Close Close

Financial Planning > Behavioral Finance

The Underrated Art of Listening to Your Clients

Your article was successfully shared with the contacts you provided.

Randy Carver is a financial advisor with a thriving practice outside Cleveland, Ohio.Carver is also a licensed private pilot with a twin-engine Cessna. Several years ago, a crash landing left him with shattered ribs, collapsed lungs and a cracked larynx. After leaving the hospital and returning to work, Carver was forced to speak with clients in a strained whisper through a voice amplifier. The impact: He learned to listen.

Carver paid attention to client’s tone of voice, nuanced words and emotional cues. He heard the words behind the words. He internalized their personal memories and stories — or money scripts — and empathized with their concerns and fears.

Empathic Listening

Randy Carver mastered a skill that a growing number of leading financial professionals call empathetic, active or meaningful listening. These industry leaders insist that the often underrated skill of truly listening is the critical first step to forming bonds of trust with prospects and clients.

‘Most Important Skill’

Michael Kitces, a trainer, coach and author of an educational newsletter for financial professionals, considers listening to be the most important communication skill for advisors.

“Consider taking classes to build your skills of active listening and empathy,” Kitces said. “Because the truth is that clients won’t really trust you until they feel that they’re being heard and understood.”

Kitces calls empathic listening the foundational first step toward strong verbal, written, motivational and public relations skills.

“If there is one skill that seems to have a bigger impact above all else for the success of a financial planner, it’s the ability to listen. To REALLY listen,” Kitces blogged to financial professionals seeking to up their game. “You’re not actually an expert at doing real financial planning, and providing solutions that help clients achieve their own goals, if you’re not skilled at really exploring what those goals are in the first place.” 

Making a client feel “heard” can be difficult, Kitces adds, particularly given most advisors’ natural tendencies to sell themselves, their processes and their portfolios.

“They (advisors) have a strong tendency to talk about their expertise, knowledge, services, products and solutions first,” Kitces said. “Only secondarily do they get around to actually hearing what the client really wants and needs.”

Rich Dialogue 

Daniel Finely, president of the consultancy Advisor Solutions and author of “101 Advisor Solutions: A Financial Advisor’s Guide to Strategies that Educate, Motivate, and Inspire,” holds active listening workshops for advisors. Through role-playing sessions that replicate advisor-client meetings, Finely helps advisors move from one-way conversations to rich dialogue. He encourages participants to rephrase clients’ words, observe language nuances and empathize with their emotions. After the sessions, he often hears that those playing the client role felt most connected when the advisor was listening. 

Experts suggest that advisors approach the client meeting as a conversation with no preconceptions about the problems or solutions. This means putting him or herself in clients’ shoes, tuning into their wavelength and listening from their frame of reference. The advisor should explore core issues and hidden concerns, pausing to ask clarifying questions and repeat back important points. Recommendations should only come when the conversation is complete. In the end, the proposed solutions should feel like a natural fit.

What are the pitfalls? The experts have lists. Financial planner and author Andrew Sobel offers a range of advice.

  • Avoid insincere listening, such as listening faintly as you formulate your next question or point.
  • Try to stop “thinking ahead.” Be sure to wait for the client to breathe to jump in with your comment.  
  • Don’t allow yourself to be distracted. Avoid checking your cell phone or email during the conversation. Be sure to take copious, linear notes.
  • No one is looking for an advisor who is in love with their own ideas or dominating the discussion.
  • Advisors also must stay away from indulging biases and allowing prejudices to influence the conversation.

William Ury, a senior fellow at the Harvard Negotiation Project and co-author of the best-selling business classic “Getting to Yes,” calls listening “the golden key that opens the door to human relationship.”

“We often take listening for granted as something easy and natural,” Ury said in a TED Talk titled “The Power of Listening.” “But, in fact, at least in my experience, real, genuine listening is something that needs to be learned and practiced every day … In genuine listening, we listen not just for what’s being said but for what’s not being said. We listen not just to the words but to what’s behind the words. We listen for the underlying emotions, and feelings, the underlying needs, what that person really needs or wants.”

Ury notes that empathic listening is employed by the world’s most successful negotiators and mediators who must build trust with their counterparts across the table.

“And it makes it more likely that the other person is going to listen to us,” Ury said. “Listening may be the cheapest concession we can make in a negotiation. It costs us nothing, and it brings huge benefits.”

‘You Never Listen!’

Of course, the value of empathic listening is not limited to financial meetings or negotiations. Listening issues are evident to anyone who’s ever heard a spouse, partner, relative or friend complain, “You never listen to me.” Experts also warn that deficient listening may be reaching epidemic proportion in this age of texts, tweets, constant disruptions and short attention spans.

As for Randy Carver, his voice has grown stronger and his practice has flourished. Carver Financial Services now manages more than $1 billion in assets for 2,500 families. Randy no longer relies on a voice amplifier to talk to clients, and his voice sounds just fine on his frequent guest appearances on Fox and CNN. In the meantime, he makes one key promise to clients and prospects: He promises to listen.