My younger daughter, Rachel, had a profound learning experience when she was about 5 years old (she’s all grown up and a doctor now). One of her friends had just changed her hairstyle to a short cut with bangs, and she and Rachel decided to experiment with Rachel’s hair so that they would match. My daughter's new style was dreadful and quite embarrassing.
After a day or two of being teased, she decided to fix the problem by cutting the offending clumps of uneven hair down to her scalp. Of course, this only solved the problem for the short term. It took a year for that “fix” to grow back out enough not to be noticeable. The only good that came out of this painful episode was that she learned that many short-term expediencies have significant—and often very negative—long-term consequences.
There are many financial advisors who would benefit from this kind of painful learning experience. I have observed two common mistakes advisors make that feel good in the short term but lead to major long-term problems.
Call Me Any Time!
Every advisor is painfully aware that the first meeting with a prospective client is a fragile encounter. There hasn’t been enough time or experiences for trust to build, and the prospect is still making up his mind about the new relationship. He is curious about how much “goodwill” the advisor has toward him and how competent she actually is. The future of the working relationship is uncertain, and this makes most advisors insecure, especially if the client represents a substantial new opportunity.
This insecurity leads the advisor to make an offer that seems gracious in the moment but leads to frustration over the long term: “Here’s my cell number. If you ever feel a need to be in touch, don’t hesitate to call me any time.” Like my daughter’s hairline, this short-term solution to feelings of uncertainty sets up a terrible situation. This offer can only lead to frustration and disappointment for both people because it sets a completely unreasonable expectation for the client about the advisor’s availability.
No matter how well intended, no advisor can fulfill this offer. She will often be busy with other clients or with personal commitments at home. For a mature advisor with a large book of business, the offer is actually impossible to honor and can lead to big disappointments and misunderstandings. Eventually every client will discover that the advisor is not actually available on the terms that were offered.
The wise advisor protects clients from being disappointed in this way by setting reasonable expectations that can be fulfilled even in a large practice: “We have a voicemail system on our telephones, and if ever you feel a need to be in touch and no one answers the phone, leave a message. I check my voicemail regularly during the day, and if you leave a message after-hours, I will return a call to you as quickly as possible the next day.”
No reasonable client will take offense at these limitations, and the advisor can set these expectations with confidence that they can be met consistently. Properly described, the advisor can even hope to exceed the client’s expectations from time to time.
It is far better to exceed a client’s expectations occasionally than to disappoint him frequently.
