October 19, 2021

Aligning client’s interests with yours

Diya Thommy

Financial Planner at Northward, A branch of iFast Global Markets

Offering the widest range of financial services seems like a good way to keep our clients happy. Offering services to every client who crosses your path seems like an altruistic way to build the business. Can this be good for your clients or for yourself?

When we started out, we had an idea of what we wanted to do. We believed in financial planning, had already seen the good that it can do, and pursued it with single-minded determination. We started creating processes and aligning our services to support the “before and after” of financial plans. Over the years we’ve had our share of bad decisions. Trying to service clients who wanted something different from what we had to offer was the biggest thorn on our side. Our false steps have taught us as much as all the right decisions we have made. Although the ideals that have carried us through the years remained the same, we have learned to adapt our services to challenging circumstances.

Our solution, we fortunately discovered, was not in offering more products or serving all clienteles, but it was building relationships with them. Of all that we offer to our clients, it is the relationship-building we should focus on the most. Because when they invest their time and effort in building their relationship with us and perceive us as the experts, we have won.

We feel the success every time when a client calls us to check if buying a house is the right decision for them. When they change jobs and want our impression of the salary structure they are considering. When they are investing in a product that we don’t recommend, but they still want our opinion on it. When they get extra money and call us to check whether it should be invested or used to pay off a loan.

The idea is to condition them, clients, from the start – by focusing on their financial plans and referring to them at every turn till they learn to think and act according to their plans. Our work, as personal finance professionals, is such that it could take at least a couple of years for our clients to really see the benefits of our services. So, we focus on the intangibles, those benefits that cannot be quantified. Like teaching them to be disciplined, coaching them on patience and commitment to see things through, allowing them reasonable independence to do the things they want to, and consistently reminding them of what they are working towards.

One of the most important aspects of professionals is delivery. Whether it is a financial plan or returns on a portfolio, we have to deliver what we commit to. It builds trust and respect in the relationship. Our client is not going to leave us because we are not experts in stock trading, especially if we can refer another professional. But committing to returns we are not equipped to deliver cannot lead anywhere good.

After our experiences, it is pretty sure that encouraging clients to pursue their interests outside of what you would otherwise recommend, as long as they can afford to do so, can shift the relationship in a positive way. Not everything we do for them generates revenue. Oftentimes we do things that may seem to give nothing in return. But when we invest in them, they invest in us as well.

Focusing on our strengths has been a key to building relationships. Whether it is creating a financial plan, or managing a portfolio, focusing on what we can do well builds confidence. Knowing that we can add value to our client’s financial well-being and that our advice is being followed and appreciated goes a long way.

Setting and managing client expectations is a huge challenge for most of us. Some of us tend to outdo ourselves when converting a prospective client. But, we know now that what we do after the client’s onboarding is what sets the tone for the rest of the relationship. There is room for disappointment when the relationship thaws over time so it is important to set the expectations right from the start.

After learning from different experiences, it’s better not to commit to any products that we cannot deliver, not to indulge in services that are not sustainable, and to never enter a relationship with someone whose values don’t match our own. There is no right or wrong in what is expected. The only difference is what you can do, and what you cannot.

To service clients consistently, we have set processes. We leave room for the flexibility to adapt to different profiles. But the more important processes (like onboarding a client, creating a plan, opening an account, applying for insurance) are to be set and followed through precisely. Processes have helped us hold on to our clients.

I’d like to leave you here with another lesson which I have learned through the years. Though communication is a two-way process, the benefit of listening far outweighs the skill of responding. We wrongly believe that knowing all the answers is what makes us good at our job. So, we relentlessly strive for knowledge. While that is a good motive, in itself, we should not overlook the importance of listening to what the client is saying.

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