{"id":670,"date":"2017-07-10T14:39:03","date_gmt":"2017-07-10T04:39:03","guid":{"rendered":"http:\/\/magazine.riskinfo.com.au\/31\/?p=670"},"modified":"2017-07-13T14:46:21","modified_gmt":"2017-07-13T04:46:21","slug":"relationship-capital-advice-practices-valuable-balance-sheet-asset","status":"publish","type":"post","link":"http:\/\/magazine.riskinfo.com.au\/31\/relationship-capital-advice-practices-valuable-balance-sheet-asset\/","title":{"rendered":"Relationship Capital: an Advice Practice\u2019s Most Valuable Balance Sheet Asset"},"content":{"rendered":"
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Industry elder, Adjunct Professor and Chairman of Mentor Education, Jim Taggart, OAM, UND, talks to his peers in this article about what he considers to be the most valuable (and under-rated) balance sheet asset an adviser can possess \u2013 their \u2018Relationship Capital\u2019\u2026<\/h3>\r\n<\/div>\n

When we think of business capital, it is done in financial terms, for without this asset it is impossible for an advice focussed enterprise to operate or grow.<\/p>\n

Mentor Education argues that \u2018relationship capital\u2019 is equally vital. In fact it is the foundation for developing new markets (and clients) \u2013 and a quick glance at the financial statements will reveal how much of this asset a business has.<\/p>\n

Business isn\u2019t a spectator sport and how well you develop and nurture relationship capital will define and play a major role in its financial success\u2026or failure.<\/p>\n

Building relationship capital<\/h3>\n

Developing strong relationship capital is a business strategy that\u2019s often overlooked and even approached in a superficial or tokenistic manner.<\/p>\n

It\u2019s the relationship capital of your people that combine to become the reputational capital of your business.<\/p><\/blockquote>\n

But the effort put into building good relationship capital is one of the most cost effective strategies with potential to deliver extraordinary outcomes.<\/p>\n

It takes thought, practice, and the right attitude to get it right with the key focus being trust, sincerity, honesty, integrity and dependability \u2013 that when combined create the business culture, and in turn the reputation capital.<\/p>\n

The practice principal and key personnel of an advice business build culture over time, as a result of their daily activities and interactions. It\u2019s the relationship capital of your people that combine to become the reputational capital of your business.<\/p>\n

When people think of \u2018networking\u2019, they often do so through a very narrow prism of networking events, adding contacts to a database, having meetings, etc.<\/p>\n

In order to build relationship and reputational capital, a broader view is required.<\/p>\n

With every P2P interaction \u2013 client, employee, the local caf\u00e9 cashier \u2013 you\u2019re engaging with people in your network and the manner in which you speak and engage with each and every one is either contributing to or deducting from, your relationship capital.<\/p>\n

Therefore, choose words, topics, and your thoughts carefully.<\/p>\n

How many interactions have we all experienced with people that were lazy, argumentative or patronising in the way they sought or articulated information?\u00a0 Those people are undermining their personal and commercial capital, one careless and thoughtless interaction at a time.<\/p>\n

We are all brokers of information, and the quality of the information is determined by us, and how well we deliver it.<\/p>\n

Networking and engaging with other people is something that deserves more thought and preparation than many people give it. To be successful and effective it must be strategic and tactical in its application and purpose.<\/p>\n

Think about how you network and the effort you put into it.\u00a0 Do you contact the event organiser beforehand and request a list of attendees? If not, why not?\u00a0 If you are taking the time to go to an event, maximise that time by deciding ahead of time who you would most like to speak with.<\/p>\n

Have you contacted any networking organisations to find out more about them or how you could get involved?\u00a0 Are there volunteer opportunities, potential to donate items for prize draws?\u00a0 Are there opportunities to speak at or host future events, or perhaps to contribute an article to an organisation\u2019s blog or member magazine?<\/p>\n

If you\u2019re going to put time into networking, you must also put in the effort required to maximise the opportunities and outcomes.<\/p>\n

Time isn\u2019t money \u2013 relationships are money<\/h3>\n

Reflect on those significant client win successes: was it related to the number of hours worked each week on the proposal, or was it the rapport and depth of relationship and trust developed with the client?<\/p>\n

Developing relationships demands a significant time investment, but it\u2019s the quality of the relationships \u2013 and the amount of relationship capital developed \u2013 that you\u2019ll be able to take to the bank!<\/p>\n

The extent to which positive, trusting and solid relationships are built will ultimately be reflected in the balance sheet.<\/p>\n

Remember, people can open doors for you, but you must walk through them to find the opportunity. No matter how many networking events you attend, only you can build relationships with the people you meet.<\/p>\n

Creating an impression \u2013 who are you?<\/h3>\n

When you attend any event, like it or not, your actions, appearance, and communication, both verbal and non-verbal, will give others an impression of you.<\/p>\n

Are you conscious of the impression you create?<\/p>\n

How do you conduct yourself at an event? Do you arrive late and leave early, or plan well so that you can stay, enjoy and immerse yourself in the event?<\/p>\n

How do you go about obtaining information from others? Do you structure your questions to obtain quality information, or do you ask generic questions that may give the impression you\u2019re being polite rather than genuinely interested?<\/p>\n

The quality of information you gather will depend on the quality of your questions.<\/p>\n

When you\u2019re interested in finding out more from someone you speak to, do you leave them with a card? Do you talk about your card to them, for example, your address, or a qualification it mentions? Do you ask for their card?<\/p>\n

Importantly, do you set clear expectations about getting in contact with them to find out more? And do you follow up and do what you\u2019ve said you would do?<\/p>\n

When you\u2019ve prepared well for the event, it\u2019s easier to have the type of quality conversations that progress a relationship.<\/p>\n

As a financial adviser, I used to spend a lot of time looking at various company websites to get an understanding of what they did, so that I could talk to their representatives at the event.\u00a0 It\u2019s those small things that make a big difference to the quality and depth of your conversations.<\/p>\n

Are you a giver or a taker?<\/h3>\n

Are you the person people gravitate towards at events or the person they avoid? Reflect very seriously on the quality of your interactions at events, and on how others may see you.<\/p>\n

Far too often people at networking events immediately go into their spiel and pitch on handing over the business card. In doing so, they are deducting from their relationship capital and ultimately wasting their time and squandering the commercial potential such events have to offer.<\/p>\n

it\u2019s important to understand the opportunity cost to you of not networking well<\/p><\/blockquote>\n

The cost of not getting it right<\/h3>\n

Some might say that it\u2019s difficult to measure the success of networking and building relationship capital. I would argue that measuring your success in these areas is as easy as looking at the financial statements of your advice practice.<\/p>\n

It takes time to develop good relationship capital, but it\u2019s important to understand the opportunity cost to you of not networking well and failing to develop that capital.<\/p>\n

Relationship capital grows into reputation capital for your advice business over time. If you view this type of capital as an asset, you\u2019ll see the sense in growing and protecting it. And as it starts to increase, you\u2019ll see a corresponding increase in opportunities, and in your financial statements.<\/p>\n

If you\u2019re a reluctant networker, let me leave you with these two quotes:<\/p>\n

\u201cLife isn\u2019t about finding yourself. Life is about creating yourself.\u201d (George Bernard Shaw)<\/p>\n

\u201cDeath is not the greatest loss in life. The greatest loss is what dies inside us while we live.\u201d (Norman Cousins)<\/p>\n

Issued by Mentor Education RTO 21683: www.mentor.edu.au <\/a><\/p>\n

\"\"<\/p>\n

Mentor Education is delighted to have Adjunct Professor Dr. Jim Taggart OMA as the Chairman and independent director of the Mentor Board, past president of the Association of Financial Advisers, and who sits on the board of TAFE NSW.<\/p>\n

Jim Taggart has over 20 years of board level experience across the public (local & state), private (finance planning, investment, development) and not for profit (church, community & fundraising) sectors. At board level, highlights include being a member of the Asia Pacific Financial Services Association, Investment Board for the Parramatta Diocese; (Chairman) Salvation Army Advisory Board (Business Appeal); Audit Committee Member, Hills Shire Council; Parramatta Stadium and TAFE NSW Western Sydney Institute.<\/p>\n

In an executive capacity, Jim established the highly successful Taggart Group in 1987 and is currently Director, Western Sydney Institute of Sport. Jim has a Doctorate of Business Administration (DBA) and is also a recipient of the Medal of the Order of Australia (OAM) and won the Association of Financial Advisers, Financial Advisor of the Year Award in 2005.<\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

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