Negotiating skills for financial planners Peter Belsey, Business Director Financial Services

Agenda  Understanding the other side  Thinking through the strategy  Annihilation or win:win?  Body language and approach

Skilled negotiators  Judges effective by both slides  Track record success  Low implementation failure Average negotiators  Experienced  Moderate track record Huthwaite’s research into negotiation Versus

Quiz: Question One True or False Skilled negotiators spend more time (than average negotiators) preparing the negotiation, by gathering more information and setting their objectives, priorities and limits

Quiz: Question Two True or False It is important to present as many reasons as possible to support each of your proposals

Quiz: Question Three True or False The key to persuading someone is to present your argument logically

Quiz: Question Four True or False Win-Win negotiating involves both parties stating their ideal outcomes and then splitting the difference

Strategies & tactics Preparation & planning Face-to-face skills Effective Negotiation POWER Negotiation – a complex skill set

Do you have opportunities to negotiate already?  With clients, when you’re advising/selling?  When you’re buying, e.g. to outsource services?  Will you have more negotiation opportunities in future?  What makes these negotiations difficult?

Negotiation ME YOU What is negotiation? When:  you can vary the terms  the resource is scarce  agreement and conflict both exist ME YOU No common ground – so nothing to gain from negotiation ME & YOU In total agreement – so why negotiate?

YOU ME What is the difference between persuasion and negotiation? Persuasion = unilateral moves towards accepting your position Capitulation = unilateral moves towards accepting their position ME YOU

What is the difference between persuasion and negotiation? Negotiation = a bilateral process, you and they make moves towards each others’ positions YOU ME YOU ME

Why is the difference important?  Persuasion is successful when the other party says: “I would like to do a deal with you if...”  Average persuaders give things away to achieve this position – skilled persuaders don’t  Effective negotiation involves movement by both parties, a creative agreement and a perception of Win-Win The golden rule of negotiation Persuade first and only negotiate later if you have to

So, do you have opportunities to negotiate or persuade?  With clients, when you’re advising/selling, may you give things away too soon?  When you’re buying, e.g. to outsource services, may they give things away too soon?

Preparing and planning to negotiate  Prepare and plan with great care, including identifying ‘negotiable issues’  Identify and use your ‘levers’  ‘Trade concessions’ – don't give them away

Preparing and planning to negotiate Negotiable issues: a) With clients b) With outsourced suppliers  What issues do you have?  What issues may they have?  Are there enough issues to negotiate with?  Any others you can introduce, that may be negotiable?  If no, plan to persuade; if yes, plan to negotiate.

Identify levers Low High Importance to us Low LubricatorsYour levers Difficult Issues Their levers Importance to them

Identifying your and their levers a) With clients b) With outsourced suppliers  What are your levers?  What are their levers?  Likely difficult issues? Any lubricators? May you need to instigate the client negotiation? ‘I could re-consider my fee if you can offer me more of your portfolio and/or commit longer.’

A principle for persuasion Being right is not persuasive “I owe my success to having listened respectfully to the very best advice, and then going away and doing the exact opposite.” G.K Chesterton

Traps in persuasion What I Want Logical Arguments More Logical Arguments Irritators Logic is not persuasive

Another trap: argument dilution... as your weakest link Your chain is as strong...

Planning for effective persuasion  1 or 2 good reasons per issue  A good reason = will help them meet their needs  Check you’ve covered all their concerns  Summarise the Benefits  Propose an appropriate fee structure for the client Note your key arguments on each issue Concluding a new deal with a client Persuading outsourced suppliers  Create doubt and movement about their position  Expose argument dilution – seek more reasons?

Ten steps for effective negotiation 1. Persuade 1 st and only negotiate later…if you have to 2. Logic is not persuasive! 3. Beware argument dilution 4. Effective persuasion leads to ‘I’d like to deal with you if…’ 5. Average persuaders give things away to achieve this

Ten steps for effective negotiation 6. Identify and use your levers 7. You may need to instigate the negotiating 8. Trade concessions, don’t give them away 9. Remember Win-Win is not 50: Never, ever forget that ‘no deal’ is better than a bad deal

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