Personality matters: Tailor your practice to meet clients needs

(March 2005) Relationships, we are told, are the key to success in the advisory business. Fair enough. But let me ask you: what makes a good relationship with a high-networth client? Is it whether you and the client get along on a personal level? Whether the client says he or she is satisfied? Whether the client is willing to refer prospects to you?

The fact is, relationships mean different things to different clients. In practical terms, that means you, the advisor to the wealthy, must be prepared to have different kinds of relationships, based on the different kinds of clients you serve.

In a business context, every relationship can be measured according to four key factors:

1. Needs: Do you address the client’s financial needs and concerns? Are clients convinced that you understand their financial goals?

2. Language: Do you speak in language the client understands? Can you communicate with the client effectively and coherently?

3. Added value: Do you provide the client with appropriate “extras?” Do you keep in touch with them as much (or as little) as they’d like?

4. Affinity: Are you “in sync” with the client’s values? Do you and the client see eye-to-eye on financial and social issues?

Below are some ideas on how you might create a service track for nine different HNW personality types. Remember, these ideas are just a starting point. As you become more familiar with each personality type, you’ll be able to refine and personalize the plan for each of your clients to keep them happy.

The Family Steward Primary motivation: Taking care of family. Needs: Emphasize financial planning over stock-picking; look at “big-picture” financial goals as well as products. Language: Relate planning recommendations back to family goals. Added value: Supply reports on family strategies (e.g., education funding, family trusts, succession planning). Affinity: Have photo of family on desk; ask about client’s children/grandchildren; send card or small gift for children’s/grandchild’s birthday/graduation.

The Independent Primary motivation: Wealth is a way to secure personal freedom. Needs: Provide frequent portfolio updates to demonstrate progress toward goals. Language: Emphasize personal goals and planning; focus on results, not technical aspects of investing. Added value: Create system of monthly portfolio updates that demonstrates progress toward goals; send non-financial lifestylerelated articles and news. Affinity: Talk about personal issues during client meetings (retirement, life after work, vacations, family) or hobbies/sports/pastimes you have in common.

The Entreprenueur Primary motivation: Wealth means power and control. Needs: Explain strategies while leaving final decision to client; emphasize personal accomplishments and let client know they’re working with “the best;” be respectful of client’s time. Language: Defer to client’s opinion; treat client as “the boss.” Added value: Provide pointform summaries of new opportunities; call or write to celebrate business accomplishments/awards; become referral source for client business; introduce client to centres of influence. Affinity: Take an active interest in client’s business; discuss the ups and downs of being a business owner.

The Runaway Primary motivation: Doesn’t want to be involved in managing wealth. Needs: Position yourself as “financial caretaker;” build personal relationship and emphasize trust; mention ability to handle details so clients don’t have to. Language: Be succinct when discussing finances; simplify explanations of financial strategies; suggest course of action to make decision-making easy. Added value: Minimize contact; invite client to lifestylefocused events. Affinity: Discuss personal interests at every meeting; always relate financial decisions to lifestyle goals.

The Anonymous Primary motivation: Intensely private about financial affairs. Needs: Provide examples of security features at your practice; establish contact schedule and procedure that respects client’s need for privacy. Language: Be succinct and respectful when asking for client information; take “soft” approach to introducing new investment ideas; be aware of client’s risk profile. Added value: Limit contact to an as-needed basis; offer to meet at client’s home or office to maximize privacy. Affinity: Be discreet when discussing family/personal matters; discuss steps you have taken to ensure privacy of your own accounts/family.

The Star Primary motivation: Money is a status symbol. Needs: Provide “Four Seasons” service; instruct staff and associates to treat client as a VIP; schedule frequent meetings with client to demonstrate client’s importance. Language: Emphasize exclusivity and sophistication of investment strategies; avoid technical discussions of investment strategy. Added value: Introduce client to executives in your firm and/or portfolio managers; invite client to exclusive events. Affinity: Discuss “the good life” with the client; share experiences you’ve had with “celebrity” clients and/or VIPs in the industry.

The Technician Primary motivation: Obsessed with the technical side of investing. Needs: Position yourself as educational/informational resource; describe rationale for investment recommendations; use sophisticated investment products and strategies. Language: Use industry language and jargon; don’t avoid complex discussions; support recommendations with graphs, charts and research. Added value: Supply client with information on “cutting edge” products and strategies; offer subscription to a technically oriented newsletter/magazine. Affinity: Emphasize education and experience with complex investments.

The Empire-Builder Primary motivation: Focused on accumulating “more.” Needs: Emphasize your own investment expertise; be prepared to coordinate efforts with other professionals; schedule frequent performance reviews. Language: Focus on results, not technical aspects of investments; play down social/personal side of relationship. Added value: Send materials that reinforce investment decisions; provide frequent, detailed performance reports; send books/magazines that mirror client’s point of view. Affinity: Demonstrate a systematic business process; emphasize efficiency and time management in all meetings.

The Gambler Primary motivation: Investing is a game; risk is exciting. Needs: Be proactive in suggesting new investing ideas and/or strategies; move fast into new opportunities; emphasize trading and momentum investing. Language: Reinforce trading decisions; talk about risk and reward; emphasize the “fun” of investing. Added value: Deliver regular trading/market reports; schedule meeting/conference call with portfolio managers to discuss specific investment ideas. Affinity: Demonstrate passion for investing and excitement about building wealth; discuss life and success in terms of risk and reward.

No matter what kind of HNW personalities you end up serving, pay attention to the four areas above, and you will create strong, lasting relationships that can withstand the most intense competitive pressures.

Thane Stenner is a first vice-president and investment advisor with the T. Stenner Group of CIBC Wood Gundy. The views of the author do not necessarily reflect those of CIBC World Markets Inc. This article is for information only. CIBC Wood Gundy is a division of CIBC World Markets Inc., a subsidiary of Canadian Imperial Bank of Commerce and member CIPF. thane.stenner@cibc.ca