Core Techniques for Effective Client Interviewing and Communication

Core Techniques for Communication article – Jaffe and Grubman Page 3formation you can then glean, both factually andemotionally from the client’s perspective.Open-ended questions also cast a wide net butelicit information in a more generic way. Examplesinclude “Can you tell me more about that?”, “I’dlike to hear more about that”, and “Can you go intomore detail about that?” They are in contrast toclosed-end questions that are either multiple choice,true/false, or yes/no. Questions like “how muchdo you think you’ll need in retirement?” or evenemotional questions like “were you angry aboutthat?” can be answered with one-word responsesthat can shut down conversation instead of openingit up. Closed-end questions are sometimes necessarybut they tend to pull for problem-solvingand narrow a conversation rather than broaden itor keep it going. Most advisors are unfortunatelyexcellent at closed-end questions but struggle withopen-ended questions. Both door-openers andopen-ended questions allow you to go wide anddeep in gathering information. They also are yourfall-back when you are not sure what to ask fornext or when you feel unsure about what the clientis feeling or thinking about something. Perhaps themost useful yet least used open-ended question is“what else?” It’s amazing how often checking for“is there anything else about that?” uncovers moreinformation that would have been lost if not forpursuing this conversational form of due diligence.Clarifying questions help flesh out a particulararea but without an attempt to problem-solve oruse the information in any way. They are part ofgood interviewing because their main focus is foryou to learn more and fully understand an issue ortopic;; they help you go deep into an area. Examplesinclude “What is it about the previous financialplan that you didn’t like?” or “What did youmost like about your previous advisor that youwould want me to do in a similar way?” One cautionwhen using clarifying questions is that youmust resist the temptation to pursue each bit of informationyou get in response. Good clarifyingdraws out a lot of information before proceedingto solutions. In contrast, premature jumping toproblem-solving means important information liesunanswered or undeveloped, which can undercutthe success of your work.2. Communicating clearly about theprocess of advising.You are probably so familiar with the process of financialadvising you may forget your clients may not knowwhat is involved, what the sequence of steps may be, orhow deep and wide the conversation may go. There isa good chance your idea of what can or may happen inmeetings and what the client thinks will happen may bevery different. You and the client can be on such differentpages as meetings proceed that the result can becomic or tragic. The only way to overcome this is foryou to take the lead in explaining and getting agreementwith the client about what will be done, when, andhow.This is particularly true when a client wants to talkabout personal issues that bear on his or her financialdealings but feels anxious about doing so. On a practicallevel, one of your responsibilities is to clarify theguidelines about confidentiality, especially what will beshared with other family members of your primaryclient. Clients may be reticent if they are not clear aboutwhom you will share the information with. Particularlywhen working with couples or next-generation familymembers of clients, you should be clear whether, howmuch, and what type of information you may share if atall. Unless confidentiality is understood, you will getless candid information than you desire. Most often,however, clients will pause at the threshold of disclosingprivate information simply because the informationis emotionally loaded and they may not be sure whetheror how to tell you about it themselves. They need toget comfortable with you before they can begin toshare.You may have your own anxieties or judgments aboutdelving into the emotional realm. Many advisors assumethat, if something is very personal, they shouldnot ask about it and the client will not want to talkabout it. Yet good financial planning naturally brings updeep issues that must be dealt with v . Some advisorsrecognize the utility of finding out personal informationbut they never ask the client’s permission to getinto these matters, so it feels disrespectful, impulsive,or intrusive. If you as the advisor do not take the necessarysteps to move forward into sensitive topicsproductively yet diplomatically, by mutual agreementyou both will retreat into safe territory. This may leadyou to avoid or mishandle the real concerns that motivatethe client, limiting the effectiveness of problemsolvingas well as the relationship.Advisors must therefore practice a certain kind of assertiveness,a communication style that blends inquiry—comfort with delving into the client’s concerns andemotions – with advocacy - sharing your expertise withthe client in appropriate ways. There are a number ofbooks on assertiveness skillsvi that describe techniquesto enhance communication. Relevant competenciesinclude the ability to speak directly and honestly, tolisten well in situations of stress or conflict, and tohandle those crucial conversations that need to occur.The goal is not to become aggressive, domineering, orblunt;; none of those is truly assertive. The goal is toapproach issues directly and know how to handle them.

Core Techniques for Communication article – Jaffe and Grubman Page 4When clients show natural hesitation as you start todelve into personal issues or periodically along the way,“talking about talking” can clear the air, handle anyhidden or lingering concerns, and pave the way intonew areas or deeper levels of the client’s life, whichdeepens your relationship with the client. There aretwo skills that go hand-in-hand in a multitude of situations:explaining the process of financial advising andthen asking the client if he or she feels okay with proceeding:Explaining process involves providing a descriptionabout what you either would like to do in theinterview or are about to do. This gives a heads-upto the client about what can come next rather thansurprising the client. It also can reflect your desireto draw an area to a close and move on. Examplesinclude “Now that we’ve talked about your currentinvestments, I’d like to spend some time hearingabout your family situation so I can know who theimportant people are in your life and for planning,”or, “You said one of your major concerns isabout your son’s overspending. I’d like to ask youin more depth about that so I can understand howwe may deal with that in your estate and financialplanning.” If the area you would like to pursuefeels like it may be personal or private for theclient, you can add recognition of this aspect bysaying “I realize this may feel somewhat private totalk about.”When explaining process, you need to add a companionskill which is so fundamental and obviousyet so often neglected that damage can be donewhen it is omitted. This is the skill of askingpermission of the client to go into private areasbefore you plunge ahead. Rather than making anindependent decision to move into a delicate orpersonal area, you stop and say, “would that beokay with you?” or “would you be comfortablewith that?” This gives clients a genuine opportunityto grant permission to proceed to the next areaof the interview or to decline if they so wish. Itdemonstrates respect – for the client’s privacy, fortheir decision-making, and for their participationas an equal and collaborative partner in the relationshipwith you. Although the situation may certainlycall for the area of inquiry, you show respectby asking permission from the person being interviewed.And we all like to feel respected, especiallywhen it comes to our privacy.Explaining process and asking permission forewarn theclient about what you would like to do and provideopportunity to either open the door or say no. Even ifthe client declines, you have demonstrated you will notintrude on the client inappropriately or unilaterally. Italso shows you are mindful that some of what you aredoing is personal.When clients know you will give advance notice aboutdifficult areas of conversation and they will have achance to accept or decline, the relationship feels safeyet has mechanisms for going deeper. And remember,just because the client declines to go in to an area oncedoesn’t mean you never broach it again. In twenty minutesor two years, the issues may be appropriate toraise again and, with greater trust or a change in heartfor the client, he or she may now be more willing to gothere with you. Timing can be everything.3. Speaking the client’s language.Certain advisor behaviors can disrupt the developmentof trust. One of the most common involves speakingexcessively in professional jargon. Using jargon is oftenmistakenly assumed to enhance trust by demonstratingintelligence or experience, when in reality inappropriateuse of jargon can undermine it. “Impressingthe client with professional knowledge” does not necessarilybuild trust.Many advisors launch into technical explanations beforegetting to know the client or as a substitute forlistening to or educating the client. Overreliance onjargon sends a message to the client, “this is about me,the advisor – my expertise, my understanding of themarkets, my ability to look good.” Being able to explainthings well in understandable English so the client iseducated and included sends the opposite message that,“this is about you, the client – your involvement, yourunderstanding, and your comfort.”You have to be judicious about how much jargon touse with a client, based on his or her level of financialsophistication, experience and knowledge. Studies haveshown that clients like and trust advisors who are greatat explaining things in natural language rather than withextensive jargon vii . With the wrong client, going intogreat depth about Monte Carlo simulations, alpha versusbeta, or complicated basis-point calculations risksthe client’s feeling stupid, discounted, or patronized.Like spice, a little jargon goes a long way and a lot isdistasteful. Being clear is not only an art;; it is a connection.It draws people closer and makes the client feelmore like a partner than a bystander in the advisingrelationship.A useful method of approaching client communicationis to think not in terms of levels of jargon (from a levelchockfull of terms used on CNBC, Bloomberg, andFinancial Times to the basic level of Today Show interviewswith financial experts) but rather to various languagesor fluencies of different types of clients. Someclients are fluent in your professional jargon, just as ifthey were advisors themselves. But many if not mostclients are much more fluent in the everyday languageof life, family, and money, not your world of finance.

Core Techniques for Communication article – Jaffe and Grubman Page 7Endnotes:i Anderson, Carol and Sharpe, Deanna (2008). Research: Communication Issues in Life Planning: Defining Key Factors in Developing SuccessfulPlanner-Client Relationships. White Paper, FPA Press.ii CFPBS (2005). Topic List for CFP Certification Examination, Addendum. Certified Financial Planner Board of Standards, Inc.iii Grubman, J. and D. Jaffe (2010). Client relationships and family dynamics: Competencies and services necessary for truly integratedwealth management. Journal of Wealth Management, Summer, pp. 16 – 31.iv State Street Global Advisors and Knowledge@Wharton of the Wharton School (2007). Bridging the Trust Divide: Advisor Best Practicesfor Communicating Value and Discussing Fees, www.spdru.com, May.v Dubofsky, David and Lyle Sussman (2009). The changing role of the financial planner (Parts I and II). Journal of Financial Planning,August and September issues.vi Patterson, Kerry, Joseph Grenny, Ron McMillan and Al Switzler (2002). Crucial conversations: Tools for talking when the stakes are high.McGraw-Hill.;; Segal, Jeanne (2008). The language of emotional intelligence: The five essential tools for building powerful and effective relationships.McGraw-Hill;; Fisher, Roger, William Ury, and Bruce Patton (2011). Getting to Yes: Negotiating Agreement without giving in (revised edition).Penguin Press.vii Arends, Brett (2011). A tip for financial advisers: When possible, use English. Wall Street Journal, May 2.;; Grubman, James (2010).Choose your words. Financial Planning, November, p. 152.viii Colgan, Mark (2004). Financial planning for widows and widowers. Journal of Financial Planning, May issue, pp 54-62.;; Starnes, Steve(2010). Is your firm prepared for Alzheimer’s? Journal of Financial Planning, December issue, pp 62-68.ix A detailed description of the principles, utility, and procedures of active listening can be found in practice development materials atState Street Global Advisors practice development website, SPDR University. See materials at www.spdru.com by James GrubmanPhD: The Five Steps to Active Listening Success and The Financial Advisor’s Guide to Active Listening.