Five Analogies Financial Advisors Can and Should Use with Clients
What we find very easy clients often find difficult to digest. Even when you think you’re getting across your points well clients can be baffled by your financial knowledge. To get across your ideas so that clients will understand, use analogies.
Advisors who use storytelling and analogies to convey strategies and concepts have a competitive advantage over those that don’t. Analogies help to paint a powerful mental picture that connects to a client’s emotions. Using vivid analogies also helps to leave a powerful impression once clients have left the office – both of you and of the message or takeaway.
Don’t be put off using analogies because you feel you’re not a naturally gifted storyteller. You can master this skill with preparation and practice.
Here are five analogies Financial Advisors can use to get you started.
1. Illustrate your importance
It’s essential that you get across to prospects the importance of having a financial advisor to give them good advice. Convey that, next to the family doctor the financial advisor is the most important person they will ever meet – the only person who can secure them a healthy financial future.
If a prospect leaves your office saying they’ll “think it over”, it’s akin to asking their doctor for a prescription then saying “I won’t take the medicine now – I’m not sure it’s the right one. I’ll wait until I’ve finished medical school”. Of course this doesn’t happen. Patients trust the doctor which is why they take the medicine. Similarly prospects need to trust you enough to take your form of medicine – sound financial advice.
2. Why clients should follow you
Being a financial advisor is like being a cliff diver in Acapulco. To jump when the water is highest is a mistake because due to the ebb and flow of the water, the water will have disappeared by the time they jump, leaving them to land on rocks. They must jump when they see shallow water and rocks so that by the time they get down there the tide has brought the water in enough for them to have a safe landing.
Like cliff divers financial advisors are veterans who know exactly when to jump. There are times when you will need to tell your clients “take my hand we are going to jump”. And because of your expertise clients needn’t be afraid to jump with you.
3. An analogy to illustrate why you should stick to the plan
Changing lanes when you’re stuck in a traffic jam never works out – the lane you choose always slows down and the lane you left speeds up after you change. Patience pays off just as it does when you invest. Sometimes investments may look like they’re performing well for a short time, but abandon the plan and you’ll find that they mysteriously slow down. Don’t be tempted to abandon what you own to chase a “near term” performer. By not turning back in the tough times you will reach your destination. The road will smooth out in the longer term.
4. Why you shouldn’t delay investing until tomorrow
Delaying the decision to start an investment plan is like delaying an important trip in your car. If you have to drive to somewhere 60 miles away and have to be there in an hour you need to drive at 60 miles solid to get there on time. That’s cutting it fine. If you delay your journey however by 20 minutes or so, you’ll be forced to drive at a dangerously high speed to get to your destination on time. Similarly delaying the decision to invest puts clients’ educational funds or retirement plans in jeopardy. The takeaway is: The time to invest is now. There’s no time to lose.
5. Why you need to spread your investment risk
Owning just one single type of asset is like having a large picture window in your living room. While it’s great to look at, if it breaks, you will have a problem because it’s expensive and difficult to replace. It makes much more sense to have a window with many panes – just as it does to have a diversified portfolio. It isn’t as traumatic to break one smaller pane because it’s a lot easier and cheaper to replace than one large one.
Spend some time each week working on how to improve your communication through illustration and analogy. If you hear something that would make a great analogy, write it down and file it. Choose your analogies with care – some will resonate better with certain types of people than others. Keep tabs on how your analogies are being received then stick with those that work best.