The biggest challenge financial advisors are facing in the pandemic era is communicating the right language to their clients and using it at a high level of sensitivity across digital platforms, an Invesco executive said.

Yes, words matter, said Scott West, head of Invesco Global Consulting.

“Advisors want to know what to say. ‘Don’t give me theory. Give me what to say,’” West said, adding that words are always important in any market, but when you go through times like the pandemic, investors hang on to every word.

Invesco has introduced a four-part webinar series titled, What Matters Most Right Now, designed to help advisors sharpen their edge as they reach out to clients during uncertain times. 

West shared the first module of the program, "The Resilient Advisor: The Right Words At The Right Time," which consist of three components.

The first component focuses on taking care of yourself. West explained that includes exercising and connecting with friends, families and hobbies. West said one of the biggest actions for him was imposing a toxic blackout, where every two days or so, he would not watch the news or do anything that gets him caught up in the issues of the day. “That’s been very powerful,” he said.

The second component, Right Your Focus, centers around acting on what you can control. “You don’t want to be a passive victim, you want to be an active participant in those activities that you can control,” West said.

The third component, which West referred to as the meat of the program, is Right Your Clients. This deals with how advisors can best communicate with clients. West said research from the Great Recession to now found that people adhered to four “P” principles – Be Positive, Be Plausible, Be Plain-spoken and Be Personal – that have proven to be effective.

Advisors need to be positive, West said, and that does not mean "blind, Pollyannaish, it’s all going to work out, just trust me." Rather, it is being hopeful and having an upbeat approach that they can take some positive actions, West said. 

Advisors need to be plausible in their messaging, “so it isn’t, we have seen this before, we are at the bottom, it’s going to rock it up from here,” West said. They have to be credible, he said, explaining that it is almost an inverse relationship, where the less you know about what is going to happen that you communicate to the client, the more credibility you have. “It’s almost opposite to what advisors feel they have to say. They feel they have to make implausible statement about how ‘it’s only going to go up from here, it’s a V-shaped recovery,’ but all those things just violate the principle of being plausible,” he said.   

Being plain-spoken, another of the principles advisors must follow, is important in the advisory industry, West said. “It’s not what you say, it’s what people hear, so you have to be careful to perform an audit on your own jargon,” he said.

He cautions that if you use an insider baseball term, be sure to accompany it with a plain-spoken complementary phrase. For example, he said, when an advisor asks, ‘What is your risk tolerance?' it can be misconstrued by an investor as a question about their threshold of pain. A better way to ask that question would be, ‘What’s your level of comfort?’ 

“So, it isn’t dumbing down the language, it’s being incredibly mindful of how words, particularly in calamitous times, strike people emotionally,” West said.

The fourth and most important of ‘P’ principles, West said, is being personal. As an example, conversations with clients should begin with, “What we are really going to talk about is really designed to help you reach your goals” or “What I want to make sure you get from this conversation is …"

West said Invesco’s research has shown that using the words "you" and "yours" is two and a half times preferable to using "I" and “me."

He noted that the research, which goes back to 2007, shows that in any given market, 29% of clients are dissatisfied, and that has stayed steady. “That’s an amazing statistic. It says that in any given market over the last 13 years, almost one in three investors are open to making a change. In some instances, they have cut the emotional cord with their advisor,” he said.

The research also shows that 67% of clients have not had any meaningful contact with their advisors during the pandemic. Maybe they have gotten a newsletter or a text, but they have not had a meaningful dialog, West said. 

But a survey within the last six weeks showed that there is a change in attitude, West said. The poll found that 82% of clients would refer their advisor to a client if given the chance. 

West said Invesco is getting calls from advisors asking how they can grow their business, what works best for client check-in calls and what are some ideas on onboarding. “That’s where I am really seeing this thing shift from being defensive to being more offensive,” he said. “Those advisors that are winning in this environment are winning their dislocated, dissatisfied clients and winning this in a big way."