What assumptions can make out of a firm

Making assumptions is part of doing business. We don’t always have access to the full facts and have to draw conclusions. However, too often the assumptions that are made are incorrect, or only part of the picture, and are never tested. This can be detrimental to relationships between firms and their clients, with firms making decisions, or giving advice, based on those assumptions. This really can be a case of when making assumptions makes an ‘ass’ out of ‘u’ and ‘me’.

The assumptions we make can affect the way we do business, the way we deal with our clients and the results we get for them.

In my experience, the most common assumptions firms make, are:

1. Assuming they know what their client wants to achieve when the client is engaging their services. By this I mean the ultimate goal – what business goal is your involvement going to help them achieve? If you understand what, ultimately, they want from the piece of the puzzle you are providing, the work you do will be focussed on this. Too often we hear that providers aren’t really listening to what clients want:

  • they haven’t asked the right questions
  • they haven’t challenged the client’s assumptions and
  • they end up making it more difficult for the client to achieve his/her/their objective.

2. Assuming the client knows the extra effort they put into a piece of work. All too often firms write off fees without telling the client. They feel noble that they have given the client a ‘good deal’ because they haven’t charged for the additional work… but the client never knows and so never gets the chance to thank the firm, or comment on it. More importantly firms may be setting unrealistic fee expectations for future work.

3. Assuming they know what the client thinks of the relationship with the firm. Often, when we are conducting client reviews, the things firms think are issues, aren’t; and the client’s actual issues are things that the firm hadn’t even considered. There are two main reasons for this:
  • the firm has never asked the client, or
  • an individual within the client organisation has made a single               comment, and it has become ‘fact’ within the firm. I have seen firms  change their strategies around significant clients based on one          partner’s say-so, and end up losing the client because they had all     the assumptions wrong.

4. Assuming clients don’t see what happens inside firms. Your clients are working with your teams and will see what is happening, particularly with regard to team changes, and with advisers who are nearing retirement. Firms have said to us “we knew that, but we didn’t realise the clients did.” Don’t forget you operate in the same market as your clients.

So, how do you know if your assumptions are right?

The only way to know for certain is to test them. Do this by:

  • asking your clients about their business and their goals
  • talking to your clients about team changes and succession planning early
  • letting clients know when you are not charging them and, where possible, the value of the work you are not charging for
  • seeking a range of views from within the client organisation about the relationship.

What other unnecessary assumptions do you think firms make?

What can be the impact of these assumptions?

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