Every financial services professional has had to deliver bad news to clients at some time and in some form. It’s not fun, but it comes with the territory. What follows are some guidelines to help you be a good “bad news bearer.”
- 1. Your Mindset Matters, even more than your choice of words. Clients will quickly ascertain your views from whatever mindset you happen to be in at that moment, because your emotions are difficult to hide. So, it’s important to remain as dispassionate as possible. Your standard operating procedure should be to stick to the facts (like Joe Friday on the old Dragnet series – “Just the facts, ma’am”). The key impression you want to convey is that you will help them through the problem and will respect and honor their decisions.
- 2. Don’t Delay. Producers often forget what industry studies verify time after time – communication matters even more than performance. Don’t delay giving bad news. The worst possible response you can get from a client is “Why didn’t I know this sooner?” Surprises make bad news even worse. In most cases, this lack of communication is an even bigger problem than the bad news is. So, make sure you get in front of bad news. Don’t be an ostrich, with your head planted deep in the sand, hoping the problem will go away. It won’t.
- 3. In-Person is Best. You will likely have to make an appointment over the telephone and raise the issue, in general terms, as your topic of discussion. But discuss the details in-person whenever possible. Your clients will appreciate that you didn’t “duck them” in any way and met with them face-to-face. Doing so will allow you to let them talk the issue through so that you can understand how the bad news will affect them. It will also give you an opportunity of offer a solution or set of solutions. You want to be with them and advising them when they begin to move past reaction and towards resolution.
- 4. Don’t Play the Blame Game. We all tend to want to make excuses and blame others. Resist that temptation. Stick to the facts to the extent possible and allow the client to decide if and how to allocate fault. You don’t want to appear to be a whiner.
- 5. Be a Stand-Up Person. If you made a mistake, own up to it. If you don’t, it will fester with your clients and no good can come from it. “Fessing up” isn’t just good for the soul, it clears the air between the two of you, and allows you to move past the problem and craft a good solution – together.
Life is messy. Not every recommendation you make will turn out the way your clients want. Indeed, not every "good" recommendation turns out well. The best we can do is make thoughtful, informed decisions based upon the best information available we have at the time of those decisions. Nobody likes bad news. But the vast majority of clients recognize that bad news can come even with the best of intentions and planning. If you communicate the bad news well, nearly all problems can be overcome. Doing so effectively can even strengthen your client relationships. You want to be known as someone who sticks with them, supports them and helps them in good times and bad. Having bad news to deliver is a problem, but it’s also an opportunity. Use it well.