To Reach Senior Clients,

Understand Their Mental Shortcuts

By Thomas Borchert

It seems that the older we get, the more we tend to use shortcuts. An old rhubarb quips, “You know you are over 50, if when you bend down to pick something up from the floor, you look around to see what else you can do while you are down there.”

Mental shortcuts like that are the way we tend to store data. We group things that are similar and build chains of relatedness. I have noticed that this tendency can work for or against a financial advisors efforts to reach senior clients. To see how this is so, lets look at what is going on in the background.

It is the connections we make from one relatedness category to another that help us remember thingsthrough association. All of us do this every day, in one form or anothermostly without thinking, yet it tends to guide and focus our thinking.

More importantly, this process is what assists us in anticipating logical conclusions. Say, for example, that I am approached by a floor person at a store who asks if my lawn mower is tuned up for spring. I “leap” to the conclusion (not a big jump) that the salesperson is going to tell me about the mowers on sale, in which I have no interest. So I say, “Yes, it is working great!” to avoid a sales pitch.

The older I get, the more I tend to rely on those “relatedness categories” (pigeonholes) to help me anticipate and avoid things in which I am not interested. This is also true of the older clients with whom financial advisors work.

Therefore, financial advisors need to take steps to offset this tendency. One important technique for doing that is to demonstrate the advisors uniqueness by asking carefully selected questions during the interview.

If the advisor does not fit in any of the clients pigeonholes, the advisor must build a new pigeonhole for the client. That is, the advisor must study the client closely to create a new mental construct. During those few moments, the advisor has not only the clients full attention, but also the opportunity to shape the way the client thinks about the advisor. The client also will be deciding with whom he will associate the advisor.

Once that happens, the advisor will remain unique to the clientuntil, that is, someone close to the advisor or the advisors service comes along.

However, because the advisor was the first person in this new “pigeonhole” category, the client will compare everyone that comes later to the advisor.

In short, the advisor becomes the standard by which others are evaluated. This is not a bad position to be in.

However, there is a serious problem with this process. It is that the client can use too little information during the exchange and mistakenly assume that what is going on is related to something actually unrelated but with which the client is already familiar. The client may then decide he or she is not interested in doing business with the advisorwhen in reality, the client would have been, had the client paid attention and not taken the old shortcut.

The point is that older clients can jump to those kinds of conclusions so quickly that the advisor does not see it coming and cannot reverse the process.

Here is an example. A retired man is looking for a better place to put $50,000 of savings than the CD that just matured. He has asked Agent A about annuities as an alternative. The agent assumes the retiree is a candidate only for fixed interest products and shows rates which are only slightly better than CDs.

In reality, the client is interested in taking more risk with these particular dollars and is turned off by the lower rates being shown. Then he approaches Agent B, who asks if the client is interested in a unique type of vehicle offering tax deferral and the opportunity to control how the money is invested. This idea is new and different for the client and he is interested. “What is it?” the client asks Agent B. “A variable annuity,” says B. “Do you want to know how it works?”

“Oh, Im not interested in annuities,” retorts the client, thinking he already understands annuities and knows “ they dont pay any better than CDs.”

It is the questions asked in the interview that determine how the prospect responds and the conclusions he reaches. Therefore, advisors should be sure to decide the order and type of questions to ask long before meeting with the client.

Remember, as the advisor asks questions, the client mentally runs ahead of the advisor, seeing if there are any explosive devices (issues) coming that will cause him discomfort. If there are, the client will attempt to steer away from them by putting up barriers of disinterest, verbal objections, negative nonverbal body language, etc. This can blow an advisor right out of the interview.

But, if the advisor asks the right questions, the client will tell you where these potential problems areand then the advisor can defuse them in advance.

Thomas Borchert, CLU, ChFC, AEP, CLTC, LUTCF, is an agent with Professional Insurance & Financial Alternatives, Sioux City, Iowa. His e-mail is:

thomasb@proalternatives.com.


Reproduced from National Underwriter Edition, April 16, 2004. Copyright 2004 by The National Underwriter Company in the serial publication. All rights reserved.Copyright in this article as an independent work may be held by the author.