Advisors finding it difficult to connect with prospects and clients during meetings may need to reconsider their word choice, according to research results discussed at an event in Markham, Ont. hosted by Invesco Canada Ltd. on Wednesday.
There are over 500,000 words in the English language, said Rob Kochel, vice president, Invesco Consulting, who presented the results, which is why it’s such a difficult language to learn and why it’s so easy to say the wrong thing.
“Words matter,” he said. “It’s not what you say, it’s what people hear.”
The research results are from a survey on the responses of 800 Canadians aged 35 to 75 who currently have advisors to specific words and phrases commonly used by financial services professionals. The survey was conducted in collaboration with Maslansky Luntz + Partners, a language-strategy consultancy firm with offices in New York and Washington.
Based on the research, Kochel offers these four communication principles:
1. Be positive
Whether they realize it or not, most advisors tend to focus on the negative when talking with people, said Kochel.
For instance, most participants don’t like to hear that an advisor can “minimize my losses.” Instead, they want to hear how an advisor can help to “maximize my gains.”
“They don’t want to hear about losses,” he said, “they’ve had enough of losses.”
2. Make it plausible
Clients and prospects tend to be suspicious of advisors who promise them everything.
Survey participants were unimpressed when promised a “dream retirement,” said Kochel. They found the idea of “comfortable retirement” more practical and believable.
As well, advisors need to be careful not to suggest that he or she plans to overhaul a person’s entire portfolio, said Kochel, as people don’t like the idea of everything being changed and turned upside down all at once. However, simply clarifying that you only want to change “a portion of” the portfolio will make it easier to convince clients and prospects to make the necessary change.
3. Use plain language
Using a lot of industry jargon can be really off-putting to people who may not understand what all those terms mean.
For example, of those people surveyed, the majority preferred an investment that was described as “diversified,” said Kochel. Whereas the term “correlated” only peaked the interest of about 1% of participants.
4. Keep it personal
According to the survey, investors want an advisor willing to focus on their individual needs.
Survey participants responded strongest to the idea of a “personalized” plan, said Kochel, as opposed to “customized” plan. Most people view “customized” plans as things that companies create for large groups and that don’t actually help individuals.
As well, investors prefer a “knowledgeable” advisor who understands their unique wants, he said, instead of an “educated” or “experienced” advisor. This means that when meeting with a prospect, advisors need to be careful not to over emphasize their years in the business or where they received their education.
See also: Positive wording can have an impact