Client Engagement

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4 Hacks For Managing Your Nightmare Clients

Advisors and their staff love to stereotype their clients. Without even realizing it, most firms segment their clients based on communication style using a crude method of stereotyping. While this segmentation is informal, it 100% aligns to the four fundamental client communication styles. Below is a guide to the four most common client communication styles and how to serve them based on their common stereotypes. Any seasoned advisor will agree that these tips can save your client relationship.

1. The Engineer: By far, the most common stereotype I hear is “the engineers”. Many firms will avoid engineers at all costs. But for firms that have mastered communication to engineers, this is their bread and butter business. The key many firms use when training new staff is: “don’t you dare show up to a meeting for an engineer without doing your homework.”

Tips for working with “The Engineer” (The information focused)

  • Make the meeting have structure, provide an agenda ahead of time.
  • Provide research to back up recommendations. Give them space to review the research and contemplate options. Ask leading questions to draw them out beyond simple yes/no options.
  • Follow-up the meeting with additional resources to educate themselves and a to-do list as “homework”.
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2. The Talker: The “talker” can be a potentially great referral source, but they sure can do a number on your calendar!

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Tips for working with “The Talker” (the Lifestyle focused)

  • Make the meeting fun and inspiring.
  • Swap stories of influential people that share a similar situation.
  • Follow-up the meeting with a phone call, even invite them to a social event. Everyone likes the life of the party, or at least wants to hear what they’ll say next.

3. Mr. or Ms. Guarantee: Averse to risk, Mr. or Ms. Guarantee cant stand the thought of losses and immediately jump to the worst case scenario. They wont like the idea of complete uncertainty and will often ask for written guarantees and whole-heartedly compare their performance to benchmarks. They need continuous reminders to stick to their plan and that slight ups and downs are normal.

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Tips for working with “Mr. or Ms. Guarantee” (the Stability-focused)

  • Make the meeting relaxed. Use a coffee table or living room type setting.
  • Reference past experiences and make recommendations accordingly.
  • Follow-up the meeting with a phone call AND email about next steps.

4. The Hardheaded: “Do as I do, not as I say”. The hardheaded have a view of the world that every rule is intended to be broken. These clients are the best selective listeners in the world and will interject on a dime to keep the discussion focused on their self-centered plans goals.

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Tips for working with “The Hardheaded” (The goal-setting focused)

  • Make the meeting formal and focus on how you will meet THEIR goals for returns.
  • Be prepared with a sample big picture plan.
  • Afterward, follow-up with an email or text summarizing the discussion.

 

 

 

Following these guidelines will keep most client experiences on the right path to success. But if you ever find you can’t quite find the right fit, either try a mix of the options above, or there are tools and training available to support your needs.

Find Your Financial Advisor Soul Mate Don't Settle for Less

Find Your Financial Advisor Soul Mate

People have unique financial needs; no two situations are ever exactly the same. Finding a financial advisor who really understands us and can deliver advice tailored to the specific situation can make a significant difference in helping us accomplish our life and financial goals.

It takes a special kind of person to be able to unlock deeply held information at the first meeting. It gets progressively more difficult if that first meeting is not conducive to our communication style. Fortunately, some advisors have Behavioral Finance tools available to ensure they are meeting your needs.

So many of us settle for second best when it comes to engaging a Financial Advisor. Yet how much more could be achieved, if the Financial Advisor we chose not only fully understood investments, but also knew how to uncover your goals and behavioral biases that may be a blockage to achieving those goals?

I wonder why we prolong a relationship with our Financial Advisor when it’s clear we are settling for second best. I want someone smart, trustworthy, and dependable and who cares about my future and my financial wellbeing by making sure they really understand me and are not giving me a generic portfolio that they prefer. Joanna Cleaver writing for US Money puts it like this.

You stay because breaking up is hard to do.

I want my Financial Advisor to see their self as a financial soul mate. I want them to understand I have a bias for Newness – giving more weight to something new and exciting, rather than because it made logical sense to do otherwise. I want them to partner with me as I manage my Mental Accounting bias – needing to allocate my finances into specific buckets for explicit purposes, rather than for long term goals.

Maybe this sounds radical, but why can’t I have a Financial Advisor who understands my communication style? I need time to understand and dwell on what they are saying. I need information delivered to me in a relaxed environment. Wouldn’t this achieve a greater likelihood that I would remain with the same Financial Advisor for years?

Many years ago, I wanted to invest in an exciting start up. Something about this entrepreneur and his ideas excited me. My financial advisor wouldn’t even discuss the opportunity referring to me as a ‘novice’ in terms of investing and to the entrepreneur as a ’7-day wonder’. The advisor had no idea about me, my plans for my life and indeed I think saw me as an amateur.

As I am reminded of that incident many years ago, I wonder if the advisor (long since out of my life) remembers the conversation as he watches the multi-billion dollar empire this young man went on to build.

All it would have taken for this story to have been different was an advisor who understood that I don’t take risks, but that I am very savvy when I see an opportunity, and that at that time I could well afford the amount I wished to invest.

Its time for Financial Advisors to approach us as our financial advisory soulmate. They need to take time to match us with advisors based upon communication style and understanding our behavioral biases. With a validated behavioral and communication process, I believe I can find my financial advisor soulmate. It isn’t just a need, but I believe it is their responsibility to ensure my financial and life goals are met.

It’s time for your advisor to learn more about Behavioral Biases that get in the way of making sound financial decisions and to use available tools and training to better support achieving life and financial goals

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The Four Words You Never Want to Hear

I’m afraid of you.

According to a recent survey (McAdam LLC and Harris Poll 2015) of more than 2000 Americans, 71% said some aspect of meeting with a financial advisor scared them. The most common reasons cited were costs, trust and the inability of an advisor to help them with their financial situation.

However, a majority of CFP professionals feel having the CFP designation increases the trust and confidence levels for clients, according to a survey by the CFP Board of Standards Inc. and Aite Group.

What accounts for the disconnect? The Financial Services industry has traditionally lead with a left-brain approach: research, analytical and factual. But at least 50% of your clients lead with a right-brain approach that is based on feelings and relationships.

With the current market volatility, the fact that you have educated your pre-retirees on withdrawals in a declining stock market means very little when facing hard choices about retiring triggers your clients emotions. They are scared about having to work longer, potentially cutback the “dream lifestyle” or just having to live with the uncertainty of it all.

This fear can be mitigated by one powerful emotion: TRUST

But is trust a “skill” you can sharpen? While I believe each person has a certain inherent trustability, there are ways you can get beneath the surface of a client to get past their fear factor.

1. Let the client choose how to proceed.

They want to feel like a partner, not being controlled. While you have a formal agenda for each meeting, you might begin the session with a simple question: “At the end of today’s meeting, what would be a good outcome for you?”

2. Stay present and open to not knowing exactly what turn the client might take in your meeting.

Be curious as to the “threads” your client may be unraveling. In your enthusiasm to talk about the carefully crafted portfolio you have designed and the safe withdrawal strategies, your client may be wondering, “What impact will all these uncertainties have on my lifestyle?” It would be best to acknowledge that fear and go down that path to demonstrate a deeper level of awareness.

3. Listen for and carefully observe energy or tone shifts.

This type of intuition is not always an advisor’s strong suit. Your client will give you cues: voice level, eye contact, and pauses. But when you listen to the “what” (fixed income in retirement) and are able to move to the “who” (no longer having income from a job, uncertainty of what’s next), you will build trust as you get at the client’s real fears and help them discover their next best action steps.

Focus on the one skill that will have the greatest impact on your relationships with both prospects and clients: TRUST. And, in return, your clients will face these uncertainties with greater confidence.

Advisors Fooled By Own Biases

Advisors Fooled By Own Biases

Some advisors have told me that they will not use a tool because of a warped belief they can read people better. The fact is, we all have personal blind spots and behavioral biases which stem from the overuse of our strengths. The right assessment process built with scientific foundations provides a huge amount of objectivity, which can help an advisor not fall into the trap of being fooled by their perception and own natural biases.

However, criticism of traditional risk questionnaires is right, as Carl Richards points out in his blog. The typical risk questionnaire is not inherently accurate and is relied upon without properly engaging the client. But if used as a starting point, success can be achieved by the advisor using it to engage the client in -a goals-based planning process.

With a reliability factor of 91% (and having been completed by over 800,000 people,) the Financial DNA Discovery Process is an independently-validated, psychometric assessment used to measure a person’s complete financial personality (including risk). So while basic, situational “questionnaires” should be out, scientifically validated processes which are accurate and engaging should ALWAYS be used so long as they are part of a more in-depth conversation.

Robo 2.0

Robo 2.0, Your Torrid Behavioral Finance Fantasy Comes True

Yesterday, my friend shared a link to a new artificially intelligent personal assistant that can communicate independently with clients. Her name is Amy and she is superwoman compared to Siri. Unlike Siri, Amy can work independently, multi-task, make her own decisions and can even teach herself to emotionally connect with others based on their digital footprint. The scary thing is robots are having more engaging conversations over email than we are (talking about interests like the Atlanta Falcons, paddle boarding or the BCS Championship). This evolution will cause ripples in the financial services industry, hold advisors to higher engagement standards and dramatically shift the traditional advisor’s role. Are your ready for Robo 2.0?

The Financial Advisor will be held to higher client engagement standards with Robo 2.0 in order to remain valuable in the client’s eyes. Superficial conversations are “out” and deeper wealth mentoring relationships are “in.” Are you Robo 2.0 ready?

Robo 2.0

With “robots” entering Fintech with robo-advice platforms (Robo 1.0) our industry is going through a major shift. Are you prepared for the next round of enhancements? I am predicting that Robo 2.0 will bring an army of “Amys” to advisor’s offices handling all previously manual tasks like answering client email, booking appointments, superficial “checking in emails”, documenting client meetings, building portfolios and lead gen. Amys will assist in nearly every facet of financial planning except for the actual meeting with clients and managing their behavioral biases.

Many have speculated that an advisor’s role in the future will be akin to a pharmacist equipped with an automatic pill dispenser, a check and balance in the financial planning process. I disagree. This is inefficient and not the best use of advisor’s talents. In Robo 2.0, firms will review and prepare all portfolios centrally and deploy their advisors to be the firm’s face and voice. The advisors will be the shoulders to cry on during a death or divorce, a counselor for health and wealth, and a gladiator for the client’s goals. Robo 2.0 advisors will be pushed to non-traditional work hours to keep up with the demands of their clients and the reality of the 24/7 capabilities of their Amys and the diverse services being offered. Not all Robo 1.0 advisors are suited for 2.0.

Higher client engagement standards.

The main advantage that a robot has over the human is that they fully prepare before a meeting. In a research study, we recently completed, advisors will not emotionally engage 40% of prospective clients. The way that they approach them in their first interactions will be a complete turn off (whether it be too pushy, too salesy, or just a personality mismatch). Robo 2.0 platforms will be able to reduce this mismatch by drawing on data from data.com, behavioral science, and demographic databases to know exactly to whom they are talking, their interests, their personality, their likely needs and key demographics and the ability to change their pitch accordingly.

In order to be competitive, advisors must emotionally connect to their clients, quicker and more reliably, by better understanding their financial personality and how to provide the type of personalized support each person needs.

So You Think You Are A Good Communicator

So You Think You Are A Good Communicator?

How many people who call themselves “good communicators” use the below logic to justify their claims:

  • “I know how to read people”
  • “I know people like them, they all work the same”
  • “I’m good at reading body language”
  • “I know this stuff so well I can teach it to anyone”

Would you describe yourself as a good communicator? Research shows that you will naturally connect with only 30% of the clients you meet. That leaves the overwhelming majority of people in the category of needing to adjust your behavior to meet their needs. But, how do you do that?

  • Does your client need concrete examples (Information) or just the big picture (Goal-Setting)
  • Will they want to know what other people are doing (Lifestyle) or do they want research to support a decision (Information)
  • Do they need help and support to get comfortable so that it feels like the right decision (Stability Style) or do they just need the rational bullet points (Goal-Setting)

While it is entirely possible for some people to really connect and engage with anyone they meet, they are the definition of “few and far between.” This brings up the question of “Why?” Through the use of behavioral science, you can better understand the natural tendencies of your clients, which will allow you to be a proactive manager of your clients’ needs. The use of a behavioral tool has also been proven to show a return of 150 bps to your AUM (Source:The Advisors Alpha: Putting a Value on Your Value, Vanguard 2015). So, adding a tool to your resources gives you a new differentiator between you and your competitors.

If there is a proven method available to ensure you can connect with absolutely every type of person, why wouldn’t you use it? Behavioral Science can help you accomplish your goals by giving you easy tips on how to engage different styles by making small adjustments to tailor your communication with your clients and prospects. Having this tool can turn you into someone with the ability to communicate with anyone, regardless of whether it comes to you naturally, or not.

What’s your communication style?