Develop Magnetic Appeal - Part II

By: John Steuernol

In a previous article I described three principles that will absolutely give your business ‘magnetic appeal.’

By way of a reminder those three principles were:

1. Seeking to discover and serve the client’s
   self interest
2. Leveraging the power of
   ‘knowledge supremacy’
3. Developing great intellectual satisfaction
   with what it is you do

Today I’ll discuss three more principles including;

1. Demonstrating strength of character
2. Having the courage of your conviction
3. Being highly selective about who you’ll accept as a client

Demonstrating strength of character is all about being liked, respected and trusted. This principle is so important that if you do not have it, well then whatever else you have doesn’t really matter. It’s something you work hard to achieve and then even harder to keep for once you lose it, you usually don’t get it back!

Trust has to be the very cornerstone upon which the investment advisory business runs but unfortunately some forget this crucial fact. Some think they can take short-cuts, or break the rules, or slip something past the client and that it won’t matter. Some get caught up with how smart they think they are and see themselves as a ‘wizard on Bay Street’. Some have the view that the end justifies the means. This is a business where one can make a lot of money and pre-occupation with wealth at the expense of good old fashion right and wrong is a slippery slope. This is a fool-hardy approach that almost always leads to a run-in with the compliance cops, sometimes the loss of your job, a fine and maybe even time in jail.

I knew an advisor who built up an impressive business of almost $100 million dollars in about 6 years who was caught by management having committed a number of mis-deeds. Today he is completely out of the business and will probably never return. He had been well on his way to building an excellent business but made those mistakes you never can recover from. He lost the trust of his management team and his clients, and now he is seeking employment elsewhere.

Investment advisors have a tremendous fiduciary responsibility to their clients. Many clients know they really don’t know how to take care of their own investments but would still rather do it themselves than entrust this role to someone they are not sure of. That is a shame, particularly when you consider the fact that a disproportionate number of clients simply make bad decisions in down markets. So many are ill equipped to really do it on their own.

So how does an advisor begin to instill a sense of trust, confidence and courage of conviction throughout his career.

1. Always, and I mean always, even when it may be painful to do so, tell the unvarnished truth. Tell it the way it is and never compromise from doing this.
2. Ensure you know your stuff. Become a student of the business and never stop learning so you are always in a position to offer the best advice possible.
3. Admit when you have made an administrative or procedural mistake and then simply go about the business of fixing it. Mistakes get made and no one is perfect and many clients are quite forgiving.
4. Be clear about the principles you’ll follow to run your business and then don’t compromise. I believe it was Bill Cosby who said: “ I cannot tell you the secret to success, but I can tell you the key to failure, and that is trying to please everyone.” So many advisors get caught up in endless compromises as they are constantly trying to please too many parties.
5. Do what you do best every day and forget about the rest. Run a business that is in harmony with your style and knowledge base.
6. Keep yourself well grounded. It’s a privilege to help clients manage their finances and investments and we just need to make sure our own sense of our greatness doesn’t go to our heads.

I think it is important to be selective about whom you will accept as a client and in this little triad of being liked, respected and trusted I want to give special notice to ‘being liked’. Some advisors do not want to be friends with their clients and I can understand this, but I also believe there is a difference between being liked and being friends. In most cases you will work with your clients for a long time, perhaps as long as 20 years. That relationship might even extend to the next generation. It would be a shame to spend that much time working with someone who you really did not like.

I think life is too short to spend a lot of time with people you really don’t like. I want to like the clients I work with and I hope at some level they feel the same way. It doesn’t mean we have to spend our weekends together and socialize a lot, but it does mean that we should enjoy the time we spend together, professionally dealing with the matters of financial & investment advice giving.

For years, I have being saying: “ If they meet you they might like you, and if they like you they can do business with you; and then they can keep on doing business with you for a very long time.”

My own advisor Sacha said of all the things I taught him, this was one of those concepts that really stuck. It is a simple truism. As advisors we need to be likeable, and it’s amazing how it makes it that much easier for client’s to work with us.

So here are my few simple rules for those who would get to become and remain as great clients:

1. At some level I like them, and they like me
2. I want to work with someone who values my advice
3. I want to work with someone is more than willing to work with ‘my approach’ to managing their affairs; and finally
4. I only want clients who are willing to pay a fair fee for services rendered

Is this too much to ask? I don’t think so, and yet is amazes me how often advisors accept clients who are less than an ideal fit with them or their business model and they do so for the simple reason that they are afraid.

In my next article I will discuss the de-stabilizing effect of fear and it’s implications for running a great investment advisory practice.

John Steuernol
Your ‘At The Moment Coach’