"The single biggest problem in communication," according to Geroge Bernard Shaw, "is the illusion that it has taken place." Financial advisors know what they're trying to tell their clients, but is that the same as what the client hears?

Often, we think of the client experience in terms of services, touchpoints, and products. This understanding fails to account for the client's perspective: what the client actually hears, feels, and believes that they get from their advisor.

Key Takeaways

  • Communicating with clients and keeping them informed is a key role of any successful financial advisor.
  • However. clients may interpret what they are told differently from what the advisor intended, leading advisors to think they've been addressing client concerns when they have not.
  • Studies show that investors with financial security or who have clear financial goals tend to be less stressed than those without.
  • More than communicating with clients, financial planners must make sure that the clients fully comprehend their advice and how to stay on track to reach their goals.
  • Above all, planners should leave time for clients to ask questions and clarify points that they do not understand.

Understanding Client Communication

A 2019 study conducted by Janus Henderson Investors, the Financial Planning Association, and Investopedia, showed a substantial gap between the issues that financial planners raised, and those that clients remembered discussing. For example, 87% of financial planners said they had asked about the client's plans to care for the client's loved ones, but only 23% of investors remembered them raising the issue.

Providing support starts with a clear understanding of investor concerns but also involves taking the lead in addressing those concerns. The financial industry is loaded with terminology, language, and jargon that makes it more difficult to convey these messages to clients. Using those terms serves no purpose other than to obfuscate our meaning and push the client further away.

Most clients seek out an advisor because they themselves don’t understand the investment business. Based on the 2019 study, 77% of investors who are clear on their financial goals experience lower stress. Having greater clarity about their goals, more knowledge about investments, and a clear plan are also part of that equation.

How to Address Client Concerns

So how can the modern advisor ensure that they're taking the lead in addressing the key concerns of their clients and that this is being understood? When it comes to client communications, there are three things to keep in mind.

How You Say It Matters

Use language that is plain, simple to understand, and has a “so what” component to it. The “so what” is a clarifying statement that punctuates why something is important to the client; for example, “Estate planning is important because it’s going to ensure that when one of you dies, your spouse isn’t going to have to worry about having the resources they need to live their best life.”

Investors with low levels of stress are more likely to have a written financial plan than those experiencing higher levels of stress. Since stress is a significant health risk, financial planning could actually improve your health.

Set the Stage With Structure

Using agendas or checklists to frame your discussions can help ensure your audience knows what you are talking about. Send these in advance and be sure to reference them during your interactions. In doing so, you’re able to build clients’ trust and confidence with a well-executed meeting. While also allowing the client to review in advance so they can share their own thoughts or questions for clarity.

It’s Not About You and the Platinum Rule

Yes, you have an agenda and an objective in meeting with your clients. Your clients do, too—and their needs trump your own. Always include time for them to ask questions, add to the agenda and most of all, let them be vulnerable.

Remember that what is clear to you may be opaque to them. The platinum rule is treating others as they want to be treated. This means becoming a student of personality, behavior, and unspoken needs.

How Often Should Financial Advisors Meet With Their Clients?

There's no universal rule on the frequency of advisor-client interactions, but most experts recommend meeting a financial advisor for big-picture discussions at least once a year. In addition, many advisors also make themselves available by phone or email for any further questions or issues that a client may have.

Can Financial Advisors Text Their Clients?

More and more financial advisors are communicating with their clients by text message, although this practice raises significant legal and ethical issues. FINRA requires financial firms to retain records of all written communications, regardless of the medium. This means that financial advisors must save and archive any text messages they send to clients.

What Questions Should I Ask My Financial Advisor?

While everyone's priorities are different, there are some common questions that clients should ask in order to understand what they are getting when they engage with a financial advisor. It is important to understand the advisor's fee structure, investment philosophy, and how actively they will be involved in managing your affairs. You should also ask if your advisor is a fiduciary, meaning that they must act with your best interests in mind.

The Bottom Line

Above all, financial advisors should strive to ensure that their clients walk away with the intended message. To assess if your message got through, advisors can try asking questions like, “Now that I’ve described our financial plan, what do you want out of that process?” When it comes to understanding what your client has said, try paraphrasing and asking “Did I hear that right?” or “What I heard you say was… what I am missing?”

By following these steps, a financial professional can increase the chances that the message gets through and that they don't miss anything that is important to the client.

Article Sources
Investopedia requires writers to use primary sources to support their work. These include white papers, government data, original reporting, and interviews with industry experts. We also reference original research from other reputable publishers where appropriate. You can learn more about the standards we follow in producing accurate, unbiased content in our editorial policy.
  1. Janus Henderson Investors. "The War on Stress: Addressing Rising Stress and Its Concerning Negative Impact," Page 12.

  2. Janus Henderson Investors. "The War on Stress: Addressing Rising Stress and Its Concerning Negative Impact," Page 7.

  3. Janus Henderson Investors. "The War on Stress: Addressing Rising Stress and Its Concerning Negative Impact," Page 8.

  4. RIA Intel. "How Often Should Advisors Meet With Clients?"

  5. Forbes. "Ask a Financial Advisor: How Often Will We Meet Together?"

  6. Smarsh. "The Compliant Firm's Guide to Compliant Text Messaging."

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