Something that looks true to me is that in the world of financial advising there are lots of excellent technicians and yet few highly effective influencers.
What is a highly effective influencer?
It’s someone who is a powerful catalyst for positive, beneficial change in a client. Your client thinks, feels and behaves differently as a result of your relationship.
Over time they become wealthier, happier and a better person. Because of you.
Why is this important? Lots of reasons, if those already mentioned aren’t enough!
Another being that it is quite possible for an adviser to give technically brilliant financial advice or good information, but this isn’t necessarily going to stop a client from making a stupid decision, is it?
Or a brilliant one for that matter.
Behavioural finance seems to be gaining an increasing amount of interest and it is not hard to imagine why.
For example, it is well known that far too many people lose money on perfectly good investments because they panic and sell at the wrong time.
Why does this happen?
Human beings behave according to how they feel.
Academics and psychologists love to create jargon around a subject – confirmation bias, loss aversion, self-attribution bias, the narrative fallacy, the herding mentality, etc.
It makes them sound clever. But it can be summed up very simply – when people are in low states of mind they don’t think clearly and are, therefore, far more likely to make a poor decision.
You could learn all about behavioural science as a subject. Pass an exam on it. And be no better off than before when it comes to positively influencing a client.
“I’m sorry Mrs. Client but I think you are in the midst of a narrative fallacy.”
It’s like saying to a smoker, “It’s bad for your health!”
Logical, true and of no help whatsoever. Information alone rarely is.
Here is a truth.
If you pay attention to people, they will give you all the information you need in order to help them make smart choices and avoid stupid ones.
But one of the biggest mistakes that people make when interacting with clients is missing the signals.
Just recently the principal of a financial planning firm I work with told me that he occasionally accompanies one of his advisers to a client meeting.
He said he was struck by how often his advisers don’t recognise what a client is clearly communicating.
A couple of examples.
Sometimes a client is clearly, visibly ready to conclude the business and yet the adviser just continues to talk.
On some occasions, they even manage to talk themselves out of the client’s business.
The person is probably thinking, “I don’t think I want more of this. I’m bailing out now!”
Sometimes a client has heard enough about something and is clearly exhibiting “I’m ready to move on.” signals.
And yet the adviser just drones on… and on… and on… and on.
They are so into what they are saying they haven’t noticed the client has (metaphorically) left the building.
The most important element of being a powerful influencer is to NOTICE what’s going on.
You cannot do this if you are in your head.
If you don’t know what’s going on then how can you respond appropriately?
What can you do about this?
Empty your mind. Get deeply curious. Pay attention. Listen to your intuition.
It is simple.
But the problem with simple is that the intellectual mind loves complexity.
This is why there are lots of technicians and yet few highly effective influencers.
“Intuition and insight is a sacred gift, and the rational mind is a faithful servant. We have created a society that honours the servant and has forgotten the gift.”
P.S. Becoming a more powerful influencer means being vulnerable and dropping your mask. When your client sees you are willing to be open, they will be open too. They will listen to you.