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Save the Shop Talk

Your clients think it’s gibberish.

Carl Richards, 09/29/2016

I attended a barbecue with a bunch of friends who happened to be emergency room doctors at a major hospital and research university. Other than a few of the spouses, I was the only other person who wasn’t a doctor. But that didn’t stop them from talking shop during dinner.

In graphic detail over chicken, I heard way more than I wanted to know about medical procedures. I was both amazed and more than a little sick. They didn’t even flinch. It was normal to them.

As financial professionals, we do something similar—but maybe not quite as gross. We have a bad habit of talking about our work that confuses everyone else. Think about the words we use. Annuity. Basis points. Alpha. Beta. Dollar-cost averaging. Volatility.

I mean, really, would you talk to your mother like that? It’s so bad I think nonfinancial people suspect we’re talking gibberish at best. For our clients, it’s not just nonsense. It’s a problem.

It ties into a complaint I hear from both clients and professionals all over the world. “I don’t know how to explain [complex topic] to clients,” and “I don’t understand when my advisor starts talking about [same complex topic].”

It’s tempting to tell both sides to try harder, but this advice ignores reality. The responsibility falls to us. Unless your clients are financial professionals, there’s little reason for them to understand what we can all agree is a complex system with overwhelming options. Instead, I believe advisors need to think more like their clients.

For the next few minutes, put on your client cap and ask yourself, “What do I want my mom to hear and know?” Yes, I’m pulling out the mom card, and I know it sounds simple, but stick with me.

First, on this side of the table, we’re talking about your mom’s money. There will be emotions involved. How does your mom feel about that money? How do you feel about your mom’s money? What does she need to hear from an advisor to help her feel better? What do you need to hear?

Second, let’s face it: If she’s worried about the markets or her money, it will be hard to focus on the details without getting a handle on the emotion first. Many of your clients will feel the same way. So, don’t be afraid to acknowledge and address these feelings early on.

Finally, after an advisor takes the time to get a clear sense of where your mom is at emotionally, there’s some context for the rest of the discussion. Maybe your mom needs to share changes to her goals or her advisor has some end-of-year, tax-planning advice. But, and I can’t stress this enough, professionals need to skip the jargon.

Imagine your mom’s response to, “Mrs. Mom of Advisor, I’ve taken a look at the numbers, and the income you’ve earned this year will push you over the surtax threshold. We need to look at recharacterizing your income and gifting some of those appreciated assets.”

Huh? What, exactly, is your mom supposed to say to that? I believe most of us mean well when we use professional-speak. In theory, it demonstrates we’ve got the technical skills mastered. But to the client, it means we’re not focused on them. We’re focused on us and what we know. Don’t be like my doctor friends at the barbecue. Every time a client sits across from you, take the time to think about both what that person needs to hear and the best way to share that information. And save the shop talk for your next conference.

The author is a freelance contributor to MorningstarAdvisor.com. The views expressed in this article may or may not reflect the views of Morningstar.

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