In today’s society, people are constantly bombarded with messages telling them what they need and why they need it. Whether through the media or advertisements (via billboards, print, online, TV, etc.), our culture has become unphased at being talked at, rather than listened to.
Yet, it is critical that service providers really listen if they hope to achieve a positive outcome for clients. Doctors are a good example. Imagine a doctor who doesn’t listen to a patient’s medical history and symptoms before giving a diagnosis.
The financial world is no different. There is sometimes a disconnect between what investors want and what financial advisors think they want. While it is important to work with a financial advisor who has the technical expertise to invest your money properly, it is equally important that they understand the personal side. A good financial advisor who has mastered the art of listening – asking the right questions, understanding family history and dynamics, reviewing business situations, analyzing financial plans already in place, identifying goals and objectives, etc. – essentially uncovering the pieces that can affect the bigger long-term picture for an individual and their family is critical in building the appropriate financial plan.
Since no two investors are the same, an advisor who fully understands the client is key—everything from future objectives right down to the person’s personality. Topics can include:
- Goal/s for Long-Term Finances
- Current Assets
- Business Assets
- Tax Implications
- Special Circumstances
- Retirement Goals
- Retirement Income
- Legacy Goals
- Risk Tolerance
To demonstrate the difference in investors, we reviewed a recent article in Forbes. It discussed the characteristics of investors who have an ‘open personality’. Because of their openness to exploring new opportunities or trying new things, open investors are often more flexible and have a higher tolerance for risk, the article says. Compared to a more conservative investor who may not take as many risks, open people have the potential to expose themselves to impulsivity in their investments. The financial portfolio for an open person might look drastically different than that of a conservative investor. This is where an advisor must have the ability understand the client, address their needs and create a plan that will work for them.
We ask ourselves every day: Are we asking the right questions? We spend a lot of time from the outset trying to understand our clients. In fact, that is why we created the LifeSteps Experience, our process to ensure that we take the steps necessary to explore and uncover the needs, goals and objectives of each client. Our process allows us to walk alongside our clients as they explore, review and confirm how they see their financial future. By listening to business, professional and personal needs and circumstances, we can provide advice and make recommendations that will help them attain their goals.
Are we listening? We sure try.