By Barbara O’Neill, Ph.D., CFP®, AFC® email@example.com
and Martie Gillen, Ph.D., MBA, AFC®, CFLE firstname.lastname@example.org
Personal Financial Managers frequently find themselves in the position of encouraging clients to adopt positive financial behaviors such as increased savings and reduced debt and spending. This is not always easy.
Below is a brief description of seven proven ways to connect with clients and encourage them to change:
- Support Client Goal-Setting– Goals provide an incentive to change behavior, especially if they are accompanied by support services (e.g., financial coaching). One study found that asking people to self-report their goals is insufficient. About 26% of respondents changed their top goal when prompted with reminders of other goals. The researchers recommended providing clients with a list of common financial goals to rank in order.
- Assist With Automation– Many clients are time-starved and personal finance can be “high maintenance.” PFMs can assist by curating key information, narrowing down choices (experts recommend starting with three), and helping clients automate their finances. Specific automation strategies include mutual fund automatic deposits, electronic bill-paying, and checking-to-savings account transfers.
- Foster Positivity– Pay attention to clients’ personality traits and outlook on life and help pessimistic clients with an external locus of control “reframe” situations to see positive aspects (e.g., “it could have been a lot worse”). In addition, give clients “homework” (i.e., small tasks such as completing a savings challenge) where they can experience both control and success.
- Identify Client “Hot Buttons”– Learn what issues are highly charged emotionally for clients and use this information as a “lens” to inform programs. One way to do this is to ask gentle probing questions such as “What makes you happy?” “Where do you want to be in 3-5 years?,” and “What worries you the most about money?”
- Clarify Obstacles– It is important to know what obstacles are preventing clients from making positive changes so they can be addressed. Good questions to start this conversation are “What has stopped you from doing [action] in the past?” and “Do you anticipate any problems or challenges in achieving this goal?”
- Listen With Empathy– Empathy is connecting to the emotions that underpin another person’s experience. Therefore, financial practitioners need to be able to handle uncomfortable emotions and to actively listen and seek to understand. Good language to use is “Here’s what I heard. Tell me if I missed anything.”
- Motivational Interviewing (MI)– MI is a collaborative conversation style designed to strengthen clients’ commitment to change by building rapport with them. Key components of MI are summarized with the acronym OARS: Open-ended questions, Affirmations (statements that help clients feel that change is possible), Reflective listening (so a client feels understood), and Summaries (recapping the content of a client session).
Bottom Line: If you want clients to change, take the time to really understand them.