Financial advisors would make terrific novelists. Who knows better the inner workings, fears and dreams of people in the grips of life's major transitions? Who else has experienced humanity's highs and lows so intimately?
The stories advisors tell-some funny, many embarrassing-make a treasure trove of practical wisdom. Here are a few favorite, valuable tales.
Talking Too Much
"A formative experience for me, though I feel chagrined by it now, was my first client meeting," says John Graves, managing partner at the Renaissance Group, a financial advisory firm in Ventura, Calif.
Back in 1986, Graves and his new boss were paying a house call to a potential client when something went wrong. Every time the client began talking about his financial goals and concerns, Graves would jump in with suggestions. When his boss kicked him under the table, Graves misread the signal. "I thought he was just crossing his legs, so I moved over to get out of his way," he says now. "But I could not get out of my own way! I just couldn't keep my mouth shut."
Afterward, in the car, his boss turned to him and said, "'You idiot! You lost that deal! You have two ears and one mouth-use them accordingly.' And, of course, he was right," laments Graves. "The client, who would've been a six-figure account, never did call us again."
Clients Must Talk
The silver lining was that Graves learned an important lesson-the type that's never taught in schools, he notes. "You have to not only shut up but encourage clients to talk about their thoughts and feelings," he explains. Even now-26 years later-Graves sometimes has to consciously stop himself from spouting quick solutions before his clients are done talking. "I literally put my finger over my mouth to remind myself to be quiet," he says.
But as every advisor knows, not all clients are easily induced to open up. Some are shy, intimidated.
Mitchell Kauffman, managing director at the Pasadena- and Santa Barbara-based Kauffman Wealth Services, has noticed the problem of getting clients involved in their own financial matters-especially with clients from the entertainment industry. "They tend to have little interest in financial affairs," he says.
So Kauffman has developed a few useful techniques. First, he admits his shortcomings. To a musician client, for example, he might confess his own inability to distinguish Bach from Beethoven. "But what I'm really saying is, 'You are proficient in that area, while I have no affinity for it,' which tells the clients not to feel embarrassed and, I hope, empowers them to feel OK if financial matters aren't their area of expertise. After all, that's why they have me."
Learning To Say, 'I Don't Know'
Second, he's straightforward about his own limitations. "When I'm asked a complex question that I'm really not prepared to answer, it's important to admit that-to say 'I don't know, but I will get back to you,'" says Kauffman. "Clients seem to appreciate my honesty."
Kauffman has also learned not to go too fast. If he sees a client yawning, fidgeting or otherwise tuning out, he'll take it as a signal. "I'll stop and ask, 'Is that OK? Does it make sense to you?' I check in and make sure we're understanding each other," he says.