The power of a good question

Have you ever wished you’d asked more questions before signing up to something? Or even wished you’d come up with the “right” question when you needed it? There’s nothing worse than hearing someone – even ourselves – saying, “I wish I knew then what I know now…”. Oh yes, imperfect decisions spring from imperfect information.

Sometimes questions can become so samey that they feel like they’re only there for show, like, “how are you?” or because they follow a familiar script – anyone remember those old I-94W US border immigration forms filled out before the days of ESTAs, and those unnerving questions “have you ever been arrested or convicted for an offence or crime involving moral turpitude?” or “have you ever been, or are you now involved with espionage or genocide?” Errr…

But pertinent questions and honest answers are behind every good decision. We can all think of costly outcomes from commercial contracts taken out without good enough due diligence, or of court cases where poor cross-examining led to miscarriages of justice. A bit of digging, however intrusive and laborious it may feel, usually pays in spades.

The way therefore we ask questions and do due diligence in any business context is fundamental, and speaking selfishly, none more so than in wealth management. Taking the time to understand what someone really needs is fundamental as the base for trust and strong relationships. Yes, this has always been the case, but it is now more important than ever. Clients have ever more complex lives and aside from the industry-standard ‘know your client’ rules, there’s a strong case for taking a deep breath and asking the awkward questions. One of those most clients seem surprised to be asked is “what’s the purpose of your wealth”. Sometimes this may bring a faraway expression, but dig a bit deeper the point I want to make is, what do they want from the wealth they’ve amassed – is it to better enjoy life – redecorating their home, art, travel…or is it to preserve it and make sure their families are better supported for the future…or perhaps is it to give back to society or the planet? In early conversations with clients, many won’t have got much further than a superficial level with this question but a deep dive here can add real value.

But what about the other way around? Many clients who join Julius Baer are new to the world of wealth management. They may have sold their businesses, made some money and have been told that they should get professional advice on how to manage their wealth. Often they start a conversation skeptical, and without really knowing much about our world or how we can help – but one thing’s for sure, most clients are used to asking difficult questions – be that in their business lives or at home. Gone are the days when a spanking good lunch or a bracing round of golf will be enough to convince a client to entrust their wealth to a firm, even today when meeting people outdoors holds such appeal. Thank heavens those days are over, and with them the pinstripes and what-hos! The reality is that people demand more these days than just being entertained; they want levelling with, professionalism and value. Obviously the onus is on us to explain how things work, highlight what sets us apart and what we can deliver for them. Perhaps though, there’s more we can do to help clients challenge us and our ilk? It is likely they’ll be speaking to a range of companies and doing their own due diligence, so what are the questions that wealth managers should be challenged on, other than the usual on performance and fees? I have had a stab at listing 10 top questions that I think every client should ask their potential wealth manager:

•  What can you add for me that I couldn’t just get cheaper online elsewhere?
• Tell me about your typical clients? How much attention will I get versus them?
• How much turnover in client-facing and non-client facing staff do you have and will I have one consistent relationship manager?
• Does the relationship manager work as part of a team?
• What will our relationship look like practically?
• Do your interests and values align with mine and what does your corporate purpose mean to you practically?
• How stable and secure is your organisation?
• Is private wealth management your core specialty?
• Do you have global expertise?
• Can you offer independent-minded and unbiased advice?

There are clearly a lot more that wealth managers are asked relating to services like tax reporting, or practicalities such as on the onboarding process and online access. I think however, the questions above are the ones rarely asked by potential clients, and yet they should be key in choosing who to trust.

While I keep pondering this point, I hope you all enjoy those lazy lunches in the sunshine and plenty of rounds of golf!

David

p.s. I would of course be thrilled to answer these questions on behalf of Julius Baer if anyone would like me to!