Until now I have avoided the temptation to comment on the range of news reports about the misbehaviour at CBA Financial Planning (CFPL) and the apparent lack of response from the Australian Securities and Investments Commission (ASIC). The original incidents are not the catalyst for this column, but rather the many “tut-tut” comments that I have heard in response. I think that many advisers are missing an opportunity to learn from the debacle. And I am not thinking about compliance lessons.
In my opinion, the core issue at CFPL that could occur anywhere is the quality of the response when someone identifies a problem in a business. I would invite you to reflect on how you behave when:
• a client complains about your advice;
• a client complains about the behaviour of a member of your team; or
• a member of your team raises a concern about your business.
Complaints about your advice
I know this is unlikely, but let’s imagine that a client is not happy with something that you have done. How do you behave?
In my experience, the natural human response is to be defensive. When we are criticised, we tend to deny that there is anything wrong. We defend our actions and look for evidence to support our position. If that is your behaviour, then congratulations; you are normal. The problem is that once we lock into our position, it is very difficult to objectively see the client’s perspective.
I strongly recommend that you practise being curious and not defensive. Curiosity leads to questions, and questions lead to better understanding and better insights. Let’s say, for example, that a client calls and claims: “You misled me with your recommendation to buy X.”
The normal human response is to deny that our recommendation was misleading and to quote the full rationale for that recommendation.
The curious response is something like, “What makes you say that?” When we understand the client’s position more clearly we are far better placed to assess the validity of their complaint.
Complaints about a team member
Similarly, let’s imagine that a client is not happy with something that one of your team members has done. How do you behave in that scenario?
I think it usually boils down to two options. You can ignore the complaint (irrespective of what you may say to accommodate the client) or you can address the issue with the team member (in any number of ways).
While the former is always tempting, and perhaps justified at times, it is not in anyone’s interests in the long term. I strongly recommend that you commit to acting on the client’s complaint, in an appropriate manner, based on the merits of the case.
Team member complaints
Finally, let’s imagine that a team member brings to your attention a serious problem with the conduct of your business. How do you behave? I think it depends on how closely you are personally involved with the relevant matter.
Again, the choice is between the defend/deny/ignore response and the curious/responsible/action response. You can guess what I would strongly recommend. The consequence of a poor choice may be the loss of a valuable team member.
I accept that none of these alternative responses come naturally, but if you are genuine about your commitment to long-term relationships with your clients and staff, I think that some effort is worthwhile.
These are the best of times to be aware of how you respond when problems are brought to your attention – and to ensure that the response is effective, rather than defensive or dismissive.
