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Proper Communication for Better Client Relationships

 By Taylor Liao, CFP

When financial planners discuss client classification, they typically talk about the type of client that they want to work with. Some may choose high net worth clients because they pay more and have more assets to manage. There is only one type of client that I will not work with. I have learned that I cannot work with clients who are not aware of their problems and don’t see the necessity for financial planning in their lives. There really is nothing my business can do for people who don’t have a strong belief that they need to change or aren’t willing to improve. Other than that, I seize the opportunity of every new client and take the time to understand their unique situations.

In the first interview, whether it is face-to-face or over the phone, I communicate the value of financial planning to the client and make sure that they are willing to do the necessary work to accomplish their goals. Financial planners only have control of giving the client the best possible advice to help them achieve their goals. We can create a detailed report, present it to them and show them how to reach their future goals but it is up to the client to actually do the work and make the changes they need to. There is a US statistic reporting that 50% of Americans who receive financial plans don’t ever use them.

Why is this number so high? What happened? It appears that financial planners are working with the wrong clients or not communicating the value of financial planning in the early stages of the client interaction. Some financial planners spend most of their time doing the financial analysis and don’t take the time to learn about the clients’ life philosophy or values. If this is the case, the financial plan becomes an object that will never be implemented. The objective of financial planning is to inspire clients to take action to reach their life goals. There should be changes that the clients make in their lives such as controlled spending, saving more money, etc. If clients don’t make any changes after meeting with financial planners, the financial planning is useless.

Better Communication

Simon Sinek gave a TED talk about how great leaders inspire action. He explained his Golden Circle method which includes why, how, and what. Mr. Sinek further explained that people normally communicate from the outside to the inside. For example, financial planners might say to a client “We have a strong team of qualified CFP professionals and we can provide you with quality service, so choose us as your financial planner.”
Mr. Sinek explained that this kind of communication does not inspire people and will not initiate the client to take action. Instead, financial planners should communicate from the inside out. Their messages should be, “We do financial planning because there are financial products being sold everywhere but no one cares about the real needs of the client. We want to change that situation by providing clients a comprehensive plan and only the necessary financial products, based on what they want in their lives. Does that sound good to you?”

Mr. Sinek emphasized, “People buy why you sell, not what you sell.” Apple has done a successful job of this, with people lining up outside their stores 5 days before the launch of their new products. Apple customers are enthusiastic because Apple communicates from the inside to the outside. They never talk about the function or performance of their products. They communicate that they are innovators who work to make consumers lives better with their technology, and their customers love it.

Simon’s theory can be used in our communication with clients when we first meet them. Because financial planning is a long process that takes lots of work (planning, implementation, actions, monitoring, and reaching goals), financial planners need to articulate the importance of it, in the first place. The client needs to know, most importantly, why they need financial planning and how it will help them. This is why I always ask questions during the initial interview, before doing any data collection or analysis. I ask, “Why is financial planning important to you?” and “Why do you think you need financial planning?” I make sure the client acknowledges that they have a problem and that is why they came to see me, then I explain how I’m going to help them with financial planning and what the actual financial planning process is.

Left Brain, Right Brain Communication

According to the theory of left brain or right brain dominance, each side of the brain controls different types of thinking. The right side controls emotions, creativity, and making decisions while the left side controls language, logic, numbers, and reasoning. Financial planners typically use their left brain more in their work, giving clients rational answers to everything. Our questions need to be more emotional to connect with clients’ right brains, because when people make decisions, they are based 80% on their emotions, and 20% on their logic and rationale.

For example, you can ask, “How much loss are you willing to accept in your investments?” This is a rational question that doesn’t cause an emotional reaction. Another way to ask this question would be, “What’s your philosophy of managing your investments? How would you feel if your investment value dropped 20%?” The second set of questions appeals to the client’s right brain more, asking how they handle loss of investment.

Most financial planners need improvement in this area. I have seen many data collecting forms that focus almost entirely on rational, left brain questions. This is a pity, because the right brain questions help planners really understand clients.

My business forms focus on all the normal questions:

  • How many children do you have?
  • What is your income/outcome?
  • How many assets do you have?

An experienced financial planner understands that with just this data, they cannot create a comprehensive financial plan. We need to understand the intangible aspects of the client’s life. A financial plan is not all about money; it’s about how a client is going to plan for the rest of their life. A qualified planner doesn’t simply specialize in financial matters; they also are good listeners and pay attention to what the client says.

Good Follow Up Questions 

After finding out that a client has a child, planners should follow up by asking questions about expectations around education, such as:

  • What level of education do you expect your child to get?
  • How important is a college education for the future of your child?
  • How are you going to save for that?

These right brain questions will help the client imagine their child’s future and trigger emotions associated with their child’s education and future. Planners should ask questions that encourage clients to talk about themselves and also reassure them that the planner is listening.

Once the client opens up to the planner about their goals, they will feel confident that their financial plan will be tailored to their lives and want to implement the advice of the planner. Planners, often, offer too much logic and data analysis to clients that don’t inspire them to achieve their goals. Instead of asking skin-deep questions, why not ask questions to the right brain that touch clients’ hearts?

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