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Why Should Your Clients Trust You?

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In my March 24 post (Want Client Loyalty? Do Something You Don’t Have To Do) I wrote about trust being the number one driver of client loyalty, and how important it is to put your clients’ needs before your needs and your firm’s needs.

But what is trust and how can you increase it?

My favorite definition of trust is the formula given in the book The Trusted Advisor (David H. Maister, Charles H. Green and Robert M. Galford):

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(Credibility + Reliability + Intimacy)

__________________________

Self Interest

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Let’s break that down from the client’s point of view:

Credibility = You know what you’re taking about

Reliability = You do what you said you were going to do

Intimacy = You have taken the time to really understand me

(All divided by)

Self Interest = You give the appearance that you are more interested in what’s in it for you that what’s in it for me

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Notice how the the elements in the numerator are additive, but even their combined effect are quickly diminished by the single element in the denominator.

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Think of the stereotypical sleazy used car salesman in the loud plaid sport coat:

Even if he knows every feature and benefit of every model on the lot and is a 10 out of 10 on credibility…

Even if he followed up on every question and returned all of your calls promptly and is a 10 out of 10 on reliability…

Even if he asked great questions about what you were looking for, who would be the primary drivers and how much you wanted to spend, so you’d have to give him a 10 out of 10 on intimacy…

…You just couldn’t shake the feeling that he had x-ray vision that saw through you directly to your wallet. Unfortunately, he’s also 10 out of 10 on self interest.

Let’s do the math:

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(10 + 10 + 10)

             __________    =  3

10

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A final trust score of 3 out 10 is a far cry from being a trusted advisor. Even though our salesman was best in class in three out of four factors, it hardly matters if his customers feel like they can’t trust him.

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So…

Even if you know everything there is to know about the economy, the investment markets and every nuance of financial and estate planning…

Even if you have flawless execution in transactions, reporting and follow-up…

Even if you have assiduously documented every personal and financial fact and nuance about your clients in your comprehensive CRM system…

…you will not have long-term success if your clients don’t feel like they can trust you.

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Why should your clients trust you?

Want Client Loyalty? Do Something You Don’t Have To Do

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In my March 17th post I quoted from the research of industry expert Mike Kostoff. Mike has been a consultant to some of the world’s leading wealth management firms for over twenty years, and he noted that the drivers of client loyalty to a firm differ than the drivers of client loyalty to an advisor.

The number one driver for loyalty to a firm is quality of advice, but two other factors rank higher as drivers for loyalty to an advisor— trust and proactive communication.

The most important element of trust is putting the clients’ interests above the interests of the advisor and firm. A very powerful way of demonstrating this is by doing something you don’t have to do.

When training and coaching others on how to build trust, I often relate some of my favorite personal stories of how others have won my loyalty by doing things they didn’t have to do:

  • The car dealer who insisted on talking me through a simple repair over the phone to save me the cost of an expensive long distance tow and repair bill. I bought four cars from that dealer and serviced five there over the years.
  • The janitor cleaning the restroom at Disney World who inquired about my daughter’s minor head bump, then quietly sent a stuffed animal to arrive at our room before we did. We have been back four times since.
  • One of my favorite restauranteurs who randomly deletes entrees from my bill and then applies a 20% discount that wasn’t requested or expected. It’s not about the money, it’s about demonstrating thoughtfulness, appreciation and generosity. I recommend his restaurant all the time.

Now I have a new experience to add to the list.

Last week the dreaded day arrived to put our fifteen year old Chocolate Lab to sleep. The back half of Molly’s body had stopped working a few months ago and we had been carrying her around when she needed to eat, drink or eliminate; but she couldn’t scratch herself, she couldn’t seem to find a comfortable position any more and she had started to whimper in pain and frustration.

We didn’t want her to suffer and we knew it was the right thing to do, but it was still a painful day.

We love the whole staff at our veterinarian’s office and they had come to know Molly well through her frequent visits and boardings.

Our loyalty to the office rose to a whole new level when we received a sympathy card from the veterinarian who gave Molly her last injection.

Then another card arrived from Molly’s usual vet, who was out of town on Molly’s last day.

Then we received this card, signed by the entire staff:

The clinic didn’t have to send any cards at all, and I would have still felt very good about the quality of care and the people we deal with on a regular basis.

By the way, we switched to this clinic from another veterinarian who was competent and personable, but it felt like he was always finding a way to sell us another service or product.

We were happy with our new clinic even though they were 5 times further away than the old one, because we didn’t get that feeling. I’m not sure we even saved any money.

But now that they have demonstrated their empathy and concern during our darkest moments, now that they have connected to us in this very emotional way, what are the chances we will ever consider another veterinary clinic?

The pressures to grow assets and revenue today are very real, and doing little things for your clients without revenue is not a quick-fix solution. It requires patience, genuine care and a commitment to build your practice for its long-term value.

But that’s why you’re reading this, isn’t it?

Best Ideas from the Best of the ABA

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After exploring my inner geek the week before at the Microsoft Research TechFest2012 and the GeekWire Summit, it was time to put the pinstripes back on this past week (figuratively, at least) as I headed to Scottsdale for the American Bankers Association Wealth Management Conference.

There were more suits and ties and fewer jeans (and no North Face or Marmot jackets), and more pads and pens and fewer iPads and utlrathin notebooks, as I might have expected. I didn’t have live Twitter conversations about the carpeting that looked like QR codes; but just like last week, I still found some bright and engaged people trying to navigate turbulent and uncharted waters to engage their customers and grow their business. Here are the highlights:

Best quote:

“Watching the stock market last year was like watching a chicken try to fly.  

Too much ballast and not enough lift.”

–  Dr. David Kelly, Chief Market Strategist, J.P. Morgan Funds

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Back to the Future: 

“Go back 10 years to 2002– the key question was when to get back into technology stocks? No one was asking about REITs, commodities, emerging markets, gold, or any of the things that have outperformed since. U.S. stocks have out-performed BRIC (Russia, Brazil, India and China) for 4 years straight, but no one is interested.”

–Richard Bernstein, founder, CEO and chief investment officer,

Richard Bernstein Advisors, LLC

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Ready and Willing, but Unable?

“Fifty percent of high net worth clients are willing to interact with their advisors via mobile, but only 18% have it available to them.”

 –Eileen VanScoy, Executive Vice President of Product Management, SunGard

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What Drives Client Loyalty? It Depends:

What Drives Loyalty To Advisors:

  1. Trust
  2. Proactive communication (1x/month)
  3. Quality of advice

What Drives Loyalty To Firms:

  1. Quality of advice
  2. Service
  3. Value for money

(Note that clients think advice is a firm’s responsibility- Top driver of loyalty to the firm, third driver of loyalty to the advisor)

–Michael Kostoff, Partner, WISE Gateway LLC,

former Executive Director of the VIP Forum

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What Drives ‘Brand Love’ and Trust?

  • Integrity
  • Intent
  • Capabilities
  • Results

Define the desired service experience, make culture a verb and make sure everyone in the organization understands and lives the desired experience as “The way we serve”:

  • Starbucks- the “third place”, as comfortable as your living room.
  • Ritz Carlton- re-create the home of loving parents.
  • Zappos- “wowful happiness”

–Joseph Michelli, PhD,
Author and Organizational Consultant

Do you have what it takes to succeed as a business developer?

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Nice post, reblogged from Financial Sales Pro:

Click here to read the entire article: Do you have what it takes to succeed as a business developer?

Excerpt:

What’s the activity level?  So you’ve got a great plan, now what?  Implementation is the key.  We all know BDOs who spend days, if not weeks, sitting in their office fine-tuning marketing materials, letters, etc.  In my opinion, this is clearly not the best use of a BDO’s time.  If a BDO’s activity level doesn’t match what’s been laid out in the initial plan, then you may be heading in the wrong direction.

I have long subscribed to a very simple sales management process:

  1. Activity: Always start by ensuring that advisors are getting out of their office and meeting with enough clients and prospects. Nothing else in sales management much matters if not.
  2. Effectiveness: If advisors are conducting enough meetings but their close ratio is low, they may need specific skills coaching. Practice sessions and joint calling can be effective techniques.
  3. Efficiency: Your top 20-25% producers are probably fine on activity and effectiveness, so often the key is finding ways to free them from non-selling activities and get them more time in front of clients and prospects.

Do all of your BDOs have what it takes?

ABA Wealth Management Conference

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Here are the sessions I am looking forward to over the next three days at the ABA Wealth Management Conference in Scottsdale, Arizona. I’ll be back here next week with observations and potential implications on the intersection of leadership, advice an technology. Let me know if you’re going!

1) Financial Services in a Mobile World
Jon Bluth, Senior Vice President of Product Management, SunGard
Eileen VanScoy, Executive Vice President of Product Management, SunGard
The mobile landscape is rapidly evolving, and the financial services industry is striving to keep pace. Similar to the Internet’s early days, fragmentation, security concerns, legacy infrastructure, monetizing solutions and ROI considerations present challenges and opportunities that must be analyzed and addressed to fully capitalize on the sweeping changes brought about by an increasingly mobile world. This presentation looks at financial firms’ emerging and actual opportunities and risks in deploying mobile technology, and discusses various approaches they can take to cost-effectively and responsibly leverage its many benefits to their business and their clients.

2) Leveraging Operational Benchmarks To Achieve Sustainable, Profitable Growth
Michael Kostoff, Partner, WISE Gateway LLC
In these difficult economic times, it is clear that wealth management executives must “do more with less”–they must drive increased revenue growth while simultaneously reducing costs. This presentation will outline how managers can leverage operational performance benchmarking to accomplish this goal, and deliver profitable growth that is sustainable in any kind of economy.   Strategies for improving staff productivity, ensuring support structure cost efficiencies and enhancing sales performance will be discussed.

3) Family Wealth Management
Pat Armstrong, Senior Vice President and Managing Director, Family Dynamics, Wells Fargo
Arne Boudewyn, Senior Vice President and Senior Director, Family Dynamics, Wells Fargo
This breakout is designed to explore strategies for engaging high net worth families in conversations about the qualitative, non-financial dimensions of wealth, sometimes referred to as the human, intellectual or social capital.  Drawing on research and best practices in the area of family dynamics, the presenters will focus their discussion on challenges and opportunities facing wealth advisors as they work with various family profiles on a range of business and estate planning concerns.   The presenters will illustrate how to surface and leverage family motivators through an interactive discussion with participants, highlighting conversation starters that can enhance the planning process.

4) Luncheon with Speaker

The Art of Vision
Erik Wahl

Your best sustainable edge in business is your ability to visibly differentiate yourself from your competition. The Art of Vision is an entertaining and highly practical program that uncovers new ways to make your organization more creative and ultimately more profitable. It is no longer enough to have good customer service and a good product. The truly great companies have altered the landscape to create a unique experience for the customer. Whether its sales, service or leadership principles; professionals at all levels can achieve superior performance by creatively differentiating themselves from the competition.

5) Expert Teams Produce Extraordinary Results

Stephen Doty, Investment Executive, Northeast Division, U.S. Trust, Bank of America Private Wealth Management

David R. McCune, Region Director, Wells Fargo Wealth Management Group 

HNW client demands are clear – they want to be served by a team of professionals. Clients seek a team of advisors with specific roles and complementary skills and talents, aligned and committed to a common purpose of putting the client first, and who consistently exhibit levels of creativity and collaboration that produce extraordinary results.  But how do we get teams to perform at this level? How do we integrate uniquely qualified individuals to think and act as a team? This interactive session will explore the philosophies that make the team approach successful and share actual experiences of a winning team.

6) General Session
Making it Personal – Relationships and Wealth Management

Joseph Michelli, PhD,
Author and Organizational Consultant

Delivering financial performance for your clients is not enough.  Learn the tools that will engage, retain, build loyalty, and grow referrals.

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7) Client Acquisition in a Wired World
Kathleen Pritchard,  Director, Head of Program Marketing and Customer Insights, Legg Mason
In today’s competitive business landscape, financial professionals who fail to leverage the power of the Internet to acquire new clients are doing themselves a serious disservice. By cultivating an online presence that showcases your specific expertise and service offering, you not only create opportunities to meet qualified prospects, but also build credibility and rapport that increases your chance of winning their business. Key topics include best practices for websites and email campaigns; building a network of contacts to facilitate referrals, both as an individual and a professional; using online search tools to identify potential clients, understand their individual needs/interests and use that information in initial meetings to open more new relationships; managing your online reputation; delivering a consistent message that reflects your value proposition; recognizing compliance concerns; and more. Also featured is a discussion on how financial professionals can enhance their client acquisition efforts by using popular online “social networking” services like LinkedIn, Facebook, and Twitter.



Top Ten Geek Week Sneak Peeks – Part 2

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Today: The GeekWire Summit

Startup technology news site GeekWire held its first birthday party on March 7 with the GeekWire Summit. Speakers included former Microsoft Chief Software Engineer and Cocomo co-founder Ray Ozzie, former Swype CEO Mike McSherry, Hulu CTO Richard Tom, T-Mobile CMO Cole Brodman, Rhapsody President Jon Irwin, venture capitalist/serial founder Oren Etzioni and other great technology minds. Nothing was focused on FinTech per se, but nonetheless here are some highlights and potential implications on the intersection of leadership, advice and technology in financial services:

“How do large companies innovate? They buy small companies.”

– Oren Etzioni

  1. On the rise of social collaboration in the enterprise, Ray Ozzie paraphrased Ethan Zuckerman (who also has a lot of interesting things to say about how we tend to interact with people who are most like us, but that’s another post) in describing the “scopes of voice” as public/private/secret/self :“I think when you get into enterprise and business scenarios, there are some organizations where speaking publicly in a public voice is very useful. Professional services firms promote an internal culture where speaking openly and being known as the professional who knows something about something works a lot better than certain manufacturing company, where the internal norms might be different in terms of secrecy and confidentiality.”  There is still lots of opportunity, but also lots of work to do, since only 27% of financial professionals use LinkedIn, and less than 4% use any other social media methods at all.
  2. Do you think that building a massive base of clients/users/followers is in direct conflict with customizing your messages to be relevant individual users or subgroups? Consider that Hulu  has 1.4 BILLION ad impressions per month, but they offer some innovative ways for users to customize their ad content. Ad Selector allows viewers a choice of three ads from one brand or one ad from a selection of three different brands. Ad Swap allows viewers to find ads that are most relevant.
  3. Great discussion on the state of mobile technology. All on the panel had praise for the Windows Phone platform, but noted that they have a long way to go with a 4.4% market share to Android’s 49% and Apple’s 30%. (IMHO, I think that RIM’s enterprise-centric 15% share is the most vulnerable to Windows, and it’s already down 2% in the last three months.) Former Swype CEO Mike McSherry said that Apple’s Siri natural speech style will help improve text entry over time too. This evolution to more natural interfaces and input styles was also noted at Micosoft Research on the prior day.
  4. Startup investor and advisor Hadi Partovi noted that the cost of sequencing the human genome has gone from $1 billion to $1,000, and predicts it is heading to $100. If that can be democratized, how naive are we about “big finance”?
  5. Facebook’s Director of Engineering Jocelyn Goldfein said that the company rolled out the new Timeline with a team the size of a startup. Facebook video chat? One guy. In Seattle. Although, that may be taking the lean approach a bit too far. (As someone retorted on Twitter “That explains a lot.”) Still– how many consultant engagements, project managers and steering committee meetings do we need to make meaningful change in our business?

“It’s not enough to encourage employees to innovate.

You have to protect them from the cost of failure.”

– Jocelyn Goldfein, Facebook

(P.S. – I live tweeted my new startup idea from the conference: Embedded QR codes in public carpeting. Remember, I get a 20% Founders Fee.)

Yesterday: Microsoft Research TechFest 2012

Top Ten Geek Week Sneak Peeks – Part 1

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This week I really got the chance to embrace that inner geek that’s just dying to break out of my pinstripe suit. On Tuesday I had the chance to visit the Microsoft Research TechFest 2012, and celebrate twenty years of Microsoft Research (Shout out to my host Juliane Carlson). Then on Wednesday I attended the GeekWire Summit and got to hear and meet all kinds of interesting people doing all kinds of interesting things. Here are some highlights and potential implications on the intersection of leadership, advice and technology in financial services:

Today: Microsoft Research TechFest2012

“The unanticipated results are often as important as the anticipated ones.”  

– Peter Lee, Microsoft Research

  1. Multilingual text-to-speech (TTS) conversion. The demo was oriented around an American using GPS to navigate around Beijing, but imagine being able to serve non-English speaking clients in situations where multilingual employees might not be available or practical.
  2. Lots of projects involving Big Data, including FetchClimate, a massive mash-up of global historical climatic data made instantly accessible. Easily useful as-is to assist in assessing branch locations, client real estate projects, etc.
  3. Another Big Data project is ChronoZoom, which is a “…dynamic cloud based data visualization tool where educators, researchers and students can easily consume, compare and understand the history of the cosmos, earth, life and humanity. Where they can easily consume rich media sets like: audio, video, text, pdfs, charts, graphs and articles in one place and discover new possibilities.” Imagine a financial markets version of this product with every price and correlation of every financial instrument for the past 80+ years.
  4. IllumiShare is desk lamp with camera that allows people to share physical or digital objects across the internet. Imagine a client who has questions on their trust document (or paper statement from your luddite competitor, because of course your institution has a secure digital document exchange with e-statments…). They could flip this on from the kitchen table of their beach house and you can see it all on your screen, even mark it up or highlight key areas.
  5. Multitouch is still evolving, and the Wearable Multitouch Projector can turn virtually any surface into a touchscreen, including the palm of your own hand. The current prototype looks a little bit like  first generation home camcorders with a shoulder bag processor and a shoulder mounted projector, but it will undoubtedly evolve. No touch is evolving too, building on the Kinect interface, including potential touchless interaction in surgery.

Tomorrow: The GeekWire Summit

Free Advice From a Mentor

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(Note: When I wrote this early in my blog’s history, when I was a senior executive for a Fortune 150 financial services firm. Now with the added perspective of an entrepreneur and consultant, I find the words truer than ever.)

I have mentored dozens of young professionals over the years, and even though each situation is unique, I always end up giving these three pieces of advice. It’s not like I planned it all out, or even wrote it out before now, but here they are:

  1. There is no secret handshake
  2. Focus on getting better, not getting credentials
  3. It all starts with you

There is no secret handshake

The CEO of a venture-backed technology company whom I know well once asked me: “Do you ever get the feeling that when someone comes to you for career advice, what they’re really looking for is the secret handshake?” 

Yes, I have gotten that feeling.

My best mentoring relationships have involved mentees who truly want to improve their performance, learn new skills, take on more responsibility or just learn more about what a potential career path might look like for them.

The best way to ensure that a mentoring relationship with me is short (and not particularly rewarding for either of us) is to mistake it as an opportunity to simply learn the secret handshake.

Do you really think I’ll hire you or connect you with someone merely because you want more money or a better title?

Put some clothes on that naked ambition, you’ll catch a cold.

Focus on getting better, not getting credentials

I often get questions like “Should I get an MBA (or any one of the alphabet soup of certifications in the financial industry: CFA, CFP®, CIMA, CTFA, etc.)?”

My consistent answer to all who ask is that if you want to learn more about that particular area and want to study it deeper, go for it. I’m a big believer of continuous learning, and earlier in my career I worked to get an MBA and put a few initials after my own name.

On the other hand, if you think that simply tacking those initials after your name will open a whole new world for you, you will probably be disappointed.

I still remember a soon-to-be-freshly-minted MBA who wanted to ‘remind’ me that he would have this very important graduate degree by the time of his next performance review, and that he hoped that would qualify him for a promotion.

I ‘reminded’ him that he was still the same person with the same level of performance, so probably not.

It all starts with you

This is kind of a two-for-one. First, I mean that before you start on any exploration of future paths, you need to understand your strengths, your passions, what gives you energy and what saps you dry.

I also mean that the whole process of working with a mentor isn’t a passive activity of absorbing second-hand knowledge through osmosis.

I was very proud and excited when my company asked me a few years ago to participate in the pilot of a program called MentorConnect, kind of an internal match.com to put mentors and mentees together based on specific skills and experiences.

I learned to start by asking mentees to share any relevant standardized test results they may have taken recently (Meyers-Briggs, PDI, StrengthsFinder, DiSC, etc.), and if they didn’t have any, I had them start with StrengthsFinder 2.0. Not only did this help give the mentee and me a logical starting place, it helped to quickly identify those who were only looking for the secret handshake. Those types often would not do the work.

I also recall the bright young assistant who was referred to me by her boss for some career advice a few years ago. She wasn’t sure what she wanted, but she was sure she should be higher in the organization by now. I took her to lunch, and we talked for an hour and a half. I gave her a couple of books to read for our subsequent meetings. I must have followed up three of four times when I ran into her, but she hadn’t quite found the time to even buy the books, let alone read them.

I guess I wasn’t completely surprised when she dropped by a couple of months later to let me know she was quitting the firm.

She was going to work on her MBA.

And no doubt continue her quest for that elusive secret handshake.