The Small Decisions that Lost a $5 Million Account

Setting the stage

Earlier this month I ran into Marci at a campus coffee shop and asked how things were going. She said that she had selected an advisor and was working with him on a financial plan, but that it had been a difficult decision. We sat down and she filled me in on her experience:

“After we met I took your advice and called my mother’s private banker, accountant and lawyer. The private banker did not want to give me an introduction to another advisor. He kept insisting that I sit down with my parent’s broker even though I told him that I didn’t want to work with someone in his sixties. Eliminating that option was easy.

The decision got harder from there. After I talked to my mother’s accountant and lawyer, they each sent an email to a senior partner at local firms who they knew well, explaining what I was looking for. I got a follow up from both partners within 24 hours. The referral from the accountant said that he had forwarded my contact information to someone who would be a good fit for my situation. I heard from Philip, an advisor at his firm, the same day and we set up a time to meet; in advance of that meeting he offered to send me some background information. 

The other referral from my mother’s lawyer said that there were several advisors within his firm who could be candidates to meet my needs. He invited me for lunch the following Monday, so that he could make the best introduction for my situation. We had a really pleasant conversation and he spent quite a bit of time digging into exactly what I was looking for. At the end of the lunch he said that there was a woman in his firm named Karen who he felt would be a great fit.

I ended up with two appointments. When I looked at their websites, both firms were established and professional. And both were obviously keen for my business. I was impressed by the way the second firm had gone the extra mile in inviting me to lunch before making a recommendation, so if anything I was leaning in their direction.”

The initial interactions

In talking to Marci, the initial meetings with the two advisors had striking similarities:

“When I first met them, I was impressed by both Philip and Karen. They were both in their forties, had loads of experience and came across as professional, capable and interested in my situation. When I arrived for the meeting with the second advisor, the senior partner who I’d had lunch with met me in the lobby and took me into the meeting room to introduce me to Karen. Again, they showed that little bit of extra interest. But neither Philip nor Karen put any pressure on me to make a decision. We spent about an hour each talking about my situation and my goals, and they both discussed their experience with investors who, like me, had received large inheritances. Because I’ve been living with my boyfriend for a couple of years, they both advised me to see an estate lawyer to ensure our relationship would not fall into the category of a common law marriage.

In both cases, I was clear that I was talking to another advisor and they were fine with that and we set up a second meeting to get into the further detail of the approach they would take. I told them both that I didn’t want to waste their time and would make a decision after the second meeting.”

Small differences that shaped a decision

Marci hesitated before concluding her story:

“Both of the second meetings were much like the first ones – professional, low-pressure conversations about how they could work with me to meet my needs and the process to develop a financial plan and to manage my investments. They both answered my questions in a forthright fashion. At the end of the meetings, I told each that I would get back in touch with my decision in a few days.

I walked away really torn. I compared the two advisors on paper and given that their approaches were fairly similar thought that either would do a good job for me. After the meeting with the second advisor, I talked to my boyfriend over dinner and he asked the key question: ‘What does your gut tell you?’

The answer became clear. I was looking for a relationship with someone who I could really connect with, not just professionally but on a personal level. Given that we’re both women and that I’d had lunch with her senior partner, Karen should have had the advantage. But she didn’t – I felt more comfortable with Philip. And there were a couple of reasons for that.

Karen used a meeting room with a great view over the city – and that was fine. But in my meetings with Philip, we met at a round table that he had at one end of his office. He had pictures on the walls of his family and also of some charities he was involved with. The very first meeting he went to get us a coffee and invited me to look around because, as a point of policy, no one in his firm kept any confidential papers on their desks. We ended up spending a few minutes talking about his family, something I never did with Karen. In fact, I didn’t even know if she had children.

At the second meeting, Philip asked if it was okay to have a couple of his support team members join us. He had two of his staff sit in, one who looked to be in her thirties who would be responsible for developing my financial plan and another in her late twenties who would deal with any administrative issues including the transfer of the account should I decide to move forward. Philip had them each introduce themselves and said that he’d asked them to sit in so that I could get direct answers to any questions. I liked both of these women and that the fact that I had direct access to Philip’s team.

The next day I called both Philip and Karen with my decision. The conversation with Karen was very tough. She was obviously disappointed but said that she respected my choice and also that the door was always open should I want to revisit my decision. She also said that she’d like to put me on the mailing list for her firm’s newsletter and on the invitation list for firm events.

Then she said that her firm had a marketing consultant who followed up with any clients who left or with prospective clients who had decided not to join the firm to get a better understanding of their decisions. She asked if I’d be willing to talk to him. I responded that there was nothing I could tell this consultant. It had been a very difficult decision, I had been tremendously impressed by her and her firm and they hadn’t done anything wrong. Based on my experience, I would not hesitate to recommend them to anyone looking for an advisor.”    

Then Marci paused again: “Frankly I would feel silly telling a consultant that I had made this decision on something as trivial as discussing an advisor’s family or meeting other members of the team. Karen’s firm did everything right. Ultimately, it just came down to Philip making me feel just a tiny bit more comfortable.

Lessons from Marci’s decision

This conversation was a sharp reminder of how things at the margins can shape decisions. Karen was a bit unlucky here; her firm got off to a great start and there are lots of clients who would not be influenced by meeting in a prospective advisor’s office versus a boardroom, talking about his family or having support staff sit in on the final meeting when a prospect has said she’d make a decision.
But given how competitive it is today, you need to do everything possible to tilt the odds in your favor. Having the right credentials, presenting in a professional fashion and showing interest in a prospect’s situation are table stakes. Increasingly it’s the little things that set advisors apart. As you look forward into 2015, consider whether there are some lessons from Marci’s interactions with Karen and Philip that you can apply to your own situation. Six in particular might stand out:

• When you receive a referral, suggest that you sit down to better understand the prospective client’s needs and circumstances and ensure that you are a good fit before proceeding. The time and effort to take that extra step sends a powerful message about your commitment to clients and ensures that the focus of the initial meeting is squarely where it belongs, on them. 

• Allow clients to get a sense of your background personally as well as professionally. This isn’t important to all clients but matters to some more than you might think. Let the client determine how much time they want to spend talking about this. Depending on the client, their interest in your personal background will vary greatly. 

• Philip’s strategy for introducing his personal situation in a low-key comfortable fashion was brilliant. Many advisors could learn from his invitation to glance at the pictures in his office while he gets them both a coffee and assuring Marci that all confidential documents had been put away.

• Assuming that your office lends itself to this, meet with existing and prospective clients around a table in your office. You can opt for a tasteful boardroom if and when there are indications that this will work best. But to the extent that your goal is to make people feel comfortable and reduce the barriers to an open conversation, the greater informality that comes from meeting around a table in your office can be beneficial.

• Introduce your team before asking a prospect to make a decision. This might matter more than you expect. The only caveat is that some clients only want to work with the senior advisor and are concerned about being pushed off to someone junior. In such cases, be careful that you position the members of your team as supporting your role as their central contact.

• Karen’s response to losing the account was spot on. Her firm’s use of an outside consultant to interview clients who have left or prospects that they’ve lost is something that many firms should copy too. 

For more on standing out when talking to prospective clients, read my article, Getting Past ‘Blah Blah Blah’ When Talking to Prospects.

Dan Richards conducts programs to help advisors gain and retain clients and is an award winning faculty member in the MBA program at the University of Toronto. To see more of his written commentaries, go to www.danrichards.com or here for his videos.

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