Do you sometimes feel more like a therapist than a financial advisor? If so, you're not alone. An initial meeting with a client should be no more than 20% of you talking, and 80% of you listening. Don't let your inner "advice monster" get in the way of really listening to your clients' concerns.
A Morningstar study of investor behavior found that the future vision we have of ourselves (or lack thereof) has a greater impact on our financial decisions than how much money we make, how much time we have or how smart we think we are.
As more and more CPAs explore opportunities in financial services, they're finding that minimizing taxes, building a portfolio and executing a Roth conversion are only part of the equation. Those are technical skills based on hard calculations. Being attuned to the human, emotional side of money may be even more important.
"When I brought this up with advisors, I used to get blank stares," Brendan Frazier, founder of Wired Planning and the Human Side of Money Podcast, told me on
Frazier shared an example of sitting in a meeting with an advisor and his retirement-age client. The client wanted to retire. The advisor put all the assets and projections on the board, and according to his calculations, he told the client he could easily afford to retire with a 90% chance of his retirement plan being successful. But the client walked out of the meeting and decided not to retire at the time. Why? Because he couldn't stomach the idea of putting all of his money in the market, and not having employment income coming in to hedge against potential investment losses.
Frazier doesn't think the advisor ever understood why he lost that potential client. But that's when Frazier realized advisors needed more training to deal with clients' emotional relationship with money.
Listening vs. really listening
I have found there's a tremendous gap between hearing somebody and really hearing them. CPAs are trained to talk about the numbers, and that means performance and the probability of a retirement plan's success if entering the realm of financial planning. But we often aren't truly listening to our clients and giving them a safe place to share all the stuff that's keeping them up at night.
Ultimately, clients just want to feel like they've been heard. But as Michael Bungay Stainer, author of the bestselling book "The Coaching Habit," argues, advisors often can't prevent their inner advice monster from barging into a client discussion to offer advice when they should still be listening. According to Stainer, your advice monster has three different personas:
1. "Tell It" is convinced the only way you can add value is to have all the answers. Because if you don't have all the answers, then you fail.
2. "Save It" believes your only job is to rescue everybody — don't let anybody stumble, struggle or have a difficult time. If anybody struggles at all, you fail. Parents might recognize that one.
3. "Control It" has convinced you the only way you win is to maintain control at all times. If anybody else takes over control, even just a little bit, then you (and they) will definitely fail.
Sound familiar?
Research from Prince Associates shows more than two-thirds of financial advisory clients (70%) will implement just one-fifth of their advisors' recommendations. To tame your advice monster, Stainer believes you want to replace your advice-giving habit with a new habit: Staying curious.
Frazier agreed: "As advisors, we don't do a good enough job listening, because we're so focused on telling people how you can help them. But at the end of the day, people want more than answers. They want to be heard. They want to be understood. They want to know that you're on the same team with them."
Asking the right questions is a superpower
Unlike doing a tax return or balance sheet, financial advice does not have a clean single answer. It requires a much more nuanced approach. That's where deep listening comes in.
Harvard Business Review did a study of two groups of people having 15-minute conversations with each other. The first group was allowed to ask no more than four questions of their conversation partner, but the second group was required to ask at least nine questions. The second group that asked more questions reported having higher levels of trust and likability with the person across the table from them. Simply letting their conversation partner talk about themselves — rather than telling the other person how great they were — created substantially higher trust and likeability.
In my experience, everybody's favorite subject to talk about is themselves. It could be as simple as asking about their family or their dog or their incredible collection of books or photographs. Frazier concurred: "Brain scans show that talking about yourself lights up the same reward area of the brain that eating chocolate and sexual activity does."
Dr. Moira Somers, a financial psychologist and author of the best-selling book "Advice That Sticks: How to Give Financial Advice People Will Follow" told me that after the first meeting with a new advisor, people's satisfaction with that advisor is directly related to the amount of "airtime" the client got at that meeting. Frazier agreed that as an advisor, you want to make sure that an initial client meeting was no more than "20% you talking and at least 80% you listening."
Values drive goals
I've found that values-based exercises can help clients gain a better understanding of what matters to them most, and this can be a transformative process because you are now creating a framework for their financial decisions that aligns with their values. A byproduct of this approach can help you build a more meaningful and supportive relationship between you and your client. Rather than focusing on transactions, you are offering more comprehensive, personalized guidance to help them achieve their financial goals and aspirations.
As Frazier reiterated: Values shape our clients' goals and goals determine their habits. Just saying they want to retire is a starting point, but if that goal is not shaped with their values in mind, then it may be hard to achieve, or it may not be a satisfying retirement when they get there.
Vision of our future selves
As psychologist Hal Hershfield would argue, when we think about saving for our future selves, we see a stranger whom we don't know. But if you can help a client go from having a vague vision of their future to a vivid description of their future self, reaching their goals becomes more doable.
For example, a vague description is: "I want to be retired by age 65." But if you can get your client to articulate a more specific vision like the one below, reaching the goals and saving for it becomes so much more manageable: "Every year, I want to take two trips to Disney World," a client might say. "We're going to stay at the Swan & Dolphin Hotel because that's where we stayed when I grew up. We want to visit all four of the theme parks while we're there. When we come home at night, we're going to have family meals for three nights and each of the kids gets to choose their favorite meal for the rest of the family. And then on other nights we're going to eat at our following favorite restaurants. And when the grandkids come to visit, we're going to sit around and have game night game night like we always used to do."
That's an extremely tangible vision of their future self, observed Frazier. With that vision in mind, he said it helps them decide how much to save each year to reach that future goal and perhaps delay or forego other high-ticket toys such as a luxury car or boat to get to the family Disney goal in retirement.
Whether you're going all in on financial planning or just dipping your toe in the water, there are many tools available to help advisors peel back client layers and have deep, meaningful conversations with them that help them see their future selves.
