I was watching the Godfather trilogy a few weeks ago. In one particular scene one of the members of the Corleone family (the main crime family in the film trilogy) is about to be executed when he utters the words “tell Michael it was only business”. Then he was killed.
This got me thinking about how much we are driven by emotion in business transactions and why some institutions count on it. It is up to you to be without emotion when dealing with finances.
A few years ago, a friend of mine resigned from a bank in Sydney. The parting of ways can be optimistically described as acrimonious. Lawyers were involved. Problem was that he had all his banking (home loan, SMSF accounts, credit cards etc) with his former employer. While he was understandably angry, as a customer he didn’t change banks. He channeled the anger into a positive negotiating strategy with a branch of the bank. He made sure the people at the branch knew he was displeased and was a former employee and got a better home loan rate as well as a better term deposit rate out of the bank.
This strategy placed thousands of dollars annually into the pocket of my friend. Emotion is a powerful force and one that should be left out of financial decisions. He is now looking elsewhere as the bank is no longer competitive. If he leaves the bank now it will be for financial rather than emotional reasons. Which is as it should be.
As a banker – quite a few years ago now – I was contacted by a client. The client had never ever given me any notion that he was displeased with me or the bank that I worked for. We met at a bar after work where he informed me that he would be leaving the bank. When I enquired as to why, he informed me that the bank’s new parent company had foreclosed on his father’s farm almost forty years ago. He couldn’t sleep at night knowing that he’s long departed father had suffered at the hands of this institution and that he was adding to their profitability.
Whilst I understand the emotion involved in this decision, it may not have been the correct decision for his business. Never mind that almost anyone that had anything to do with foreclosing on his father’s property had long since retired.
Of course, it’s more than a financial decision when you choose a bank. The bank must deliver a level of service that you’re happy with. They must understand your business. They must stay with you in times of difficulty and not just send you a breach notice every chance they get. But this too is business. These factors should go into the decision-making process.
It’s up to you (or your broker) to question what happens when things aren’t so rosy anymore. Unfortunately, people in business think they have little or no choice. Nothing could be further from the truth. So, when you finally make the right call for your business and your bank asks why you’re leaving. Tell them it’s only business, then duck.