Basic communication skills are a must if you want a client to take your advice: “Develop the gift of presence: listen attentively; speak plainly; connect warmly.’’
Advisors must squelch the impulse to talk too much: “they do not need to impress or educate clients as much as they need to understand and involve them.’’
Somers said that most clients are unable to remember and follow up on the content of meeting recommendations. Aim for shorter meetings and send clients a memo within 24 hours summarizing what was discussed and agreed upon. Dates for completion of follow-up items can be assigned.
Client resistance to discussions of wills, trusts and health care directives is significant: “The percentage of North Americans without a will has hovered around the 60 percent mark for decades,’’ she wrote, and between 70 percent to 80 percent of the same population lacks a health care directive.
“Know from the outset that you’ve got a significant adherence challenge on your hands because of the nature of the advice you have to give,’’ Somers said.
She suggests asking clients what aspect of their finances they are most likely to struggle with and to help them to figure out how to make a task, such as creating a will or health directive, more palatable.
Three questions will help the client navigate a meeting and follow through on advice. Advisors should ask “How do you feel about the recommended action?’’ “If you decided to carry out this action, how would it benefit you?’’ and “If you decided to go ahead with this step, how confident are you that you could do it?’’
Advisors should be prepared to adjust to upheaval in a client’s life, such as death of spouse; illness or loss of job.
“Between 70 percent and 80 percent of the new clients in an advisor’s practice are people who are anticipating or have just gone through a major life event.’’
Advice That Sticks. How to Give Financial Advice That People Will Follow,’ by Moira Somers. Practical Inspiration Publishing. 208 pages. $19.99.
Eleanor O’Sullivan is an award-winning journalist who writes for Financial Advisor.