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Many businesses talk about their clients. Famous restaurants in New York put their pictures on the wall. Others feature ambassadors or spokespeople. Celebrities are seen wearing luxury brands. In most cases they are hired or have given their permission. The logic is association. “I want to be more like that person, so I will use the same products.” Financial services does not work like that. People value their privacy.
Why? Because for many years, money was considered a private thing: “Old Money whispers, New Money screams.” It’s also been said “Money talks, wealth whispers.” It goes back to the logic of 100 years or so ago: People made money, then bought the outward signs of wealth. “Fake it until you make it” was not the way it was done. Upon being asked how much his yacht cost, JP Morgan reportedly said, “If you have to ask, then you can’t afford it.”
Many people today acquire the “playing pieces” of wealth, financing their ownership with borrowed money and cash flow. They might not have that much money in the bank and prefer others not to be privy to that information. At the other end of the spectrum, many people who live a low key lifestyle have quite a lot of money and prefer that information be kept from prying eyes.
People might not understand how client confidentiality works. Here are a few ways you can get that point across.
1. Aligning yourself with noble professions. “As financial advisors, we share a trait with other professions. Doctors, lawyers and accountants are bound by client confidentiality. We don’t talk about our clients.” (As an FYI, illegal activity fits into a different category. Then the lawyer or accountant should be talking with the police.) This approach puts you into the category of respected professions charging a fee for their advice.
2. Our behavior is governed by two different sets of rules. You might not be able to talk about your clients, but it’s a one-way street. “I would like to take a moment to address client confidentiality. I am not allowed to talk about my clients. I cannot tell anyone you are my client. You are not bound by the same rule. You can tell as many people as you like that we work together. I encourage it.” Ideally you could like your client to be your advocate.
3. Use your previous relationship to your advantage. The person you are talking with has been a friend for years. The explained they don’t do business with friends because “friends talk.” They wonder if you talk about your clients. You might reply: “We have known each other for five years. We know a lot of the same people. It’s possible people in our shared social circles might be clients already. In five years, you have never heard me mention the name of another client. I am not going to start now.” Your friend likely knows a few people who are your clients. They might have referred you! You are using the longevity of your relationship as proof you respect client confidentiality.
4. How might I answer? Someone might approach you and mention the name of a client. They might ask “How do you know this person” realizing the client relationship is the obvious connection. Saying you don’t talk about client relationships is close to admitting they are a client! “I cannot confirm or deny…” sounds like you watch too much television. A couple of approaches you might use are: “We met in downtown Brooklyn, years ago.” (This is truthful because that is where your office is located. Another approach is to mention their business or a common location. “I see her at the gym all the time” or “I have shopped in his store.” These are examples of plausible answers you could volunteer if someone asks how would you address a specific situation.
5. The charitable giving example. You are involved in the community. You give back through your high profile role at one or more nonprofit organizations. They have capital campaigns. They are looking for donors. Your client is afraid you will suggest them as a potential donor because you have a backstage view of their personal finances. You would explain client confidentiality extends to fundraising. You will not be volunteering their name as a potential donor or approaching them for a charitable donation based on your privileged information.
Some clients of your firm choose to use an office in another community because they do not want to be seen walking in or out of your brokerage office on a regular basis. You can assure your friends the relationship they develop with you will remain confidential – and you make house calls.