By: Daniel C. Finley
ADVISOR SOLUTIONS

How to Connect with A Negative Client

As a financial advisor, a Bear Market can bring out the worst in some clients. Typically, when the stock market is down, most clients find that their anxiety is up.

More of the financial advisory clients that I coach have shared that their own clients are getting concerned by all of the market volatility. As a result, some of their client interactions are becoming increasingly negative, with their clients questioning the value they are getting for the fees they are paying since they are losing money. Unfortunately, these experiences are causing some financial advisors to question their value.

Eleanor Roosevelt, a former first lady, said it best, “Nobody can make you feel inferior without your consent.”

I believe that she is correct, although some clients might question your value, it’s up to you to either feed into their negativity or not. Rather, it’s better to learn how to connect with a negative client and turn the conversation around.

The Value Proposition Formula

Knowing your value and having clients understand your value can be challenging. That’s why having a formula to take control of the conversation when clients question your value is so important.

Let’s take a look at a step-wise approach to mapping out what I call the Value Proposition Story Formula.

Step 1: Empathy/ Acknowledgement

When a client is concerned about the stock market, their portfolio, or what you bring to the table, they have valid concerns. It’s not your job to belittle those concerns. However, it’s also not your job to further feed into those concerns. By using empathy and/or acknowledgment statements, you can validate that it is okay for them to feel the way they do.

Peter A., a veteran financial advisor and coaching client of mine, recently noticed a number of his clients asking, “Why am I paying you fees when I’m losing money?” I reminded him that he needed to be ready with a response that conveys empathy and/or acknowledgement. So, we worked on what he should say and came up with the following, “I completely understand that you are concerned.”

Step 2: Defining Question

Once you diffuse the situation by being empathic or by acknowledging that you have heard them, it’s time to take control of the conversation by redirecting their thoughts and answering, The Defining Question, a question that helps to further define and direct the conversation.

I explained this process to Peter and it didn’t take him long to determine that the real challenge for his negative clients is that they only see his value in relation to the market. In other words, if the stock market (and their account value) was up, then his perceived value was up. However, if the stock market (and their account value) was down, then his perceived value was down. 

So, we settled on a simple question to help his clients be more open-minded, “Have I ever explained what you are getting for the fees that you are paying?” The client can only respond in one of two ways: “Yes, I am getting (insert investment product here)” or “No, you really haven’t.”  Either way, he can then move to the next step.

Step 3: The Value Proposition Story

People tend to connect to a good story and when it comes to your value proposition, which is a simple statement that clearly defines the benefit/s that you provide, you will want to use this three part formula: a strong beginning (a credibility statement), clear middle (two or three benefits) and a definite end (a question that gauges where the client feels about your value).

We mapped out Peter’s beginning with the following, “As you know I’ve been working with international clients for fifteen years.” Since he works with international clients, his benefits are more unique than most financial advisors.

He continued with his benefits, “What you might not know is that my value is not just the returns that my client gets. Instead, the value I bring is in having discretion in the account so that I manage your portfolio to get out of risky investments, even if you can’t be reached. Also, I help you from hurting yourself because I’m not emotionally attached to any one stock.”

Step 4: Close

The close is a simple closed-ended question designed to elicit a “yes” or “no” response to ensure the client is on the same page.

Peter knew that the best close was simply to ask, “Can you see why you are paying those fees?” and for the client’s agreement. If they didn’t agree, he would go back and elaborate on his benefit statements.

Why Connecting with the Negative Client Works

Connecting with a negative client works because it’s a way of taking control of the conversation instead of refuting the client. When you use these strategies, along with several others that I explain in The Advisor Solutions Podcast Episode #76, “How to Connect with A Negative Client,” you will find that the topic of “fees vs. value” is a way to make and build a connection, which can help the client understand what you do for them in good times and in bad!

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