Whether your are trying to get your clients to contribute to their RRSPs or convince them of the dangers of chasing a “great stock tip,” persuasion is a big part of a financial advisor’s job.
Unfortunately, the term “persuasion” is often confused with aggressive sales tactics or manipulation. But unlike manipulators, who aim for control, persuaders are going for a positive outcome for both parties.
“Persuading involves presenting someone with the best course of action and outlining the reasons for that choice,” says Rosemary Smyth, a Victoria-based business coach for financial advisors. “As an advisor, your goal is to help the client see that the proposed solution is in his or her best interests by outlining its benefits and features and explaining what the outcomes will be.”
Persuasion grows out of rapport-building and communicating information, says Smyth. “If you haven’t built rapport and communicated the right information, your persuading will fall short.”
Here are some tips for mastering persuasion:
> Listen more than you talk
Advisors often talk too much, instead of finding out to what is important to their clients, says April Lynn Levitt, coach with the Personal Coach in Oakville, Ont.
“They talk about features and benefits and then move on to the closing,” she says, “when they should be exploring how something can fill a client’s needs.”
To determine those needs, ask open-ended questions, such as: ‘Tell me about your past financial experience,’ or ‘What keeps you awake at night?’
Once you determine the problem or challenge your client is facing, craft an appropriate solution. For instance, if your client wants to become more tax-efficient, explain how an RRSP contribution will help achieve that goal.
> Watch your tone
Be sensitive to the “push and pull” of persuasion, Smyth says. Encourage and entice but do not “snag” — that is, become aggressive or pushy.
“You get into ‘snagging’ when you put yourself first,” Smyth says. “Make it about them, not you.”
> Involve the client
People are more likely to agree to something if they’re involved in the process, says Levitt.
“If you’re doing an analysis or projection, ask what they see themselves doing in the future or what their preferences are, and take your lead from that.”
Adds Smyth: “Don’t get into parental mode where you’re telling them what to do. Instead, lay out various options and let them choose, then back them up.”
> Learn to read people
Learn to pick up on cues regarding the best time about when to proceed and when to back off, Smyth says.
“The client’s timing isn’t always the same as yours. For example, if a couple is divorcing and you want to talk about how they will divide their investments, be sensitive to the fact that they may not be ready to make a decision. In that case you can say, “Maybe we should reschedule this to another time.”
> Accept rejection as part of the business
No matter how well-founded your recommendations or the skillfulness of your presentation, there are times when you’ll strike out. Remember that you can’t win them all and learn to accept rejection with good grace.