The Art of Client Service in Investment Banking: Eight Lessons from a World-Class Dealmaker

These simple tactics can help any banker improve their client coverage strategy in the short-term and over time.

As much as technology is changing the way investment bankers work, some of the fundamental principles of client service will always stay the same. Speaking during a lecture at the University of Virginia Law School, Jim Donovan, Vice Chairman of Global Client Coverage at Goldman Sachs shared his advice on client service for dealmakers. From the value of a strategic pause in your conversations, to the dangers of mixing work and pleasure, we summarized all of his most noteworthy insights into this article written for up-and-coming and senior bankers alike.

1. Take time throughout your conversations with clients to pause

In the middle of a meeting or presentation, it’s natural to feel a little nervous or pressured and talk fast. “If you pause it will slow you down," Donovan says. “It will make you appear less nervous to the client. It also has a unique positive feedback effect. If you pause, it actually calms you down.”

Just as important, pausing helps create strategic space within a conversation or presentation that helps improve client engagement. “You create a vacuum, a space into which the client is likely to ask a question or make a comment. That's good. You don’t want your presentation to be a speech. You want it to be a conversation, a dialogue. Pausing encourages dialogue and encourages comments and questions from the client.”

Lastly, pausing can help you tip an imbalance of power in your direction. “The client has power. You have less. Pausing creates uncertainty. That uncertainty serves to slightly shift the balance in your favor.”

2. Regularly ask open-ended questions

To truly understand your clients, open-ended questions are critical. “Instead of asking the client, are you worried about competitors entering your market space and taking market share away from you,” Donovan says, you want to ask questions like “what are you worried about?"

First, this gives clients an opportunity to talk and express themselves. “People enjoy talking about themselves… So the more you get the client to talk about themselves, the more they're going to enjoy the meeting and the more they're going to associate interaction with you in a positive way.”

Second, it will help you do your job better by helping you discover the information you need to not only understand their business but also, who they are and what they value. “You'll learn what the client's biases are, what their interests are, what their passions are, what their fears are - that will help you do your job better” and provide the kind of tailored solutions they’ll value the most.

3. Leave the jargon behind

“If you're a lawyer, you'll learn terms like summary judgment or res adjudicata. If you're an investment banker, you'll learn terms like… CAGR or CAPM. Don't use those with clients,” Donovan says.
More often than not, clients simply won’t understand what you're trying to say and instead of thinking you’re smart for having used technical terms, there's an even greater chance, Donovan says, that you’ll end up creating distance between you and them.

“They don't want to appear foolish… So what will they do? They will sit there in silence… feeling foolish and resenting you for making them feel that way.”

By eliminating jargon from client interactions, you can decrease the risk of a high-cost miscommunication while opening the door for clients to stay engaged in productive conversations that are centered around their needs.

Over time, this helps clients feel more understood, while at the same time making them feel like they can share more of what’s on their mind.

4. Offer advice that’s in their interest – not yours

One of the most powerful ways to establish credibility and trust with a client is by offering advice that seems to go against your own interests.

“If you and your firm only get paid if a transaction is consummated, advise the client not to consummate the transaction if that makes sense for the client,” Donovan says. “There's no more powerful way to establish credibility.”

This level of integrity is rare and speaks volumes in an industry where transactional mindsets often prevail. When clients see that your recommendations stem from a genuine commitment to their success, they’re more likely to trust you in critical decisions and come back to you as their needs evolve.

At the same time, by engaging in more candid and reflective conversations with your clients, you’ll be able to learn more and think more clearly about their strategy and needs.

5. Draw a line between your business and personal relationships with clients

While it's natural to develop close relationships with clients, it's essential to maintain a professional boundary, Donovan says. Blurring the line between business and social life with your clients can undermine the integrity of your relationships by introducing new variables that create unnecessary risk.

“It's easy to do,” he says. “You're working long hours. You're thrown together with the same group of people all day, every day… And it is absolutely the wrong thing to do. You have been hired to solve problems for clients. You have not been hired to be their friend. You should be friendly, but you should not be their friend.”

Recounting his experience as an associate earlier in his career, trying to predict which of his colleagues would reach the senior levels of his firm, Donovan said that one of the biggest factors amongst all the people who “washed out” was that “they had crossed the bright line between business and social activities.”

6. Maintain a positive attitude, no matter what

Positivity and enthusiasm are contagious and clients want to work with people who are optimistic. Those emotions and the reactions they create are also an important way that clients remember and judge their experience with you. While they may not remember everything you said, they can often remember how you made them feel.

When you walk into a meeting and the client asks you, how are you doing? Donovan says to keep your answer simple and upbeat and never say anything like “oh my gosh, I'm having a horrible day - I lost my cat and I'm really worried about him… The client may react with sympathy, but it's not the right thing to do.”

Clients hire dealmakers to solve problems by listening to theirs, so don’t create problems by making them listen to yours.

7. Practice humility constantly

Even if you feel like the smartest person in the room, dealmakers need to approach their clients with humility, acknowledging they often have more experience and knowledge in their respective fields.

“It's fine to say to the client, ‘I don't know the answer to your question. Let me get back to you’, Donovan says. “Don't pretend to know more than you do. People don't like that. People don't respect that. And if you pretend to know more than you do, you will lose the respect of the client.”

Humility fosters mutual respect and enhances collaboration, paving the way for successful partnerships. At the same time, it helps dealmakers avoid the unnecessary costs of over-promising and under-delivering when they make it seem like they have all the answers.

8. Know what you know and speak decisively about it

Clients rely on investment bankers to provide expert advice and guidance. Once you’ve practiced being humble to figure out what you don’t know, be confident about what you do know and say it with confidence.

Every great dealmaker has some kind of competitive or even comparative advantage and ultimately, that’s what an executive is looking for when they hire you - that unique insight and opportunity that only you can deliver.

“They're coming to you for guidance. They're coming to you to make decisions for them. So be decisive. Take a position. Give a recommendation. Clients don't want to see equivocation. They want to see decisiveness. They want to see you take a position. They want to see you say, this is what I think. This is what I recommend.”

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