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Financial Planner Blog

How to Connect with Clients Better

By Taylor Liao, CFP  

What is the key to being a competent financial planner: skills, knowledge or something else? The answer may not be how professional one acts or how amazing their presentation is: thick stacks of paper with fancy drawings that deliver the perfect solution for the clients every time.

The most important characteristics of a “professional” financial planner should be more focused around attitude instead of knowledge and skill set. It’s how you treat your client that matters, such as paying sincere attention to their real needs, taking care of every client, as if it’s your first case, carefully focusing on his/her needs, instead of thinking how much money you will get from their case.

Financial Planning is Different from Product Sales

I just posted a status on Facebook last week, explaining that I had just finished a case of financial planning for a girl. She referred to me her mother and her colleagues, an American couple, who are both teaching English in Taiwan now. One guy replied to the post and said that he couldn’t believe that I had received a fee from that client.

He perceived that I was using “financial planning” as an elegant package to sell insurance. I replied that he didn’t know the real meaning of planning. Financial planning doesn’t always result in a product sale; it improves a client’s financial status through clarification of their spending: income and outcome. Before the couple came to our firm, they thought that it was beyond their reach to achieve their goals. Now, they have the confidence to face the challenges of their daily life. When you see how grateful clients are, you know they have received great value that cannot be measured by money.

Putting the Client’s Interests First

What is the most important characteristic of a “professional” financial planner? I think it’s sticking to the principle of “putting the client’s interests first”. Some of us may have worked in other fields before becoming financial planners – I would ask them “What is the most difficult transition to becoming a financial planner?” I believe the biggest change is the foundational attitude that must be adopted to help the client before helping yourself. The client’s needs should be the biggest factor when deciding whether to implement product sales or not.

If you can’t throw away sales-oriented thinking, you can’t be a successful financial planner. Why? Because that will cause a conflict of interest in your role. When a client pays an advisor a fee, they trust that the advisor is not just selling them products to make more money. If you are contemplating how much commission you can receive from a case, then you can’t apply an objective point of view to provide the client the best comprehensive advice.

It’s not easy when the commission of an insurance product is higher than a planning fee. The best way to stick to the principle of “client’s interest first” is to focus on the client’s needs initially before even considering product sales. I work on a fee and commission basis; I sell products to clients, too, but I separate the planning and products into two different procedures. First, in the introduction stage, we talk about the client’s situation: how do we rearrange their spending, control their budget and find a solution? Then, we will have this same discussion two or three more times and, if it’s necessary, I will implement a product, such as an investment or insurance policy. Sometimes, all the client needs is financial planning advice and nothing else.

Demonstrate Professionalism by Connecting with the Client

How can you demonstrate professionalism to a client who doesn’t understand financial planning yet? When a client agrees to do financial planning, they must unveil their personal financial details to us; information that they don’t share with a lot of people. It is important to build a relationship on trust that allows us to optimize the financial planning process.

You can use a metaphorical approach to connect with clients. When I have to explain what financial planning is for the first time, I usually relate it to their work industry. This makes it easier for them to relate and understand. For example, pretend I’m talking to an engineer, who is working for a firm that manufactures the navigation system for cars. He is in charge of the design group. Our dialogue would go like this:

  • Me: How soon will your firm develop a new model?
  • Engineer: In about one year.
  • Me: Does every model have good sales?
  • Engineer: No; not always.
  • Me: Why not?
  • Engineer: We do marketing surveys before developing products, but sometimes our decisions turn out wrong. Sometimes, we have too many functions that don’t meet the requirements of the end user and that makes it impossible to sell.
  • Me: Do you think it’s bad that your firm developed a product that ignored the real need of the end user?
  • Engineer: Yes.

We have the same situation in the financial services industry. The firms in the financial sector issue many products that are not designed by clients’ need and not even fair to clients. But, they continue pushing the products through their sales channel. Financial planners have seen unreasonable products sold to clients that don’t consider their needs, their risks, or their budget. That’s why financial planning was established. We found clients who needed help and we listened to their needs and helped them achieve their goals.

Explaining Financial Planning

I say to my clients, “What’s your opinion? Before buying a financial product, would you like to sit down with someone who will listen to you discuss your financial status and your goals, and then, if necessary, they will help you choose the right tool to meet your requirements. In other words, would you be interested in financial planning?”

As I demonstrated in the dialogue above, comparing financial planning to something the client has experienced in their life helps them understand better, which in turn helps you connect with them.

We all know that financial planning is new to most people and can be a complex topic to understand. It’s hard to explain financial planning in a few words but it will greatly improve our relationships with clients if they have a solid understanding. Financial planners looking to be professionals should prioritize defining financial planning to clients and the public. It is also important to express to clients how financial planning can help them and what the financial planner’s role is in the process. If done successfully, clients will accept financial planners as professionals and the public will become more aware of the profession.

4 comments to How to Connect with Clients Better

  • rangaswamy

    dear sir i am G.Rangaswamy AFP(Retirement planning and Employee Benefits) I am extremely happy with your post which shows the Professionalism in financial planning this is the way to treat the clients.thank you so much for spending your valuable time

  • Taylor Liao

    Dear Mr. Rangaswamy,
    Thanks for your message and hope that will be help to you. This profession needs our effort to support it everywhere in the world.

  • Dear Taylor ,hope fine ,
    it’s a great article, i am owner of capital one financial services (mumbai) INDIA true dont’d try to sale any product you may ,or may not success to sale the same but if u give proper financial planing and educate a client about financial product ,he/she will buy sure immediate or after some time.plz send more such type of articles.

    • Taylor Liao

      Dear Mr. Shaikh,
      We are just having a typhoon now in Taiwan, but no serious damage. Nice to know that you like this article. I will share more of practice experience with client.

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