Paying more attention to the discovery and goal setting potions of the financial planning process will create better experiences for your clients and your your business.
That’s according to Reed Fraasa, managing director of New Jersey-based Highland Financial Advisors, who spoke at the 11th Annual Institute of Advanced Financial Planners (IAFP) Symposium in Ottawa on Thursday.
“Putting more time [in the discovery and goal setting stages] could deliver better results not only for the clients but for our businesses,” said Fraasa, “because retention, efficiency [improve].”
For an effective meeting that gets clients talking more about their life goals and, as such, their financial goals Fraasa suggested these five tips based on the Kinder Institute of Life Planning in Massachusetts:
> Use open-ended questions
Open-ended questions help get the conversation going in a discovery meeting particularly when using the right words.
“Certain words are expansive and certain words are narrowing,” said Fraasa.
For example, “How do you feel about…” will open up the conversation with a client or prospect.
On the other hand, asking “what do you think about…” narrows the conversation.
> Be an empathic not sympathetic listener
Listen with empathy rather than sympathy to keep the client engaged in the conversation.
Most people listen to others sympathetically, said Fraasa, meaning they feel pity when listening to someone’s situation and as such remain detached. A better way to listen is with empathy, he said, meaning you are sharing in the person’s feelings.
When listening sympathetically a person will often interject with words such as “really” or “of course,” Fraasa explained, and will look for an opportunity to jump in and start talking.
An empathic listener, on the other hand, will not say anything and will maintain eye contact.
> Ask clients to be descriptive
Ask clients to explain their future plans to get clients thinking more broadly, said Fraasa, and to imagine how their lives might be.
For example, if a client is thinking of moving to another city you can frame the question like this: “Describe for me what that move to Calgary looks like?”
Once you ask the question, pause and let the client take over the conversation. Even after the client has finished, ask if there is anything else they wish to cover and then pause again.
“This one technique,” said Fraasa, “this is one of the most powerful thing you can learn.”
> Repeat after the client
Restating a client’s comments can help keep the conversation open, said Fraasa, so long as you don’t focus on one specific point.
For example, in answering one of your open-ended questions, a client may touch on several issues, such as her concern over a move and the disruption it will cause to her family particularly for her son who plays hockey.
After the client has finished speaking, rephrase what she has just said in its entirety, said Fraasa, rather than asking a specific question about her son having to leave his hockey team, for instance.
> Focus on the client
Never share your personal experiences during the discovery process, said Fraasa. Instead, keep the conversation focused on the client.
Most advisors believe they will form a connection with clients by sharing their own experiences, said Fraasa. However, doing so takes the client out of the moment and out of their feelings at that time and it can be very difficult to bring the conversation back on track.
Instead share how you felt about something the client said, Fraasa, which will continue to focus the conversation on her rather than you.