Psychology of Financial Planning

CHAPTER 8The Principles of Effective Communication

To be an effective financial planner, you need to first establish a relationship built on trust, honesty, and credibility. Building this foundation of trust with the client helps facilitate lasting change in financial beliefs and behaviors. There are several psychological techniques a facilitator can utilize when they are developing a fulfilling relationship from which the client can benefit, even in times of financial uncertainty and volatility. Savvy financial planners know that the best way to help their clients is by creating a supportive environment to encourage change, rather than forcing change.

BEING PRESENT

It is crucial that planners learn to be fully present with their client to build trust. This includes limiting distractions and discussing and, perhaps more importantly, listening to and responding to the client's speech and nonverbal communication. Following the client's timeline and agenda will reap far more benefits than trying to force the client to take action based on the planner's terms. This requires training and practice.

It's a common misconception among financial planners to believe they are only providing value to a client when they are telling them what to do, whether it is giving specific investment advice, designing financial plans, or helping clients with goal setting. But the most value comes from taking the time to listen to the client. Clients who have planners who truly listen to them feel ...