Executive Summary
In recent years, technological advances in remote communication have allowed all sorts of professionals to expand beyond having clients just in the towns and cities where they live and meeting those clients in just one location. Financial advisors have been taking advantage of that trend as well, as the internet and video and other collaborative meeting tools have increasingly made it feasible to serve clients across the country (or even around the world), start practices on a shoestring budget, or simply to keep clients when they relocate themselves (resulting in a more and more geographically diverse clientele over time). Still, financial advisors who adopted a fully virtual “location-independent” practice were in the minority... until this past March, when suddenly, those who were fortunate enough to have jobs that lent themselves to remote work, found themselves having to navigate the world of virtual work literally overnight, including financial advisors.
The transition wasn’t always smooth, and many advisors still lament what’s been lost by not being able to meet with clients in person. But the good news is that it turns out that there are some rather favorable aspects to meeting clients virtually, and engaging with professionals in a virtual environment is something that psychologists have been studying in their domain for many years now. In fact, a recent literature review in the Journal of Financial Planning suggests that virtual financial planning may be just as good (or perhaps even better) as advisors address their clients’ emotional concerns!
Specifically, the research shows that virtual client meetings create a lower barrier to entry for otherwise-nervous clients who want to meet, and provide more flexibility in how and when meetings happen, as they offer increased logistical convenience and reduce any stress around actually going to the meeting itself. And as it turns out, having the option to meet from a more comfortable and familiar (i.e., home) location may even have a therapeutic benefit in and of itself! Meanwhile, that same flexibility increases the advisor’s availability, which can be particularly valuable in times of need.
Beyond that, virtual financial planning can potentially help clients adhere to their plans as well. In a more ‘normal’ environment, where in-person meetings typically take an hour or so and happen only once or twice a year, it is very easy for tasks to fall through the proverbial cracks. Instead, shorter and more frequent virtual meetings can help both clients and advisors focus on a few of the most important tasks… and the supporting follow-through necessary to ensure they actually get done. This can be especially helpful for clients who are stressed about their finances, as might be more inclined to keep their virtual meeting and actually talk to their planner, instead of canceling or putting their meeting off.
That’s not to say that virtual meetings aren’t without their challenges, though, but the good news is that there are some simple strategies advisors can use to deal with those challenges effectively. At this point, it’s no mystery that “Zoom Fatigue” is a very real thing, as our brains simply aren’t wired to deal effectively in a (prolonged) virtual environment. Not only do they hinder our ability to read body language and receive subtle (but extremely important) nonverbal cues, but they also reduce the amount of feedback that participants provide, as it’s natural for our brains to zone out in such situations. To combat “Zoom Fatigue” and stay focused on the task at hand, advisors can try having only the video conferencing system open on their computer, shutting off notifications from their phones and other communication applications, avoid using a virtual background, keep microphone and cameras ‘on’, and use all the reduced distractions to focus themselves on being more active listeners.
Ultimately, the key point is that, although financial advisors have had to manage a plethora of changes in a post-pandemic world, the good news is that there are several benefits that clients (and advisors) can enjoy as a result, including offering lower barriers to entry and greater flexibility and convenience, as well as an increased likelihood that clients will adhere to their advisor’s recommendations. And while there are various challenges inherent in remote settings, there are a few easy-to-implement strategies that advisors can employ to not only harness the utility of virtual meetings, but in many cases, provide even better outcomes for clients!
Benefits Of ‘Tele-Financial Planning’: Convenience Of Handling Issues, Better Plan Adherence, And Easier Meeting Coordination
While conducting financial planning meetings virtually is a new phenomenon for most financial advisors, the reality is that at least some financial advisors already typically meet with at least some of their clients using virtual meeting tools. And the phenomenon isn’t unique to financial planning; in fact, “teletherapy” has similarly been on the rise in the world of psychology as well. But with the coronavirus pandemic suddenly forcing a wide range of professional services into the virtual world, what was occasionally a medium for some professionals with some clients has now become the primary medium for most professionals with nearly all of their clients.
To explore the issue, a systematic literature review in the Journal of Financial Planning (JFP) conducted by Derek Sensing, Brian Walsh, Ives Machiz, Nicolas Stanley, Matthew Russell, and Dr. Megan McCoy examined the research on teletherapy for its potential application to the world of “tele-financial planning”. And the good news is that, despite some advisors' initial challenges and woes in trying to connect with clients through webcams and screens, the existing research on teletherapy provides strong support that virtual financial planning will be just as good (and maybe even better!) for addressing clients' emotional concerns!
How Virtual Meetings Can Make Clients’ Lives Easier
While in-person therapy is common – with the proverbial or literal couch to sit on while talking to the therapist – it turns out that in-person interactions are not necessarily a prerequisite for a therapist to help patients, even with difficult emotional issues like PTSD. The JFP review highlights one analysis finding that teletherapy was just as effective as in-person meetings and, in some cases, even more effective for successfully working with clients… driven by the reality that virtual client meetings create a lower barrier to entry and provide more meeting flexibility.
In this context, a low barrier to entry involves the logistical convenience of virtual meetings and the reduction of stress associated with actually going to the meeting itself; for example, with virtual meetings, there is no waiting room anxiety, no need to drive to and from the (therapist’s or financial advisor’s) office, where clients instead have the convenient option of being able to meet from the comfort of their home or some other preferred location (which may have a certain therapeutic benefit in and of itself).
In turn, the added benefit of meeting flexibility refers to the degree to which an advisor can be available for the client, specifically in times of need. As while there are some times when a client will need more help from their advisor at certain points in the relationship (such as when an emergency pops up), and the advisor’s ability to meet quickly and perhaps even more efficiently (no driving, no waiting, and having screen sharing options to actually discuss the issue) for those times when clients needed a little extra support was a huge benefit.
Essentially, financial advisors don’t necessarily need to be with their clients in person to help them through tough emotional issues… extensive teletherapy research suggests that this simply is not the case. Advisors need not be afraid to have those deeper conversations just because they are meeting their clients over Zoom. Tele-meetings do not have to be a barrier to true connection!
Virtual Meetings Can Help Financial Advisors Service Their Clients Better
In addition to the convenience for clients – not just with respect to time savings, but the real improvements in accessibility to advice in times of need – there are benefits for the advisor, too!
The first of these is how virtual financial planning can potentially help clients better adhere to their plans.
Because in the ‘normal’ financial planning environment, advisors have traditionally done a yearly check-in or two, with meetings that last an hour or more. It is often only during these meetings (or in preparing for these meetings) that advisors and clients uncover that certain tasks, even though they were assigned six months ago, are still not done, which isn’t unique to financial planning. The same thing happens to therapists working with their patients in person – while patients might agree to try something (an activity or a medication), they may fall short on their promised follow-through.
Yet, teletherapy is changing how therapists work with their clients, removing some of the traditional barriers, such as travel requirements and waiting room time, and, even more importantly, reducing resistance to sticking to the plan itself! As while research shows that shorter but more frequent meetings helped therapy patients stay on track with their therapist’s prescribed course of action, it is my opinion that this would help financial planning clients stay on track with their financial plans, too.
In essence, tele-financial planning allowed financial planners to conduct shorter meetings… and with shorter meetings, there is more opportunity to check in more frequently! Because by eliminating the inconvenience of the client’s drive and waiting time, the advisor won’t feel as compelled to have a full hour-long meeting to make the client feel that their effort to physically come to the office was worth it, and instead the meeting can simply wrap up in its natural (not-always-needing-a-full-hour) course!
And what is more, research on teletherapy has also taught us that clients who feel stigmatized by their situation were more likely to choose a virtual meeting anyway!
In a financial planning context, this suggests that clients who feel bad or uneasy about their financial plan or financial decisions might be more inclined to keep their virtual meeting and actually talk to their planner, instead of canceling or putting their meeting off. After all, anxiety can stop people in their tracks, but lowering the barrier to entry might help clients take baby steps toward feeling comfortable meeting with their advisor. And by facilitating more frequent check-ins, virtual meetings can help the advisor more quickly identify when their client may be feeling stuck because they will know sooner that the client is off-track, which enables the advisor to offer extra support to their client when they need it until they are ready to move forward again – which is what people with anxiety need!
Another big benefit of virtual financial planning for advisors is that it facilitates comprehensive planning and collaboration among professional experts under one big (virtual) roof. In the pre-COVID world, advisors and their staff likely had to act as ‘event coordinators’ to get multiple professionals together in one office on the same day to meet with a client – managing schedules for busy people can be a logistical nightmare.
With virtual meetings, however, the lower barrier to entry allows CPAs, estate planners, trust executors, financial advisors, and clients to be in the same virtual meeting without the need to travel, which may help make meetings much easier to coordinate for all parties involved.
The same thing goes for meetings that include multiple family members. Clients with family members in different places can meet with much greater ease (and frequency) than ever before, and it may even be needed more than ever before because humans have become more transient than they have in the past and, especially in these times of pandemic social distancing, the ability to connect virtually allows for those important connections to be maintained.
Advisors may already meet virtually with clients who move around a lot, but up until the recent past, with the onset of COVID-19 and social distancing requirements, these meetings may have been one-off and sporadic. Making virtual meetings a routine practice can normalize them and perhaps even provide the advisor with a new line of business – meeting with clients anywhere, especially if serving a niche that requires flexibility like the military or travel nurses.
Three Communication Deal Breakers That Thwart The Benefits Of Virtual Financial Planning: Failing To Learn The Virtual Meeting ‘Language’, Zoning Out, And Multi-Tasking
Consider the fact that the majority of human communication happens through body language and other non-verbal cues. And now consider that a lot of these cues and messages are lost by way of virtual communication. A great researcher friend of mine, Blake Gray of Texas Tech University, says virtual meetings are hard because they force us to speak in a new language.
And virtual meetings do introduce a new language. Learning to meet virtually can be just like a native-English speaker learning Spanish or Cantonese. Except the challenge isn’t learning a new vocabulary, though; instead, it’s more about figuring out the role of context (environment, situation, relationship between people talking) and congruence (when words, tone, and body language are in alignment) in virtual communication.
And this is exactly why virtual meetings can be so difficult, unfulfilling, and even boring. We can’t always see other meeting participants' bodies, and reading the facial expressions of multiple people all at once (or even dealing with the absence of expressions altogether if someone is not on camera) can be very tough to our brains that are used to a certain (in-person) way of interpreting these non-verbal cues.
What is more, people in virtual meetings tend to give less listener feedback; for example, they generally don’t offer as many speech cues (even simple phrases like “uh-huh”, “yes”, or “hmm”) or body gestures (e.g., head nods or shakes), and sometimes even mute themselves when not talking. This can result in very little or no listener feedback, which is actually really important for the communication process!
Perhaps an even bigger issue than the simple fact that communication is harder during virtual meetings is the tendency for people to zone out in virtual meetings. Thankfully (in some ways, I guess?), zoning out is something human brains naturally do in this scenario (it’s not just you!). Harvard researchers say it is because of something called the “Ringelmann Effect”.
The Ringelmann Effect says that the bigger the group working on a task, the less responsibility an individual in that group will feel to complete the task successfully. And really, you don’t have to be familiar with Ringelmann to know that people behave differently in groups – lots of research over the years has been published showing that when we are in groups, responsibility spreads out.
For example, advisors have likely heard of the Bystander Effect, where the presence of other people tends to discourage an individual from responding to an emergency. While the Ringelmann Effect is distinct from the Bystander Effect in that it deals with the success of a project (like having a good meeting) instead of (not) providing help in a time of distress, both are instances where a group setting can lower individual responsibility to take action. Or in the context of a multi-person Zoom call, being more likely to ‘zone out’ because we feel less individual responsibility to interact with the speaker (undermining the interpersonal communication in the process).
Another reason that zoning out naturally happens is that we don’t normally stare at so many faces, at once, for so long (not to mention subconsciously studying all of the different home, office, and coffee shop backgrounds as well). And when we do, it can make us feel tired – this is what people mean by “Zoom fatigue”. Essentially, when we stare at lots of faces and the different backgrounds behind those faces all at once, our brain tries to process how we could possibly be in so many different rooms all at once! Our brains are working extra hard to take in all of those extra non-verbal pieces of information that the brain likes to use to make sense of the conversation that we are having. And because there is so much sensory input… it gets overstimulated and tired.
Additionally, we aren’t generally used to seeing ourselves during a conversation. Yet, this is common in virtual meetings, and our own face is perhaps the most distracting face of all. Research finds that if we can see ourselves, we will stare at ourselves. There are many theories as to why we do so, such as the ‘cocktail party’ effect. Researchers have suggested that when we are in a loud and crowded room (e.g., such as at a cocktail party), we are more tuned in to hearing someone call out our own name because our brain tends to be attuned to seeing and hearing itself.
Others think that because we are social, we are consciously (and subconsciously) driven to look our best for others. Thus, when we see ourselves during a meeting in real-time, we are very aware of how we look (and have a tendency to want to make lots of adjustments to ensure we’re showing up well). As social creatures, we are also driven to compare ourselves to others and, therefore, will frequently critique ourselves and our appearance more often in a virtual meeting when we can see ourselves (at least compared to how much we would otherwise).
Last but not least, virtual meetings are tough because of the nearly irresistible temptation to multi-task that advisors and clients face. After all, reminiscent of the Ringelmann Effect, if we don’t feel that we are part of the conversation, it’s very easy to do something else, like answering our emails instead of listening to the dialogue. In other words, advisors might answer their email or look at their phone because they are already staring at their computers. In an in-office meeting, however, where the advisor actually meets with the client in a conference room sitting at a table, there is very little opportunity to look away from the conversation taking place.
Simply put, in today’s at-home environment, multi-tasking is 'life' for many advisors. We may 'work' (e.g., listen to a conference call) while at the same time we might be doing laundry, have the TV on in the next room, or have babies (the fur and human kind!) making noise in the background. And the bad news is that it all makes the ability to concentrate on the actual meeting really difficult!
Addressing Concentration Issues And How To Create Interactive Virtual Conversations
If you did not already know, multi-tasking is truly a physical impossibility; your brain can switch (sometimes quickly, from one thing to another), but it cannot do two things at once. Therefore, we must accept that we are not multi-taskers and make a true effort to purposefully avoid conscious distractions (as there are already enough subconscious distractions your brain is trying to contend with!).
Thus, when you are on a video conference call with a client, make it a point to have only the video conferencing system open on your computer, maybe a blank Word document to take notes (or just a trusty pen and paper handy at your desk for notes), and the presentation that perhaps you plan to go over (or screen share). Remove your phone from your sight. Turn off all other applications like Slack or Teams and email, including (and especially!) the ‘new message’ notifications for those programs.
Set yourself up for success by removing as many potential distractions as you can think of. You wouldn’t want someone to answer their email or tell you to wait a moment while they check a text message while you were having a conversation, so it’s only common courtesy not to do so while on a video call.
Even if the client doesn’t notice, your attention strays from the conversation that you should be paying attention to, and that is the bigger issue. And because all clients can see when they look at a video call is you – your facial expressions, and where your eyes are focused – in practice, they often can tell when you’re distracted with something else on the computer. Which just undermines the communication and advisor-client relationship further.
Now how to avoid some of those subconscious distractions too! First, turn off your ability to see yourself.
- Here is how to do it in Zoom.
- Here is how to do it in Webex.
- If you don’t use Webex or Zoom, set the client’s window as the focus window so that you are at least primarily seeing them, or if it is a group meeting, try to remove your picture from the screen, or at least use a ‘Brady Bunch’-style view, so your picture is minimized.
Another useful tip is to have a real but simple background and encourage others to do the same. Remember, your mind and your clients' minds will get distracted by trying to process the fact that it is looking into two or three different rooms at the same time. Keeping the background simple creates less for the other person’s brain to process and helps to keep them focused on the conversation.
Notably, while it can be tempting to use a virtual background, they can actually be really distracting for the brain. Basically, our brains don’t simply think, “Oh yeah, they’re just hiding the Legos on the floor or the messy shelves,” and then go back to the conversation. Instead, they tend to wonder, “What is it that I am not seeing? Is this person trying to hide something from me? If so, what is it?” And then the brain will spend energy concentrating on what is actually in the real background that they can’t see. Instead of focusing on the conversation itself!
It sounds a bit ridiculous, but that is exactly how our brains, evolving over eons of time, are trained to work. We do not like the unknown, and we can spot fakes. It simply makes us uneasy. So, just show the Legos – some anecdotal comments I have collected from advisors seem to suggest that being more open and ‘real’ in the virtual world generally helps individuals to feel more connected anyway!
The last ‘don’t do’ tip is to refrain from muting yourself (or turning off your camera) even if you are not talking. Distractions happen; just apologize if a dog barks or a baby cries, or if someone walks by in the background. Apologizing for a distraction is still better than not giving listener feedback. Furthermore, muting and unmuting can create awkward silences and unnecessarily distorts the ability for people to respond in real-time, which is otherwise essential for a ‘good’ discussion. And if having a genuine conversation is what you actually want, then real-time dialogue, distractions and all, is a big part of it.
Another reason to keep microphones on is that status quo bias hits us hard. From my work as a professor, I know that if my students mute themselves, they tend to stay muted and are much less likely to speak up when I ask a question later. Even when they have their own questions, they are also less likely to stop me and speak up.
And clients will tend to do the same thing. If they’ve muted, they’ll be less likely to break in with a question – even if they have one, if only because by the time they unmute, the pause in the conversation where they would have asked the question has passed. So unless there is constant construction (or another loud noise) going on in the background where your ability to hear over the noise is impossible, encourage everyone to keep their microphones on!
And if you prefer to reschedule because the noise distraction is impossible to deal with, don’t hesitate to suggest doing so. It is totally okay as, again, one of the great things about virtual meetings is how easy it is to create flexibility around meetings! Picking a new meeting time when everyone can participate – with their microphones on – is better than running a poor meeting with little to no feedback (talk about wasting an hour of everyone’s time)!
If you read my articles a lot (thank you!), you will recognize that this next suggestion is an oldie but goodie. Use active listening skills to stay engaged and avoid zoning out – it is just that simple. When we use active listening (a lot) and repeat back what has been said (a lot), it might feel strange, but it will keep you engaged and focused on the right thing – the conversation.
You can even warn clients and say, “Hey, in today’s meeting, I am going to be using a lot of active listening. It really helps me to focus while we’re in an online setting where some of the ways we communicate tend to get lost. Therefore, I am going to spend a fair amount of time today repeating things back to you and maybe even asking you to repeat things. I promise I am not asking you to repeat things because I’m not listening – I am, in fact, doing my very best to build in extra feedback and connection so that I listen intently and receive your information fully.”
To that end, do not be afraid to use the other important components of active listening, such as summaries and follow-up questions.
Examples:
Linda, thank you for explaining your plans for the new lake house. I want to clarify, do you….
Bob, that is great news! Thank you for sharing. Just so that I have it right, am I correctly summarizing when I say…
Debra and Frank, this information has been really useful. I would like to gain more clarification about X. Please tell me more about how X impacts…
Finally, if you are doing a lot of active listening, you hopefully aren’t losing track of the conversation very often. And yet it can happen from time to time (and many times for legitimate reasons). While it can be scary to admit that you lost track of what the client was saying, what is actually worse is pretending that you heard everything they said (when you didn’t) and later discovering that you still need the information or saying something that contradicts what was said or calls into question the fact that you were not listening.
Accordingly, if you do lose track of the conversation, remember that it is always better to speak up and ask the client to clarify what was said. Here are some suggestions for how to do it:
- I appreciate your sharing that information, and I want to make sure I am following. Would you mind summarizing what you just said?
- I want to be sure I am getting all of the details and information; would you mind repeating what you just said?
- What you just explained is important to me and I want to ensure I have the details; would you mind going through the main points again?
While virtual meetings may have forced us into a new normal (thanks a lot, COVID!), we can harness their utility as a new way of communicating that we actually continue using, even beyond the pandemic, because of the potential benefits they bring to the client meeting.
Teletherapy can address even heavy emotional concerns in a virtual environment, and, in some cases (given the low barriers to entry and meeting flexibility), virtual meetings can potentially be even better than in-person meetings! The trick to bringing about the great benefits of virtual meetings is understanding how to communicate effectively, much akin to learning a new language, but in a virtual environment.
And making simple environmental changes (such as removing barriers that create conscious distractions and doing your best to minimize subconscious distractions) while using active listening skills may be all that you need to harness the usefulness of virtual meetings!
Yes, yes, and yes!!!! Been living this model for years and know for a fact Virtual will work!
Not only that it will work, but that there is research to suggest it will work BETTER!
Totally, and it’s what the consumer wants!
A great article on an important topic as more financial advisors and their clients get comfortable with a virtual-first relationship.
Beyond the benefits addressed in this article, the opportunity for advisor hiring decisions to prioritize aligning a client’s individual needs to an advisor’s niche and subject matter expertise over their zip code is the future.
Another superb, unique and educational review of a vital subject! Thanks Michael- you truly are the best educational resource for top-level advisors!