How important is trust, trustworthiness and being a trusted advisor to your clients? Important enough to hold off the wedding for one late, but important, guest.

The following true story came directly from the mouth of a very senior private bank executive at a UK based (with large operations in Singapore) bank.

He was accentuating the importance of his relationship with a dedicated client.

“The wedding was to be a large Indian wedding- large as most Indian wedding are. This wedding happened to be on the mystical island of Bali.”

” So we packed up our bags and boarded the plane, ready for a relatively short trip to Bali.”

“Low and behold, the plane was late taking off. We would inevitably be late. What to do? This was my best private wealth client. This could embarrassing and more importantly, could seriously hurt my relationship.”

“We arrived about 30 minutes late, sped to the hotel to change. Of course, in Bali, the traffic can be horrific, and it was. After speeding to the hotel, bouncing off the traffic, we arrived one hour late. What was I to say?”

“When we got there, hundreds of people were waiting  for the wedding to start. Why hadn’t it started?”

“Well, my friend,” said the father of the bride, “we have delayed the wedding for you. You are an important guest.”

Wow. Trust can go far. 

This is a classic case of what happens when one is the trusted advisor.

It goes beyond the business relationship.

(for more on how to achieve the Trusted Advisor status based on the four levels of client relationships, see the following)

Trip Allen, Team Egyii, Singapore

The following posting is derived from an article in the  WSJ in September.  There are some appalling numbers and facts surrounding it.

“According to a new survey from Prince & Assoc., 81 percent of investors with $1 million or more in investible assets plan to take money away from their current advisor. An even larger number — 86% — plans to tell other investors to avoid their advisor. Only 2% plan to recommend their firm to other investors.”

For more, see:  WSJ-Revolt Against Advisors

So let me ask you a few questions…

If you are a “brand firm” what are you doing about this? Scrambling around for solutions?

If the institutions are not to blame, how will the individual advisors deal with the damage control?

What is it going to take to re-build the trust and relationship when clients are sick of having products pushed on them? (This was only successful during “good times” when no one noticed, when your portfolio was on the upswing)

 Isn’t it time for a change?

Shouldn’t the advisors and institutions be taking a different approach, as things have REALLY changed this time around?

Tell us what are you seeing out there?

Trip Allen, Team Egyii, Singapore

Very often I speak with private wealth prospects in my daily encounters. The following is an actual excerpt between a “seven figure” private wealth prospect and a relationship manager from a large UK based bank wealth management division. The use of strange and confusing terms, the feeling of betrayal and an obvious air of arrogance put a horrible taste in his mouth about the relationship manager, the institution. The only thing he walked away with, what he felt, was advice from a “barber” and the fact that he would not do business with this “reputable” bank. Who wants barbershop advice at that price?

I arranged a meeting with a large UK based (from here on in called “XXX Wealth Management Division”) bank’s private wealth relationship manager in Singapore mid 2008.  I was interested in depositing a seven figures, plus sum in sterling to a secure bank that could also provide me with some extra services.

My questions to qualify the RM and the wealth management division were as follows:

Question 1: Is my deposit guaranteed in Singapore?

Answer from the relationship manager- Yes.

The true answer should have been NO as the Singapore government only guaranteed funds at end of 2008 and only to Singapore registered banks.

Question 2: “XXX Wealth Management Division” are part of a “much larger bank”, and the “much larger bank” bought another “large European Bank” at the peak of the bubble of banking stocks- is that correct?

Answer from the relationship manager – Yes we did and paid cash – that shows how strong a bank we are.

In truth, “XXX Wealth Management Division” is now majority owned by the UK tax payers and may fall into 100% ownership of the UK tax payers if it becomes a failed operation.

Question 3: I may want a mortgage for a property in Singapore. Is this possible?

Answer from the relationship manager – Yes we can provide them but if the market deflates any more you may have to take a 10% haircut. (I let the lady ramble on for a little while before wondering what a 10% haircut was) and I asked…

Question 4: What is a 10% haircut?

Answer from the relationship manager – It is the difference between the price you purchased the property at and its market value today. Did you not know that?

Question 5: - Investments? Please tell me what you offer

Answer from the relationship manager – Yes we offer hedge funds with a $250,000 USD minimum investment.

I stated that it is just gambling with my money and was of no interest to me. (Mr. Madoff can back me up on this one.)

Comments from prospect:

In any transaction of this kind you want to feel that you can trust the person and the company you are placing the funds with. I felt the opposite of feeling secure especially once I asked my questions to the bank.

Bottom line is I asked no further questions and walked away with the bitter feeling of “sharp city” types who take your money and then fritter it away. You can guarantee one thing – and that is their charges on your capital will be consistent, and high.

OUCH!

So, I ask, how difficult is it for the relationship manager to ask the right questions, get a feel for who the prospect is and what the prospect REALLY wants?

Trip Allen, the Egyii Team, Singapore