Communication Essentials for Financial Planners

Strategies and Techniques

John E. Grable, Joseph W. Goetz

• Publisher: Wiley
• Year: 2017
• ISBN:
  9781119350774
• Edition: 1
• Topic: Betriebswirtschaft
• Subtopic: Vermögensverwaltung

Exploring the Human Element of Financial Planning

Communication Essentials for Financial Planners tackles the counseling side of practice to help financial planners build more productive client relationships. CFP Board's third book and first in the Financial Planning Series, Communication Essentials will help you learn how to relate to clients on a more fundamental level, and go beyond "hearing" their words to really listen and ultimately respond to what they're saying. Expert coverage of body language, active listening, linguistic signals, and more, all based upon academic theory. There is also an accompanied set of videos that showcase both good and bad communication and counseling within a financial planning context. By merging written and experiential learning supplemented by practice assignments, this book provides an ideal resource for any client-facing financial professional as well as any student on their pathway to CFP® certification.

Counseling is a central part of a financial planner's practice, and attention to interpersonal communication goes a long way toward progressing in the field; this guide provides practical instruction on the proven techniques that make a good financial planner great.

• Build client relationships based on honesty and trust
• Learn to read body language and the words not spoken
• Master the art of active listening to help your clients feel heard
• Tailor your communications to suit the individual client's needs

The modern financial planning practice is more than just mathematics and statistical analysis—at its heart, it is based on trust, communication, and commitment. While interpersonal skills have always been a critical ingredient for success, only recently has this aspect been given the weight it deserves with its incorporation into the certification process. Communication Essentials for Financial Planners provides gold-standard guidance for certification and beyond.

CHAPTER 1
An Introduction to Applied Communication

INTRODUCTION

The primary premise of this book is that the financial planning process can be significantly enhanced through the appropriate application of communication theory. By theory, we mean one or more models based on a set of premises that lead to explanations and conclusions. In the preface to this book, we introduced a nine-step framework as a way to conceptualize how financial planners interact with current and prospective clients. A key assumption embedded in this framework is the notion that financial planners who understand and practice the process of communication will be better prepared to help clients reach their financial goals. If you are a student enrolled in a CFP Registered Program, the nine-step process of communication may provide new insights into better ways to communicate with others. If you are already a financial planner, you may find that the framework validates much of what you are currently doing when working with clients. That is, the framework—and communication theory in general—can be used to endorse many of your current practices while providing information to help improve other aspects of interpersonal communication.

Consider the following example. Begin by visualizing a financial planning office. A prospective client makes an appointment to meet with a financial planner. On the day of the meeting, the prospect arrives 10 minutes early. She is seated in the office waiting area. At the appointed time, she is escorted into the financial planner’s conference room. A few minutes later the financial planner arrives. She sits down across from the prospect before introducing herself. So far, in this imaginary scene the financial planner has yet to say a word to the prospective client. The question at this point is: Has communication taken place? A novice financial planner might say, “No.” Someone who has more experience probably will say, “Yes.” Communication theory would support the experienced financial planner’s insight.

Let’s evaluate what communication has occurred thus far in this scenario. We know that the prospective client reached out to the financial planner in one way or another to make an appointment. This might have occurred online, through email, or through a phone call. It is also possible that the client made an appointment in person. Regardless of the method, some interaction between the prospect and the financial planner and her staff must have already occurred. This interaction set the stage for further dialog. It is also reasonable to assume that initial conversations laid the groundwork for what the prospect expects from the financial planner. After all, early in the client–financial planner relationship, when a client has only a small amount of information from which to make assumptions, the content of communication is arguably even more important. In general, people tend to overmagnify the meaning of information when only a small amount of information is available. For example, let’s assume the prospective client reviewed the financial planner’s website, and then initiated a phone call to the planning professional to ask some questions.

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Prospect: “Hello, could you tell me a little about the services you offer.”

Planner: “Sure, we provide investment management and retirement planning advice. Would you like to set up an appointment?”

Prospect: “Oh, okay. I guess that would be all right.”

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At this point, the website and quick phone call served as communication tools to deliver a certain message to the client. What has the financial planner communicated on this short phone call? Did the prospect really want to know about the services offered? Maybe, but maybe she also wanted to know if the people within the firm would be approachable and take the time to listen to her. These first-impression messages can be quite powerful and have a lasting effect. Research suggests there may be some truth to the old adage: “You never get a second chance to make a first impression.”¹ Given the persistence of first impressions, a financial planner should choose to be intentional in their initial communication with a client.

The financial planner also may benefit from asking open-ended questions to determine what services the client is really looking for and whether the client is a good fit for the services provided by the planner before scheduling an in-person meeting. By asking the right questions, the financial planner may begin building trust and commitment with the client or save time on the part of both the client and financial planner if the relationship is not a good fit.

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Prospect: “Hello, could you tell me a little about the services you offer.”

Planner: “Sure, we provide a wide array of financial planning services and customize those services to each client. Perhaps you could help me understand which financial issues you’re most interested in addressing.

Prospect: “Oh, okay, well three main concerns come to mind, and they are whether I’m currently saving enough, investing the right way, as well as figuring out a long-term plan for one of my kids who has special needs.”

Planner: “Okay, thank you, this information is really helpful. Our team has worked with a number of other families to set up life-care plans for their child who has special needs, as well as provided retirement and investment planning specific to their situation. It sounds like our firm would be a great fit for your needs. Would you like to set up an appointment to learn more about our services?”

Prospect: “Yes, definitely. I’m excited to get started.”

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Communication between the prospective client and planning staff started again the moment the prospect entered the business premises. Was the person greeted? How was the greeting received? Did the client feel welcomed? Was the prospect immediately offered something to drink or not until she reached the conference room? What were the environmental triggers in the waiting room that signaled the financial planner’s working style? Was there a television showing business news or were general readership magazines available to peruse? Was the client sitting in silence? Was there classical music playing in the background, or was the client able to overhear conversations taking place within the office? Each of these elements will be discussed in more detail throughout this book. At this point, it’s just important to note that the environment can influence the way clients decode a financial planner’s message. The concepts of encoding and decoding a message are examples of elements within communication theory. The office environment and staff interactions, in particular, can shape the manner in which communication does and will take place, as well as influencing the comfort level and expectations of the client.

Now that the client is sitting down directly with the financial planner, imagine that the following brief discussion occurs between the prospect and financial planner:

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Planner: “It is so nice to meet you.”

Prospect: “Thank you for taking the time to meet with me.”

Planner: “You are welcome. How was the traffic today?”

Prospect: “Not bad. It took only 20 minutes to get here.”

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It is apparent that some form of communication is o...