Fake news has become a rising trend in the aftermath of the presidential election, and misinformation abounds. Whether the chicanery originates online, from the pen of a journalist, or the mouth of a broadcaster or politician, this fake news phenomenon has put affluent clients on high alert for indiscretions.
As their financial advisor, you must recognize what this means to you. On the surface, this is basic: full transparency, putting the client’s best interest behind every decision, open and clear communication, and following through on everything.
Take Jon, a veteran financial advisor who always had clients’ best interests behind every decision. He suddenly found himself in the middle of an integrity crisis, when he lost a $5 million client who wasn’t aware of all the fees imbedded in his portfolio. From an affluent client’s perspective, this was tantamount to Jon outright lying to his client.
There are three basic types of lies advisors tell:
1. The Blatant Lie
These are the most obvious and get everyone’s attention—especially when they read about the latest Ponzi scheme (Madoff has a lot of company). We’re fascinated by how people can be duped and how professionals can be so dishonest. And, of course, we want to hear all about how it happened.
Still, a blatant lie could be as simple as, “The check is in the mail,” or “Your account’s average rate of return is currently 9 percent,” or “There will be no additional fees associated with this new account.”
2. The White Lie
Often this lie is used as an attempt to not hurt someone’s feelings. For example, when a Gold profile client asks why they weren’t invited to your wine tasting, you say, “I didn’t think you and Sandy liked wine.” The truth is, “Matt, I’d love for you and Sandy to attend these events, but first, we need you to become one of our Platinum clients.”
It might seem a bit easier in the moment, but the trust factor is strengthened by the truth. In the example above, it’s been our experience in coaching advisors that this discussion can prompt some Gold clients to consolidate their accounts held elsewhere and become Platinum clients. This would never happen with a white lie.
3. Lie of Omission
This is what backfired on Jon as he lost a long-standing $5 million client. Failing to communicate information that could be important to decision making is a form of lying. Whether intentional or not, when a lie of omission is discovered, it can be a permanent trust-buster.
Affluent clients are on high alert, and one misstep, regardless of how innocent, is all that it takes to break their trust.
There are many areas of a financial practice that should be truth-checked:
- Value proposition – Does it accurately describe the value you deliver to your clients? Is every member of your team on message (articulating the team’s value proposition)? Are you able to quantify and demonstrate your value proposition?
- Team members – Is everyone a client-centric knowledge working professional as advertised?
- Digital brand – Does your online presence accurately represent who you are, the services you deliver and individual team members (expertise, experience, qualifications, etc.), in a clear and concise manner? Inflated bios are a frequent offender. Does your web presence (i.e., website, LinkedIn, and Facebook) communicate a similar message? Would a Google search uncover embarrassing information on any team member?
- Office – Is your office as professional and client-friendly as the image you’re projecting?
The first step in being able to handle this fake news phenomenon with today’s affluent is to truth-check against the three basic types of lies. You can start by taking what I’ve outlined above and discussing it with your team.
Matt Oechsli is author of Building a Successful 21st Century Financial Practice: Attracting, Servicing & Retaining Affluent Clients. www.oechsli.com
