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Serve Investors, Don’t Sell Them

Posted by David A. Couper, MA on May 19, 2015 8:30 AM

Wall_Street

After two years of thinking about getting a financial advisor - but doing nothing - I finally overcame procrastination and actually met with two of them. My experience reveals the difference between talking about trust versus actually building it.

I was predisposed towards the first advisor who someone recommended to me. My sense was that he advocated a holistic “it’s not just about the numbers” approach. Since my work centers so strongly around people and human relationships, this notion appealed to me.

We set up a formal call, and one of the advisor’s colleagues joined us. To my surprise, the colleague took control of the conversation and adopted what I perceived as a very traditional, overly aggressive stance. He had one focus, and that was to explain why I should work with him. He was trying to close a sale, not understand my needs. As for the holistic approach that initially appealed to me? Whoosh! It simply disappeared. We never spoke about it.

The second advisor was from a seemingly traditional middle market firm. Going in, I didn’t have much of a point of view about him.

This advisor listened to me. He seemed more interested in serving me than selling me. In fact, during a 90-minute conversation, he took a significant amount of time to give me advice about how to manage a rental property, even though he was not - and would never be - compensated for that advice.

One advisor focused on his needs; the other focused on mine. I chose the latter. In listening carefully to me, he gave me reason to trust him with my worldly assets.

The first advisor gave lip service to a holistic approach that took into account my values, fears and aspirations.

The second didn’t waste my time talking about his firm’s “feel good” approach; he simply asked questions and listened to my answers.

The bigger the purchase decision, the more important trust and communication become. Firms that serve individual investors have to earn trust through their actions - not just their words - and also adopt the right communication style for each client. Advisors who simply launch into their standard spiel will face a harder and harder uphill battle.

Since this experience surprised me, I’ve spent some time thinking about it. I wonder if the first advisor fell victim to what often happens in high pressure financial services firms. The marketing and branding teams come up with high-minded, touchy feely concepts that make great TV commercials. But when budgets come up short and management puts pressure on advisors to close deals, all that nonsense gets tossed out the window. They just want to sell, sell, sell.

Service is a way of life. It’s not a marketing strategy. It’s not sexy on a billboard. But it works so much better than all those sexy, flash-in-the-pan ideas.

Image: epicharmus/Flickr

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