A LPL Financial white paper highlights the opportunity for you to grow your business by reframing how you view, interact and approach investment decisions when working with couples and families.
Many financial advisors admit that they are not comfortable advising couples. According to a LPL Financial white paper, some of the reasons which prevent these advisors from feeling confident in working with couples as clients are:
· Discomfort in dealing with the differing communication styles between men and women.
· A lack of understanding concerning the different male/female perspectives towards finances.
· Concern about facilitating the conversation between couples on sensitive financial subjects and managing potential conflicts.
However, the white paper suggests that it is high time advisors change their mindset and start drawing up a comprehensive approach that includes both the husband and the wife.
Before adopting this approach, you must understand that effective communication between men and women means balancing the conflicting gender needs. The primary goal for men is independence and for women it is involvement. As a financial advisor, you are in the unique position to help counterbalance these differences. Additionally, being aware of your own communication style is critical to effectively resolving the power struggles that can occur between couples, as well as between you and your clients.
Understand a man’s psychology
Primary Goal: Independence
· In a male world, conversations are negotiations where the priority is to achieve and maintain the upper hand.
· Conversations are hierarchical.
· To admit to being wrong is difficult. This drive for independence manifests itself in men not wanting to “be told what to do.”
· Men will often say “I” instead of “we” or “us.” This tends to make women feel excluded from the conversation or plan.
· Men tell facts and often express facts as absolutes in their financial discussions with women. As a result, they can appear patronizing to women.
Understand a woman’s Psychology
Primary Goal: Involvement
· Women approach the world as individuals in a network of connections.
· In conversations, women seek and give confirmation and support.
· The primary goal of conversation for women is to reach consensus.
· Women speak in details, which can often frustrate male listeners.
Advisor’s Role as Facilitator!
Engaging with both partners can present some daunting challenges for the financial advisor. You have to be able to establish a rapport with each one of the individuals; engendering trust in your commitment to their financial well-being. Equally as important is your ability to maintain your role as an objective guide while facilitating sensitive financial conversation that may result in conflict between the partners.
Successfully creating a balance between these roles of trusted confidant, financial guide and conflict negotiator require that you be aware of both your verbal and non-verbal behavior when communicating with couple clients.
It is important to be aware of the words that you use when speaking with both men and women. One of the challenges for male advisors working with women is to engage with them as a partner and focusing on them feeling included in the process. Words to keep in mind are “we”, “us” and “our.” These are words of inclusion, cooperation, coordination and alliance—the very essence of rapport.
When assessing your client’s financial needs and goals, it is important to find out what their orientation towards money is. Besides, it is also important to understand their financial history. This would define their thinking as well as future objectives.
Financial History and Priorities Review
Here are some examples to help you understand your clients’ Financial History and Priorities Review. Choose several questions from each section or create your own questions that will allow you to understand every individual partner’s money history, values, current financial goals and expectations of your role as their financial advisor.
I. Past Money History
Understand the unique meaning of money for your client and identify their financial beliefs.
· What role did money play in your life growing up?
· What were the financial expectations of you growing up (i.e., expected to work during high school and/or college; or received money for whatever you needed from parents)?
· What were your parent’s financial histories?
· Do you think you learned any beliefs that may have limited your ability to cope financially?
· Is there anything you could share with me about your financial past that would help me better understand your current needs/expectations and/or behavior?
· Which financial values and/or decisions of your parents continue to impact you the most today?
II. Values and Goals
What is my client thinking, feeling, needing and wanting?
· What are some of your current financial priorities for yourself and your family?
· What responsibility/commitment do you feel financially towards your spouse, children and community?
· What are some of your greatest worries about your financial future?
· How does the way you currently spend money reflect your values, interests and concerns?
· Do you currently engage in any behaviors that are self-defeating?
III. Your Role as a Financial Professional
What am I responsible for in this relationship?
· Tell me about your history with other financial advisors.
· When making a financial decision, would you prefer me to send you information for your review prior to a discussion?
· How do you measure financial success?
· What specific measures can we establish to document the successful achievement of your goals?
· What style of communication works best for you when making a financial decision?
How couples relate to advisors is changing. IFAs who adopt a more collaborative partnership in financial planning and investing, versus the archetype “primary” decision maker would be the winners.
