How to know when your financial adviser is really listening to your words

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Many financial advisers believe that to connect with clients, they must educate them, make recommendations, provide reassurance — and do most of the talking.

In truth, the best advisers build trust by listening more and talking less. By letting the client steer the conversation, they gain a better understanding of underlying concerns or fears and how to address them.

The challenge for many advisers is to know when to shift from speaker to listener. With all their financial expertise, they may feel compelled to dispense knowledge. That can lead to over-explaining the technicalities of investing or lecturing about wise saving or spending habits.

On average, people speak at a rate of roughly 125 words per minute. Yet most of us can process about 500 words per minute when we listen, leaving lots of extra mental capacity to daydream if a speaker isn’t captivating.

Attentive advisers don’t let their mind wander. Instead, they harness all their mental energy to retain what they hear while observing speakers’ nonverbal cues. They keep quiet and let clients open up, gently prompting them to elaborate by asking follow-up questions.

When Dawn Doebler, a certified financial planner in Bethesda, Md., conducts discovery meetings with prospects, she enlists an aide to take notes so that she can devote her full attention to the speaker. “The scribe frees me up to really listen and focus,” Doebler said. “And it makes it easier for me to follow up and find commonalty with the prospect.”

In these meetings, she finds that clients do 80% to 90% of the talking. She credits having a prepared list of more than 40 questions that she likes to ask. Examples include, “What are your best and worst financial moves?” along with inquiries about a client’s family and religious beliefs. “Having the list reminds me to do less talking,” she said. “You have to keep moving and complete all the questions. It also gets the client used to doing more of the talking.”

Like Doebler, Mike DiNuzzo strives to limit his speaking when getting to know prospects. A certified financial planner in Beaver, Pa., DiNuzzo and his colleagues have a rule where they only talk 10% of the time in their first few meetings with new clients. To adhere to that rule, DiNuzzo is mindful not to talk over the respondent to insert his opinion, tell a story or answer his own question.

“We don’t give an opinion unless we’re asked,” DiNuzzo said. “When we do speak, we start by repeating what we heard in our own words to confirm understanding” before proceeding.

Perhaps the toughest part of keeping quiet for most of the conversation is handling pockets of silence. Advisers who ask a lot of questions come to realize that some clients take their time formulating a response. “With most people, give them enough time and they will give you an answer,” Doebler said. “Sometimes, they’re not sure what to say. The trick for advisers is to wait and be comfortable with that silence.”

More: Here are the average retirement savings by age: Is it enough?

Plus: Why the 2020s could favor market-timers over buy-and-hold U.S. stock investors



Source : MTV