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Getting Close to Clients

Building client relationships isn't that hard if you follow a few common-sense rules.

David J. Drucker, 03/15/2007

The fact that several coaches to our industry make their living teaching advisors how to build client relationships shows how complicated we've made this process of client bonding. It just doesn't have to be that difficult if you follow the same life lessons for relationship building that you've probably already learned.

The reason building relationships is an issue at all is that advisors try to work with everyone who can afford them. When new in the business, advisors take all comers in order to pay the bills. When more established in the business, advisors take on all prospects who meet their definition of an "ideal" client. Problem is ideal clients are usually defined in monetary terms. They are those clients who have at least $1 million in investable assets or those who can afford the advisor's minimum fee, be it $1,000 a year or $10,000 a year.

It's not surprising we follow this process of qualifying clients because it's the same process upon which most goods and services are sold in our economy. Right now, my house is full of general and subcontractors fixing damage we incurred during an uncharacteristically fierce winter snow storm several months ago. When seeking bids on the job, I felt it important to select the contractor who I thought would be competent and dependable. The contractor to whom I gave the job sized it up from a materials and labor standpoint but probably didn't give a lot of attention to who I was. I was able to pay his deposit, so he was happy.

But as goods and services become more personal, the process needs to be adjusted. Consider a psychologist's practice. If you have an introductory meeting with her as a prospective client, is she more concerned about your ability to pay her $150 fee each visit (most clients have insurance anyway) or does she pay more attention to who you are and whether she can help you? As services become more personal, the balance between ability to pay and ability to relate shifts.

This explains why it's those advisors who still earn the bulk of their income from selling products who are attracted to these "relationship coaches": the process they learn for selling--that in which the customer is often manipulated into buying something that may or may not be the best solution to his problem--is diametrically opposed to the relationship building process. In the latter, we get to know the person, we share personal information and we seek out common ground. This can sometimes be faked, of course, and that's what the best salesmen learn how to do.

But if you're interested in more than just a quick product sale, you need to keep it real--and you need to adjust your parameters for your "ideal client." Rendering professional financial advice, as a consumer service, is becoming more personal all the time. So, just for a moment, let's envision a scenario where money isn't a concern. Yet, you still want to grow your business, and clients still need to meet your monetary minimums, but you can afford to bring other criteria into the selection process. What I hear repeatedly from more established and successful advisors is, "I'll only work with people I like."

Isn't that what relationships are all about? We go to a party with the opportunity to meet dozens of new people and maybe find one or two potential new friends. Or you try one of those "It's Just Lunch" affairs in order to find a compatible partner; at best, only one or two "lunchees" have potential. There are only so many people we let into our lives--the ones we sense we can trust, with whom we have commonalities, with whom we want to share personal information.

Suppose you applied this same process to selecting clients? You conduct your initial meeting (assuming the client passes your telephonic screening process) looking for clients with whom you would choose to spend time if you'd met them in a social setting entirely apart from your financial advisor persona. Think about how easy the relationship-building process would be if you worked with clients who met this criterion.

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