As John E. Grable and Joseph W. Goetz see it, in their new book, Communication Essentials for Financial Planners: Strategies and Techniques, “Selling financial planning products and services provides an overall social good by enhancing the financial well-being of individuals and families. The best financial planners are analytical thinkers and outstanding communicators.’’
And yet, despite “the ineffable importance of consistent and effective communication with clients, few planners have implemented systems within their firms to increase knowledge and hone skills associated with client communications.’’
Improving these skills, the authors say, means a more effective financial planning process, which leads to higher client retention and potential referrals.
So, for the financial planner just starting out or the veteran seeking improved communication skills, Grable and Goetz present the tools and techniques to succeed. Their conclusions come from research and clinical studies from the fields of psychology, academia and social science.
In explaining their theories, they use terms such as dyadic interaction, transference and relational partnerships and say that there are clients who view their financial planners as therapist, counselor, coach, mentor or life advisor.
Grable, a CFP, teaches financial planning at the University of Georgia; Goetz also teaches financial planning at UGA and is co-founder of Elwood & Goetz Wealth Advisory Group, Athens, Ga.
Grable and Goetz advocate the consultative sales model, which focuses on matching a product or service to the customer’s needs, desires and personal characteristics. Financial planners can determine customer wishes through five communication steps, including defining the scope of the engagement, helping clients define goals, clarifying goals, learning client’s history and attitudes, and explaining how financial advice satisfies client needs and goals.
Understanding methods of communication is important (telephone, email, meetings, etc.) but even more important, they write, is mastering the purpose of communication and developing counseling skills. Their research says the most successful financial planners spend up to 34 hours weekly communicating directly with clients.
Chapters deal with basics such as learning how to ask questions and how to respond to client’s questions for productive meetings and better implementation of advice. Readers will learn the difference between directive and nondirective communicating, and how to avoid manipulation—a tactic the authors believe is usually unnecessary.
Grable and Goetz say their research shows that men overestimate their willingness to take risk, while women underestimate their risk tolerance. Financial planners have to learn to ask penetrating questions to make sure client estimates are correct. Knowing the four levels of client relationship—orientation, exploration, emotional and stability—helps planners understand how to frame questions.