As advisors, we come across nearly the entire spectrum of personality types. Despite variances in backgrounds and behaviors, I’ve found that every client generally fits into one of two categories: the “how” types (hows) and the “why” types (whys).
The hows are fixated on the construction and execution of a plan, but often lose sight of their ultimate financial goals. The whys, on the other hand, can effortlessly visualize where they want to be but struggle to find the discipline to get there. With that said, the first step in revealing both sides of a client is helping them identify their natural tendencies.
As the financial advisor, I usually clue into which category describes each client during our first encounter. At that point, I work to activate the complementary perspective because they typically won’t activate it on their own.
For the hows, I’ll ask them to visualize their desired retirement lifestyle. Research has established the potent impact of visualization for athletes, and it’s my job to coach my clients to do the same. Even golfing legend Jack Nicklaus once said, “I never hit a shot, not even in practice, without a very sharp in-focus picture of it in my head.”
For the whys, I’ll dig into their specific goals to compel them to put substance behind their vision. Regardless of their natural way of thinking, I encourage them to start with their vision and values and let the details follow.
It’s important to understand that clients are never entirely hows or whys. They all have a natural leaning, or preference, but it’s never a total bias.
For many, it is a slight preference. Others have a distinct dominance. With that said, whenever I talk about hows and whys I’m actually referring to whichever one represents their usual way of thinking.
The hows tend to be very logical, disciplined and organized. A tongue-in-cheek article from Business Insider points out that they are also easy to irritate. They often excel at carrying out a financial plan because they are adept at prioritizing tasks and seeing them through. On the downside, hows can be so task-oriented that they don’t fully grasp why they’re performing each action. For example, a person could be so committed to minimizing taxes that they actually hurt their after-tax returns in doing so. These people need to occasionally step back and ask themselves “why am I doing this?”