Knowing your clients on an individual basis is the most important element of client education. You can hone your communication techniques further by understanding the learning styles of the demographic groups within your client roster. For example, women often learn differently from men, and younger people process information differently from their parents.
Understanding these differences can give you an edge in communicating with your clients and helping them understand the path to their financial goals.
> Generation Y
Also know as "millennials," the "net generation" and "echo boomers," this group includes those in their 20s and early 30s. And they are living proof that the days in which a "linear" teaching method (logical steps, cause and effect) is the norm are numbered. Today's young people jump from topic to topic, wired to their BlackBerries and iPads and conversing instantaneously online with an untold number of connections.
"Young people today don't even go to websites," says Gary Rabbior, president of the Toronto-based Canadian Foundation for Economic Education. "The app world provides them with more tailored needs. It's briefer, quicker, more life-relevant."
Members of the younger generation, Rabbior says, are keen on learning about investing. Attuned to the world of low interest rates and recessions, they want to know how to protect themselves, build a future and retire at a younger age than their parents. And generally they want to work for themselves.
Many advisors, however, aren't connecting with this generation because of the advisors' ties with that linear learning system, Rabbior says.
But, he adds, the new ways are not impossible to learn: get onto Twitter, start a blog or collaborate with a younger advisor to share experiences and insights — always adjusting the information to younger clients' life-cycle events.
When you reach that younger audience in a way that resonates with them, Rabbior says, the results can be beneficial for you. Because these people are so well connected — through social media, for example — they are willing to share their experience with others.
> Baby Boomers
Unlike their younger counterparts, boomers — generally those aged 45-65 — require a more visual approach to learning, with more description and relevant lifestyle information, says Rick Atkinson, founder and president of RA Retirement Advisors and author of Don't Just Retire — Live It, Love It!
"A lot of younger advisors talk over the heads of clients," Atkinson says. They use jargon, which intimidates these clients, who feel awkward about asking what the advisor is talking about.
Atkinson, who has 35 years of experience in human resources, teaches a number of workshops every year on pre-retirement and what boomers should expect when they're no longer working every day. Boomers want to know about the financial products they need for retirement, but it's not a quick and easy kind of teaching.
"The older generation is much more into face-to-face discussions," Atkinson says. "The younger ones are OK with a text or an email, but for my generation, it's the relationship that they want."
When dealing with boomer clients, put money as the last item on the agenda. These clients first need to have a vision of retirement — what they will do with their time and how friends and family will fit into their new lifestyle.
Says Atkinson: "Only when they have this idea of how they will spend their retirement years do boomers want to talk about what's working in their portfolios, what isn't and discussion of new products."
Older advisors, Atkinson suggests, can use their own life experiences to relate to their fellow boomers. Younger advisors can provide examples of people they know who have retired successfully.
Women generally learn about financial issues through understanding relationships with their financial advisors. "They want someone to sit in front of them who is not judging them and is able to provide them with clarity and education," says Rhowena Adolfo, division director and consultant with Investors Group Inc. in Whitby, Ont. "What I'm really trying to bring to the table is their relationship with money."
All Adolfo's new clients go through the same general process: a 20-30 minute face-to-face introduction. When she probes into the reasons why men and women come to talk to her, she really notices the difference.
"I often need to delve deeper into the longer-term reasons behind why a woman has come to talk to me," Adolfo says. "For example, if she comes in saying she needs to reduce debt, that can actually mean that in the longer term she wants to save to buy a house that will make her family more comfortable. What I have to uncover with a female client is the underlying need or underlying ‘why' the debt issue needs to be addressed."
Women have a fundamental fear that they won't have enough money, Adolfo says, while men believe money can be "restocked."
Some women have a better idea of what they want than others, she adds, and suiting the needs of women must be based on specific life-cycle events.
"There is no cookie-cutter solution for everyone," says Heather Freed, an independent financial planner. "I know 60-year-old boomers who blog, and 30-year-olds who don't have a Facebook or LinkedIn page. Talking to your clients and getting to know them will never go out of fashion." IE