Beverly Flaxington is a practice management consultant. She answers questions from advisors facing human resource issues. To submit yours, email us here.
Advisor Perspectives welcomes guest contributions. The views presented here do not necessarily represent those of Advisor Perspectives.
Dear Readers,
I’ve spoken, taught and written about the importance of the “human element” when it comes to financial and wealth planning. Investment excellence, whether your own or from a partner, is of course essential to helping clients meet their goals, but working as a coach and consultant to help them plan is also essential.
Unfortunately, most finance and investment coursework does not include the important skills that are learned when one pursues a psychology degree or a degree in life coaching. I have worked with advisors for many years helping them incorporate these skills into their practice. As The Human Behavior Coach®, it has been my life’s work to study human behavior. In this week’s column I’ll share some important elements I include whenever I work with advisors to help them be better life coaches:
- Learn the art of consultative questioning. This may seem obvious, but ask open-ended questions, probe for the “why?” when a client gives you an answer and so on. Life coaches take this one step further and adapt a genuine curiosity when they are working with a client. It’s not about filling in the questions on the financial plan (which is also important, of course) but it is about learning what’s underneath the answers that a client gives you. My rule of thumb is three questions for every response from a client – in other words, if you ask, “How did you develop your approach to saving?” and the client says, “My parents were spendthrifts so I learned what not to do,” you could in many cases stop there. After all, you got the answer to your question. But if we look at this further, we might want to know: “How do you define spendthrift? What behaviors did they engage in and how did spendthrift manifest for them?” and “What exactly did you learn ‘not to do? ’” This way you are really trying to understand what’s underneath their answers. Most people need help to explore what they mean!
- Ask the unexpected questions. Your prospect or client is sitting with you ostensibly so you can help them plan for their financial well-being, whatever that means to them. They are going to expect you will need answers to many questions around goals, values, income, expenses and the like. Because of this, prepare something they won’t expect to be asked – “What was your favorite part about the major track you chose in college?” What? How can this help you get them closer to their financial goals? Because with every unexpected question, a person is forced to think about things they weren’t expecting. When human beings do this, they often offer up things they weren’t expecting to share. Other unexpected questions – “If you were writing your own obituary today, what things haven’t you done to this point that you would want included when someone writes your final one?” Or “What is the best thing about being a parent/grandparent/aunt or uncle?” (assuming they are one, of course). These seemingly off-point questions can offer a wealth of information about how someone thinks, what they think about themselves, what they value and how they make decisions. You must really listen to the answers in order to make these work for you.
3. Practice true active listening. In today’s age, active listening is a thing of the past. Advisors might be busy thinking about what they need to say next, how they want to present what they have to share, what question they expect to ask next, whether they’ll run out of time in the meeting and so on that they can actually miss many important cues and clues that prospects offer in the dialogue. Active listening takes practice. And although the adage about having two ears and one mouth may be true, listening takes energy and focus and isn’t natural for most people. One strategy is to count to 10 after your client speaks before you respond or ask the next question. The pregnant pause is very uncomfortable for most, but it can be very valuable. Another is to commit to yourself you will learn at least three new things in the meeting about your client – it’s like a treasure hunt where you have to uncover something to win!
- Practice doing the “what if” scenarios with your clients. They will give you their goals, their dreams, their hopes and their fears but what if they couldn’t do these things and had to choose something else of importance – what would it be? When I use my SHIFT Model® with clients trying to help them reach a desired outcome, before I will put a solution in place, I must have two to three alternatives that could work as options. Going through an alternatives process can open the mind up to ideas not previously considered. Your client says they want to retire at 50 with enough money to live out the rest of their lives. What if they retired at 35? What if they retired at 65? What would they do differently? How will this change or impact the idea they have about retiring at 50? What if they have plenty of money long before 50? You want to ask both the “feeling” and the “thinking” questions – some are feelers and some are thinkers. Be sure you ask, “How would you feel if you had plenty of money long before 50? What would you think about this?” Your objective is to get their minds to wander a bit and consider options and alternatives. Again, the magic number might be 50 (in this case) but make sure they have clearly considered why it is so. There are many stories of people who met their goals, and were unhappy in doing so.
- Use a financial planning tool/software/questionnaire as a roadmap but not as the be-all and end-all. The tools available in the market today can be very useful and beneficial but having the savvy to apply them correctly is what counts. Use them for engagement, to jog ideas and ask questions and to help the client focus but don’t put all of your decisions in this one basket. Consider, with the client, what the answers really mean to them.
There are many other life coaching questions you can ask that relate to risk (but not in the traditional risk/return manner), to appetite for different investments, for ways to engage couples or families in dialogue, for changing life conditions and for generational impact. I’ll try and cover these in a future article to give you additional ideas for implementing a life coaching approach to your financial advisory work.
Beverly Flaxington co-founded The Collaborative, a consulting firm devoted to business building for the financial services industry in 1995. The firm launched Advisors Sales Academy to offer practice management resources to advisors, planners and wealth managers. She is currently an adjunct professor at Suffolk University teaching undergraduate students Leadership & Social Responsibility. Beverly is a Certified Professional Behavioral Analyst (CPBA) and Certified Professional Values Analyst (CPVA).
She has spent over 25 years in the investment industry and has been featured in Selling Power Magazine and quoted in hundreds of media outlets, including The Wall Street Journal, MSNBC.com, Investment News and Solutions Magazine for the FPA. She speaks frequently at investment industry conferences and is a speaker for the CFA Institute.
Read more articles by Beverly Flaxington