“Hi Jim. I wanted to inform you that your funds will be transitioning from an A share to a C share, which means you will actually pay less in fund fees, however, my fee cost will be increasing just a big. Let’s set up a time to discuss.”
Now there’s an email nobody wants to send or receive. As the financial industry evolves and advisers are held to an increasingly higher standard, you may have to take a new approach to difficult conversations with your clients. The ability to engage clients in these discussions is critical in building and retaining a successful practice.
Here are three tips based on the research of G. Richard Shell, award-winning author and creator of the University of Pennsylvania Wharton School’s “Success Course,” on how to better approach challenging conversations and ensure you’re creating Demonstrations of Value (DOVs).
Talk About Client Goals First
When times are tough, take a positive approach by focusing on their goals while still acknowledging the concern. For example, you could say, “I know you set up this portfolio to save for Katie’s college education. She’s starting high school next year, so we still have four years until tuition starts. I know the markets have been rough, but I believe we’ll still be able to achieve your goal. Here’s why.”
By leading the conversation with knowledge of your client’s specific needs and concerns, you can better address the need to maintain an objective view throughout market challenges and not let emotions cloud a commitment to a longer-term strategy.
Help Them See the Big Picture
Your client comes to you with big news. She and her husband are ready to buy that house on Lake Winnipesaukee they’ve been talking about for years. While you share her enthusiasm, you want to make sure that she’s putting this decision into context.
During this conversation, you have an opportunity to demonstrate your knowledge of your client’s plans and needs. How long do they plan to own this house? Will they need to consider space for additional family members later on? Is this where they’d like to retire one day? If yes, how does that fit into their overall retirement plan?
When you help them consider the questions that matter, you reinforce your value more deeply than their investment positions. You can help be a leader when it comes to a family’s important life decisions.
It’s About More Than Money
Get to know your clients beyond their portfolio. While it may seem obvious, occasionally our time gets the best of us and we don’t focus on the details that could make a difference.
Keep notes on their hobbies and interests, where their priorities are, how old their kids are and family anniversaries and birthdays. Knowing these specifics can help foster a relationship that goes beyond just business, creating a partnership that can withstand even the toughest financial environments.
Are you ready to demonstrate your value in a collaborative client relationship? For more tips on how to boost your communication skills, learn about the 3Cs to enhance your negotiation skills.
Executive Director, Janus Labs
Janus Capital Group