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."