(Runtime: 8:00. Read the audio transcript.)
**
Relationships form the infrastructure of any business — and that’s especially true in wealth management, says Chris Reynolds, co-founder and executive chairman of Investment Planning Counsel.
Speaking on the Soundbites podcast this week, Reynolds said building solid relationships is critical in a business where people’s financial security is at stake.
“Wealth management’s an industry that has fear in it,” he said. “It has family dynamics, it has money anxiety, it has market volatility. What clients really need is to feel that you are steady.”
He said advisors must exhibit emotional maturity — the ability to stay calm, thoughtful, and generous even in the most challenging situations.
“Emotional maturity creates the conditions for deep relationships because people can relax around you. They know you won’t overreact; they know you’ll listen, and that you’ll respond with commitments rather than huge drama,” he said.
“And drama is exhausting. If your business feels like a soap opera with portfolio statements, it’s time to really make some changes.”
Sharing insights from his book The Six Circle Strategy: The Entrepreneur’s Journey to Wealth and Freedom, Reynolds said an advisor’s real product is confidence — and confidence comes from trust.
“Consistency comes from relationships that are built through communication, authenticity, care and follow-through,” he said. “Every single day, you are trying to build confidence and trust with your client base.”
Strong relationships with employees are just as important, he said. Employees need a positive feedback loop to amplify what is working, and a corrective loop to adjust what is not.
“The best leaders … create a culture where trying, learning, adjusting and improving is normal. That builds relationships,” he said.
Customer relationships
With clients, the goal is to make people feel seen — something that can be achieved by celebrating important milestones in their lives, from the sale of a business or the birth of a grandchild.
“I know advisors who make a big deal when a retirement goal is achieved or maybe a client sells a business, or a major anniversary, or first grandchild,” he said. “These are things that every advisor and every team should look for because they’re really the emotional markers of financial life.”
Advisors who celebrate with their clients move from being a service provider to a trusted family guide.
Reynolds breaks clients into three categories, starting with the best kind: the “raving fans,” who are a joy to work with.
“You love them and they love you. Every time you see their name pop up in your schedule, you get a big smile on your face. They listen, they engage, they appreciate what you do, they refer lots of people because they believe that you’re creating value. Those people bring energy to you.”
The second category consists of “business as usual” clients with whom the advisory may have a relationship but who haven’t developed the same level of engagement.
“These are good clients. They pay the bills. They are the beige sweater of your client base,” he said. “There’s nothing wrong with beige, but no one writes songs about it.”
The third category consists of “unprofitable relationships” — emotionally draining clients who sap the energy of the advisor and the team.
“They are the ones who really bring down a business, which I call your unprofitable relationships,” he said. “They ignore advice. They drain you. They drain the team. My advice? Bundle those up and get rid of them.”
Reynolds said advisors tend to spend way too much time trying to rescue the wrong relationships, and far too little time deepening the right ones.
“You can have the best performance that there is and still lose clients if the relationship is weak,” he said. “You can have average performance in a tough market and keep all of your clients if your relationships are strong and they trust your process.”
The practical bottom line, he said, is to be real, listen carefully, follow through on commitments and be there for clients when things get difficult.
“If you want a simple test, ask yourself, ‘If I stop managing money tomorrow, would this person still want to have a cup of coffee with me?’ And if the answer is yes, you’ve probably built something real and special. If the answer is, ‘Only if the coffee is free,’ you probably want to keep working on the relationship.”
**
This article is part of the Soundbites program, sponsored by Canada Life. The article was written without sponsor input.