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Industry Spotlight > Women in Wealth

4 Tips for Effective Client Communication

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“I speak Curian Capital, the advisor speaks advisor and the client doesn’t speak either,” says Keith Johnson, vice president of practice management at the aforementioned Denver-based managed account provider.

Johnson made the observation by way of introduction to the topic of effective client communication. It’s a hot topic at the moment, as empathetic communication takes more of a front seat with the recognition that not all clients think and act alike. But for advisors that are tempted to dismiss it with a “yeah yeah” wave of the hand, Johnson has four areas he’s zeroed in on to attract, and retain, more business.

1). Financial jargon — “When I came to Curian, I quickly realized they were using different jargon than the firm at which I previously worked,” Johnson observes. “It’s just the nature of the business and something we all do. Now imagine that each advisor does it in their own practices and it’s all completely different from what the client understands.”

While noting it’s something like “who’s buried in Grant’s tomb?” he quipped, “Ask a client how many stocks are in the S&P 500. You’d be surprised by the answer. These are the things advisors just assume clients know.”

Discussions of risk, in particular, often confuse the client because of a misunderstanding of how the term is defined.

“It might be thought of as fluctuations in the portfolio, or a lack of diversification or any other number of possible uses. To reduce confusion, advisors should use the term ‘loss’ instead of risk.”

Of course, the plethora of information can also cause confusion.

“Say a client can’t sleep and gets up in the middle of the night. They’ll flip on the TV to a commercial about throwing all their assets into gold. They’ll flip the channel and it will be real estate. Flip again and it’s a repeat of that night’s Jim Cramer or Suze Orman. Each client meeting should be a conversation about what they’ve heard and where they’re getting it.”

Keith Johnson2). Personality differences — “If an advisor can adjust their use of jargon to the personality trait of the client, it will make all the difference,” Johnson (right) says. “Imagine if the client is a very analytical, detailed-oriented engineer, but the advisor is a gregarious people-person who loves to talk. How do you think that conversation will go?”

Anyone in sales, he adds, is intent on getting their point across; it’s just their nature.

“Learning how to communicate in different personality languages is a masterful art.”

3). Personal beliefs of the client — While it might be hard to imagine since advisors are in the wealth accumulation business, some clients are taught that wealth accumulation for wealth’s sake is bad, and anything left over should be given away. “If the advisor is talking about preparing for retirement, making the money last, living their dreams and the client wasn’t planning on any of that, the conversation will obviously fail,” Johnson notes. “If we can get to a place where the advisor is connecting emotionally through language, that’s one of the biggest things they can achieve.”

4). Women — Too many advisors still — still! — ignore the wife when speaking with a couple. Even those that don’t often view women as a niche — even though there are more women than men, more with college degrees and they live longer than men.

“I once watched an advisor completely ignore the female spouse,” Johnson concludes. “When it came time for my critique, I told him he should have spoken directly to the wife, since the husband will be dead and she’ll have all the money. It’s that direct.”

Check out Getting Referrals Your Own Way on ThinkAdvisor.


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