Consumer trust isn’t something to be taken for granted, but reports from the UK, US and here at home are all pointing towards an uplift in trust levels around financial advice, which can only be a welcome development.
There are significant tailwinds behind the financial advice industry at the moment, but some major obstacles are still preventing advice practices from taking advantage of surging demand according to a new study from CFS.
The right words at the right time – reacting to client concerns
In unpredictable markets, emotions can run high, and good intentions mingled with bad communication can potentially damage adviser-client relationships. We know that emotion drives investor behaviour, however this can be easily forgotten when we are under stress.
When addressing clients in difficult times, Invesco Global Consulting’s research has found that the highest-performing financial professionals communicate and engage with their clients in a way to allow their client’s emotions, financial and life circumstances guide the conversations, rather than focusing on general market conditions or short-term reactions to market volatility.
One of the least effective things you can do when you begin talking with a client, is jump straight to markets or the latest data. This is tempting to do as it is what most financial professionals talk about with one another on a day-to-day basis, however, when your clients are feeling fearful or anxious, they have difficulty actually hearing the facts. In fact, our language study revealed that 90% of investors preferred to start conversations with how the current market affects them personally and their long-term financial plan, not the most recent numbers, data and observations.
Understanding your client’s emotional reactions is going to be the most helpful tool for you when communicating with clients during difficult times and remembering to connect with purpose when reaching out to clients.
Here are two considerations for when you talk with your clients. First, when you connect with them, be sure to demonstrate that your call is intentional and purposeful, and focused on them.
Our research has shown that clients prefer the following type of language:
“Hi John, the reason I’m calling today is to start a conversation with you regarding the changes in the market. Just so you know, we are monitoring the markets and your personal financial situation. I’m prepared to give you some of our thoughts on what’s going on in the market and how we are staying the course with your financial goals. But before I get started, I’d like to hear from you. How are you and your family doing during these challenging times?”
As you proactively reach out to clients, you will benefit from truly being prepared for the conversation. The number one thing to avoid is simply checking in without a purpose. We have found that clients expect purpose and leadership from their advisers—especially during volatility.
Secondly, at some point, clients may express their concerns and fears about the market. Here is a way to “normalise” your client’s concerns based on the psychology of persuasion and communication. We collaborated with our long-term partner, certified business coach and clinical psychologist 1Dr. Tim Ursiny, to come up with what we call ‘AAA’ or ‘Triple A’. A method of responding to client concerns:
- Acknowledge: Reflect on what clients are saying. Give them a chance to vent, to express themselves — an opportunity that, all too often, clients don’t get. By doing this, you can help normalise a client’s concerns.
- Agree: Find some aspect, even if it’s a small part of what your client has said, that you can agree with. Think of it as the 1/100 rule — identify 1% of what your client has said and agree with it 100%. This is most powerful when it is something that you personally and genuinely agree with.
- Add: This is where you provide additional information (historical context, analysis, examples, and facts) to help alleviate your client’s concerns. You can do this by using a story or analogy when explaining complex ideas to your client, another method is to find cultural references or examples that your client responds to.
The research-based techniques we’ve outlined here are proven ways for financial professionals to communicate their service, value, and client support, even in challenging times. We firmly believe that acknowledging your clients’ emotions and thoughts will in turn lead to better relationships and results for both you and your clients.
1Tim Ursiny has a Ph.D. in psychology, has authored numerous books including The Top Performer’s Guide to Attitude: Essential Skills that Put You on Top and is the founder of Advantage Coaching & Training.
Invesco Global Consulting is a unique resource that exists to help advisers in the three areas all advisers consistently focus on – winning new business, retaining existing clients and growing their wallet and market share. We focus solely on the importance of the client relationship, methodically researching the language of our industry and the emotions associated with it to create actionable and implementable practice management and business strategy programs, assisting advisers across Australia.
