Client meeting
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As the financial services industry goes through rapid technical automation, financial advisors and financial planners will need to become coaches, rather than technical advice-givers. To transform themselves, they will need to do a better job of connecting emotionally with their clients.

As I have discussed previously, general soft skills and communication skills are imperative to engaging with clients. This column will focus on the six key active listening skills. Learning and employing these skills will greatly enhance your conversations with clients.

What is active listening?

Active listening is fully concentrating on what is actually being said, rather than passively hearing the message of the speaker. The six key active listening skills are:

  1. Paying attention by:
    1. Waiting before responding
    2. Not cutting cut your client off, finishing his or her sentences or starting to formulate your answer before she or he finishes speaking
    3. Paying attention to your body language as well as your frame of mind
    4. Being focused on the moment and operating from a place of respect
  2. Withholding judgment by:
    1. Being open to new ideas, perspectives and possibilities
    2. Limiting strong views
    3. Suspending judgment, holding on to criticisms and avoiding selling your client’s point away
  3. Reflecting by:
    1. Not assuming that you understand your client correctly, or that he or she knows you have heard them
    2. Mirroring your client’s statements and emotions by periodically paraphrasing key points to indicate that you and your client are on the same page
  4. Clarifying by:
    1. Not being shy to ask questions about any issues that are unclear or ambiguous. You could say something like, “Let me see if I am clear” or “Are you talking about this?”
    2. Using open-ended, clarifying and probing questions to encourage your client to engage in self-reflection and problem-solving rather than having them defend their position or guess the right answer. Examples of questions you might ask are: “What do you think about this?” and “Will you explain this further?”
    3. Putting the emphasis on asking rather than telling, as this will invite a thoughtful response and create a spirit of collaboration
  5. Summarizing by:
    1. Restating key themes of the conversation as it proceeds to confirm and solidify your grasp of your client’s point of view. This helps both parties to be clear on mutual responsibilities and follow-up.
    2. Briefly summarizing what you have understood from your client and asking him or her to do the same. You might say, “Let me summarize to confirm my understanding…did I get that right?”
  6. Sharing by:
    1. Beginning to introduce your ideas, feelings and suggestions after you gain a clearer understanding of your client’s situation. You can do this by talking about a similar experience that you had or share an idea that was triggered by a comment made previously in the conversation.
    2. Once you and your client have talked through things in this way, the conversation can shift to problem-solving: “What hasn’t been tried in your retirement plan?” or “Let’s talk about new approaches to managing your portfolio.”
    3. Continuing to query, guide and offer — but not dictate — possible solutions. Your clients will feel more confident and eager if they think through their own solutions.

You can improve your listening skills by using the following helpful tips:

  • Limiting distractions — shut off smartphones and concentrate on your client’s body language and tone of voice.
  • Paying attention to what is being said, and not what you want to say. Set a goal of being able to repeat the last sentence of what you client says, as this will keep your attention on each statement.
  • Being okay with silence — you don’t have to always reply or have a comment. A break in dialogue can give you a chance to collect your thoughts.
  • Encouraging your client to offer ideas and solutions before you give yours — you should aim to do 80% of the listening and 20% of the talking.
  • Restating the key points that you heard and asking whether they are accurate. Saying, “Let me see whether I heard you correctly…” is an easy way to clarify any confusion.

The world of financial advice is rapidly changing but there is still room for the human touch. Financial advisors and financial planners who invest in emotional skills such as active listening will go a long way to ensuring that they are part of the future advice market.