Most advisors don’t listen

According to a survey of women who invest, the biggest complaint against financial advisors is that they don’t listen.

The dictionary defines listening as, “to take notice of and act on what someone says.” The key words are “act on.” While most advisors think they listen to their clients, the problem is often they aren’t acting on what they hear.

It’s not because women have shied away from expressing themselves. The women interviewed have been loud and clear about what they want, “connect investing to what’s important in my life,” they say.

One woman we interviewed said when she met with her advisor, she told him “my husband and I are preparing to retire. We want to discuss potentially buying a place in Italy and spending our winters there, going north of the city in the summer and maybe taking a trip every two years that would include the grandchildren.” She specifically mentioned she didn’t just want to hear about her investments and their rates of return.

But, she said, “when we met a few weeks later he showed up with charts and tables, he talked about our investments, slight shifts in our asset allocation, and the returns on our portfolio. No discussion of goals, no discussion of foreign currencies, no discussion of the timing for retiring or selling our house.”

What happened? He failed to act on what he heard, because, like most financial advisors, he had a process for meetings that he was comfortable with. Unfortunately, it only included talking about finances.

It is worth noting that female financial advisors are often just as guilty when it comes to not listening and female clients show no gender preference when selecting an advisor. They are drawn to advisors who they believe understand them. Those who are the happiest with their advisors frequently state, “he actually listens to me. I feel he knows and cares about me and acts in my best interest. ”

How to listen

  • There are no short cuts. You’ll be able to better listen to clients by sitting beside them or just across from them, make eye contact and avoid physical barriers between you (i.e. do not sit behind a desk or table).
  • Make it in a place that is conducive to listening – at dinner or in their home, when you’re not rushed.
  • It is not enough to politely nod and look like you are listening when you are with a client. You have to act on what they tell you.
  • You can only act on what they say by “listening with heart” to what is important to them. Encourage them to talk about their lives. Only then can you put their finances in terms that resonate with them.
  • Make mental or actual notes about what your client is saying and jot them down. What are her concerns, what are her dreams/plans for the future, what is her role in the family hierarchy, and how would she like to work with you?
  • Finally, show that you really listened by coming back with a plan that relates to her life.

Take away: Listening is hard but anyone can learn the skill. Financial advisors who are good listeners are liked, appreciated and trusted. Listening helps you do a better job on behalf of your clients because you know more about them, what outcomes matter to them the most. It’s also a competitive advantage: happy clients are not likely to leave you and will recommend you to others.

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