to focus on the relationships.

The problem with too many advisors is they are in a hurry. They are in a hurry to see the next client and they are in a hurry to make the next sale.  The clients don’t really matter so much. It’s their money that advisor is after. Some advisors run up to 40 appointments a week and skip lunches (no kidding, I know some). This is madness. You can out produce these folks with a fourth of the appointments, and you’ll sleep better at night. You’ll get all the client’s assets. You’ll have a happier staff. And, you’ll have more free time than you’ll know what to do with.

A Little Experiment

Try this: the next time an existing client comes in for a review (You do those, right?), schedule it for 90 minutes. Spend the first 45 minutes with their file out of site, and your notepad, calculator, and pen still in the credenza drawer. Have your staff bring in some hot coffee or an icy cold beverage and something sweet to munch on, say, some fresh baked cookies (get a toaster oven). Once the client sits down and is served, clasp your hands on top of your head, lean back in your chair, smile broadly, and say, “It’s really great to see you. Tell me what’s new in your life.” Then just listen. Ask more questions. Keep the conversation going. Tell a related story or two. Show genuine interest in the client’s personal life. Laugh a lot. Share a little of your own story (remember, intimacy is spelled in-to-me-see). Make friends. And, keep doing it every time you see them. Soon, they’ll start to look forward to the visits. They will enjoy themselves in your company. They will leave your office with a sense of satisfaction and contentment, and they will start to care about you (this stuff really works). It’s called love. Spend it lavishly on others and it comes back to you in spades.

There IS a Silver Bullet

Clients won’t hire you, or if they do, they won’t stay long, if they don’t like you, trust you, and find you competent. But, even if you are hitting on all these cylinders, if there’s no relationship, you’ll eventually be toast. Why do people go to class reunions, keep seeing the same doctors, stick by their friends through thick and thin, frequent the same restaurants (even if the food isn’t that good), and stay in difficult marriages? Relationships. Sure, you need to be good at your work, produce reasonable returns, throw a good party, have a nice bedside manner, and all the rest of it. But, what truly builds the business and gives it longevity is your ability to make friends with your clients and build strong relationships with them. There’s your silver bullet. It’s the relationship, stupid!

Why Do Clients Come Back?

The reason surely isn’t the investment returns you bust your can to produce. It isn’t your spiffy college education, your crazy wow-factor master’s degree, or your prestigious alma mater.  It isn’t your over-the-top, no-holds-barred, insanely expensive annual client appreciation event. It isn’t your penetrating insight into the financial markets or your utterly remarkable financial planning expertise. It isn’t your crack administrative staff. It’s not even your extensive list of licenses, professional designations, or other industry credentials (Sorry, I know you’re proud of all those.). Public speaking skills? Office location?  Cool business card logo? Nope, nope, nope! (drum roll, please) It’s the relationships you’ve built.

Eating at Fred’s

I have been dining at Fred’s Italian Corner for 25 years. I live in the Houston suburbs, and Fred’s is 40 minutes one-way across town through the busiest 3 miles of Texas interstate, deep in the famed Houston Medical Center. My family eats there once or twice a week. I first started eating at Fred’s in the 1990s when my cousin, Eddie, had leukemia and needed regular blood transfusions at nearby M. D. Anderson Cancer Center. I’d donate some blood, then stop in at Fred’s for a hot plate of steaming Sicilian spaghetti and meatballs. I grew to love Fred, the slender, quirky, Sicilian owner of Armenian extract, who’d sit behind the register, taking orders with his skinny, and ridiculously tall chef’s hat, chatting up the customers and barking orders over his shoulder to his kitchen staff, who, in his opinion, were imbeciles, and never seemed to get anything right. He always had a big smile and wanted to know what was going on with you. After 10 years, he died of cancer. I was stressed. Not only had a lost a friend, but I feared for the restaurant’s future. The place had become my own personal kitchen. Everything was just so, and nothing ever changed.

His son, Andy,  took over for a while, but I was worried it would fail. I resented his son’s presumption to take over “my” restaurant. Andy knew I was uneasy about his taking over, but he persevered. He’d come by our table and make small talk every time we came in. I got to where I’d call down to the restaurant on the way there, and he’d take the family’s whole order over the phone. When we arrived, our table was ready and the food was promptly delivered. When Andy was thinking up a new dish for the menu (he liked to tinker with the sauces and this annoyed me beyond reason), he would whip one up for us on the house, and then ask for our honest opinions. He eventually won us over.

One day, we came into the restaurant and saw some new faces behind the counter. Andy explained that he had decided to sell the business, and to foreigners at that! I was miffed. Not only were they not Sicilians, or even Italians, they were Iranians. The first thing they did was install a TV in the restaurant. Can you believe that? I was disgusted. For several months I was leery and very stand-offish with the new owners, not giving them the time of day. I would ask for my favorite (pre-ownership change) waitress and just ignore the new owners. But, they kept coming to the table, visit after visit, always smiling goofily and lavishing upon my family a gross amount of warm, personal attention (A gross amount, I tell you!). They kept piling on, first one family member, and then another. We got to know all their names, and they finally pierced my armor. I call the old man “Papa” now. His son, Amir, recognizes my voice when I call ahead with my order, and he doesn’t even ask if it’s me. He just says “Hey, buddy! What would you like tonight?” To tell you the truth, the food isn’t even that good anymore. But, where else can I go and feel like I am in my own kitchen and among my own friends, EVERY SINGLE TIME?

The Morals of the Story

It should be obvious from my experiences at Fred’s over the years that building good relationships is essential to building good businesses. But, I’d like to draw out two additional morals from these experiences. The success of both Andy and Amir in working hard at winning my friendship ensured that I’d be a longtime customer of the restaurant, even through ownership changes, a decline in the food quality, and a host of other things got under my skin.

Moral #1: If you decide to pass along some of your B and C clients to an associate advisor, the associate advisor’s top priority will be to focus on building a quality personal relationship with each client before trying to do any significant business. This is the best way to ensure the relationship stays in the house, so to speak. People usually hate change. A change in advisor can be devastating for a client. The only thing the new advisor should be in a hurry about is making friends.

Moral #2: Relationships trump everything else. Great relationships will endure poor service, long lobby wait times, and lousy investment performance because they are rooted in love. We all need this reminder: “Love is patient, love is kind and is not jealous; love does not brag and is not arrogant, does not act unbecomingly; it does not seek its own, is not provoked, does not take into account a wrong suffered, does not rejoice in unrighteousness, but rejoices with the truth; bears all things, believes all things, hopes all things, endures all things. Love never fails.” – 1 Corinthians 13:4-8 Build great relationships on the foundation of love and they will endure the test of time.

Keep Client Interactions Calm and Focused

Whenever I sense that a client is starting to get stressed in a meeting, I know that I must take action. I imagine, for my own amusement, that a small pressure relief valve is protruding from the side of his neck. In my mind’s eye, I reach across the conference table and gently turn the valve to back off the pressure until I sense that the client’s stress level has dissipated and his demeanor has returned to normal. This is is my cue to find a way to relieve his stress. If we are discussing the proposed allocation of his portfolio, I will say something like, “We are not making any decisions today. We are just talking. I will send you home with some materials to review on these investments and then we will get together again to make decisions. If you have objections to any of these recommendations, we will set those investments aside and keep working to find the right solutions. You are in the driver’s seat.” The client immediately relaxes, and I can see that we were moving too fast in making investment decisions. Communicating to the client that I was in no rush let him know that he was in charge, and that we would move at a pace that was comfortable for him.

If we are discussing our fee arrangement, and it is clear the client is getting uncomfortable, I will say something like, “I realize that you may not be used to paying an advisory fee, and if this type of arrangement doesn’t work for you, I will understand. I may not be a good fit for you, and that’s okay. There are other good advisors out there, and many of them do not charge a fee. Take some time to think it over, and let me know if you would like to proceed.” I am giving the client a way out. This relieves the immediate pressure so he can evaluate the merits of working with me and my staff in an atmosphere free of stress. When people are under pressure they make poor decisions. Stress can produce indecision and paralysis. My job is to help my clients make good decisions. If I create a high pressure environment, I am going to destroy my ability to help them make good decisions. If I am oblivious to the stresses they are under, I will plunge headlong into a morass of hesitation, suspicion, and doubt in the client’s heart. Once I have created those emotions, I will likely never turn them around.

Develop an Affable Bedside Manner

Never lose your temper with a client; no matter how justified you deem the provocation. Keep your demeanor deferential, polite, and courteous at all times. There is no place for arrogant pride, condescension, or intemperate behavior in your client relationships.  Rather, work hard to display humility, professionalism, and self-control in every client encounter. Some clients are hard to love, but love them we must. In our practice, the majority of our clients are in retirement.  At that stage of life, we see our clients struggle with frequent and significant loss: hearing, memory, spouses, and sometimes even children or grandchildren. We need to be sensitive to the challenges our clients are facing. Clients need our friendship, and they need our reassurance and support. We must be willing to forgive their quirks and small offenses as we hope they will forgive us. Working with clients, especially older clients, sometimes can be frustrating. Communication between people is always a potential source of difficulty. The Apostle James gave some great advice, “Be quick to listen, slow to speak, and slow to anger.” – James 1:19. The onus of good communications is upon us as the advisors. We must take responsibility for ensuring that our clients’ communication challenges are overcome. When we as advisors take the lead and treat our clients with dignity and respect, our staff members will follow suit. Set the best example and lead from the front.

Three Essential Attributes

Unless you are prepared to either manipulate and cajole people into doing business, or drown in hapless mediocrity, you must master this principle.  Every potential client needs to answer in the affirmative the following three questions: Do I like him? Do I trust him? Do I find him competent? It is rare that a prospective client will move forward and hire you without going through this mental checklist. And, even if they do, the relationship will be weak and flimsy, collapsing under the weight of the slightest suspicion or mishap. Your job is to recognize that every prospective client needs to follow the same three step decision-making process, and then determine to help them walk through that process. Whatever system you are using to win new clients, it must incorporate a methodology for getting these three questions answered “yes” in the client’s mind.

Likeability

Everyone wants to work with people they like. Adopt a positive and soothing “bedside manor.” I once had an advisor working for me that was very bright. He was as quick a study as I’d ever met. His tenacity was unmatched. And, he had an interesting story. A wounded Viet Nam War veteran, private aircraft pilot, and father of six. But, his clients didn’t like him. He was abrasive and condescending, dismissive of their concerns, and he often brow beat them into submission. Eventually, he lost his securities licenses due to client complaints. It is not that hard to be likeable, but some people do need to work at it. Develop good listening skills. Smile warmly and often. Take a sincere interest in the people you are helping.  Put them at ease in your presence. Keep your humor respectful and in good taste. Be deferential, gracious, and hospitable. Don’t rush things. And, never use foul language. Remember, you may have all the skills to manage their life savings, but if you’re a stinker, you may never get the chance.

Trustworthiness

By far, the quickest path to earning trust is being open and forthright, telling the truth, and keeping your promises. From the very first encounter with a prospective client, use candor and forthrightness in your interaction. Don’t be flippant. Be sincere. Be sure that what you are saying is accurate and that you follow through on every commitment, no matter how insignificant.  Prospective clients are grading you on everything. They come in your door for the first time looking for a reason not to do business with you. Don’t give them one.

Disclose, disclose, disclose! I once worked alongside another advisor who asked me to join him in a client appointment.  He presented an investment, and the client made the decision in the meeting to make the purchase.  After the meeting, the advisor told me that the sale wouldn’t stick.  He said that he had not done enough disclosure of the investment’s features, benefits, costs, and risks.  He sensed that he had short-changed the process and that the client lacked the trust to move forward.  That afternoon, my colleague received a call from the client cancelling the transaction.

Don’t make the mistake in thinking that when a current client refers someone to you that there is a built in trust factor. A referral is merely an introduction to an interview, and you are the prospective employee who is being interviewed by the employer, the prospective client. You will need an approach for developing new client relationships that takes time and allows trust to develop.  If you move too fast, even with a referral, you will lose the chance to show your competence and win the account.

Competence

You must have the planning chops to win and sustain good client relationships. Competence requires training and experience, and for these there are no substitutes. An aspiring advisor should consider working in the practice of an experienced financial planner. Young advisors need mentoring, and they especially need training in the technical skills of financial planning. Earning professional designations such as Certified Financial Planner (CFP) or Chartered Financial Consultant (ChFC) are excellent paths to technical competence. But, the freshly minted advisor will still require experience, and this is best gained under the tutelage of a mature professional. Competence is not only technical skill, but it is also the ability to understand current economic trends and help clients navigate them. Financial advisors must have technical skill and the wisdom to give sage advice. Your opinions must be cogent, relevant, timely, and well presented. It is one thing to be competent, but it is quite another to communicate competence. Credentials alone won’t do it. Competence must be demonstrated.

A young female missionary once asked me why I loved to fish. She just didn’t get it. “Worms, hooks, slimy dead fish!  Why would anyone want to fish?”  We were walking together down the Royal Mile in Edinburgh, Scotland with a number of other fellow students from Southwestern Baptist Theological Seminary.  A group of about 40 of us had signed up for the 2003 Oxford Summer Study Program, which was a joint project of our seminary and Oxford University’s Regent’s Park College and was designed to allow seminary students the chance to study theology and church history among the Dreaming Spires of Oxford and to experience relative points of interest all over Great Britain.  Part of the study program took us to the University of Edinburgh for several days of lectures and a bit of sightseeing.  Our group was exploring the city centre and visiting its quaint shops and cafes.  I had just emerged from the local Orvis Outfitters shop, where I arranged a fly-fishing excursion for the following morning on the River Tay, which meandered through the grounds of the castle which shared the name of the river upon which it rested in the Scottish lowlands.

“Why did I love to fish?” I asked.  “It’s the anticipation.” Intrigued, she wanted me to explain.  As the young missionary and I strolled along , I relished the opportunity to relive an account of an oft played out scene between my daughter, Chelsea, and me.  When Chelsea was about 5 or 6, we had a game we played every other evening or so.  Just after bed time, when I had tucked her in and secured the house for the night, I would creep back to the bottom of the stairway and, without warning, stomp my foot on the first step of the staircase.  As I did, I would blurt out the word, “Fe!” loud enough for Chelsea to hear me.  Chelsea, who knew exactly what was coming, would squeal with delight. After a second or two, I would stomp my other foot on the next step, and holler out, “Fi!”  I could hear Chelsea wiggling around under her covers, searching for somewhere to hide.  Another stomp and, this time drawing out the word, “Fo!”  And then another quick stomp, and “Fum!” Chelsea would be breathless, jumping around on her bed, giggling madly.  Two or three more stomps, and then all at once, “Fe, Fi, Fo, Fum!”  Chelsea would let out a blood-curdling scream, followed by more thrashing and cackling.  Then, I would sneak the rest of the way up the stairs and slip quietly along the hallway until I was just in front of her door.  She knew I was coming, and the anticipation was driving her batty.  After giving her a few seconds to settle down, I would beat loudly on her door and say, “Fe, Fi, Fo, Fum!  I’m gonna wop Chelsea on the bum!” and then I’d rush into her room, jump on her bed, and tickle her silly.

After a minute or so, exhausted from the ordeal, I would try to catch my breath, calm her down, and bid her good night.  But, all she could could do was beg, “Daddy, please, let’s do it again!  Please, please, one more time?  Please, Daddy, please!!!”  We would laugh and hug and tickle some more, and then I’d stroke her hair, tell her how much I loved her, tell her how she was the total package and that no boy would ever be good enough for her, and then I’d kiss her good night.  An evening or two later, we would reenact the madness once again.  “That’s fishing,” I said, grinning stupidly.  The young missionary, with tears in her eyes, and also grinning stupidly, said, “Wow! I want to learn to fish!”  It’s a simple principle, but learn to create anticipation with your clients.  Here are three easy steps:

1. Use an Extended Meeting Process: Have a meeting process and explain it in the first meeting.  I use a 3 meeting process before I expect to do any business with a client.  I explain my process in the first meeting so they’ll know what to expect, but they also understand that they will have to wait a bit for the relationship to develop.  The first meeting is when I gather their personal information.  The second meeting is when I give an assessment of their portfolio.  The third meeting is when I share my philosophy for putting it in order.  The client wants to see the process through and will keep coming back.  This creates anticipation.

2. Take Time to Implement Decisions: Refuse to implement decisions in the same meeting that decisions are made.  If the client likes an investment you’ve suggested, send them home to review the prospectus and sales materials and only execute the trade in a subsequent meeting.  Some clients want to decide and act in the same meeting.  Don’t give in to the temptation.  The best relationships and the best decisions need time to mature.  When clients are not forced or manipulated, they are drawn into the relationship and want to see their decisions implemented.  This creates anticipation.

3. Don’t Make Follow Up Calls: Once I have met with a client on a particular decision, the ball is in their court.  I don’t want to harangue them into something they may not understand yet or be ready for.  While the client may be expecting a follow up, I don’t go there.  The client drives the relationship and the decision making process.  My job is merely to guide it.  Over time, the clients learn that I am not in a hurry to make a commission or fee on their account.  Those things will happen in due time.  The client needs to take a leadership role in moving things forward.  This keeps them comfortable and in control. And, of course, this creates anticipation.

Show Some Love

Some years ago, I had a pastor whom I loved. But, I never seemed to be able to get his attention. After services each Sunday, I would wait in the handshake line to speak a word of encouragement to him and let him know I appreciated the sermon or was praying for him. Invariably, while shaking my hand, he was anxiously looking over my shoulder to see who was in line behind me. He was never in the moment. I eventually left the church. A few years later, he was caught in an adulterous affair and lost his ministry. Pretty sad. He wasn’t satisfied with what he had, and he wasn’t willing to continue to invest in his relationships because he was always looking for the thrill of the next one.

I used to be on the marketing treadmill, too, until one day I was told that my existing clients were having to wait sometimes 3 or 4 weeks for an appointment.  Clients were complaining that they could not get me on the phone. A few were threatening to leave me. I was frustrated about not being more attentive to my clients’ needs, but felt the pressure to focus on getting new ones. I felt I was acting like my former pastor, and I was ashamed. I was just too busy, and something had to change. My clients weren’t getting the love, and it was my fault. I was too focused on the next client to love the ones with which I had been blessed.

Unlocking the Potential

For the record, we have about 250 client families in our practice. We manage around $140M. I averaged 5.5 appointments a week last year. Things are pretty good. We’re blessed. How did we get here? It was a three-step process. First, I realized I had over marketed and that I needed help. We seriously curtailed our seminar schedule and I broke down and brought on another advisor. Not a loser from the industry who couldn’t make it somewhere else. I brought one up from operations. I started training him and helped him get licensed. In time, I was introducing him into my clients relationships, and he started doing some of the lighter planning and transactional work. Second, I identified about one third of my client base and began shifting the majority of the responsibilities for managing their accounts to my new associate advisor. This transition took some time, but we managed it well and it was successful. Third, we reorganized the practice’s revenue structure from commission only to hybrid. We started charging fees. This was a daunting task, but we buckled down and got through it, emerging victorious on the other side.

Love Your Book

Once I was able to reduce the number of client families I was personally responsible for, I was able to give them the love they needed and deserved, either personally or through my associate advisor. We started focusing more on spending time with them and attending to their needs. Clients went from zero or one appointment a year to three or four. Three things happened. Client attitudes started to change, referrals shot up, and new business started rolling in from these relationships. We eventually cancelled our seminar schedule all together, even though we still had $10,000 of unused credit we had paid to our marketing company for upcoming seminars that would never happen.  We were content. We went from a growth pace of 10-15% per year to more than 30% per year, and that with no active marketing plan. Our marketing plan was replaced with the concept, “Love the Book!”

Now, we continue to win new clients exclusively through referrals and our business is robust. As the practice grows, we add new associate advisors who are gradually introduced into existing client relationships and eventually take them over. No advisor, including me, is allowed to manage more than around 85 families, yet we bring on more than 50 new client families a year. About every 18 months we graduate a new advisor from our paraplanner track and everybody transitions clients to the new associate. We are thriving, and our clients are well cared for. Everybody wins. The goal of marketing is to eliminate its need.

Getting off the Treadmill

Most financial advisors I know are looking for ways to keep their calendars full with new prospects. They exhaust themselves on endless marketing treadmills adding as many new clients each year as possible. And, every time they add a new client, it gets harder and harder to do a great job for the ones they already have.  These advisors run seminars at expensive restaurants, they join the Rotary Club, they serve on school committees, they write blogs (ahem), they do anything and everything to find that next client. Certainly, at the beginning of a financial advisor’s career she has to do a lot of marketing, but it should not become a way of life. The goal of marketing is to eliminate its need.

Trouble is, most advisors already have too many clients. Let’s do a little math. If an advisor has say  300 client families and sees each one 4 times a year, that works out to 1,200 appointments annually. Assuming 4 weeks of vacation, illness, and business travel each year, this advisor must have 25 appointments a week just to keep up with her current book. Some of you may be thinking right now, “I can’t spend that much time seeing my existing clients or I’ll never have enough time to find any new ones.” Or, you might be thinking, “My clients don’t need that much of my time, besides, I already have all of their business.” Nonsense. You need to take a fresh look at your book.

The Book Produces

This is a mantra in our practice.  In fact, it goes like this, “The book produces; love the book.” Advisors like to believe that they have all of their client’s money. But, study after study has shown that most clients, especially the more affluent ones, prefer to work with more than one advisor, and sometimes three or four. This means that there is opportunity for more business in most client relationships. Business is continually being generated from our existing book of clients. A spouse retires, an inheritance comes in, the other advisor leaves his firm, a CD matures, dividends pile up, profit is taken on an investment, a job change necessitates a 401k rollover, a business succession plan needs creation, a partner buyout occurs, and on, and on, and on it goes. There is no end to the possibilities in a book of business. If you aren’t paying attention and cultivating this business, another advisor is getting it.

Stay tuned for Part II…