How Financial Advisors Can Improve Client Conversations

Transitioning your sales culture to create greater transparency is no longer an option.

By Donna Horrigan

While the Department of Labor’s (DOL) Fiduciary Rule is at best on life support, financial services organizations can’t ignore that the tides have shifted. Whether the expectations for greater transparency are coming from external regulations or their client base, even the most experienced advisors are now feeling the pressure of a rapidly changing financial services market.

The question is, do your advisors have the skill set and mindset they need to be successful going forward?

Regardless of what plays out in the courts, transitioning your sales culture to create greater transparency is no longer an option. It’s what your clients expect—from your organization and from the advisors who are working with them. Regulations mandating change are almost beside the point. As the 2019 Edelman Trust Barometer reveals, people want businesses to take the lead on key issues rather than waiting for government regulations to force them to do it.

After the DOL first proposed the rule, though, financial services organizations did begin making significant changes, including to their marketing plans, product portfolios and advisor compensation. But there’s one element that they discovered is more challenging to change: the conversations advisors have with their clients. As we all know, changing the behavior of people is a lot harder than changing rules and procedures.

And in fact, most financial advisors haven’t significantly changed their actual selling behaviors very much. That’s largely because training has focused on awareness-building and giving advisors information about what they should be saying and should be doing. These things are important, but they don’t change behaviors and mindsets.

Pete Novak, a top-performing General Agent from Charter Oak/MassMutual and GAMA Hall of Fame recipient, puts it this way: 

“You need to ask the right questions to fully understand where the client is and where they want to be. You can’t just sell product any more. Unfortunately, you still have too many advisors out there talking about product because that’s what they’ve been doing for the past ten years—and have been successful doing it.”

This is a dramatic shift for many advisors. Holding back on product discussions and conducting a well-planned diagnosis of a client’s personal economy requires a different skill set and mindset.

It’s also worth noting that no amount of technology or artificial intelligence can compete with a human being who has the emotional intelligence and communication skills to understand what the client values and then be able to engage them on a personal level. As PeachCap CEO David Miller points out, effective advisors “sympathize and empathize with clients, walking them through the most appropriate investment strategy based on their age and financial status…This is something that technology and algorithms can’t do with a purely data-based decision making model, so it’s important to stress your personal approach to clients.”

The need for working in your client’s best interest is increasingly a winning strategy. Here are three things you can do right now to help your financial advisors change their conversations with their clients:

1. Translate your organization’s stated values into actual advisor behavior. Many organizations espouse their values on their website, on the walls of their company’s lobby and in marketing material. You’ll see words like “Integrity,” “Ethical” and “Client First.” These are admirable and essential qualities for a financial services organization. The key, though, is turning these important values and ethical standards into the foundation of the client conversation in a way that’s visible to clients. Some examples include:

• Understanding client’s wants or needs must always precede any attempt to sell.
• Selling isn’t something you do to people; it’s something you do for and with.
• Truth, respect and honesty provide the basis for long-term selling success.

Too many selling and consulting models steer well-intentioned advisors away from what they know in their hearts is in the best interest of their clients. Only with a foundation of strong values and ethics, translated into specific measurable behaviors, can organizations then implement a client-focused sales communication model.

2. Upgrade your questioning model.Most advisors have a sincere desire to do the right thing for their clients; they want to help their clients achieve their financial and life goals. Their challenge is that years of prior selling habits are hard to shake.

Your advisors need a questioning approach that goes beyond the fact-based diagnostic models clients can find by themselves on dozens of financial planning websites. And they need more than just the basic questions to understand needs. They also have to be able to help their clients honestly discuss their current and desired situations, the consequences of not changing course, and the benefits of doing so—all in a manner and language that resonates with the client.

3. Change behavior; don’t just give information. Don’t fall into the trap of assuming that a seminar or series of online modules will change what your advisors actually say and do when meeting with clients.

To change behaviors, ongoing repetition, reinforcement, coaching and accountability have to be woven into any training program. This can be accomplished through a series of structured follow-up sessions that build accountability for application of new concepts. It’s also critical that leaders continuously model and coach to key concepts to make sure new behaviors stick.

Transitioning your firm’s culture to one of greater transparency and focus on client needs is not an option. Clients are demanding it.  Many firms are promoting their commitment to this goal. The essential next step is translating that to advisor behavior when meeting with clients.   When you make the commitment to give your financial advisors the skills they need to better understand their clients’ needs beyond just gathering data, they’ll rise above the rest of the field and provide differentiating value to their clients.