Enhancing the professionalism of financial advisors in the best interests of the consumer




Raising Your Social Capital

An advisor’s ability to engage his high-net-worth prospects and clients, and build the professional networks crucial to his success, largely depends on the extent of his “social capital.” Financial skills and knowledge alone are not enough; social skills and cultural savvy are also important. Evan Thompson and Diana Wiley test your social capital and show you how to connect your soft skills to your bottom line

Financial advisors will often describe their ideal client base as wealthy, multi-generational families with complex financial and estate planning needs. They are aware of the financial skills and knowledge they will need to work effectively with these clients, as well as the access to a wide range of resources and related professional expertise. What they often pay less attention to is the significant social capital required not only to build client relationships across generations but also the various professional relationships that will support them in this role.

Years of professional experience and hard work can fail to make the grade when you have mere seconds to make a positive first impression in a social or business setting. Any misstep can take you out of the running, and you may not even realize what has happened. For instance, there is often a thin line between confidence and perceived arrogance, or “just being yourself” and social sloppiness or lack of finesse. Research shows that first impressions are nearly impossible to reverse.

What is social capital?

Social capital goes well beyond the concept of etiquette and being “good with people.” It is the composite of your social skills, cultural savvy, personal and business networks, and your ability to get things done using these networks. Contributions you make to the community in which you live and work also add to your social capital.

Your clients build an impression of your practice over time based on the interactions with each member of your team. The more affluent your client base, the more socially sophisticated your team needs to be. Consider how you, or members of your team, might handle the following common social situations. If you don’t think members of your team would fare well, they may be hurting your business and you may need to invest in building their soft skills to improve your bottom line.

Test your social capital

Situation #1

You are attending a black-tie fundraising dinner sponsored by your company on behalf of a charity that is strongly associated with your firm’s marketing campaigns. In your opinion, the company’s philanthropic dollars would be better placed in support of health research rather than this particular charity. In conversation with the guest to your right, you discover that he is a guest of the keynote speaker and a philanthropist who has supported your firm’s charitable cause in a significant way. Do you:

  1. Offer your opinion on your company’s giving strategies?
  2. Cite some of your personal philanthropic activities?
  3. Reveal how much you gave last year, and to which charities?
  4. Find a subtle way to make the other guests at your corporate table aware of what he has done to support your common cause?

Response: This is a potentially disastrous situation if you do not have a great deal of self-control, particularly as the dinner wine starts to flow. At a table with other corporate colleagues and a guest of the keynote speaker, any inappropriate comments could come back to haunt you.

The safest option is D. You need to shift your opinions into neutral and resolve to keep them there for the duration of the dinner. Rather, focus on the person himself and the generosity his substantial gifts represent. Most major gifts are given as the result of a personal experience which has touched the giver. You might delicately ask how the connection with this particular charity came about. Chances are that the answer will soften your opinion in this situation. For example, it may be that his recently deceased wife chaired the board of this charity for many years or that it touched his life in some other way.

 As this guest does not know anyone else at your table but has probably been placed there intentionally because of his association with your company’s sponsored charity, it would be gracious to introduce him to the table at large as a fellow supporter of the common cause. In this introduction, you would not give the personal details that person may have chosen to confide in you, as it is up to him whether he wants to make this information known to the general group.

Situation #2

You are walking to a restaurant with your client, the owner of a large family business, and his son and daughter. On your way there, you unexpectedly meet a senior member of your firm. Which person do you introduce to whom?

  1. The person standing on your immediate right.
  2. The daughter, as the only female in the group.
  3. The business owner as a client of the firm.
  4. The senior member of your firm.

In a social situation, you would usually present the men in the group to the women, starting with the most senior man (either socially or by age ranking, depending on the situation) unless one of the men were a dignitary of some sort, in which case everyone would be introduced to him. In a business situation, the correct answer is C. The client takes precedence and the senior partner in your firm would be introduced to the business owner first, and then to his daughter and son.

Situation #3

You have met someone at a wedding who seems to be an excellent prospective client. When is it appropriate to offer this person your business card?

  1. Immediately upon introducing yourself, as you shake hands with your right hand and offer your card with your left.
  2. When he or she requests it.
  3. After you have asked for theirs, very early in the conversation.
  4. It is seldom appropriate to present your business card at a social event.

Response: Social occasions are about building personal relationships with people, not growing your prospect list and soliciting business. Forget this at your peril. In all likelihood, your social networks will eventually feed into your business interests, but this needs to be a subtle process. Making your business intentions evident to anyone on a social occasion will earn you dislike, even contempt.

The answer here is clearly D. Conversation at a social event should focus on finding areas of common interest outside of your usual business interests, such as sports, travel or cultural events, for example. If your interaction results in a mutual desire to continue the conversation at a later date, or to exchange information of some sort, then it is acceptable to offer your contact information. For example, your conversational partner may have expressed an interest in the villa you stayed at in Tuscany where you had a fabulous experience. This may well elicit a card in return. Some people carry “social” cards with a personal telephone number and home address for these types of situations.

Situation #4

Something as simple as how you receive someone’s business card can say a great deal about you. When accepting a card, should you:

  1. Place the card in your suit coat pocket or handbag without looking at it?
  2. Without a word or any hesitation, respond by presenting your business card?
  3. Quickly glance at the card, say nothing and remove it from sight?
  4. Look carefully at the card and offer some recognition of the firm name or industry, while perhaps mentioning that you have a positive association with the company or someone within the firm?

Response: The last option is a flattering and respectful response. There is no need to dwell at length on the card, but it is discourteous to give it a perfunctory glance before putting it away. Ideally, you should place it in your business card holder.

Situation #5

You are in conversation with someone who insists on standing very close to you. To discourage this, you should:

  1. Keep stepping back from the person until he or she gets the message.
  2. Advise him or her that you have a bad cold and that you don’t want the person to catch it.
  3. Ask him or her to stand a little farther away as you have no hearing challenges of which you are aware.
  4. Suggest it is warm in the room and some distance between you might cool things off.

Response: None of the above. Handshaking distance is a comfortable space for most people, and you should govern your own behavior by this rule. People from some cultural backgrounds, however, may feel comfortable standing much closer to you than you would prefer; or, in a noisy crowd, some people might bend towards you to hear better. A woman might find she is being crowded for less innocent reasons.

People who invade your personal space are usually unaware of their behaviour, so trying to give cues is generally not a successful strategy. Even if you feel really uncomfortable, it’s best to tough it out until you can find a plausible reason to excuse yourself, such as to refresh your drink, or because you have spotted someone in the crowd to whom you must say hello.

Situation #6

You arrive at a social function and don’t see anyone you know well enough to approach and initiate a conversation. You should:

  1. Make eye contact with someone in a group of between three and four people in conversation and confidently proceed toward them. You wait for an opening and introduce yourself to them.
  2. Approach three people in deep conversation and introduce yourself to all of them, offering them your business card.
  3. Approach a group and single one person out, excitedly noting that you think she looks familiar and start rhyming off a series of fictitious circumstances under which you think you have met.
  4. Approach the organizer or host and ask her to introduce you to someone she knows.

Response: Joining a group conversation requires confidence, tact and experience. If you are uncomfortable in this situation, a safe approach is to ask the organizer or host to introduce you to someone. If you are not well-known to the host, it will help to give her a brief introduction of yourself that is relevant to the situation so that she can help to get the conversational ball rolling.

 If you want to take things into your own hands, approach a group of people who seem to be talking in a casual way (people engaged in a focused conversation will be annoyed if you interrupt them). If you pause outside their circle, people will often welcome you by widening the circle to include you. Smile warmly to show your thanks and engage in conversation by listening intently first. If you have something to contribute, make it short and amusing and take cues from the others before you become a full participant in the conversation. If you find that you have wandered into a conversation where you are not really welcome (e.g., longtime friends who are meeting for the first time in a decade), smile warmly again and drift into the crowd.

Another approach is to find someone in the crowd who seems to be in a similar position, and “rescue” him or her by starting a conversation. “I am a friend/colleague of the host but I really don’t know many people here. What is your connection with this event?”

This is not a comfortable situation for anyone. The key is to relax and be quietly confident. Put your shoulders back and hold your head high. Enter the room with easy, relaxed strides — you will look more confident than you feel and people will be more likely to approach you.

Situation #7

A client has been monopolizing your time during a client appreciation event and you want to get away to chat with other clients. How do you graciously disengage yourself?

  1. Say that you have enjoyed your conversation but that you don’t want to monopolize her time.
  2. Say that you have spotted someone in the crowd to whom you must say hello.
  3. Suggest that you introduce her to someone who shares her interest in modern art, for example.
  4. Excuse yourself to refresh your drink.

Response: Any of the above.

Situation #8

You are having lunch with one of your centres of influence when the conversation turns to a topic about which you have very little knowledge, say, sailing. You:

  1. Change the topic quickly to one that allows you to showcase your knowledge in another area, such as golfing.
  2. Do your best to make your lunch partner think you have experience on the water.
  3. Dismiss sailing as a “rich person’s pastime” and say you spend your time on more worthwhile pursuits, such as community service.
  4. Say that you have not had much experience on the water but express an interest in hearing about the person’s sailing experiences.

Response: Take the last option. Ask him if he sails often and whether he’s primarily interested in racing or cruising. Take your cues from his answers to encourage him to expand on his experiences. Show that you are a skilled listener and are genuinely interested in hearing about what interests them. Chances are that this interest will be reciprocated and that you will then have a chance to talk about your favourite activity. Even if this does not happen, you will be noted as an interesting conversationalist, as you have let the other person talk about everyone’s favourite topic — themselves!

Showing your genuine interest in someone will get you through most social situations, including some of the trickier ones. Even if you do make the odd faux pas in etiquette, people will remember you as being gracious and attentive. Incidentally, you will also have significantly increased your social capital and your ability to generate more.

Evan Thompson and Diana Wiley are co-founding partners at Thompson, Wiley + Associates. Evan can be reached evan.thompson@thompsonwiley.com and Diana can be reached at diana.wiley@thompsonwiley.com. If you would like a PDF of this article, please email kdoucet@advocis.ca.