Just say, “No”
My wife, whom I dearly cherish but who also has the ability to see right through me, tells me that I tend to be a people pleaser. Not wishy-washy or fickle, just excessively accommodating to others. As hard as it is to admit, when evaluating her claim, I think she is spot on; I don’t like to say “no” to people.
Faced with a decision that inconveniences or results in someone else not getting what he or she wants, I am more inclined to be accommodating at my (or our) expense. (Note: not a good strategy for a parent of two teenage daughters and a 7-year old son.) This is a trait or, dare I say, weakness that I have been working on. So how, you may ask, does this relate to your advisory business?
I see this same weakness in advisors. The real challenge is that advisors view an inability to say “no” as a strength; one that results in good decision making or positive brand attribution. But I would ask you to look at this another way, because while it feels good to be accommodating to clients and team members, excessive accommodation can be detrimental to the business.
There must be a healthy balance and most advisors would do well to be more stringent in a number of areas. Here are five examples:
- Clients who do not take your advice. Keeping these clients in your book for the sake of additional revenue or to avoid perceived brand erosion (by disengaging them) is the wrong decision for two reasons. First, the client is paying for advice that they are not taking. Second, you have clients who own a portfolio that is not in line with your best recommendations. You cannot separate yourself from the outcome of that solution and you bear the risk. Both parties are better off by finding an alternate advisor (whose advice they will take) or by transitioning to a direct, low-cost solution. Just say no.
- Clients who treat you or your staff poorly. Given that you have built a strong team and value each member, don’t tolerate any client who doesn’t treat the whole team with the utmost respect. Life is short and your team members are incredibly valuable! As a personal example, I have one colleague who is the glue of our practice management team. Rachel holds the ship together and makes sure our programs run seamlessly and our materials are top-notch. If any advisor participating in our programs treats her poorly, they are out! It is non-negotiable. She is more valuable to our team than any single client relationship and we need her to feel valued and remain highly engaged. (Note: If you want to empower your staff, let them decide which clients need to go. The goodwill and loyalty it generates will more than compensate for the financial loss, if any.) Just say no.
- Accepting clients below your minimum. Time is your most precious resource and you need to utilize it efficiently. Filling your business and consuming capacity with low-revenue clients takes capacity that could be filled with high-revenue clients. This also has negative brand implications. If you are working to build a high-end wealth management shop then it is inconsistent with that brand to keep and/or accept low revenue clients. (Note: There are instances where you might make an exception for a family member of a high net worth client or for a strategic relationship, but these should be the exception, not the rule.) Just say no.
- Wholesaler lunches. When I evaluate an advisor’s business, I’ll look at the number of products/individual positions in their clients’ portfolios. I often make light of the volume by pointing out that the number of holdings in the book has a direct correlation with the number of wholesaler lunches the advisor attends. A poor attempt at humor, but often times painfully true. The last thing you need is another product. Find a select group of providers whose process is right for your clients and whose story you can communicate. Focus on this group and forget the rest. Take a pass on the coffee cart and the free pizza lunch and focus on growing your book. (Note: Consider Russell, the employer of this author, as a possible exception to this rule.) Just say no.
- Team members who are not on board. Nothing destroys chemistry and energy quicker than a disgruntled and/or disruptive team member. Regardless of performance, if someone on your team is not on board with the vision for your practice, this person needs to be “off the bus.” The advisory business is difficult enough even when you have strong and cohesive team. If you have team members who are obstacles or slowing you down, you need to resolve the situation as soon as possible. Just say no.
I recognize that this advice is easy to give and much harder to execute. As a word of encouragement to you, some of our very best advisor clients, who are growing their businesses in dynamic fashion, take a firm stance on these issues. They have refined their ability to say “No” and are reaping the benefits. As a practical matter, I recommend that you pick one example from this list that sounds easiest to you and consider starting there. You will find it empowering to take a more proactive and positive hold on your business.
As for me, I am off to go tell my 7-year old that he can’t have ice cream at 8:30 p.m. and my teenage daughters to be done with Facebook1 for the day. Just say no.
1 Facebook® is a registered trademark of Facebook, Inc., and is used in this presentation for illustrative purposes only.