Financial advisors operate in a competitive world. From the client’s point of view, advisors offer services that are similar from firm to firm. Everyone seems to position financial planning, asset allocation and professional money management as an app[roach unique to their firm. How do you stand out. Sometimes, it can be as simple as highlighting the obvious. In this case, it is client confidentiality.
You might assume clients take confidentiality as a “given.” That should be true, yet they assume people talk. Some people will do business in a different town because their face is familiar in the town where they live. It is true people can conduct online relationships, yet the more money you have, the more complex your situation becomes. You need the human factor.
You might introduce confidentiality by aligning yourself with other respected professions. “Like doctors, lawyers, accountants and other professionals, as financial advisors we are bound by confidentiality.” This aligns you with a series of licensed professions who are compensated via fees for professional services rendered. Everyone has seen TV shows where doctors and lawyers explain they are bound by client confidentiality. (Although there is usually an unspoken loophole if a crime has been committed.)
You might need to explain further. “We travel in the same social circles. We know the same people. It is possible some of them are clients. We have known each other five years. You have never heard me mention a client relationship before. I am not going to start now.” Your relationship longevity works in your favor.
An advisor in Northern California had a great visual strategy. In his office, clients might notice bookcases filled with folders and binders. They each had different code numbers. He would explain “When you visit my office, you will never see a client name on a binder or piece of paper on my desk. If someone else visits my office, they will never see your name on a binder or paper either.” It’s confidentiality in action.
Sometimes clients ask you to break the confidentiality rule. They might be doing charitable fundraising and are targeting a potential donor who has revealed they are one of your clients. They ask “How much money do they have in their account?” They think it’s a harmless question. They have seen this on TV all the time. After you explain you cannot acknowledge if someone is a client, you would pose the following question: “If the roles were reversed and someone asked me how much money you had in your accounts, would you be OK with me telling them?” The answer will be “Of course not!”
Confidentiality can be positioned to prompt referrals. Suppose you completed a client portfolio review. Things went well. You can remind them: “You did well last year. I am not allowed to tell anybody because I am bound by client confidentiality. However, as my client, you are not bound by the same rule. You can tell as many people as you like that I gave you good advice. I encourage you to do so. I would be glad to help your friends if I can.
Client confidentiality might seem obvious. It can be positioned as a selling point, a benefit and a way to encourage clients to send you referrals.
