When your clients are telling you the sensitive, private details of their financial lives, are you listening? I mean really listening? I’ve personally experienced two levels of listening, and perhaps others identify with these tiers as well.

Basic Listening:
This first level entails gathering enough information to grasp the speaker’s main point and to respond with verbal and non-verbal gestures, such as nodding in agreement or saying “uh huh” or “Really?” With basic listening, we are participating in hearing at a cursory level, so we may then provide the appropriate social response to the speaker. According to Stephen R. Covey in The 7 Habits of Highly Effective People, “Most people do not listen with the intent to understand; they listen with the intent to reply.”

Many times, I’ve been in social situations where I introduced myself and could not, moments later, remember the name of the person whose hand I just shook. Why? Because I was so focused on my side of the introduction that my ears heard—but I did not listen to—that individual’s name.

Deeper Listening:
The next plane of listening is more detail-oriented and involves not just hearing the speaker, but focusing intently on their words—while also suppressing any thoughts or responses that might pop into our heads. In my experience, this deeper listening more often leads to a better understanding of the speaker, as well as enhanced retention.

So, what is the relevance to financial counseling?

Listening to our clients is the heart and soul of our counseling sessions. What we glean from our clients’ stories and discussions will become the foundation upon which we build possible solutions and, with the help of the client, create a plan that they will implement. Unless we are in the proper listening mode, we will not affect the best solutions. On the contrary, even the slightest overlooked detail may lead to a plan that is irrelevant. Imagine focusing entirely on investment selection when your client just said—but you didn’t hear—that he is behind on his car payments. Or consider a scenario where you exclusively work on a budget for a client, who mentioned she might be a victim of identity theft.

There are some actions we can take to both tell our clients we are listening and to help ourselves absorb their words.

  1. Take a look around your office and take note of any device that may distract you or your client(s). Does your office phone ring loudly or do you answer it in the middle of your sessions?  Do you have your cell phone on silent mode and do you ignore or store it during counseling? (After all, how focused is your listening when you respond to every notification arriving on your phone’s screen?) Are you reading your e-mail or otherwise looking at your computer screen instead of your client’s eyes? In spite of all the detractors listed above, your client’s eyes are the best place to focus during a conversation. This ensures deep listening and avoids the perception that your attention is divided.
  2. Let your clients tell their stories completely and avoid interrupting—unless you are asking for clarification. Because personal finance is such a private topic, the last thing we want to do is interrupt our client just as he or she begins to open up and speak without inhibition.
  3. And finally, but most importantly, don’t verbally or mentally create solutions until you’ve collected all the data from your client.

In Great Questions Financial Advisors Ask by Alan Parisse and David Richman, the authors relay the advice of their peer that captures the caliber of listening to which we should all aspire: “I listen to my clients with the attention and excitement of a first-time skydiver in a parachute-packing class.”  

Guest Contributor: David Kershberg, AFC®

January 03, 2018

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