Executive Summary
Being a good financial planner is not just about having the knowledge and information to direct clients on how to best achieve their goals and financial success.
Ultimately, most would agree that the true measure of success is to look at how effective the planner is in actually helping clients achieve those goals; in other words, does the client actually have an improved path to success because of the planner's involvement. In turn, this means that the planner's true success hinges not only upon having the right advice, but also depends upon the client actually implementing that advice, and the planner's ability help those clients make the required changes!
There's just one problem: it turns out that telling people what to do is actually a terrible way to get them to do it!
The inspiration for today's blog post comes from a fascinating session at last week's FPA Retreat conference, and a presentation by Karen Miller-Kovach, the Chief Scientific Officer for Weight Watchers, discussing the research about helping people achieve their weight loss goals and how that parallels to behavior change techniques for financial planning. (You may recall that I had written about this session several weeks ago in anticipation of it; I think there's a lot that financial planners can learn about habit formation by looking to parallel professions!)
One of the most striking points that came up in the session was Miller-Kovach's point that being an expert and sharing your expertise is nice, but creating an "I'm the expert, you're the newbie, I'm going to tell you what to do" interaction is actually a terrible way to persuade anyone to do anything, right though that is the exact tendency we all have as experts. In fact, Miller-Kovach points out that such behaviors - on the part of the expert - are actually disproportionately common amongst experts, in what she calls "the Righting Reflex": a built-in desire to set things right and fix things. Fortunately, this desire to set things right attracts people to the helping professions; unfortunately, it leads them to try to bring about change in their clients in a far-less-than-optimal manner!
As Miller-Kovach points out, when we are told what to do, most of us immediately push back or set up barriers. In some people, the desire to exercise "free will" and not do what we're told is so strong that we'll deliberately not do what's best for us, just to spite the person who "ordered" us to do it! But even for those of us who want to be compliant, when it comes down to behavior change that is difficult, the research is pretty clear: telling someone what to do to change their behaviors isn't terribly effective at doing it, and creating a power dynamic where you are framed as the expert with them as the novice can exacerbate the problem further.
So what has to happen? Miller-Kovach cites Prochaska's stages of change in pointing out that ultimately, change occurs in 5 steps:
Pre-contemplation - we're not even thinking about the change
Contemplation - we're consciously thinking about the change at some point in the distant future
Preparation - we're getting ready to make the change in the near future
Action - we're making the change
Maintenance - we're maintaining the new (changed) behavior and trying to avoid relapse
In order to be motivated through these stages, the individual needs to acknowledge that the change is important, and they need to have the confidence that they can accomplish the change. Miller-Kovach (citing research on Motivational Interviewing) makes the point that we can help create motivational environments, where individuals can have realizations (about the importance of change and their confidence in change) that will help to motivate them.
Viewed in this context, planners delivering expert advice about what to do to succeed is often of limited value, because it's generally only relevant for those in the preparation and action stages, who are implementing the change (or are just about to do so), where the knowledge can be applied. For those who are still in the contemplation (or especially, pre-contemplation) stage, telling people what to do as the expert is useless, because they are simply not yet prepared to make the change. Instead, the key role of the planner working with such clients is not to tell them what to do, but to simply help move them forward through the stages of change to the point where they might be more ready to take advice in the future, by helping them having realizations about the importance of the change and their confidence to achieve it (notably, facilitating these realizations is also just as relevant when the client is in the preparation and action stages as well, to keep momentum for a change that is underway).
Miller-Kovach suggests four questions that planners can quickly ask to help clients consider where they are in the change process, and to help them have importance and confidence realizations that can help facilitate their own personal motivation:
What would you like to have happen? (Help clients to aspirationally focus on what they want, rather than on what they don't want.)
What needs to happen? (Help clients think themselves through the changes that will be necessary to achieve the goal.)
Can you? (Checks that what the client wants is actually possible in his/her own mind; does the client think his/her own goal is realistic, and does he/she have the confidence to try to achieve it?)
Will you? (Asks client for a commitment; verifies if the client really believes the change is important.)
Of course, the planner must ultimately use their own knowledge and expertise to guide the client to what the correct change and course of action should be to accomplish the goal. But Miller-Kovach's session - and the research on motivating change in the world of weight loss - makes it clear that true success is at least as much about effectively motivating clients to enact the changes they need to make, than it is to simply know what should be done and "telling" the client what to do as the expert.
So what do you think? Would you adopt these kinds of discussions in your practice? Have you witnessed clients who were reluctant to change, perhaps because they were still in the pre-contemplation or early contemplation stage of change, and not yet ready for preparation and action? What is the planner's role in moving clients through the stages of change, versus giving them the information/advice/recommendations about what the changes should be and letting them do it when they're ready?
At the Coaches Training Institute (http://thecoaches.com) we called the questions as outlined above POWERFUL QUESTIONS. What can you ask that empowers the listener to reflect, motivate and commit to specific actions and changes. I incorporate this concept in my firm’s process and deliverables allowing time for clients to move from the “pre” stages to the “action” stages. I just did not have a formal name for it. Thanks for sharing this fascinating information!
Often times what was recommended V/s really implemented seems to be having huge gap. It is going to be a challenge for both planners and client to take a commitment and proceed with actual recommendations.
Very serious issue comes from if plans contains equity exposure and if it does not perform, clients would look at the entire recommendations as futile.
As there is short term performance measurement kept by the clients and obvious clients’ point of view which he always keeps it for measuring planners performance. Inability of planners demonstrate high performance because of uncontrollable factors which would lead towards deterioration of relationship.
As clients are becoming tech savy and get info at no cost and with least amount of time causes impediment on planners efficiency.
Therefore i presume one should be crystal clear at the initial meeting itself about performance matrices and go forward as win-win situation.
We can’t guarantee future performance but we can look at realistic with actual s.
There is also the need for the client to “take” ownership of the process including the decisions – the financial planner cannot make the decisions for the client – the client needs to see the available options and choose; so taking control.
The clients you will have the worst experiences with are usually those who say they do not want to have anything to do with the process and want you to make their decisions for them – they do not
take ownership.
The next step is that you need to be with the client through the various stages – it is no good to present the client with a plan and say ‘off you go’ – the plan then stands a good chance of failure and when the client comes back the adviser will claim they did not follow the instructions properly.
The financial planning process needs to be an ongoing relationship which develops in terms of trust, capability and subsequently results.
Clients also need to avoid going for the quick fix and the instant result. A huge part of the advisers task is education over the long term and teaching the client to act contrary to the pack.
I enjoyed your article.
Ya, one thing not to become to your clients is their worst version of their “mom or dad or teacher”. They’ll yelp as much as they did as children and teenagers!
One of the reasons why some coaches fail, too, is the expert syndrome. That’s why I feel it is so important for coaches to receive training in coaching (for more than 1 weekend). Training teaches you many core competencies of which Powerful Questioning is one of the basics.
I agree with Tony about taking ownership. I recommend that for each goal a client has, my clients get the answer to the same question I ask:”On a scale of 1-10, how important is it for you to reach this goal”. It helps guide them through a process, one that I now have steps to (thanks to your post here)
Trust is a big key here and trust takes time. I find that after 3-4 months of working with a client one of two things happen 1) They do what I was warned of in coaching school — they rebel because they get that it’s time to make deeper changes and either quit or walk through it (I quietly remind them that we talked about this up front, as I learned at Coach U). OR 2) I hear these words more often “can you help me with “X”.
I loved reading about Prochaska’s stages of change. I’ve seen others – Like the Three A’s — become aware, accept and then take action, before but not one so concise.
I’m guessing that part of the process is the reason why if a client, at first, doesn’t hire you, it’s important to ask for permission to put them on your newsletter list or for some other sort of “touches” in the future is a good thing.
Again, thanks for your insights.