Advice That Sticks. How to Give Financial Advice That People Will Follow,’ a new book by Moira Somers, poses the right questions about a pesky subject and provides the answers in a brisk, authoritative style that’s leavened with wit.

Somers, a Canadian financial psychologist, executive coach and wealth consultant, works with financial professionals to help them successfully dispense financial advice. She bemoans the lack of training that advisors receive in dealing with a client’s personal life and psychological makeup; understanding these two areas is essential to advising, she says.
“Regrettably, most credentialing programs in the financial professions seem to operate on the assumption that, once the technical stuff is mastered, the so-called ‘soft skills’ will take care of themselves.
“One advisor lamented to me, ‘the only advice I got with respect to ‘soft skills’ was, to have a firm handshake and to use mouthwash,’’’ Somers said.
 Most people find it hard to follow advice about money, even from an expert, so advisors need to start by avoiding basic mistakes. Advisors should not:

• Assume that a client is inevitably ready to take action,

• Use insider jargon,

• Ignore how emotions affect a decision, and

• Express disapproval or disdain to a client.

She says each client’s profile should include their financial history and circumstances, what inspires their adherence to advice, their personal characteristics, how the advisor team treats the client, and what social and environmental factors influence client choices.

Every advisor will meet non-compliant clients who are enough “to make Jesus want to drink gin straight out of the cat dish,’’ (quoting writer Anne Lamott).  That’s where what Somers called Adherence Boosters come in. Advisors should establish a clear agenda at the outset of each client meeting, and ask questions such as “What would make our time together today the best use of your time, energy and money?’’ and “What are you hoping will happen as a result our meeting?’’

Clients should be asked at the end of the meeting if the objectives were accomplished, and if they are unsure about the meeting’s content. Clients are unlikely to follow through on advice if they do not comprehend the advice, which also means they are unable to give truly informed consent.

“Failure to understand clients’ goals and objectives is one of the top five reasons advisors are fired, second only to failure to communicate on a timely basis.’’

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.