The Trusted Advisor Interview

by Andrew Gluck 2001

from Financial Advisor Magazine, 2001

Gaining trust would seem to be an intuitive skill, not something that you can acquire. How can you teach people to gain trust and have personality qualities that they do not have now?

RW: You can avoid the things that lead to distrust and develop certain habits -- if you are willing to put in the effort. Let me give you an example of something that I myself used to do. One of my bad habits was that when someone described a situation to me -- a client, let's say -- I often recognised the issue and in my eagerness to please I would interrupt their narration and start to provide the answer. My hope was that I would impress them by proving how smart I was.

But I have learned over the years that this habit, unfortunately, has the exact opposite effect. By interrupting and trying to show that I have an answer, I prove two things to them: one, that I'm not really listening to them, and two, that I'm a little over-eager to treat their problem like a generic one, i.e., not treat them as special. Over the years, I have learned as a matter of habit to suppress my enthusiasm and let people finish their description before I reply.

I know that you are talking about me, right? Actually, you're probably talking about most people. It is pretty common to interrupt and not listen well.

RW: It's very common, and goes to the heart of what I write about in the article. Unfortunately, because we are all wound up in ourselves, our mental focus is always on me, me, me. When someone else is talking, rather than really listening we are sort of mentally rehearsing what we are going to say in response. And the essence of trust is convincing the other person that you are sincerely trying to help them rather than trying to get what you want.

This is not a new thought. It is as old as Dale Carnegie, who wrote back in the 1920s and 1930s that you have more fun and success if you help other people achieve their goals than you will by focusing on your own goals. When I first heard that, it struck me as either communism or some kind of inspirational religion. Over time, I have learned that everything you want in the world -- whether it is riches, fame or respect -- has to be given to you by other people.

To get another human being to give you what you want, you must first give them what they want. If all you do is say, "Me, me, me -- please give me what I want," you get less. If you spend more time focusing on giving people what they want, you get more of what you want. It is a basic human paradox.

Is it fair to say that in your view, being an expert, a technician, is not the main thing that you need to be successful?

RW: Finding somebody who can solve your problem is not that difficult. But finding somebody that you want to work with, somebody that you can trust with your problem, is in fact quite hard. It is scarce in the marketplace. I in no way want to minimise the importance of being skilled at what you do. But technical content is not that scarce in the marketplace. Finding a lawyer that can write a brief is not difficult. Finding a doctor that can do the operation is not difficult. That does not minimise the importance of the technical skill of the personal financial planner who can prepare a discounted cash flow statement. You need to have the skill.

But you can't make yourself special on what is common. You can't earn a high income differentiating yourself on things that everybody can do. The skill is an entry fee. You have got to be smart and skilled at what you do. But by itself it is not a sufficient condition for success.

Okay. So having the extra little bit of skill and knowledge is not what makes you successful. But don't you need that specialty skill for the really complicated situations?

RW: Imagine that financial planners are in a sort of a health care business, and that a client is trying to buy brain surgery. The client has a one-of-a-kind need for something innovative that no one has ever done before. Then indeed there would be room for the frontier supplier, the brain surgeon of the business.

All I'm trying to point out is that the people who need true brain surgery probably make up less than 5 percent of the population. Most of the rest of the populace trying to buy financial advice, rather than trying to buy brain surgery, is trying to buy an aspirin. They've got a headache and their financial circumstances are like millions of other people's. The actual service is needed, but it is not customised to a particular individual.

Or sometimes they are trying to buy a nursing service, someone to go through the process with, hold their hand, answer questions and understand the pros and cons of the choices. Discussion and helping people understand choices are essential parts of the value that is rendered. But it is not primarily a technical skill. It is an interactive skill.

You say in your article that it is like teaching. Is that correct?

RW: There is very big difference between being the expert and being someone's advisor. I started off in my consulting career after many years as a university student, thinking that I would earn my income by being the expert. What I discovered very quickly about my clients is that they did not like me coming in and saying, "Here is what you are doing wrong." My clients felt as though I was being a little pompous, patronising and condescending.

As smart people themselves, clients don't want advisors to tell them what to do. They want you to tell them their choices so they can make their own decisions: "Help me understand my options. Help me understand the pros and cons. Give me a recommendation. Help me reason through to a decision." That is very much like being a teacher, and it is very much different than knowing the answer yourself.

It's making the client find the answers.

RW: And it changes the focus of attention, which means that those of us who have ego needs, which includes me, sometimes find it hard to remember to do this. It's so much more fun for your ego to show off and prove that you have the answer so you can say to people, "Aren't I smart?" However, the client doesn't want to focus on your smarts, but rather on his problems. The issue on the table here is not your ego.

But aren't there times when you do want to be forceful, when you do want to say, "This is what you should do, Mr. Client"?

RW: If you try and say to the client, "I'm the expert here. Shut up, client, and I will tell you what you should do," you will only get away with it if your client fundamentally trusts your motives. Notice that there is a very big difference between trusting your competence and trusting your motives.

Let me give you a short story from the article. My dentist tells me I have to have root canal work in three parts of my mouth, and this is very disruptive and very expensive, and the question becomes, "Under what circumstance do I accept his recommendation?" If I think that he is being an honourable, caring person, and that he is trying to help me with what is in my best interests, independent of his financial interest in the issue, then the odds that he gets my money go up.

If, on the other hand, I don't believe that his motives are honourable, the odds that he gets the work and my money go down. The point is you can be more insistent when a client believes that you are truly trying to help and are not after their money.

How do you know when you have that privilege?

RW: You can never know for sure. So you must earn your relationships. You need to spend time and make occasional gestures toward earning your clients' trust, proving that you truly are trying to help. And you must do it without asking for anything in return. If you do this three or four times, you can put it in the "trust bank" and draw down on it later.

If you try and insist that what you have to say is the right answer before you have made gestures of goodwill, you are too early in the relationship and it will backfire on you.

Let's talk about some of the details of what is in the article. Explain some of the core skills of an advisor.

RW: One of the skills is giving advice. There are certain language skills needed when you try to frame what you have to offer. We have already hinted at this. It's the difference between saying "You have got to do this," and "Have you considered the following alternatives?"

This may sound like a small detail and playing with words, but whenever anyone is thinking of using a financial planner, they are highly concerned. Their savings and their cash flow are at stake. This not a comfortable, easy conversation. If you work hard to put people at ease, it is appreciated. So work very hard to think, "How can I give my advice in such a way that it comes across as being supportive?"

The second set of skills involves earning trust. Let me give a real example that happened to me only two weeks ago. My wife and I are redecorating our house.

Historically, I have not been a fan of decorators. This particular woman we are currently using, however, was a genius in earning my confidence. We were choosing wallpaper, curtains and carpet for a room. At the end of the discussion, when we had made our decisions, we were having a cup of tea and it was mentioned that my wife's sister was coming in from out of town to visit. The lady finished her tea and left, as appropriate.

Three hours later, the doorbell rang, and there she was with a window frame in her hands with swatches from the curtains, wallpaper and carpet. She handed it to my wife and said, "I heard you say your sister is coming and I'm sure you will want to discuss with her what the room is going to look like, so I thought you would like to have this." And then she left.

Now, you decide how much impact that would have on you, but it had a lot of impact on us. It was thoughtful and supportive. This woman was trying to earn our goodwill by making a substantive gesture. It was a work-related issue -- she didn't show up with flowers and chocolates and try and make friends. So there is an example of earning trust with a gesture. It is acting as if you care.

You say there are 11 rules of relationship building for advisors. Give us the highlights.

RW: One of the things that all people in business have difficulty with is realising that every interaction they have with a client or a potential client always has two consequences. One is the result that comes from the transaction itself, and the other is what you have done to affect your long-term relationship.

You need to understand which game you are playing. There is a difference between being good at a one-night stand and being good at building long-term relationships. Many sales people become skilled at the one-night stand, but this involves a different set of activities and a different set of talents from building mutually beneficial, mutually supportive, long-term relationships.

Relationships in life are drawn on the same principles whether they are personal or business. The way you build relationships with your spouse or children is to spend time with each other, especially when there is nothing to talk about. If your spouse or child has something substantive to say, then you had better get together and talk and deal with the substance of the conversation. But you won't be building your relationship.

You are building the relationship when you find the opportunity for 15 minutes to go for a walk together or have a cup of coffee and catch up with each other's lives. The same is true in business. That's when you build relationships with your clients.

What do you mean, spending time together with clients when you are not doing business?

RW: When the business is finished, instead of dashing off, say, "Let's go for a cup of coffee." Take the opportunity, if it is presented, to find out a little bit more about the person as a person, not just as a source of business.

Then aren't you trying to make your business relationships friendships?

RW: No. There is a difference between being friendly and turning people into friends. Let me use my own experience to illustrate. For 5 years, much of my business has been global, and many clients at the end of a day's work have said, "How about coming to dinner with us, Richard, just to chat."

And I've been foolish enough for 5 years to say, "I'm tired" or tell them I'm busy, and I've tended to turn down those opportunities to have dinner. I now realise that I have been making a very big mistake, that while I have had successful transactions, what I failed to do is turn that transaction into a relationship because I was not willing to socialise. My clients were not trying to turn me into friends -- they were being gracious enough to be friendly.

I now understand that business is about human beings, and if you are not willing to show a little interest in the human being behind the transaction, you will not do as well.

You say that earning trust requires action. Explain.

RW: Other human beings will give you what you want if you give them what they want first. In other words, you earn your relationships by making small gestures.

My wife is a genius at doing this. When we were first dating, years ago, she found out that I had some work in Egypt, and she really wanted to be invited on the trip. But we had only been dating for three dates or so. Now there are stages in a relationship, and you can't push too far or too fast. So how did she get invited on that trip?

Well, she invited me to dinner at her home. When I showed up, there was Egyptian music playing. She had cooked a full Middle Eastern meal served in traditional style on the carpet, and there were guidebooks to Cairo scattered around the floor. The sale was made. What she did there was to say, "I will earn your goodwill by demonstrating to you in advance that I'm a fun person to be with and will be an interesting companion."

You encourage advisors to "go first," to make a gesture or share personal information about themselves -- even before a client does it. That's risky.

RW: How do you build relationships with another human being? It is risky. It is like dating in high school. You have to pick up the phone, and it may sound silly. And the way you build relationships is to make the first move. If you are unwilling to make the first move in business, you will be sitting home alone on a lot of Saturday nights.

Is there an easy way for advisors to get into the right mindset to behave in ways that will encourage trust?

RW: If you are not sure that something you do will work when you're the supplier, ask yourself, "Would it work on me if I were a buyer?" The key to doing well in business is to understand that clients are "us." They are not "them." Thinking about clients in the abstract, almost like aliens, will slow down your ability to understand them. "Clients are us" is a very simple rule when you are in doubt about any selling tactic.

Let me tell you a story about what happened to me when I had to choose a lawyer to probate my relative's will in Brooklyn. The first lawyer I called tried to get my business by saying that his firm was founded in 1927. My reaction: I don't care. The second lawyer tried to get my business by saying that he had 15 offices in the tristate area.

My reaction: I really don't care. I thought to myself, "When are you going to stop talking about your firm and start showing an interest in me?"

Finally I got through to a lawyer who was a genius. He said to me, "Before we go any further, let me ask you a question. Have you ever been involved in processing a will in Brooklyn?" I replied that I had not. He said, "Do you know what is involved?" I said I did not have a clue. He said, "Forgive me, but I don't think you are in a position to choose an advisor if you don't know what you are getting into. So let me send you a three-page booklet that describes exactly what you are getting into."

The booklet was the most valuable thing I could have received at that point. It contained all the information I needed to know about the process. It told me what was urgent and which documents I needed to find among my relative's affairs.

And the last paragraph really got me. It said, basically, "Even though it has nothing to do with our legal services or fees, you are required by law to notify the following city, state and federal agencies and here are all of their phone numbers." That guy had my business because he earned my trust by going straight to being helpful, as opposed to promising to be helpful if I paid.

You say there are four components of trust. What are they?

RW: The first component is credibility. You can't be trusted if you are not credible. But credibility doesn't just mean capable. It means that you can take what you know and apply it to a client's world. Most advisors approach this component with relative competence.

Next is reliability or dependability. Some people think that you can earn trust with one clever gesture. Most of us see beyond that. We trust people who can be depended upon to maintain consistent behaviour. My dentist calls me at home, for instance, to see how I'm feeling after a procedure. The fact that he does it every time builds trust. You don't have to do everything for a client. But what you say you are going to do, you must do. It is not about doing more. It is about being absolutely reliable and dependable. This way, I can go about my business and forget about a task because I know you are going to deliver what you said you would deliver. That sounds small, but not a lot of people live up to that.

What are the other components of trust?

RW: Intimacy is a fancy word for saying that from time to time you will switch your role and start to get acquainted with the client as a human being. It's the willingness to drop your role and relate to the other person as an individual human being, not as a salesperson. A lot of people never credibly drop their sales role, never successfully relate to the client as a human being.

While these three components build trust, the last one reduces trust. It is self-orientation. If I think you're only in this for you, and that you will sell me whatever you want to make a good commission and that you don't really care about me, very obviously I don't trust you. So what I'm really looking for in this fourth factor is a person who can suppress self-orientation and focus on me.

A lot of financial advisors get paid on commissions. Is that inherently bad for trust building?

RW: It is a huge barrier. Not because people are necessarily acting unethically, but just because it builds a suspicion. Many financial advisors face a really difficult time because, from the time they walk in the door, clients feel they had better stay on guard because the advisors' incentives are structured in such a way that they are not interested in the client.

At a minimum, the principle of full disclosure must be applied. That goes a long way. The professionals I have talked about -- my dentist, lawyers and others -- get paid based on the consequences of their advice. Conflicts are everywhere, and financial advisors are not unique. What builds trust is complete, open disclosure. Tell the client he needs to know how you get paid and the alternatives. Anyone who does that would have my trust.

You say there are five steps to gaining trust. Explain them.

RW: First you must be sure that the client wants to talk about the issues. That's the engagement phase. You can't move forward with a client unless the client has clearly signalled that he or she wants to talk about this topic with you. Once engaged, and before telling a client what you know, you should spend a lot of time encouraging the client to talk.

Listen and try to understand more and more about his or her preferences, risk profile and what the company has tried before. Don't show off what you know. Stop talking until you know the client's preferences. Otherwise, you risk coming across as being insensitive, and the client will lose trust because you are showing off too early.

The third and best way to help a client is to help them think about their problem in ways they never have before. You help them frame their issue. A large amount of the value you add is when you can say, "I bet you never thought about it this way, but ..." You cement relationships this way. But you must listen well before you can frame an issue.

What's the fourth step?

RW: Envisioning. It is an old concept that entails getting the client to imagine what it would be like in the future state that you are trying to get him to. You can't get anyone to do anything unless they desire the outcome. Unless I really want the benefits of a diet, then I will reject the diet. It is the ideal.

And the fifth step goes to the opposite extreme. You must discuss all the barriers that might get in the way of reaching the ideal. It's getting a commitment. It is explaining what the client must do, the choices he must make, the money he must come up with. It is making sure that you don't have a false agreement by creating the desire for the dream without an understanding of what it takes to get there.

No minimisation of these issues should be made. This way, clients are not disappointed with all of the things they have to do to get to the ideal. And you must get them to agree to do their part.

You make the point that every client meeting must have a stated goal. Why?

RW: We all have too many meetings where we don't know why we are meeting, and we waste a lot of time. The key is to have a clear understanding of the goal of each meeting.

You say advisors should be like Columbo, the television detective. What do you mean?

RW: Columbo was incredibly smart and he always knew the answers. But he knew that the trick in life was to get the other person to say it. The way you get the other person to say it is that you play dumb. The trick is saying, "Could you please explain this to me?" In both sales and advisory situations, if the advisor says it, you may doubt it. If I can get you to say it, it is true.

Many advisors feel uncomfortable with the touchy-feely family issues, with dealing with clients' personal problems. Do you have ideas on this?

RW: Don't invade a client's private life. But also recognise that business is about people. If you are not comfortable with people's issues and emotions, and all you are comfortable with are numbers, you will fail.

Giving financial advice is about people, people making scary, risky decisions. If you can't deal with emotions, you are dead. The truth is, there is not a more emotion-filled business than financial planning. If you are not comfortable with emotions, you won't get on very well.