William Reeb

Dominic Cingoranelli
The top barrier to communicating with clients

Effective communication is a key to becoming a trusted adviser, but it can be sabotaged by something as surprising as clients’ own self-esteem.

August 4, 2014
by William L. Reeb, CPA/CITP, CGMA, and Dominic Cingoranelli, CPA, CGMA


Self-esteem, in our opinion, is the greatest obstruction to communication today.

To emphasize this, consider a CPA asking his client, Bob, the following question: “So, tell me … what motivated you to invest in the triplex rental unit?”

At a quick glance, the question seems inquisitive, but harmless. The history of this transaction is as follows: The client bought the triplex five years ago and paid $400,000 for the unit, and payments including escrow are $4,100 per month.

In scenario one, let’s assume that the real estate market is booming. Therefore, the triplex is now worth $700,000, the rental units average 90% occupancy, and the property has a positive cash flow of $1,200 per month. In this case, Bob’s response to his CPA’s question might be as follows:

“Well, I have been around the real estate business for a long time. When you know what you are doing, you can make some great investments. I bought that property because I could see its potential.”

A second scenario

Before we get underway with a discussion of Bob’s answer, let’s consider scenario two. In this situation, the real estate market has taken a nosedive. In Bob’s locality, real estate typically has declined about 35% in value. The triplex is now worth $270,000, the rental units average 60% occupancy, and the property has a negative cash flow of $1,000 per month. Under these circumstances, Bob’s response might be as follows:

“I don’t really know why I made that investment. I guess I was grabbing for the brass ring and missed. Besides, everyone I know is in the same position I am. And those who aren’t, well, they either didn’t make enough money to buy in to these kind of deals, or they’re just cowards for being unwilling to take any risks.”

So where are we? A simple question was asked with no inference about the quality of the decision. Yet the quality of the decision creates a stigma of success or failure that often guides the friendliness or hostility of the response. So using this example, where is the most common bottleneck in communication? It often is dominated by the egos or the self-esteem of those attempting to communicate. Problems occur any time people perceive their self-esteem to be threatened. Once threatened, the barriers go up, and the protection systems are armed.

In the second scenario, although Bob started out somewhat humbly with his comments, he clearly was threatened. This was apparent because his response justified his decision, established himself as someone special, and concluded with an attack on those more fortunate. The meaning of what he said was something like this:

I know I made a mistake, but so did everyone else. By the way, this mistake could only be made by successful people like me. Otherwise, you couldn’t have bought rental property in the first place. And those who are successful like me, but didn’t get hurt by the real estate market, well, they are cowards and not worthy of my consideration.

It is understandable why most people become defensive and protective of a poor decision, especially when you consider America’s view of failure. But why do defense systems engage even when decisions are outstanding?

Verbal inflators

In the scenario where Bob clearly made an excellent decision, when you analyze his response, a threat was still perceived. Why do we say that? Because Bob made some ego-inflating comments. Comments like “when you know what you’re doing” and “because I could see its potential” were not made for the CPA’s benefit but made as verbal inflators to Bob’s ego to remind himself that he is somebody special. The fact that the inflator statements were stated to the CPA indicates a likelihood that Bob was uncomfortable with himself about something.

He might have felt threatened because he was visiting his CPA. He could have been experiencing some self-doubt due to some unrelated event that happened earlier. Literally millions of reasons are possible why people suffer from self-doubt. However, regardless of the reason, weak egos can quickly disrupt the communication process, especially when two weak egos collide.

As an example, just think what would have happened if the CPA had responded to Bob with similar ego-inflating comments. If Bob was insecure to start with, then he would soon become even more insecure. This insecurity would most likely manifest itself into additional defensive posturing and create even more barriers, which would impede the communication process.

While these scenarios are contrived and exaggerated, they were created to make a point. There is a fine line between communication and alienation. Your ability to walk this fine line depends on how well you can manage your own feelings of worth and remain nonthreatening to the person or persons with whom you are communicating.

Editor’s note: Excerpted with permission from Becoming a Trusted Business Advisor: How to Add Value, Improve Client Loyalty, and Increase Profits. © 2010, AICPA.

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William L. Reeb, CPA/CITP, CGMA, is CEO of Succession Institute LLC. Dominic Cingoranelli, CPA, CGMA, is executive vice president of consulting services at Succession Institute LLC.