Understanding Your Clients’ Behavior Is Key to Your Success as a Financial Advisor

Understanding Your Clients’ Behavior Is Key to Your Success as a Financial AdvisorThe more you understand what motivates your prospects and clients, the better your chances of success when it comes to attracting and retaining them. When you begin to see things from your clients’ and prospects’ point of view you can start to influence their decisions and help them make good financial decisions.

So break out of your own mindset. Step into their shoes: Then you will be able to build strong client relationships, anticipate your client needs and manage their expectations.

Understand that clients don’t always act rationally

Embarking on an investment journey is a big decision for most clients. For many it’s their introduction to new and perplexing terminology. They’re also faced with the proposition of risk and significant financial commitment. Research indicates that the decision-making process for making these kinds of high-level purchases tends to be more strongly lodged in the emotional part of the brain rather than in the rational and logical part.

The upshot being: In order to ‘prompt’ clients into making good investment decisions you need to appeal to their emotional side.

Tell stories to connect with clients

In order to influence clients’ emotional decision-making, you should tell stories, ranging from the ‘who I am’ story to the ‘I know what you’re thinking’ story. Stories and analogies will help you win clients over to your point of view. Your clients need less data put in front of them, and more reasons to trust ‘you’ as a person. By using stories, you can make yourself look like someone clients could form a relationship with.

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Overcome apathy by giving clients a reality check

In general people are not motivated to save for the future, they would far rather spend their hard-earned cash on tangible objects they can see and hold right now. And to many people retirement seems an age away. Saving for this far off ‘rainy day’ seems like something that can always be put on the backburner.

Face down investment apathy by giving clients strong reasons to invest: Give them a reality check. Use hard numbers and inform them that they have only 200 paychecks before they retire. This could be the motivator they need to kick start an investment journey with you.

Understanding your clients’ goals will help you keep them on track

As an advisor you’re not simply managing your client’s portfolio – you’re managing their expectations. Their expectations are, more often than not, to get them on stable ground, get their taxes paid, get their kids through college or earn enough money to retire comfortably.

Whatever their motivations are, take the time to listen carefully to your clients so you can understand their specific goals. This way you can anticipate any bumps in the road that might affect them further down the line – and have a contingency plan on how to address them.

Overcome ‘buyer remorse’

Your job doesn’t end once you’ve opened a new account. After a client has committed to investing he or she will compare their decision with their expectations. If their expectations don’t match up with reality, then your ongoing business with them, along with referrals, will hang in the balance.

This type of regret or buyer remorse is all too common in the financial services industry as clients start to worry their investment won’t enable them to achieve their long-term goals, or they become concerned by market volatility.

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Don’t let your clients regret their decision to do business with you, by reassuring them and by giving them an uber-positive ‘post purchase’ experience. Make sure your clients feel good about their decision so they go on to spread positive feedback about you.

To do this be the most honest, professional, responsive advisor there is. Let your clients know you constantly have their best interests in mind and that they – as people – matter to you.

Provide them with passionate and attentive client service and the understanding that you will never let them down on purpose. Remind them that you’re there to hold their hand throughout the entire investment journey – which will end successfully.

By taking the time to understand your clients’ mindset, you can adapt your approach and win more clients, as well as ensure they become your loyal advocates in future.

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