Improving the prospective client interview process.

For the past five months my home has been a war zone! Not to worry, my wife and I are getting along fine; it has not been that kind of war. But our runaway home remodeling project has certainly frayed our emotional edges from time to time. Yet, as with most challenges in life, the endless parade of contractors and workmen through our topsy-turvy plaster-dust world has presented opportunities for insight into how better to cope with the human condition. Being on the customer side of arrangements with so many contractors has been like the experience of a medical doctor who suddenly becomes the patient. The whole process has helped me to think in new ways about my work as an advisor to retirees.

A Good Listener Is Hard To Find

In the spring of the year 3 AB (After the Bubble), deriving little joy from the pursuit of great investments, and being seduced by the apparent soaring market value of our modest though well-situated dwelling, Mary Liz and I allowed ourselves to consider increasing our investment in the ol' homestead. Meeting with local builders of good repute, our visions began to run in the direction of an addition; yes, the actual extension of the roof and foundation. In our imaginations, the happy result would be the doubling in size of our too-small kitchen and the creation of a large screened porch, where we could relax in the summer free from Maryland's perennial plague of ravenous insects.

In terms familiar to financial advisors, the builders we had selected were fee-only professionals; they did not sell windows, refrigerators or ceramic tile. So we entered our discussions naively content that their interests and ours were more or less aligned. I don't mean to malign these hardworking people; it was clear to us that Sam and Bill are essentially talented professionals of good will. But they were also excellent dream weavers, planting seeds and summoning increasingly expensive images of luxurious living at the Martin household.

At the outset, the builders had politely complimented our own rough sketches and expressed satisfaction with our budget parameters. Yet, by our second meeting we found ourselves being gently guided to curved exterior stone walls, complex roof designs and innovative window selections. These were all dramatic and exciting improvements. But, upon sober reflection (alone in the quiet recesses of our increasingly unsatisfactory abode), we realized that we were about to commit to building a wing for a country club instead of a modest improvement to the suburban nest from which our children had already sprung.

We had pictured an affordable home improvement. Bill and Sam, I think, had been imagining an exciting professional challenge, a spectacular addition to their "before & after" portfolio with which to dazzle prospective customers, and a fantastic fee. As we realized how wide the chasm had become between our expectations and the builders', we phoned them to say we "would have to think about it."

Have you ever received the "We'll have to think about it" call from prospective clients? I certainly have. And I learned quickly that it is usually a round-about way of saying, "No, thank you." As I reflected on our aborted discussions with the general contractors, I began to recall some of the prospective clients who did not hire me even though I thought we'd enjoyed good personal chemistry in our exploratory meeting. I couldn't help but wonder which of them might have become good clients if I had paid more attention to their expressed needs and the cost of services that they had envisioned. I also reflected on a few "clients from hell" who have come and gone over the years. I wondered how much of the stress in those relationships came from a mismatch of expectations that could have been headed off by a more forthright prospect interview process.

When I first hung out my "advisor" shingle many years ago, I did have minimal criteria for new clients, such as the ability to fog a mirror. You wanted help deciding whether to take the cash rebate or low-cost financing on your new Escort? I was your man! What should you do with your $10,000 inheritance from Aunt Jeanne? You've come to the right place! It took several frustrating years to learn that an advisor cannot be all things to all people at any price. Advisors in private practice gradually realize that we need to bring in a certain amount of revenue each year and that there are particular kinds of services we can offer to make that happen. As I reflected on the disappointing experience with these first builders, I gained new clarity about appropriate services and appropriate clients, and about the central importance of having a frank and wide-ranging discussion with every prospective client.

Always Two Sides

First, I am reminded that there are two parties to every discussion about professional services, the client and the professional; and their interests are not necessarily aligned. The whole purpose of the initial consultation should be to provide an opportunity for both parties to see if there is a good chance for such an alignment. A good "fit."

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