U.K. Prime Minister Winston Churchill was in a playful mood that night in World War II-era Cairo, dressed in a maroon velvet one-piece suit of his own design, when he challenged his military dinner guests to a contest: Who could quote the most Shakespeare?
Fifteen minutes later, the guests had exhausted their store of passages from "Hamlet," "King Lear" and the like. But Sir Winston, a noted lover of the Bard, kept going, reciting sonnet after beautiful sonnet. It took a good while for his guests to realize that Churchill wasn't reeling off Shakespeare quotes but rather mock verses of his own invention.
Churchill's aperitif hijinks, reported in Ben Macintyre's "
No lecture, no cry
Raise your hand if this sounds familiar: You are excitedly, and at length, outlining a complex retirement strategy you've devised for a client when suddenly you see their eyes glaze over. You realize that you have so overwhelmed them with your fluent retirement-planning-ese that they have no chance of assessing the merits of your plan, much less adopting it.
As financial therapist Brad Klontz and his co-authors wrote in "
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Detailed explanations are sometimes unavoidable in the financial planning process, but the most productive client meetings involve an advisor talking, yes,
Interior finance, a concept coined by the late Dick Wagner, addresses how the money issues occurring in our heads play out in real life. It can help advisors make client communication more interactive by creating awareness of their emotional connections to money in order to discover goals and correct behaviors. It's a framework that doesn't just save financial planners who like the sound of their own voice from themselves, it helps them listen to and guide clients through interactive self-discovery exercises that can build trust and improve practices.
Klontz and co-authors mention how effective interior approaches can be: "When a client authentically taps into their own motivation (intrinsic motivation), nothing will stop them. If the motivational energy comes from the outside (extrinsic motivation), most anything will stop them."
A common extrinsic motivation, for example, may be a monetary reward, whereas intrinsic benefits include tons of different emotions like pride or a sense of accomplishment that are gained in the activity itself. If your clients lack motivation to chase financial solutions, helping them tap into their motivations may help.
Flashpoints, values, motivations
Knowing that an interactive approach can improve your practice sounds good, but implementing it can seem daunting. Not to worry. Here are three topics that you are probably already using in discussions with clients but haven't formalized into a process.
Flashpoints are intensely emotional financial events that have changed our worldview. They are inflection points that induce strong feelings. For example, if someone has an inflation phobia, uncovering clients' vivid memories related to the subject may help them become more rational and receptive to solutions.
Motivations represent our general desires in the moment to accomplish something. Reflecting on past motivations can reveal helpful information when planning for the future. Uncovering what drove us to old flashpoints creates an awareness conducive to identifying financial goals.
Values are what we stand for; what's important to us no matter what others think. They inform our decisions, especially painful ones. Financial decisions are most rational when they are aligned with values. Meeting with a financial professional is a great opportunity to explore values, as they are connected to wealth decisions.
Through self-discovery within these topics, clients can identify financial concerns so the advisor can better guide them toward solutions. What's more, combining them into an exercise can help clients articulate and recall memories, as this process lights up different parts of the brain.
By way of example, a model I created called the charitable money tree activity can initiate meaningful philanthropic discussions with clients. An alternative to monologuing financial strategies à la Churchill, it gives clients a chance to reflect, write — and even just doodle — about their charitable history. Interactive exercises like this one build interest in the topic and give clients a place to park their thoughts. Perhaps most importantly, they can spark productive advisor-client conversations that will inform the advisor's planning solutions.
In the answers provided by the hypothetical client in the illustration above, the advisor would discover that the client has an inclination for social interactions and an interest in military issues and animal welfare. The information could lead to discussions about investing in companies that score high in certain SRI categories, making room in the client's budget for, say, charity galas. It might even present an opportunity to show off your knowledge about
However, problem solving is not required at this point in the process. Financial professionals can fall for the seductive idea that we can strategize for everything, but we also provide value when we help clients articulate their interior connections to wealth, thereby increasing emotional benefits that accompany financial planning.
