All advice firms are in the relationship-building business. How you and your clients regard each other will influence whether they follow your advice, remain with you for the long term and refer others to you.
You might think all your client relationships are as strong as they can be. But if you have just one that isn’t working properly, it can be a serious drain on your time and emotions.
Doug Carter is a US financial services coach who has been teaching how to improve client communications for 30 years. He recommends advisers ensure both parties have a clear understanding of what they can expect from each other. He calls this the “expectations conversation”, which involves the following eight steps:
- Step 1: Ask the client what their reasonable expectations are of you and list these until they have nothing more to say;
- Step 2: Ask them if it’s OK to add some expectations you think they should have of you, and list them;
- Step 3: Address any of their expectations you think are unreasonable. For example, if they expect their money to make 10 per cent per annum. Try to suggest another way of dealing with that expectation;
- Step 4: Ask the client to tell you what expectations they think you should have of them. It is unlikely anyone has ever asked them this. Write their answers down, then read them back. The expectations will probably be like the ones they gave in step one, but fewer;
- Step 5: Ask them if it’s OK to add some expectations you think you should have of them, and list these. While you should have a good idea of any expectations beforehand, you’ll need to adapt them to each client;
- Step 6: Ask them if they think any of your expectations are unreasonable. If they are, find an alternative way of dealing with them or agree to eliminate them;
- Step 7: Ask them if you have ever done anything that has failed to meet their expectations. A new client will obviously say no. An existing client will usually be hesitant to answer truthfully, because they won’t want to upset you. They might say something like, “it’s only a small thing, but…”. Let them explain and don’t interrupt. I remember a client once saying to me, “I get too much paper”, so we reduced his paper reporting. You’ll be amazed what impact this step can have on client satisfaction. Allowing them to be “heard” is usually enough to deal with the issue but, if not, you’ll know what to do to fix it;
- Step 8: Agree what happens if either of you fails to meet the expectations. One solution might be that you’ll have a telephone call to discuss the issue to mutual satisfaction. This step is very empowering for the client. It gives them a way of resolving problems in your relationship and will give them confidence you have their best interests at heart.
Remember, a great relationship is built on good communication.
Jason Butler is an expert in financial wellbeing @jbthewealthman