So, I am going to mention Covid. Yes, even this far in, after so many articles on or related to Covid, I am mentioning it.
I am doing so because, especially over the past couple of months, I have become more aware of why I make certain choices – particularly in relation to retail and hospitality.
And, without wishing to imply my ‘world view’ in this sense is particularly special or profound, it does reinforce some of my thoughts on what’s important (actually, essential) in great adviser/client relationships.
My retail and hospitality ‘revelation’ (it’s not really a revelation, more a realisation) is that a massive factor in why I choose to physically enter a shop (rather than order online, which I also do a bit of – music-related T-shirts especially) or a restaurant (rather than cook at home or get a Deliveroo) is the feeling I get in doing so: the interactions I have, the discourse, the connection I feel.
Of course, the hygiene factors (status, job security, salary, etcetera) have to be fulfilled. For shops, the stuff in them has to be interesting, beyond mundane, and the environment conducive. For restaurants, of course, the environment also has to be conducive and the food not what I can easily prepare at home. And then for both, there’s the connection, the intimacy. That’s what makes me inclined to return. That’s what makes me feel I have a connection, a relationship.
Connections matter
Connections and relationships are self-evidently important in financial services too. I have talked about the trust equation before but basically it’s the result of this: reliability plus credibility plus intimacy, all over self-orientation, equals trust.
What we are looking for is high scores for the first three, and a low score for self-orientation. If high is ‘5’ and low is ‘1’, we want as close as possible to 15 as the outcome of this little calculation – the ultimate deliverer of trust.
Reflecting on this, though (and my son, Chris, co-founder of The Speakers Gym, is definitely of this view), it may be that reliability and credibility are the hygiene factors and the real gold is in intimacy. If so, the scores need to be appropriately weighted to give greater power to the ‘intimacy’ score. This is where some true, lasting and difficult-to-copy differentiation can take place.
Of course, the power of great intimacy and low self-orientation will be diminished unless you also are utterly reliable and credible; basically, doing what you say you’ll do, and knowing your stuff.
In relation to knowing your stuff, all the recent (and still current) noise and rumours around potential tax changes are something on which, in my experience, clients will expect you to have an informed view: the likelihood of income tax increases; the review of capital gains tax, potential outcomes and what this may mean for financial planning strategy; the future for inheritance tax and the reliefs currently available; and definitely a view on pension reform and what if any action could or should be considered now.
Business owners will definitely expect you to know about the government support schemes, corporation tax and employee benefits. So, hygiene factor, yes, but requiring some rigorous and continuing effort on your part; a key contributor to maintaining your ability to deliver all-important adviser alpha.
So, ‘Do the work to maintain credibility’ is the message, but it’s the way you make your client feel (Larry David reference) that is pretty… pretty… pretty important.
Making the link
So I think my musings on why I would be more inclined to revisit a shop or restaurant (how I feel when I’m in said establishments) can be connected to and relevant to the creation of trust in a financial adviser/client relationship. Agreed?
I can’t believe I’m going to end this piece in a tax planning column by saying that, while knowing your ‘tax stuff’ is clearly really important, knowing, understanding and listening to your client is even more so.
Be informed, reliable and likeable, and remember – it’s not about you.
Tony Wickenden is director of Technical Connection
Comments