Module 1 Chapter 1 PDF

Module 1 – Communicating to Build Relationships Section 1 – Building a Relationship With Your Client  SECTION ONE – BUILDING A RELATIONSHIP WITH YOUR CLIENT Personal Variables Each of us has three main personal variables: 1. Beliefs...

Module 1 – Communicating to Build Relationships Section 1 – Building a Relationship With Your Client  SECTION ONE – BUILDING A RELATIONSHIP WITH YOUR CLIENT Personal Variables Each of us has three main personal variables: 1. Beliefs 2. Values 3. Attitudes These variables influence our decisions in every facet of life. Your clients’ personal variables affect their decisions regarding the purchase of financial products and services. Let’s take a closer look at each personal variable. Reflective question – While you study this topic, ask yourself: When I know my client’s beliefs or values will harm her financial well-being, what is the first thing I should say to her? Beliefs WHAT ARE BELIEFS ? Beliefs are principles and ideas we hold to be true. Beliefs lie at the core of our personality and define who we are. Our beliefs relate to a wide range of items, from our ideas about the existence of God to the best make of cars. Our beliefs exert influence even over our choice of financial products and services. Example Bob believes parents are not responsible for financing their children’s post-secondary education. HOW ARE BELIEFS FORMED AND MODIFIED ? Beliefs are formed through thought and reflection. Some clients are open to modifying their beliefs as a result of influences from a group or an authority. Others cling to their beliefs strongly and are not open to changing them. Example Bob believes his children should independently finance their post-secondary education because he had to finance his education. At the same time, Bob is open to influences. When his eldest daughter asked whether she could live at home while she goes to college, he happily agreed. As a result of Bob’s openness, his daughter will save on accommodation costs and will be able to afford her tuition fees. © CANADIAN SECURITIES INSTITUTE (2016) 3  MODULE ONE – COMMUNICATING TO BUILD RELATIONSHIPS Values WHAT ARE VALUES ? Values are a person’s preferences for certain conditions. Values form the basis for an adviser’s long-term success because they guide personal and corporate behaviour as well as goals. Exemples Fairness Honesty Integrity Respect Resourcefulness Work–family balance HOW ARE VALUES FORMED AND MODIFIED ? Values arise from beliefs. Values are also inherited from our family and culture. Values vary from person to person. Values are modified as a result of social influences, including other individuals and significant reference groups. Values also evolve when we try them out and incorporate the feedback we receive from our experiences. Example Bob values honesty and responsibility. As a result, he prefers to buy stocks of corporations that are good corporate citizens and rate high on employee satisfaction. WHAT IS THE RELATIONSHIP BETWEEN BELIEFS AND VALUES ? Now that you know what beliefs and values are, look at the following example that shows the relationship between the two: BELIEFS Bob believes a family should share good times together before the children grow up and leave home. VALUES Bob values family vacations. 4 © CANADIAN SECURITIES INSTITUTE (2016)  SECTION ONE – BUILDING A RELATIONSHIP WITH YOUR CLIENT Attitudes WHAT ARE ATTITUDES ? Attitudes are strongly held ideas that make us more likely to act in a certain manner. They are derived from our emotions and allow us to respond consistently to any given situation. Example Bob considers guaranteed investment certificates (GICs) to be the only form of safe investment. HOW ARE ATTITUDES FORMED AND MODIFIED ? Attitudes are products of a related belief and value. When our beliefs and values change, so do our attitudes. Example Bob values safety. He believes GICs are the only safe form of investment. When Bob’s adviser recommended investing in a conservative mutual fund, Bob resisted. Bob considers all forms of investment other than GICs to be risky. WHAT IS YOUR CLIENT’S ATTITUDE TOWARD MONEY? Money represents different things to different clients. Generally speaking, clients have five types of attitudes toward money: 1. Security 2. Love 3. Power 4. Freedom 5. Personal value Advisers who are able to identify what money means to their clients are more successful in offering financial services that satisfy their clients’ specific needs. © CANADIAN SECURITIES INSTITUTE (2016) 5  MODULE ONE – COMMUNICATING TO BUILD RELATIONSHIPS NEXT Let’s take a closer look at client attitudes toward money. Attitude Linda’s Story Client Insight Money as a Linda says: Clients who consider money symbol of Money makes me feel secure. It is not to be a symbol of security will security just so I can pay for my day-to-day want to use tried and tested expenses, such as food, healthcare investment methods. and housing. It’s more about reducing For these clients, change or anxiety. I feel anxious when I think, innovation represents insecurity. “what if I don’t have enough?” Sometimes, changing the status quo I remember the awful times of is necessary. In this case, you need the last recession. Ever since, I to reassure the client at every step. promised myself never to be without You also need to approach the savings again. matter slowly and gradually. Sometimes I feel that I worry way too By approaching the discussion much about stability, even though I slowly, the client may continue to have considerable savings. feel insecure, but she will be more But hey, you can never be too careful, likely to listen to your rationale. can you? Attitude Devika’s Story Client Insight Money as Devika says: Clients who consider money to be a symbol I love buying gifts for him, for her, for a symbol of love think they have to of love everyone. Last month, I spent all my buy love and acceptance. money on gifts! These clients may have been raised I know lots of people. They all love me in emotionally inhibited homes. … though sometimes I don’t feel so For these clients, saving money is sure about it. Why am I thinking like not a priority. Spending money is this? They always accept my gifts, so of their priority. course they must love me. To protect such clients from Ok, now I should leave … I have to go greedy or dishonest people—and, buy a … in certain circumstances, from themselves—you need to establish a relationship on the basis of trust. 6 © CANADIAN SECURITIES INSTITUTE (2016)  SECTION ONE – BUILDING A RELATIONSHIP WITH YOUR CLIENT Attitude Alphonso’s Story Client Insight Money as Alphonso says: Clients who consider money to a symbol I am no nouveau riche. Three be a symbol of power may want of power generations of family money, the best to dominate their relationship education in the world and unmatched with you. social connections … that’s my When you acknowledge their introduction. power, they will be more willing to Do you know what this means? It listen to your recommendations. means having the power to influence people, gain respect and dominate others. When I spend money, I spend it to display my might and to enhance my social status. When I accumulate money, it is to reinforce my power … not that I fear someone will dominate me … never! Attitude Beth’s Story Client Insight Money Beth says: Clients who consider money to be as a I have always wanted to live life the a symbol of freedom are receptive symbol of way I want. Now that I have won the to making sacrifices in the short freedom lottery, I’m going to move into my own term to have adequate assets in house, retire early and escape from the future. the stress of working life. I thought An entire company, Freedom I would have to work all my life to 55 Financial, focuses on clients accumulate this much money. Now who consider money a symbol I’m so happy … I feel free. of freedom. © CANADIAN SECURITIES INSTITUTE (2016) 7  MODULE ONE – COMMUNICATING TO BUILD RELATIONSHIPS Attitude Letika and Roger’s Story Client Insight Money as Letika says: For clients who consider money a symbol Did you say we look happy? Yes, to be a symbol of personal values, of personal we are! After 25 years together, money is a way to express what is values we don’t have a single regret. He of greatest value to them. teaches, and I’m a doctor. We have These clients may use money more money than we need, but our to project a certain image of needs are very basic. themselves. What really makes us happy is giving Some might even equate money to and volunteering. personal worth and value. It’s not that we don’t like our money. When you acknowledge their Having money makes us feel in attitude toward money enhances control. So, no, we won’t give away all their sense of self-worth, you can our money. But we just don’t prefer an earn their receptiveness. extravagant lifestyle. We would rather help out the less fortunate! Putting It to Work! HOW WILL YOU DEAL WITH CLIENTS WHOSE BELIEFS AND VALUES ARE DIFFERENT FROM YOURS ? In some situations, you may think it is in the best interest of your client’s financial well-being for them to rethink their beliefs and values. That’s because an adviser’s core belief is to help others. Learn to manage such situations with skill and diplomacy: Acknowledge the client’s beliefs and values, even though you may not agree with them. Reassure your client that you respect him. When presenting your recommendations, clearly communicate the financial benefits. This approach will help the client to understand the value of modifying his beliefs and values. In these conflict situations, the client might need time to think about your recommendations. Allow the client some time to reflect. Tell him you will follow up later. As a result, even if the client decides against your proposal, he will recognize that you respect his beliefs and he will be willing to work with you in future. Example Bob’s youngest daughter is seven years old. As an adviser, you believe that Bob can reduce his daughter’s burden in the future by making a Registered Education Savings Plan (RESP) contribution today. 8 © CANADIAN SECURITIES INSTITUTE (2016)  SECTION ONE – BUILDING A RELATIONSHIP WITH YOUR CLIENT You might see this suggestion as a straightforward situation; however be diplomatic when you present the option to Bob. After reassuring Bob that you respect his belief about his children paying for their own education, present the benefits and ease of starting an RESP. Ask whether he would like to think it over. Set up a time to meet him again. Offer to answer any questions he might have. Your flexibility will help Bob to be more receptive about assessing the financial merits of modifying his belief. Cultural Variables Our behaviour is shaped by numerous influences that affect our beliefs, values and attitudes. One of the most powerful influences is culture. When you understand how cultural influences affect your client’s financial decision making, you will be better able to relate to the client’s behaviour. The result will be a more effective working relationship. Reflective question – while you study this topic, ask yourself: Is it possible for clients to adapt to another culture (also known as, acculturation)? Definition of Culture Culture is the sum total of a society’s collective wisdom and institutionalized rules of behaviour. Culture is so embedded in our personality that its presence is often invisible. Culture provides some very basic functions that help to reduce uncertainty and increase predictability in our daily lives. Example In Tin Ling’s culture, shaking hands with clients is not the preferred greeting. Behavioural Influences of Culture We acquire our cultural influences in two ways: 1. Through socialization 2. By acculturation, or adapting to another culture © CANADIAN SECURITIES INSTITUTE (2016) 9  MODULE ONE – COMMUNICATING TO BUILD RELATIONSHIPS Let’s take a closer look at each cultural influence. Cultural Description Example Influences Socialization Learning that occurs naturally from When Henry means to say “yes,” our contact with parents, teachers, he shakes his head sideways. This guardians and reference groups. gesture means “no” in Romania. Acculturation Learning that occurs when we Henry now lives in Canada. He enter a new cultural environment has noticed that shaking the head that observes different rules of sideways means “no” in Canada. By behaviour. Acculturation is the modifying his body language to the process of adapting to the new Canadian culture, he demonstrates culture. acculturation. Dimensions of Culture Culture has six dimensions: 1. Values 2. Ideas 3. Attitudes 4. Traditions or customs 5. Artifacts 6. Symbols Some dimensions are abstract, whereas others are tangible. Let’s take a closer look at these dimensions of culture. ABSTRACT DIMENSIONS Values Cultural values are collectively held values that relate to basic social issues. These issues include education, accomplishments, leisure and family. Example Professional accomplishments are highly valued in Western cultures. Accomplishing numerous tasks is also important in our culture. Time is a scarce resource, which leads to our need for punctuality and efficiency. We generally consider it rude to make someone wait. Such behaviour may be more common, however, in countries where time is less structured. 10 © CANADIAN SECURITIES INSTITUTE (2016)  SECTION ONE – BUILDING A RELATIONSHIP WITH YOUR CLIENT Ideas Cultural ideas are adopted by a community and not questioned by its members. Some cultural ideas vary radically from one group to another. Example In most countries, people believe in monogamy (having only one spouse). In some other countries, people believe in polygamy (having more than one spouse at the same time). Attitudes Cultural attitudes are adopted by a community and are not questioned by its members. Attitudes vary across cultures, as they do among individuals, on matters such as gender, accumulation of wealth, savings and consumption. Example A dominant Western cultural attitude toward money is that money equals success. Those who are wealthy are judged to be successful. TANGIBLE DIMENSIONS Traditions Traditions or customs are the unwritten laws or rules of cultural behaviour. Example In Canada, our custom is to invite a potential client for lunch or to send holiday greeting cards to existing clients. Artifacts Artifacts are objects that reflect the cultural values of a society. Example A Western business suit Symbols Symbols are generated by artifacts and convey certain ideas or emotions. Symbols include numbers, colours and inanimate objects. Examples The number 13 is considered to be bad luck in Western cultures. Many Western buildings do not have a 13th floor. White symbolizes purity in North America, but in some parts of Asia, white is the colour of mourning. In Canada, the beaver symbolizes hard work and industriousness. © CANADIAN SECURITIES INSTITUTE (2016) 11  MODULE ONE – COMMUNICATING TO BUILD RELATIONSHIPS Functions of Culture Culture has four basic functions: 1. To provide rules of conduct 2. To set standards of performance 3. To affect how environmental cues and interpersonal signals are interpreted 4. To provide patterns for dealing with recurring problems Let’s take a closer look at each function of culture. Fonctions Examples 1. Culture Rules of conduct refer to our interactions with others on a daily basis. provides rules of conduct. How you address clients when you meet them for the first time; that is, by first name or last name The type of letter you write to a prospective client The definition of polite behaviour 2. Culture sets Performance standards result both from different cultural norms and standards of from individually held values. performance. Reaching the level of Chief Executive Officer (CEO) depends, in part, on conforming to what the organizational culture believes is worthy of reward. Achieving a Nobel Prize depends, in part, on conforming to what society believes is an endeavour worthy of reward. In addition to tangible results, clients may also consider interpersonal skills as part of performance. 3. Culture Interpersonal signals can be interpreted differently, depending on the affects how culture in which they occur. environmental cues and In France, a kiss on the cheek between members of the opposite interpersonal sex would be interpreted as a common greeting in a subway station. signals are In Japan, the same greeting would be considered inappropriate. interpreted. Bowing in front of someone in Japan is a proper greeting. In Canada, such a gesture is only used when greeting royalty or as a humorous show of respect to someone you know very well. 12 © CANADIAN SECURITIES INSTITUTE (2016)  SECTION ONE – BUILDING A RELATIONSHIP WITH YOUR CLIENT Fonctions Examples 4. Culture Recurring problems are resolved in a manner appropriate to each provides culture. patterns for In Canada, clients commonly ask to speak to the manager when dealing with they are dissatisfied with the service provided by an employee of recurring the organization. problems. Western societies accept that family members may disagree on certain issues, particularly money matters. Consequently, wills and estates are administered by people outside the family. These outside parties are regarded as acceptable intermediaries for potential or real problems. This approach may not be the case in other cultures. For example, in some countries, the family is viewed as the ultimate authority: private financial information is not divulged to anyone outside the immediate family. Cultural Challenges Cultural challenges are divided into two types: 1. Awareness 2. Effective communication Let’s take a closer look at each. Cultural Description Example for Both Challenges Awareness In a business environment, awareness A strict Muslim will not of cultural differences prevents invest in any product that misunderstandings. Such awareness also generates interest. conveys respect. If you are not aware of Awareness refers to sensitivity regarding this cultural difference or the influences that shape the attitudes you do not communicate and requests of people from different a safe investment cultural backgrounds. recommendation (such as a GIC) with care, you Effective Awareness of cultural differences calls for could find yourself in an communication extra care when explaining the practices awkward situation. Your and procedures of your institution or the lack of awareness could features of products and services that jeopardize the adviser– may be perceived differently by clients. client relationship. © CANADIAN SECURITIES INSTITUTE (2016) 13  MODULE ONE – COMMUNICATING TO BUILD RELATIONSHIPS Putting It to Work! HOW WILL YOU DEAL WITH CLIENTS WHOSE CULTURE IS DIFFERENT FROM YOURS ? Use the following rules to demonstrate your awareness and ability to communicate with a culturally diverse clientele: Keep an open mind. Be willing to learn some of the basic aspects of the client’s specific culture, instead of generalizing. To follow these guidelines, frequently ask the client how she feels about your recommendations. This question will reassure her that you care. Your concern will also help you to establish common grounds for a strong relationship. Example John is an adviser at ABC Financial. He has an appointment with a prospective client, Mr. Keith Yeung, who has newly arrived from China with his family. Before the meeting, John had conducted some research online. He learned that in some Eastern cultures, the client will look to build trust before discussing business. When John met Mr. Yeung, he addressed him by his last name. He gave Mr. Yeung ample time to speak. Mr. Yeung spoke about the family’s immigration experience. John briefly contributed by sharing his own parents’ experiences. During the conversation, John sensed that Mr. Yeung was looking for tax-efficient investment solutions; however, he did not make this assumption. Instead, he waited until Mr. Yeung appeared comfortable. He then asked Mr. Yeung to express his investment needs. John briefly recommended a Registered Retirement Savings Plan (RRSP) portfolio and answered a few questions. John then asked whether Mr. Yeung would like to discuss the recommended solution with his family. Mr. Yeung was happy to hear this question. A week later, John followed up with Mr. Yeung, who gladly awarded his business to ABC Financial. Relationship Building In recent years, the relationship approach has caused financial institutions to rethink their market strategy. Today, relationship building is recognized as the key to attracting and keeping good clients. Reflective Question – While you study this topic, ask yourself: What can I, as an adviser, do to demonstrate my willingness and effort toward relationship building? 14 © CANADIAN SECURITIES INSTITUTE (2016)  SECTION ONE – BUILDING A RELATIONSHIP WITH YOUR CLIENT Challenges of Relationship Building Numerous factors can hamper relationship building. Challenges of relationship building: Read the following conversation between two industry experts. This conversation has been Lack of time adapted from real-life research. Poor judgement This conversation provides an overview of the Lack of the perceived importance emergence of the relationship approach. You of relationship building will also see some of the challenges faced by Not knowing how to assess and advisers today. This conversation highlights improve relationships with clients principles that you can use for building strong relationships. DO YOU REMEMBER THE 1980s, WHEN FINANCIAL INSTITUTIONS BUILT OFFICES WITH GRAND FAÇADES, WITH BRICK AND MORTAR? YEAH I REMEMBER THOSE DAYS! DO YOU REMEMBER THE INTERIORS? THEY HAD ORIENTAL RUGS, AND TEA … TEA SERVED IN REAL SILVER CUPS. YUP, I REMEMBER THAT TOO! WHY HAVE THINGS CHANGED NOW? … BECAUSE FINANCIAL INSTITUTIONS HAVE LEARNED SOMETHING NEW… NEW YEAH! FINANCIAL INSTITUTIONS HAVE LEARNED THAT TODAY, CLIENTS ARE LOYAL TO INSTITUTIONS THAT ESTABLISH A PERSONALIZED RELATIONSHIP WITH THEM. OH WELL! THAT SOUNDS KINDA OBVIOUS! DOES IT? ISN’T IT? WAIT TILL YOU HEAR THIS. IN 1993, MARKETING SOLUTIONS’ CONSULTANTS CONDUCTED AN EXPERIMENT. THEY SENT MYSTERY SHOPPERS TO BANKS AND TRUST COMPANIES. THE FINDINGS WERE STARTLING. MORE THAN 70% OF THE ADVISERS DIDN’T EVEN ASK FOR THE CLIENT’S NAME. ARE YOU SERIOUS? BUT THEN THIS REPORT SEEMS OLD. DIDN’T YOU SAY 1993? YES, I DID! BUT THE QUESTION OF RELATIONSHIP BUILDING REMAINS UNRESOLVED EVEN TODAY. IT SO HAPPENS, THERE ARE SOME REAL CHALLENGES TO BUILDING RELATIONSHIPS. © CANADIAN SECURITIES INSTITUTE (2016) 15  MODULE ONE – COMMUNICATING TO BUILD RELATIONSHIPS CHALLENGES? LIKE WHAT? WELL, IN THE SAME EXPERIMENT THEY FOUND LINKS TO SEVERAL CHALLENGES: LACK OF TIME; POOR JUDGEMENT; LACK OF PERCEIVED IMPORTANCE OF RELATIONSHIP BUILDING; AND NOT KNOWING HOW TO ASSESS AND IMPROVE RELATIONSHIPS WITH CLIENTS. WOW! DID THE FINANCIAL INSTITUTIONS DO ANYTHING RIGHT IN THAT EXPERIMENT? ACTUALLY THEY DID! THEY DEMONSTRATED GOOD TECHNICAL SKILLS. AND THEY STILL COULD NOT SATISFY THE CLIENT? I THINK YOU’VE NAILED IT! A SUBSEQUENT RESEARCH REPORT DISCOVERED THAT CLIENT SATISFACTION IS A COMBINED RESULT OF TECHNICAL COMPETENCY AND RELATIONSHIP- BUILDING SKILLS. THE RELATIONSHIP APPROACH IS STILL NEW TO FINANCIAL INSTITUTIONS. BY THE WAY, THESE REPORTS ARE QUITE INTERESTING, IF YOU’D LIKE TO READ! SURE SOUNDS INTERESTING! DID THEY ALSO DISCOVER A QUICK-N-EASY METHOD FOR BUILDING RELATIONSHIPS? QUICK-N-EASY? NO! BUT FOUR GOLDEN PRINCIPLES WORK FOR ADVISERS: 1. BE CLIENT-CENTRED 2. BE ACCESSIBLE 3. BE AN EFFECTIVE COMMUNICATOR 4. BE CONSISTENT OK, YOU’VE PIQUED MY INTEREST NOW. WHERE CAN I READ MORE ABOUT YOUR GOLDEN PRINCIPLES AND THOSE RESEARCH REPORTS? WELL, THE REPORTS ARE RIGHT HERE, FOLLOWED BY THE PRINCIPLES THANKS! YOU ARE MORE THAN WELCOME! NEXT Now that you have an overview, let’s take a closer look at the research reports. 16 © CANADIAN SECURITIES INSTITUTE (2016)  SECTION ONE – BUILDING A RELATIONSHIP WITH YOUR CLIENT Research Reports: Challenges of Relationship Building APPROACH In the spring of 1993, Marketing Solutions’ consultants Summary: conducted an experiment to gauge the ability of Technical Competency + financial institutions to offer useful advice. After in- Relationship Building Skills = depth interviews with focus groups, the researchers produced a list of what clients expected when asking Client Satisfaction for investment advice at a financial institution. Then, two “mystery shoppers” visited 252 branches of banks and trust companies. They presented the same story: the client’s mother was to receive $50,000 within a few weeks. Each client asked for suggestions for what her mother might do with the money. Their initial inquiry was: “I’d like to speak to someone about investments.” The researchers then graded the performance of the financial services personnel on the basis of the criteria developed from the focus groups. Overall, the clients were looking for two things: knowledge of the products and services available and interest in the client’s needs in obtaining their business. FINDINGS How Banks and Trust Companies Performed The individuals who served the clients: Banks Trust Companies Total introduced themselves 24% 22% 24% asked for the client’s name 29% 28% 28% asked for the client’s telephone number 2% 6% 4% made a follow-up telephone call 2% 1% 2% The performance details above, which the researchers tested, can be considered part of basic relationship building. Why are the scores so low? Several factors can account for the low scores. Some of these factors might be practical reasons that are related to real-world constraints, such as the following: The advisers lacked the necessary time to give the clients personalized attention. The advisers made a judgement that the potential business, especially without the mother present, was not likely to materialize. Relationship building was not as much of a priority or focus as it should have been. The advisers know that relationship skills are important but have had little opportunity to assess or improve their skills. © CANADIAN SECURITIES INSTITUTE (2016) 17  MODULE ONE – COMMUNICATING TO BUILD RELATIONSHIPS HOW CRITICAL ARE RELATIONSHIP-BUILDING SKILLS TO BUSINESS DEVELOPMENT AND RETENTION ? HOW MUCH IMPROVEMENT IS POSSIBLE ? The following research report on trust services presents a disturbing finding. According to a study of trust company clients who were in a grieving process, 84% were dissatisfied with the adviser’s attitude. These clients felt that their pain and suffering were not understood. The adviser’s competencies were not challenged, but clients felt that the adviser was no more than an expert in financial matters because the adviser neglected the human and emotional aspects of the relationship. Because of this experience, 72% of those who were dissatisfied considered severing their ties with that institution. We all endorse good relationships. Building relationships takes skill and a concerted effort. We have identified the ability of advisers to create good relationships with clients as a key ingredient to success. We must not, however, overlook the other major dimension of success: technical competency. Relationship building skills and technical competency are both necessary ingredients for delivering quality service. Principles for Building a Relationship Four principles support the building of strong relationships with clients: 1. Be client-centred. 2. Be accessible. 3. Be an effective communicator. 4. Be consistent. Let’s take a closer look at each principle. BE CLIENT- CENTRED Being client-centred means identifying client needs accurately and recommending products and services to meet those needs. The Japanese word for client, okyakusama, means “honourable guest” or “lord.” This term is the proper orientation for the adviser. The needs of clients are of primary importance. Their satisfaction is the main objective. WHAT IF... the client’s needs are in conflict with the financial institution’s interests? the client makes unreasonable demands? the client takes excessive time to make decisions? 18 © CANADIAN SECURITIES INSTITUTE (2016)  SECTION ONE – BUILDING A RELATIONSHIP WITH YOUR CLIENT Reflective Question – In such cases, you should ask yourself: Is the relationship worth the time, effort and stress it takes to maintain? If you prefer, consult with a colleague or your manager. The decision you make as a result of your questions will be beneficial for you, your client and your financial institution. BE ACCESSIBLE To demonstrate that you are accessible, do the following: Promptly return your clients’ telephone calls. Proactively telephone your clients. When possible, meet your clients face to face. Clients differ in their preferences for methods of contact and frequency of contact. Some clients prefer to deal face to face, whereas others prefer to communicate by telephone. Some clients might ask to speak with the adviser frequently, whereas others empower the adviser to make financial decisions on their behalf and to report periodically. At times, due to multiple commitments, you might be challenged to find a balance between being accessible and meeting other demands of your job. From the client’s perspective, however, being accessible is of vital importance. BY BEING ACCESSIBLE, WILL I BE ABLE TO JUSTIFY MY FINANCIAL INSTITUTION’S SERVICE FEES ? Yes! Clients tend to assess the value they receive from their financial institution. Personalized service from an adviser helps the client to recognize the added value you deliver, compared with a no-fee service provider. BE AN EFFECTIVE COMMUNICATOR Communication, at its core, refers to sending, receiving and processing information. According to Mary Lehman of the American firm, Bankers Trust, the key to client satisfaction is “communicate, communicate, communicate.” Clients like to know that someone is looking out for them and looking after their needs. The better your communication skills, the better your chance of forging sound client relationships. © CANADIAN SECURITIES INSTITUTE (2016) 19  MODULE ONE – COMMUNICATING TO BUILD RELATIONSHIPS CAN YOU GIVE AN EXAMPLE OF EFFECTIVE COMMUNICATION ? Example Mr. Richard Blakey has been a loyal client with ABC Financial for the past 10 years. He attributes his loyalty to his adviser, Stephanie Wong. Last December, he called her supervisor to comment on Stephanie’s performance as his adviser. Mr. Blakey talked about what he likes about Stephanie: She smiles while speaking. She takes time for small talk, instead of talking only about business. She listens without interrupting. She speaks clearly, not too fast or too slow. She speaks loudly enough so he can hear (Mr. Blakey has difficulty hearing). BE CONSISTENT Consistency is an overarching requirement for the success of the other three principles. Consistent service quality helps you to develop a long-term relationship with your clients. A long- term relationship translates into continued business and loyalty. WILL CONSISTENCY HELP ME INCREASE BUSINESS WITH CLIENTS WHOSE PORTFOLIO IS SPREAD ACROSS SEVERAL FINANCIAL INSTITUTIONS ? By being consistent and establishing a long-term relationship, you gain a competitive advantage for yourself and your financial institution. A satisfied client may decide to move all or most of his other financial assets to be managed by you and your institution. Putting It to Work! HOW WILL YOU ASSESS IMPROVEMENT TO YOUR RELATIONSHIP-BUILDING SKILLS ? By practising the relationship-building principles, you can overcome the challenges of relationship building. The results will reflect in your business performance and client feedback. You can also self-assess your performance using the relationship-building checklist. RELATIONSHIP-BUILDING CHECKLIST Instructions: At the end of each month, answer the following questions on the basis of how you feel about your overall performance of that item. Give yourself a pat on the back for items that you answer as “yes.” Items that you answer as “no” can be added to your “focus for next month” list. 20 © CANADIAN SECURITIES INSTITUTE (2016)  SECTION ONE – BUILDING A RELATIONSHIP WITH YOUR CLIENT All items are equally important, except item 8, which is more important than all the others. You may customize this checklist based on performance standards set by your financial institution. Items Place a mental check ( ) in one of the columns below This month I focused on: Yes No 1. Addressing clients by their name. 2. Listening to clients with the intention of understanding their needs. 3. Recommending products and services on the basis of clients’ needs. 4. Speaking clearly, not too fast or too slow and not too loud or too low. This month I took the time to: 5. Promptly return clients’ calls (within _______ hours) 6. Make follow-up calls to clients (when applicable) 7. Meet clients face to face (when applicable) 8. This month I consistently performed the items I checked off as “yes.” If your answer to this item is “no” your clients will likely not be able to recognize your strengths. Make it your item of focus for next month. Example Mrs. Tina Fruitman’s family is a new client of ABC Financial. In the annual client satisfaction survey, she answered one of the questions as follows: Our adviser is Jim Smith. He does a fairly good job most of the time. The problem is you can never get him on the phone the first time. He always returns the call though. He takes the time to chit-chat a little and tries to understand what we’re looking for before suggesting a solution. He does a good job, but I wish sometimes he’d take the initiative to call us first. The other day I called him for something else and during the conversation he asked: “Would you like me to tell you about our new low-rate mortgage?” Brilliant fellow … except that he never addresses me by name. I think he’s shy. When this feedback reached Jim, he was surprised to see how similar his self-assessment was to how Mrs. Fruitman felt about his performance. © CANADIAN SECURITIES INSTITUTE (2016) 21  MODULE ONE – COMMUNICATING TO BUILD RELATIONSHIPS Here’s how Jim assessed himself: Items Place a mental check ( ) in one of the columns below This month I focused on: Yes No 1. Addressing clients by their name. 2. Listening to clients with the intention of understanding their needs. 3. Recommending products and services on the basis of clients’ needs. 4. Speaking clearly, not too fast or too slow and not too loud or too low. This month I took the time to: 5. Promptly return clients’ calls (within _______ hours) 6. Make follow-up calls to clients (when applicable) 7. Meet clients face to face (when applicable) 8. This month I consistently performed the items I checked off as “yes.” Resolving a Conflict Many conflictual situations can be prevented by applying the principles of relationship building. However, when a conflict does arise, it can cause dissatisfaction and weaken client relationships. By knowing how to resolve conflicts, an adviser can recover and reinforce relationships with clients. Reflective Question – While you study this topic, ask yourself: What is the first step I will take toward resolving a conflict? The Conflict Resolution Process The conflict resolution process includes five basic steps: 1. Choose your attitude. 2. Use active listening to gain clarity. 3. Communicate with empathy and understanding. 4. Collaborate on a resolution. 5. Implement resolution and evaluate results. Let’s take a closer look at each step. 22 © CANADIAN SECURITIES INSTITUTE (2016)  SECTION ONE – BUILDING A RELATIONSHIP WITH YOUR CLIENT CHOOSE YOUR ATTITUDE Affirm the following to yourself: I will, Be receptive. Stay focused on finding a solution. I will not try to negate or confront the client based on emotions. USE ACTIVE LISTENING TO GAIN CLARITY Listen with the intent to truly understand your client. Identify the meaning behind what the client is expressing by using words and actions. COMMUNICATE WITH EMPATHY AND UNDERSTANDING Acknowledge the client’s feelings so that they know that you can relate to their problem. Try not to judge what you hear—either as approval or disapproval. COLLABORATE ON A RESOLUTION Some clients have a great amount of knowledge and understanding about financial products and services. Treat such clients as colleagues. Other clients have very little knowledge and rely on your expertise, which makes this collaboration much like a teacher and pupil scenario. IMPLEMENT RESOLUTION AND EVALUATE RESULTS Once you and your client have reached a resolution, it is important to act promptly to implement the new decisions. The effects of the resolution, and its results, will help renew or even improve your relationship with the client. Putting It to Work! HOW WILL YOU ASSESS IMPROVEMENT TO YOUR CONFLICT RESOLUTION SKILLS ? Consider the principles of relationship building and the conflict resolution process as twin concepts. As any good adviser would, focus mainly on building relationships… after all you can resolve a conflict only when it arises, right? Use the Conflict Resolution Checklist to self-assess your performance from time to time. © CANADIAN SECURITIES INSTITUTE (2016) 23  MODULE ONE – COMMUNICATING TO BUILD RELATIONSHIPS Items Place a mental check ( ) in one of the columns below In a conflictual situation the adviser: Yes No Focused on finding solutions Listened actively Communicated with empathy and understanding Acted promptly to implement resolutions Improved relationships with the client by resolving their matter Example An elderly client called Sarah complaining that she had been charged a $6 service fee. At the time of account opening the bank had promised that the fee would not be charged because the client was a senior citizen. The client’s tone was emotional and almost rude. Sarah empathized with the client and promised to investigate. If the client had not been so emotional, Sarah could have connected her to the call center. However, this time Sarah personally called the call center and found an explanation. The bank statement also showed a credit for $6. So in reality the client had misinterpreted the account statement. The client appreciated that Sarah attended to the matter with empathy and commitment, and did not confront her. At the end of that month, Sarah completed the Conflict Resolution Checklist as follows: Items Place a mental check ( ) in one of the columns below In a conflictual situation the adviser: Yes No Focused on finding solutions Listened actively Communicated with empathy and understanding Acted promptly to implement resolutions Improved relationships with the client by resolving their matter 24 © CANADIAN SECURITIES INSTITUTE (2016)