In another excerpt of items appearing in WealthBriefing's latest research report, on managing the client experience, Osmond Plummer, who works as a wealth management trainer, discusses some of the challenges.

This interview forms part of WealthBriefing’s latest research report, The New Normal: Codifying Superior Client Experience In Wealth Management, which was produced in association with Barclays Wealth and Investment Management and will launch on 15 May. To mark the launch, a webcast featuring senior executives from Barclays and others has been produced discussing headline findings, and access to both this and the report itself will be free as part of WealthBriefing member benefits.

Osmond Plummer works as a wealth management trainer internationally, helping bankers with the “soft skills” they need to interact with clients more effectively and develop deeper relationships with them. The views expressed here are of course his own, and may well clash with the experiences of others in the industry, but they nevertheless provide lots of food for thought.

Wealth management is emphatically a “people business”, where the quality of advisor-client relationships directly impacts the bottom line. Yet, in Plummer’s view, most firms are neglecting to develop the soft skills of their bankers and a cultural shift is sorely needed whereby wealth managers recognise that people skills matter just as much as technical expertise.

As things stand at present, certain segments of the wealth management industry seem to be labouring under the misapprehension that bankers are “born not made” – but nothing could be further from the truth, according to Plummer.

Currently the industry is doing “very, very little” in the way of soft skills training and few firms have any budget at all for it, he said. His impression is that many institutions are merely paying lip service to people skills training when in fact “you have to systematise your approach to dealing with wealthy people” and tackle the common areas where bankers fall down.

Bearing bad tidings

The (natural) tendency of bankers to “hide under the desk” rather than tackle tough phone calls is widely acknowledged, but dealing with bad news scenarios is a core skill which needs to be explicitly taught, said Plummer, adding that his approach is something of a revelation to bankers as he teaches that “the only way to deal with bad news is to be upfront”.  “Bankers need to be completely ‘there’ and ideally face-to-face with the client making sure that the client appreciates that they are there to resolve problems, holding their hand,” he said.

While conveying bad news is never pleasant, Plummer believes that arming bankers with the requisite skills to do so while minimising any damage to the relationship with the client is crucial to counteracting the human tendency to try to avoid being the bearer of bad tidings. There are many techniques which can “soften the blow” of bad news and knowing these damage limitation measures is a crucial element of the private banker’s toolkit. In fact, in Plummer’s view, while bad news scenarios can be somewhat of an “acid test” when the banker is at any fault, handling them well actually strengthens relationships. This necessitates bankers first “holding their hands up” to admit fault and then moving to a swift resolution of the problem – but all the while demonstrating empathy with the client.

“If you’ve screwed up, then ok you’ve probably got to take it on the chin and live with it. But if you can give bad news and a solution at the same time then you can actually make it into a good experience,” he said. Clearly, a better case is one in which the mistake was someone else’s (ideally from outside the company) then bankers can show even more empathy and “be angry too”, he continued.

Unfortunately, Plummer’s experience is that all too often empathy is distinctly lacking in many bankers’ approach to worried clients and that a failure to really feel for clients leads to bankers going to ground. Over the past few years, he has often found it to be the case that while “clients are screaming” because they are concerned about their portfolios their bankers opt not to return their calls. “The banker doesn’t want to give bad news so they clam up,” Plummer said.

As well as giving bankers the requisite confidence to deal with unfortunate situations, a crucial part of bankers’ training is discovery and resolution, said Plummer, and key to this is the art of incisive questioning. This really is an art, he explained, since bankers are asking for highly-personal information which touches on clients’ most deeply-held values and the intricacies of their family’s unique dynamics.

The first point to be made here is that “private bankers talk too much”, quipped Plummer, explaining that “the real skill of private banking is listening - getting clients to open up and talk to you”. As such, Plummer believes that one of the main areas of focus when training bankers should be questioning structures and methodologies (like open questions and reflecting questions) - in short, which types of questions should be deployed and when.

Softly, softly

When it comes to questioning techniques, Plummer also places great importance on equipping bankers to question clients sensitively, since, as he points out, you’re asking questions like “How much is too much?” when it comes to deciding what children should inherit. Here, he notes that many UHNW clients are so worried about their children becoming warped that they haven’t in fact divulged the true extent of the wealth they stand to inherit.

At a time when clients are increasingly internationally mobile, and firms are expanding from West to East (and vice-versa), cultural sensitivity is another area where bankers often desperately need guidance, said Plummer. He notes, for example, that for Chinese clients it is very bad form to explicitly ask about what they want to happen to their affairs when they die, since this is almost tantamount to wishing them dead. Another example is that in the Middle East it is considered impolite to start talking about business matters straight away (and indeed during the month of Ramadan it is altogether off limits).

Bankers need to be equipped to probe clients fully, but in a way that will not cause any offence, explained Plummer, and there are many traps bankers can fall into, such as obliquely questioning the fact that Islamic inheritance practices give precedence to sons over daughters. “You have to be very careful in patriarchal societies,” he said.

Sales skills are obviously another hugely important part of the mix (although private bankers do not like to think of themselves as salespeople), and a lot of what Plummer does is “undoing” previously learnt techniques. Often, people are told to focus on “ABC – Always Be Closing”, he said, when in fact this is counterproductive since HNW clients are constantly being sold to and, as a sophisticated segment, “they know what you’re doing”. He explained that once a client has said no it’s often better to beat a retreat and either go to a “Plan B” or wait for the next selling opportunity as the psychology of indebtedness dictates that clients will be much likely to say yes the next time round. He also advocates techniques like “creating a club” whereby bankers will say something along the lines of “Our other clients like you have found this interesting, would you like to know why?” This way, clients are made to feel that they want to join their peer group and they are the ones asking the questions – a non-threatening and more engaging way of selling.

The psychology of questioning and sales techniques – and indeed “the psychology of wealth” as a whole – is complex. Plummer therefore spends a lot of training time unpicking how things should be presented to clients and the language bankers should deploy to do this. However, he believes that the rewards generated from soft skills training in terms of client satisfaction (and therefore retention, recommendations and increased wallet share) are compelling.

Putting a programme in place

So what should an ideal soft skills training programme look like? To start with, it is not as onerous as one might think, Plummer explained, but it has to be followed through. He believes that a three-day training programme is ideal and that this should then be followed up with “refresher” afternoon or morning after six months to discuss what is working for bankers. The emphasis also has to be on demonstration and active discussion rather than bombarding bankers with handouts. Instead, role plays should be an integral part of a soft skills training programme and wherever possible these should be video recorded and workshopped in small groups, said Plummer.

This element of public critique also ensures that training participants are engaged and not merely “going through the motions”, explained Plummer. Sadly, he reports that securing staff buy-in for soft skills training initiatives can sometimes be quite difficult, particularly with veteran private bankers who believe that they already know everything that they need to. “Senior private bankers tend to be very stuck in their ways,” he said. Securing buy-in from senior staff is however crucial to the success of any training initiative, he went on to explain, since as with any initiative it has to be seen to be coming down from the top. If junior bankers are put through soft skills training first then senior bankers will conclude that “it’s not for me”, said Plummer, adding that senior management must show that they too are “willing to change and willing to consider that they might need to”. This is however “rare at the senior end”, he believes.

As a wealth management trainer, Plummer naturally wishes that the industry as a whole would adopt soft skills training more rapidly. He would also like to see an improvement in how firms approach the post-training phase of the process, which he believes is generally “poorly managed”. In his view, at present the soft skills side of things is “virtually ignored” in performance reviews (and indeed recruitment) in favour of financial results. This is arguably a deeply ironic state of affairs since soft skills are of fundamental importance to the amount of business bankers are able to write.

It might not be what industry professionals want to hear, but Plummer believes that “soft skills are the bits bankers need more than anything because anyone can learn about finance, anyone can learn how a portfolio works”.  He has in fact been doing a lot of work recently with Chinese institutions, which are said to be struggling to find enough quality bankers to cope with the country’s burgeoning HNW population. Perhaps a little controversially, he said that he suggests these institutions “go to the best restaurants in Beijing and Shanghai and get the head waiter...you can teach them about finance and they will already know how to do all the client stuff because they’ve got those people skills”.

The phrase “bankers are born, not made” is one often aired in the wealth management industry, in reference to the fact that private bankers need to have a distinct mix of personal attributes – in addition to technical expertise – to really succeed. For his part, Plummer believes that nothing could be further from the truth and it is entirely possible to imbue the characteristics private bankers need to evince in their interactions with clients if they are motivated to learn and change: bankers can indeed be “made”, as long as the individuals concerned are open to new ideas.

“You can make private bankers; you can train people if they are determined and prepared to commit to the process and consider changing the way they do things – then you can make a difference. However, if someone says “this is a waste of time, I don’t know what I’m doing here”, then it will be a waste of time,” Plummer said.

“All you can do with any training is provide the toolbox, it’s up to them to open it.”