Strategies for Turning Difficult Clients Into Favorites

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My guest today is Beverly Flaxington, a practice management consultant and co-founder of The Collaborative, a professional development consulting firm in Massachusetts. Beverly, last time you were with us, you spoke about the importance of EQ for advisors, but this week we're going to turn the tables a bit and talk, talk about how to identify EQ in clients and discuss strategies to help advisors. Start on a high level by telling me why EQ matters in terms of the clients and what— and just in terms of the whole advisor-client relationship.

So you think about when you're in any sort of a relationship with someone, and especially an important relationship like advisor to client. Here the advisor has the keys to the client's financial success, right? And in theory, and the client wants the advisor to be able to help them. If I've got a client with very low EQ, right, that emotional intelligence. They are not self-aware. They do not self-regulate well. They're not— they don't have good social awareness. This is going to make my job as an advisor much more challenging. And what oftentimes happens is when you have a client with lower EQ, it translates into what we might call that difficult client. So being able to recognize along the way what's the level of EQ that I'm dealing with, I think helps the advisor to figure out what's my best engagement process and approach for working with this person, this couple, this family, etc.

And to be clear, if they're— if they have low EQ, they're not behaving in ways that they ordinarily would, right? There's a little bit of a disconnect between what they really are thinking and feeling and what you think they're thinking and feeling.

Yeah, so you'll have scenarios. We sometimes will do a mini kind of workshop inside of a workshop where we talk about difficult clients. So let me just use some of those examples. So advisors might share with us, I have a client who does nothing but call up and yell at me no matter how well their portfolio is doing, how great the plan is. They just call and they yell at me. I can't even have a conversation with them, right? Or we might have somebody that says, you know, they're threatening me, right? They're— you ruined my family. You've destroyed everything. You know, you want us to have these conversations and these family meetings, and it's caused all this upset. So the idea being that the client blames the advisor for something that's going on. Now you think about it, so that is an example of low EQ on the part of the client. But then, Greg, what often happens is the advisor— what's going to happen to me? I'm the advisor, I'm going to get defensive, I'm going to get upset. What? You have no business accusing me. So now my EQ is lower because rather than try to figure out, okay, what's happening with this person I'm dealing with, I'm reacting. And so this is why I think it's important to almost assess what sort of client is this, where are they potentially on the EQ scale, because I as advisor could get drawn in and my own EQ suffers if I'm not paying attention to this. But those are the sorts of ways that a lower EQ can play out, or I'm not gonna trust you, I'm not gonna give you information you need, et cetera. Makes the advisor's job much more difficult.

Right. Would it be fair to say a good strategy then is until an advisor really has a better handle on this person's constitution, that they should just strike a more neutral tone and just be really discerning, looking and listening and trying to read the tea leaves to understand where this person's coming from? Because like you said, you don't wanna jump to the incorrect conclusion or get defensive or emotionally engaged needlessly.

You know, there's something that we talked about, Greg, in our last podcast. It's this idea of staying curious, right? The advisor staying curious. And I would underscore that in what we're talking about here. To the degree that you can be interested in who is this person, you can ask more questions. You can really listen. How does this client describe something? How do they talk about things? What else do they refer to? We give ourselves away all of the time. Our communication style, what we care about, how we think about things. But the problem is oftentimes advisors aren't listening for it. They're just listening for what age do I want to retire? Do I want to have my second home? Are my kids speaking to each other? And so will the estate, you know, be easy to settle? And those things are all important. Don't, don't get me wrong. But we're not oftentimes listening for the way somebody shares something or how they reference something. And if you can listen for those things, that's where you're going to get some insights into who am I really dealing with here and what sorts of challenges might I face.

Yeah, I mean, I'm sympathetic to the advisor's challenge in this count. I mean, if you go— how many times have people started a new job and the first day or two they encounter someone who's like just really unpleasant or nasty and they're like, oh my God, it's very jarring, what have I done? And then they tell maybe their boss like, oh my God, this guy Jim. And then they said, oh, that's just Jim. You know, he's always like that. And then it's like, oh, thank goodness. I was worried. And they're like, nah, it's just, everyone sees that. You know, that's what he's like when you meet him.

Yes. And, and, and, you know, so what a great scenario though you just went through because again, if my tendency, uh, you know, as the advisor say, right in that situation and Jim was my client, is to start to think, what am I doing wrong? See, that's such an example of lower EQ because it's like, wait a minute, more like, why am I having a reaction to Jim right now? What do I need to learn about Jim? Or what do I need to learn about my reaction to Jim? And this is what I do think is challenging, Greg. And when I talk about this work, I never diminish and say, you know, hey, just do a better job of listening and self-regulating. These are challenges for human beings in general, but I think they're particularly challenging in a profession that is so technical and you have to have so much knowledge, and but that also is so emotionally loaded for the people that you're dealing with, right? What's closer to us than our health and our family? It's our money, and the first two we can only support with money. So advisors are working in these very emotionally charged environments with technical information, and now we're saying, but boy, you better pay attention to all these other interpersonal dynamics that are going on if you really want to be successful. It's tough.

Yeah, absolutely. And to use the example I cited of Jim from Company X, someone at a company could just tap on someone's shoulder and say, what's the deal with this guy? And you'll get the lowdown instantly. It'll be told to you discreetly. You're an advisor. You're on your own. I mean, you can Google the person, but whatever. You can't call up the phone necessarily and get a reality check on someone.

Absolutely. And there's an aspect, you know, we talk a lot about behavioral style, as you know, and just differences in communication approaches. And so think about that. So here I've got this newish client across the table, perhaps as an advisor, my style is to be very direct, ask the hard questions, you know, really try to get at the root of things. But I've got somebody who's very stoic, they're uncomfortable opening up, they're not giving me information. If my EQ is not there, and and I perceive the client's EQ to be low, we're going to get stuck in that dance together because I'm not modifying and they're not modifying. So I think advisors in that kind of scenario could start to say, it's about me being curious to learn more about this person. So maybe I need to approach them more like the way they are and see if I can get them to open up as a result. A lot of times if you start to match their, their style, their communication style a little bit, they'll feel like they the client feels like you get me, and they might be a little bit more willing to open up and make it a little bit easier on you. But if you ignore all those dynamics, you are presenting yourself with more of a challenge than you need to.

Right. I think, isn't there, I may be mistaken, but I believe there's a term called mirroring for that. And I think it's often recommended for job interviews. So it's kind of like if the person interviewing you speaks very quickly, then you should speak a little bit quickly too. You see some of it, I don't know, crossing legs or just in terms of tone and demeanor. It's almost subliminal in effect, I suppose, if you're not too obvious about it. Is it just kind of getting on that person's wavelength a little bit to try to get them to open up and be a little more forthright?

Yes, and actually that's a good way to bring it up because you think about in classic sales, sometimes we'll teach people to mirror behavior and the person crosses the legs, you cross the legs, they lean forward, you lean forward. And that's not really what we're talking about here. It's more like if I've got this slow-paced person who needs to process, really needs to think about things, and I'm faster-paced, I probably need to slow my cadence down. Yeah. Or vice versa. I've watched advisors, as an example, Greg, in meetings where you've got this entrepreneurial driving person on the other side of the table, the advisor is flipping through the book like one page at a time, and you can visibly see this person getting irritated by the fact that the advisor is not adopting their sort of style. And so yes, there is a mirroring aspect, but I like to try to make the distinction— it's not imitating someone, it's trying to match tone and pace, right?

And I guess there'd also be an aspect of just emotional appropriateness, if you will. I mean, You could have a client come in who might be grieving, a widower or what have you, and if the advisor walks in buoyantly and extends his hand, "Hey, how you doing? Have a cup of coffee," you know, it's like, whoa, whoa, whoa, you're not reading the room. This isn't right. You know, can you talk about that? I mean, are examples of people doing it right or not right?

So I'd say a couple things too. You know, there's also, when we think about from an EQ lens, I was just in my mind, thinking about the example you gave, you know, the advisor has to also be aware, am I comfortable with the fact that this person is grieving? Can I kind of match their emotional state? Or does the fact that they're grieving upset me? Which again, that's my emotional EQ lens, right? Self-awareness. And so, yes, it really is in a way when we talk about empathy, you know, it's impossible really to get in someone else's shoes, so to speak. You don't know their background, their history, their life. But you can try to understand the lens through which they're looking. And that's, I guess, maybe the best way to try to talk about what we're saying here, which is what's the lens of this person who's grieving? You know, what might they be experiencing? What do I want to know about them? What do I need to understand about them? I think that's what we're trying to get to. And because I might be the advisor, you know, I hear I'm coming in, I'm uncomfortable. I want to shut this down. So I don't want to open up something that might make me feel ill at ease. But that's where the depth of these relationships that last forever throughout generations come into play, I believe.

I'm curious about the idea of, let's say, perception being reality in the advisor-client relationship. And let me— that was kind of cutting to the chase, but for the backdrop. So let's say you have an advisor who's by every account, you know, brilliant, accomplished, et cetera, right? And he or she has a very high opinion of themselves, and new client comes in and, you know, it just gets a sense that this person might be aloof or a little bit arrogant, but the advisor might be like just resting on their laurels or thinking that this person should be thrilled to be with them. Can you just talk about how it's really the optics that matter? Because it's really— they're just judging you in many ways based on how you're coming across. I mean, they'll be aware of your credentials and what you've accomplished, but it's the interpersonal element has got to be massive and the chemistry. Do you leave and go home and tell your partner or significant other, I really liked him or her, or we didn't click, right? And that's so important. It's not just about talent and credentials, et cetera.

It's such an important piece that I feel we miss so often in this business. There's all of this research and I kind of laugh when I say it because legitimately all this research has been done that shows that in life we buy from people that we like. And who do we like? We like people like us. And I think that this gets missed so often by advisors that, you know, we do a lot of marketing work and, you know, how do you stand out in a crowded market? And when I talk to advisors, you know, they're all saying essentially the same things. There's a lot of table stakes in this business business. But I try to point out that the differentiator is what is it like to work with you? What's different about working with you to go through my planning process, to help me get to retirement, to put together my estate plan? And I think that personal element is the differentiator. And so often that's not the focus. The focus is more like, here's a laundry list of everything we can do for you and how long we've been doing it, and that that care, that excitement about why me, it just gets ignored. And it's kind of the root of why somebody is going to choose you and oftentimes why somebody is going to stick with you.

Yeah, absolutely. And I think all of those amazing things that firms offer, that's all true. But increasingly, it's table stakes. It's almost like a nuclear arms race. You have to keep having A, B, and C. Keeping— you have to offer more and more services, all right, to keep up with the proverbial Joneses in the advisor world. But having more services is increasingly not a differentiator. It's going to often boil down to something tangible, that sense of servicing the client in a genuine way that's palpable.

Well, and I would even go one step further with what you said, Greg, which is if you put to, you know, think about how daunting the financial discussions are that advisors have with people. My retirement, my legacy, You know, what I'm going to pass to my kids, family dynamics. We're talking about some pretty heavy decisions that get made, like life-altering sorts of decisions. And yet I often will see the materials advisors put together or the way they present, you know, it's this laundry list of all these things you need to be thinking about or you should be doing. And so what happens to us as human beings when there's something emotional and now you're telling me here's this laundry list of everything, my tendency is going to be actually to go into paralysis. Now I'm freaked out. I can't deal with all of this, right? So you just bowled me over with all these things you can help me with. But all you did was scare me because now I realize how much I haven't done. So it backfires. It's actually not to the advisor's advantage. What's to the advantage is ask me a whole bunch of questions, find out what matters to me, and then almost ease me into it by showing me with the things that matter to me How can you help me? And then let's build from there.

So, I mean, what you're saying, it sounds very logical, kind of intuitive. Why does it not happen more? I mean, to what extent is this inertia, if at all? Like year after year after year, it was not— it was done a certain way and the ball keeps rolling and, you know, oh yeah, yeah, that you pay a little lip service, but not much actually changes. Can you speak to that?

So that is something, of course, in my line of work, I do think about that question a lot. Greg, it's a very good one because again, what we're talking about here is— can so dramatically change the way you do business, the way you interact with clients, the way you understand clients. But I think that number one, we're not taught a lot of this. And in fact, if you've got financial acumen and you've come into this business because you really do enjoy numbers, the markets, technical pieces, you probably never had a chance along the way to learn any of these human dynamics, if you will, that we're talking about. So in fairness, a lot of it is, what is this and where do I even start with it? I think number 2, there's also, um, you know, you, you consult with someone, say, and you maybe you get like bad advice. And by that I just mean, take the marketing lens we were talking about, you know, somebody might tell you, oh my gosh, you do all these things, we'll put that all on a, on a one-pager. So they're They're not thinking about the way people's minds work, right? They're just thinking about the information we have to convey. And again, no judgment, it's just a different approach. And then the last thing I think is, you know, you have to in a way put yourself out there to be able to do some of the things we're talking about, to listen with empathy, to engage with a client when they're in emotional state, to refrain from solving the problem right away. And it takes a little bit of risk. In fairness, I think fear of the unknown, fear of what's going to happen, is this really going to work, I think that absolutely holds advisors back too.

Absolutely understandable. Fear of the unknown causes many people to continue doing what they have been doing. Do you have any final thoughts, Beverly? Because we're almost out of time and I do have a question for you. I'd like to ask you for one piece of actionable advice before we wrap up. Can you name one thing advisors can do to hone their thinking about the client experience?

The biggest thing I think is that when you are having internal meetings and you're talking about the client or you're doing a client review, or you as an individual are doing a client prep, in addition to everything about their plan, their portfolio, their products, talk about, even if it's just to yourself, what you know about this person. What do they value? How do they think about this process? What do they most care about with what you're doing? And if you can't answer those questions, you know, you think about just super quickly, way back in my early days, I was in executive recruiting. And in order to set someone up for an interview, you'd want to tell them, well, here's what this person likes, what they don't like, stay away from these words, this sort of thing is a trigger to help the how did it really get across to this interviewing individual? Well, it's very similar in that we don't talk about the softer elements sometimes with clients. All about the process, the products, the portfolio. So start making a conscious effort to talk about some of those softer pieces. See what you know about the person, what you need to know, and then make sure you're incorporating questions to get at some of the things that you probably haven't learned yet about them in each and every interaction.

And when doing this, to what extension an advisor based their opinion based on what they hear, the words said, compared to how things are said and the amount of passion behind things are said? Or do you look at both and just kind of make a holistic judgment based on all of it?

So what's important with the words people use is that we will use certain words that give us away. It was interesting, I was doing something yesterday with an advisor and he talked about efficiency, but yet his whole team is all about the people. They're like, it's like being in, you know, a place that you're interested in the social good. They want to help clients. And he kept talking efficiency, efficiency. And to him, you know, that ROI is important. But then it finally came out that they said, we get offended by this word efficiency because it's like you're looking at our clients as as a thing, not as people. And so it's things like that. If you listen to the words we use, it will show the way that we're thinking about something. And then delivery for sure. I mean, the research tells us less than 10% of what we take away from an exchange is actually what someone said versus how they said it. So paying attention to all those other nuances is really important. But I enjoy so much like listening for word choice because it will always give me an insight into how does somebody really make a decision or think about something. So word choice is an important thing to focus on.

Well, that's excellent advice, Beverly. I just want to thank you genuinely for taking the time. To our listeners, go into Barron's podcast page and you could see a previous interview I had with Beverly. And it's been a real blast. I thank you very much for joining us.

Thanks. It's my pleasure, Greg. I enjoyed it a lot myself.

Thanks so much. My guest again has been Beverly Flaxington, co-founder of The Collaborative.

This podcast was brought to you by Wells Fargo Advisors. Looking for a firm your clients can't outgrow? Wells Fargo Advisors offers financial advisors full balance sheet solutions with wealth planning, investment products, banking, and lending that meet the needs of affluent to ultra-high net worth clients. Build your practice your way and on your schedule with independent and employee model options designed to meet your needs today and tomorrow. Learn more at joinwfadvisors.com.