The pandemic, along with demographic shifts, economic challenges, political transitions and environmental threats, has influenced how financial service professionals communicate personally and professionally.
Last spring, researchers from the MQ Research Consortium and the Kansas State University personal financial planning program, with the support of the Financial Planning Association and Allianz Life Insurance Co. of North America, renewed a 2006 study that examined communication best practices and how they affect the trust and commitment clients have in their planners.
Among the findings in the new study, both planners and clients favored at least some virtual engagements, even after the pandemic fades into the background.
Virtual meeting technology did not seem to impede many aspects of financial planning engagements, according to the study, but it did affect aspects of communication where understanding the client mattered or qualitative topics were discussed — which suggests that virtual meetings may work better for some types of client meetings than others.
The study also found that planners need to reevaluate their methods for getting to know and understand their clients.
In four key areas of qualitative data gathering, planners rated their effectiveness significantly higher than their clients did: clients’ cultural values, their personality type/traits, their money attitudes and beliefs, and their family history and family values.
The findings indicate that financial planners need more training on recognizing and managing client financial anxiety. For one thing, planners greatly underestimated clients’ financial anxiety.
Clients’ financial anxiety decreased their rating of planner ability to deliver services related to most communication topics, tasks and skills explored in the research.
The study said that training in recognition and management of client financial anxiety could help planners facilitate productive meetings and identify when a referral to counseling services is appropriate. Incorporating a brief financial anxiety scale into the client intake process could be beneficial.
In the original 2006 study, clients rated their financial planners higher on a number of communication skills than planners rated themselves. That was no longer the case in 2021. Researchers wondered: Are financial planners overconfident, or are clients being more critical?
In the gallery above are eight areas in which planners say they are communicating with clients, but the clients disagree. They are ranked from the smallest to the biggest gap between the share of planners and of clients who agreed with each statement.