Advisors: Listen up! Here are the five habits of effective client listeners

It’s easy to take listening for granted. We do it all the time and don’t think about it.

But when financial advisors talk with clients, especially in anxiety-producing times, they must up their game and make optimal listening part of their professional skill set.

“There’s listening casually and listening carefully,” says Szifra Birke, an industry consultant specializing in behavioral issues impacting advisors and clients. “There’s a big difference.”

For example, advisors at Vestia in Nashville, Tennessee, are taught to make sure they hear what clients want to say — which may be quite different from what they actually are saying.

“One of the biggest mistakes advisors make is not recognizing the question behind the question,” says Lauren Oschman, Vestia’s CEO. “At a recent portfolio review meeting, a client asked if there was a point when the market goes so low that she should stop investing. But she wasn’t just asking a technical question about the market. We realized she was deeply concerned about her financial status as she saw her portfolio decline.”

Advisors can be too quick to take what a client says at face value, agrees Indrika Arnold, senior wealth advisor at the Boston-based RIA The Colony Group. “We can jump to conclusions too quickly,” Arnold says. “An awful lot of the time, something is deeper than what comes out of the client’s mouth. It’s our job to listen more closely and ask probing questions to find out what’s going on.”

On a fundamental level, advisors simply need to listen more.

When preparing for “values meetings” with clients, Vestia advisors are encouraged to keep track of the ratio of how they’re talking and how much they’re listening. 

“It’s not complicated,” Oschman says. “We want advisors to do more listening than talking, but that can be easier said than done.”

One of the reasons is the very nature of a financial planner’s job, according to Birke, CEO of Birke Consulting in Lowell, Mass.

“Advisors want to jump in and fix things; that’s what they do,” Birke says. “Sometimes they need just to step back, restrain themselves, and let the client keep talking.”

Advisors should even try to remain silent when the client is finished speaking. “Being comfortable with silence is a great tool,” Oschman says. “When someone is finished speaking, it doesn’t necessarily mean that’s all they have to say. The silence may prompt clients to say something important they otherwise wouldn’t have, especially if an advisor rushes in to fill that gap.”

It’s also critical to remember that the point of a conversation with a client is to know their priorities. To impress clients, too many advisors take too much time at meetings discussing financial concepts – like asset allocation or standard deviation – when they should be listening to the client’s concerns about issues impacting their lives, like retirement or health care costs.

At Colony’s “discovery meetings” with clients, advisors are encouraged to continually “re-confirm” what the client is saying. “We want to understand what is really important to them,” Arnold says. “We’ll say things like ‘Did we hear you correctly?’ to ensure everything is right.”

Another way to make sure you understand what the client is saying is to write down what they’ve said and review your notes before subsequent conversations, says Katie Cress, a consultant at Indigo Marketing Agency. “It’s a basic exercise that will help advisors concentrate and reflect,” Cress says.

Other techniques advisors can use include role-playing, where advisors put themselves in the client's shoes, and  ‘mirroring,’ where the advisor takes cues from the client and ‘mirrors’ their pace and style.

For example, advisors can intentionally mirror a client’s verbal pacing, coming closer to their speed to help them feel comfortable. “Being in sync with someone can increase trust and comfort and help settle nervous systems so clients can make a good decision,” Birke explains. “That’s pretty important sometimes; we’re making decisions about our financial futures!”

Being able to read body language is also a critical part of listening. “Observing body language is the subtext of what the client is really saying,” says Spencer Sherman, founding partner and CEO of California-based Abacus Wealth Partners. ‘You’re ‘hearing’ what’s underneath the words the client is saying.”

According to Birke, listening isn’t just an interpersonal affair between two people. It’s also important for advisors to cultivate an intrapersonal awareness of what makes them tick, what they respond to well and what triggers their stress and anxiety.

“It’s a matter of ‘know thyself,’” she explains. “The more an advisor knows how he or she functions under stress, the better shot they have at being aware of the signals someone else is sending, whether verbal or non-verbal.”

The Zen Path to Better Listening

Improving listening skills are a cornerstone of the annual "Mindful Advisor Retreat” at the Green Gulch Zen Center in Marin County, California. 

Overseen by Spencer Sherman, the founding CEO of Santa Monica-based wealth management firm Abacus Wealth, the retreat is designed to help advisors “enrich communication skills, emotional intelligence, and ability to connect deeply with clients.”

Spencer, the author of The Cure for Money Madness and a regular guest teacher at Spirit Rock Meditation Center, draws on Buddhist principles of mindfulness, present awareness, compassion and equanimity to help advisors hear their clients more clearly.

Cell phones, laptops and iPads are put under lock and key as Sherman incorporates guided meditation, talks and role-playing exercises to help advisors “let go of their own agendas so they can be fully present when they are listening to their clients.” 

Instead of demonstrating to clients how much they know about financial strategies, the markets and financial planning, advisors should hold back, Sherman says. 

“Advisors want to lean in with answers but need to step back and ask questions so clients can arrive at their own solutions,” he says. “Curiosity, compassion and mindfulness allow clients to affirm their wisdom. Let clients guide the meeting and if you’re talking with a couple, encourage them to talk with each other rather than with you.”

Echoing the Zen classic “Zen Mind, Beginner’s Mind,” Spencer says advisors need to let go of assumptions and approach listening to clients “from a place of not knowing,” Spencer says. “Let go of categories and remember how unique each client is. Listen as if it’s the first time you’ve ever heard anyone say what they’re saying.”

[The next Mindful Advisor Retreat is on February 15 and 16, 2023 https://www.spencer-sherman.com/upcoming-events  or contact him directly at spencer@abacuswealth.com.]