Knowing Your Clients

You reviewed your overall business. Now let’s focus on really knowing your clients!


The Total Practice Review provided you with an overview of your business by looking at; production, assets, clients, how you feel about your business, your quality of life, and where you’d like to be in three years, two years, one year along with some specific goals for the next 30, 60 and 90 days. So the overall landscape has been assessed, and some direction and action steps have been established.

Now we’re going to look closely at one of the most crucial elements of your business. portf3Knowing your clients.

It sounds like a fairly basic and simple concept and yet so many financial advisors, and other business professionals too, seem to overlook it, or don’t fully grasp it’s significance. Typically, they work so hard at identifying and closing a piece of business, which at it’s root is an individual or group they’ve gotten to know, and then once closed, they move on to the next potential conquest.

What they don’t seem to fully understand is that this new client has a wealth of information about themselves that is still unknown. And surrounding these new clients is a treasure trove of contacts, experiences, people and potential that is being left untapped. 

For those of you who know me, you’ve been exposed to my “Arraying Your Universe” exercise which gets people to identify and profile the people in their universe. Individuals who do the exercise are always awestruck by the number of people they had forgotten about, and how little they know about the people they do remember. When people take the time to really dig into their universe they will find a “goldmine” of information and potential opportunities.

The same logic follows for the newly acquired client. They too have a universe that they are a part of, and a little exploration on your part will reveal that you have just barely even scratched the surface of that universe. The connections the new client has, the people they know, the associations they belong to, the companies they have worked for, or companies they have knowledge of, the golf and/or tennis clubs they belong to, etc.

I believe that in the financial services business, people or groups are only willing to give you their money when they have reached a certain watershed mark. That mark being that they “TRUST” you! Think about that! The significance of the statement of trust is enormous! And they demonstrate that trust with a huge psychological belief response. They give you their hard earned money to invest for them. Consider that until that trust is earned, you are nowhere.

If you accept my premise that people won’t give you their money to invest until they trust you, then your business fundamentally depends on your ability to gather around you as many people as you can who have money, and who are willing to entrust that money to you. Each time you close a new client you have been successful at creating trust in the mind of the new client.

Now if your pattern of behavior is to close a new client, and then do a celebratory dance and go find another one, that’s great, but you’ve missed the opportunity to mine the universe of a person who has already demonstrated that they trust you.

This newly acquired client could, very likely, be the conduit to many more potential clients who would be open to a conversation with you on the strength of their friend’s knowledge and belief in you. Think about that!

You may have heard of the saying “six degrees of separation”. What it means is that you are six people away from knowing anyone you’d like to know. And when you do the math, if each person knows between 150 and 300 hundred people, and each of those people knows their own 150 to 300 people, when you connect six people, you’ve got a ton of people.

I’ve conducted this exercise many times, both for myself and with clients and it’s always amazing to see how a few people result in an enormous number of connections and business deals. You meet Mike, and then Mike introduces you to Jim, and then Jim introduces you to Cathy, and Cathy introduces you to Sarah, and then Sarah to Dave and so on. I’ve seen it many times where huge books have been built, and if you trace the connections back, it’s not unusual to find that seven to ten people are responsible, and the lead source of the business.

So based on the above, the assignment is to begin “knowing your clients”, and if you think about it, “knowing your own universe”.

Start by selecting 3 clients and build a profile of what you know about them. While you can look at obvious aspects like: occupation, family, background, interests, etc., move beyond these to: whom do they associate with, associations they belong to – social, sports, philanthropic, travel, neighborhood, etc. When was the last time you sat down with them over a drink or a meal and really took the time to understand what was going on in their life: family, friends, challenges, disappointments, things they’re looking forward to? It’s always fascinating to learn of other people’s lives and how they are both similar, and dissimilar to your own. And the more you know about someone else’s life the more you understand about what’s important to them and where and how you can add value, and how this insight might apply to you as well.

One way to test your knowledge of your client is to list the number of people that your client knows that you know, and what you know about these acquaintances of your client? How many can you list? Six, ten, more? And, in addition to the quantity, what’s the depth and quality of your knowledge? You could do the same for the people in your universe too. It’s a very revealing process to assess your real understanding of the people in your universe.

In addition to you learning more about your clients and people in your universe, which puts you in an advantaged position in being able to add value to your relationships with your clients and friends, you are also distinguishing yourself with the same people as they become acutely aware that you have taken a serious interest in their lives. What they like to do, who they like to do it with, their enjoyments and challenges, their highs and lows, goals and aspirations, interesting people they know and organizations they are familiar with, or friends who are part of those organizations, are now important to you and your clients and friends will now understand this. The true value of your relationships is going to come into focus for you and enable you to view your clients and friends in a multi-dimensional way.

As you become more involved in your client’s and friend’s lives you will get to meet more of the people in their universe and, as appropriate, be able to add value. What’s that old saying “You can get everything you want, if you’ll just help enough other people get what they want!”

One other reason for knowing your clients is to honestly assess whether their values are in accord with your own. In addition, is their investment philosophy in line with yours? For each client, particularly the top 25-50, ask yourself the question. In most instances does this client agree with my suggestions and value my investment advice? If yes, Great!

If no, then ask yourself if this is the right client for you? If you can recount many times when you have gone to this client with many very timely and prescient suggestions, only to be rejected, you probably are not suited for each other. That’s not to say this client is a bad person, just that they shouldn’t be your client. They should be someone else’s whose philosophy, or lack thereof, is more in-line with their own. Think of the wasted energy you could conserve and apply to your business and clients who do agree with, and benefit from, your sound advice. You want to accrete energy, not repeatedly put yourself in situations where it’s dissipated.

Your specific task from this assignment is twofold:

1. Pick three clients and assess your level of knowledge about them and the number of people you know through them, and the quality of your connection with those people. Once this phase is complete challenge yourself to know more about the people you have a connection with, and to identify and make a connection with two more people for each client. This does not need to be done immediately, but phase it into you communication style, so you become more attentive and concerned about the other aspects and people in your client’s lives.

2.Identify a client who is draining your energy and resolve to correct this condition within a three month period, and if unable to, assist the client in finding a more suitable advisor.

3. Use a mind map technique for each client to capture the information, and track progress.

I look forward to reviewing any input you’d like to send me. Any information will be, as always, treated in the strictest of confidence.

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