Good communication is crucial to any business relationship. In conversations with clients — face to face or over the telephone — listening is as important as talking.

Listening helps the advisor ensure that he or she fully understands the client’s needs and can offer an appropriate solution. And showing that you are listening assures the client that his or her concerns are being fully considered. Effective listening is a skill that takes discipline and patience. But anyone can acquire it.

The first step in effective listening is creating an atmosphere of trust for the client. Jason Roth, a psychologist in Halifax, says revealing personal financial details is probably the most intimate discussion many people will have. In fact, he says, many people are more comfortable talking about their sex lives than their finances.

“Talking about finances brings out feelings of insecurity, vulnerability and fear, so clients need to feel comfortable and safe when meeting with their advisor,” Roth says. “Listening and paying attention to what the client is saying helps create a sense of trust and safety in the meeting.”

But not all advisors are good listeners, according to Andrew Bond, an Ottawa-based retirement and career transition planner with Andrew Bond Associates and an instructor for the Christopher Leadership Course, a program that develops effective communication skills. Many advisors, he says, are quick to jump in with solutions before clients have finished telling their stories. Proposing solutions without fully understanding what a client is saying gives the impression that you are more interested in selling products than understanding the client’s situation.

“It’s important to listen to the client, understand the situation and proceed from there rather than opening with what you have to offer,” Bond says.

Even if an appropriate solution immediately comes to mind, listening to the client’s story allows the advisor to learn about that person’s values and objectives, which may be useful information now or in the future. For example, a client may divulge that he loves to travel or is about to become a grandfather. This may lead to a conversation about retirement planning, estate planning or education planning. The advisor can come up with a financial solution appropriate to the client’s values.

Roth tells of an advisor who was on the verge of losing a top client and asked Roth to intervene. Although the advisor was adding significantly to the client’s net worth, he didn’t listen when the client told him he was feeling spiritually unfulfilled, and wanted to contribute some of his wealth to the causes he believed in. The advisor had told the client: “You don’t get wealthy by giving your money away.”

Roth persuaded the advisor to create a private charitable foundation for the client. “It’s true that the client’s net worth went down, but his sense of happiness and well-being, and his appreciation of his advisor, went up.”

Experts say 93% of communication is non-verbal. Tone, style and body language say more than words. In other words, it’s not what you say but how you say it. Sometimes what the client is saying verbally is not the true story, Bond notes. That’s why it’s important not only to listen to the client’s words but also to get into the habit of “reading” body language and paying close attention to the way people speak.

Bond provides some clues to deciphering body language:

> Arms Folded. This usually means the person is trying to shut out the world. The person either may not be paying attention or not following what you are saying. “They are closing into themselves,” Bond says.

> Covering The Mouth When Speaking. The person is subconsciously trying to prevent themselves from telling a lie. What they are telling you may not be the complete truth.

> Avoiding Eye Contact. This usually means what this person is telling you isn’t exactly what he or she believes. But Bond warns of cultural exceptions — in some Asian cultures, for instance, it is considered impolite to maintain eye contact.

> Lying Back In The Chair. This suggests indifference or that the person is not really listening.

Tone of voice is also important. Talking loudly can indicate anger; a quiet tone can mean the speaker disagrees with what you are saying, but doesn’t want to object.

@page_break@“What they are saying is often not what they mean, or isn’t the real problem,” Bond says.

A client may be concerned about finances and act as though everything is all right, but his or her body language is saying something else. Listen to the tone of voice, the choice of words, posture and whether he or she is focusing on what you are saying. You may find what the client is telling you is not the real issue.

Bond tells of a client who wanted to retire and asked his advisor if he had the financial means to do so. It turned out that the client really wanted to get away from his boss and retiring was the only option he could see, when, in fact, there were other solutions. The astute advisor was able to understand the problem and guide the client toward counselling about his problem at work.

“A client may be looking for something you don’t have,” Bond says. “You’ll get more respect by saying, ‘I can’t help you with this, but here is another professional I suggest you talk to’.”

Roth says the successful planner not only has information and insight but also the ability to communicate this information and
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