How to Build Client Trust That Lasts

We advise our clients that in any 10-year period, we will see three years below our expectations, three years above and four years close to what we hoped to see for returns. This helps set the stage for later conversations. If we are in a down period or just underperforming, we remind them of our 3/3/4 year expectations.

Many money managers would be shocked on how much we downplay our good investment returns. Even in really good years, I tell clients something like this: "I know you think we are geniuses, but we got lucky this last year and I want to remind you there will be years when we will be looking at negative returns."

Also if they will be getting statements in the near future, particularly ones laying out fees and expenses, I say: "Don't be alarmed when you get your statements—we've already discussed this, but let me remind you of the fees and expenses." With some products, like life insurance, that have high fees up front, it is critical to review costs and expectations a few times before the client pulls the trigger.

Send Detailed Notes

We send detailed follow-up notes after the meetings as a reminder of what we discussed. We found this was very important with more complicated products and services. It helps our clients remember the discussions better, and they are far less likely to come back to us later with questions. We are careful to document these notes in our database.

Add Extra Meetings

Before 9/11, the top advisors who worked with the affluent market had what was called the two-meeting close. The first meeting was to take in the data. The second meeting presented a plan and product solutions. Clients signed on in the second meeting.

It was fast and simple. Advisors could literally go from having a brand new prospect to a client with assets on the books in a matter of a few weeks. Because it was so efficient, it was also highly profitable since the advisor could see a lot more clients.

A lot has happened since then. A couple of major market reversals, the war on terror, and much higher taxes have all made clients a lot more fearful—which means it takes more effort to build trust than it did 15 years ago.

Our solution: We added a number of meetings to the client process. It is not unusual for us to take four meetings to do what we used to do in two.

Also a lot of our clients are lovely, kind, smart, educated people from other countries who are working in the U.S. on visas. They are not familiar with our tax structure or investment systems. We add at least two additional meetings for them so we can explain things in even more detail. So it is not unusual for us to take six meetings, just to get a client's financial matters set up.

A lot of advisors would chafe at this—claiming it is not efficient. I disagree. Because we spend so much time getting a client's affairs in order, they are more comfortable with the process and with us. They don't feel rushed. All their questions are answered. The result is a strong relationship, which is far more efficient than a weak one.

Do What You Say

Small things can lift or tank a relationship. We don't promise anything to our clients unless we know we can deliver them. This is one of reason we don't promise returns.

Even following through with a simple promise, like to send them an article you mentioned, is a chance to prove you are worthy of trust. Doing what we tell our clients we will do builds a stronger relationship—just like my hero Keith Urban says.