Speaking Your Client's Language

Part of what makes us so good at helping people with money is that we know a lot. This knowledge allows us to help people untangle their finances and set goals for the future. But I think this knowledge can just as easily trip us up.

In Made to Stick, the authors, Chip and Dan Heath, refer to it as the curse of knowledge. 

How does the curse work? Let’s use a first client meeting as an example:

Into your office walk Bill and Mary Smith. 

Both have college degrees, good jobs, and a mortgage, but the extent of their financial knowledge is setting up a contribution to their company’s 401(k). These are smart people (they came to you, right?) who know that they need to make financial plans, but they aren’t sure where to start. They’ve come to you for help. How do you begin?

Do you start by rattling off a list of different indexes, rate of returns, or annual contribution limits? If so, you’re triggering the curse of knowledge. 

The Smiths are unlikely to be your first clients or your last, and you’re so comfortable with the material that it’s easy to forget everyone else isn't.

The point, as we learn in Made to Stick, isn’t to "dumb things down," but to find a "universal language."

Using industry jargon and assuming the client knows exactly what we’re talking about is a trap we all need to avoid. We know too much, and if we aren’t careful, it shows.

As advisors, we need to think back to that first day in class and remember how little we knew, how foreign the words and acronyms sounded. We need to realize the first meeting with an advisor may very well be the equivalent of our client’s first day in class.

Instead of abstract terms, use concrete examples. Don’t start off by talking about a rate of return. Start by talking about what's most important to them. Talk in terms that are relevant as opposed to some far off future, and you’ll be surprised at how clients respond. You’re talking in their terms, but you’re still getting information that helps you help them.

We need to embrace the reality that we may end up being a teacher as much as an advisor. Some people will come to you with more knowledge, some with less, but all will respect you and our profession more if they feel like we’ve treated them with respect. 

Knowing a lot can be a powerful tool, but like all tools, how you choose to use it can determine your success or failure.

Since 2009, I’ve jokingly talked about a “secret society of real financial advisors.” These are people like me who put their clients’ interests first, are transparent about their fees, and practice what I call reality-based financial planning. It was a tongue-in-cheek name for a philosophy that can make a real difference in clients’ lives. But I’ve heard from hundreds of advisors over the years who approach their work the same way and want to know how they can join.

So it’s time to make our society not so secret.

If you liked this article, I think you will LOVE what I am building at The Society of Advice.