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There are two words financial advisors don’t say enough.
“I’m sorry.”
Mistakes happen in the day-to-day practice of wealth management. Sometimes advisors fail to follow up on an issue effectively or mess up important paperwork. No one’s perfect, after all. Yet advisors are often loathe to apologize.
That’s a mistake. When it comes to smaller screw-ups, advisors who don’t own up to their mistakes are missing a chance to deepen their relationship with clients.
Why? Because any error, mistake, or miscue runs the risk of eroding the trust that a client has with an advisor, and wealth management is a business based on trust and relationships. Science tells us that most people are open to some measure of reconciliation when they are somehow wronged. The act of apologizing helps the victim know that the balance is shifting back to their own needs and values, while allowing the transgressor to make amends.
Research shows that saying sorry is one of the best ways to show empathy, which is a key factor in any trusted relationship. When we’re wronged and we receive an apology, “we are then able to develop a new image of that person,” therapist Beverly Engel wrote in Psychology Today. “Instead of seeing him through anger and bitterness, the person’s humility and apology cause us to see him as a fallible, vulnerable human being. We see the wrongdoer as more human, more like ourselves and this moves us.”
So, what stands in the way of an apology from most advisors? Well, for one thing, many advisors fear that, in a regulated environment, apologies can be mistaken as an admission of wrongdoing. That is certainly true of behaviors that can lead to expensive penalties or regulatory actions. But advisors don’t even want to apologize for the smaller, more quotidian miscues, and that often comes down to psychology.
Two of the most common psychological barriers to apologizing are fairly obvious. According to Karina Schumann, a professor of psychology at the University of Pittsburgh and one of the foremost researchers on the psychology around apologies, we often start with the perception that an apology won’t be effective in helping us, so we just phone it in. (This literally happens when we text or email an apology, rather than make the point to try to meet personally or more directly.)
Second, we often fail to offer a high-quality apology because we really have low concern for the victim or the damaged relationship.
But Schumann’s third point is most telling. We believe that an apology will somehow be a threat to our own self-image. We see it as a weakness, rather than a strength. Perhaps we’re embarrassed. Very often, we are. An apology, after all, is an explicit admission of how we have transgressed on someone else.
History pushes us in the direction of thinking an apology makes us soft. John Wayne, the 20th Century’s ultimate man’s man, delivered the famous line in She Wore a Yellow Ribbon: “Never apologize, mister. It’s a sign of weakness.” That same line was re-quoted in more modern media, in both the film Little Miss Sunshine and the television series NCIS. The phrase, “never apologize, never explain,” is so widespread in history that it’s attributed to everyone from King Charles I to Winston Churchill to Gertrude Stein.
But it’s all bad advice. Advisors would be well-served to understand that strength comes from facing problems, not running away from them.
Truly confronting our behavior is a sign of strength. As bestselling author Steven R. Covey notes, you cannot offer an apology from a standpoint of weakness. “It takes a great deal of character strength to apologize quickly out of one’s heart rather than out of pity,” Covey wrote. “A person must possess himself and have a deep sense of security in fundamental principles and values in order to genuinely apologize.”
When an apology is delivered forthrightly and ungrudgingly, strength of character shines through. And we know that clients often choose and retain an advisor based on strength of character and alignment of values. Showing those attributes by owning up to mistakes is a great way to connect with clients on a human level. They will forgive you for most foibles, and they will appreciate your commitment to restoring and earning back their trust.
Ray Hennessey is CEO of Vocatus, a financial marketing and communications firm. He is the author of the book Beyond Sorry: How to Own Up, Make Good, and Move Forward After a Crisis.
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Advisor Perspectives welcomes guest contributions. The views presented here do not necessarily represent those of Advisor Perspectives.
