And in any decade, the ability to listen well remains the most fundamental skill of good communication, the study said.

Among the key findings was that planners and clients have dramatically differing perceptions of the planners’ behavior and engagement.  

“It was a surprise definitely because when we compared it to the 2006 results, planners and clients were much closer in their perceptions,” said Carol Anderson, founder and president of Money Quotient. “Obviously there’s a disconnect in some of these areas for sure. I believe most financial planners recognize the importance of understanding their clients, but how that’s communicated to the client needs to be re-evaluated. It might be their intention, but it’s not coming across.”

For example, both clients and planners were asked if the following quantitative topics were part of their conversations:

  • Planner communicates recommendations in terms clients can understand (84% of planners said yes, but only 51% of clients agreed).
  • Planner explains pros and cons of investments recommended to the client (80% of planners said yes, but only 46% of clients).
  • Planner keeps clients well informed about investment performance, especially in down markets (69% of planners said yes, but only 38% of clients).
  • Planner gives clients as much financial information/education as desired (83% of planners said yes, but only 47% of clients).

And if the following qualitative topics/issues were addressed:

  • Planner is open to discussing what client values most in life (87% of planners said yes, but only 50% of clients).
  • Planner’s financial recommendations are based on client’s personal goals, needs, and priorities (90% of planners said yes, but only 49% of clients).
  • Planner communicates importance of considering all areas of life when creating a financial plan (81% of planners versus 47% of clients).
  • Planner contacts clients on a regular basis to see what changes in life may affect the financial plan (85% of planners versus 39% of clients).

“Ironically, these results were a complete reversal from the original 2006 study when clients rated their planners higher than planners had rated themselves,” the study noted. “Do planners have a false sense of overconfidence, or have clients become more critical of planners’ communication skills? More work is needed to understand why this shift occurred, but these results remind us that a real connection with clients cannot be assumed.”

In addition, in four key areas of that all-important qualitative data gathering, planners continued to rate their effectiveness much higher than their clients did. When asked if their planner made an effort to learn about:

  • client cultural values, 68% of planners said yes, but only 41% of their clients agreed.
  • client personality type/traits, 73% of planners said yes versus 38% of their clients.
  • client money attitudes and beliefs, 80% versus 53%.
  • client family history and family values, 67% versus 53%.

Effective financial planning is a highly individualized process, so first and foremost financial planners must use a qualitative data gathering process that allows and encourages clients to communicate their values, priorities, hopes and concerns, the study said. Financial planners also need to put more work into one other area of their client relationships, and that’s with regard to recognizing and managing client financial anxiety.

According to the study, planners greatly underestimate their clients’ financial anxiety. On average, planners thought financial anxiety affected about half of their clients, but nearly three-quarters of clients reported experiencing financial anxiety at least half of the time.

If a planner thinks for a moment that’s a client problem, not a planner problem, the planner would be dead wrong, as a client’s financial anxiety decreased their rating of planner ability to deliver services related to every communication topic explored in the research and to most of the communication tasks and communication skills as well, the study found.