You can give a client a perfectly-constructed financial plan outlining exactly how to reach their goals.
But, if they don’t actually do any of the items listed on the plan, it’s useless.
You can propose a perfectly-allocated portfolio.
But, if they don’t invest their money, it won’t matter. And, if they do invest their money but don’t stay invested, then it won’t matter.
And that’s why “behavioral coaching” continues to emerge as one of the primary sources of value in the relationship between advisor and client.
Behavioral coaching can be summed up like this:
- Helping clients to do the things they’re supposed to do
- Helping clients avoid the things they’re not supposed to do
This shows up when the client fails to send in their data and documents.
Or when they still haven’t gotten their estate planning set up.
Or when they are unable to reign in spending and continue racking up debt.
The least effective way to change behavior is telling someone what to do (which almost everyone reading this is certainly guilty of!).
Learning how to change behavior for the better first requires an understanding of the various forces that influence client behavior both positively and negatively.
There are forces that motivate clients and forces that demotivate clients.
Fortunately, Dr. Michael G. Thomas has done extensive research on two of these forces that often go overlooked:
Financial empathy and data visualization.
In this episode, he’ll share what you need to know about how impactful both of these forces can be and how he uses them to influence client behavior for the better.
Things You’ll Learn
- The toy store experience that still shapes the way he makes spending decisions
- How his savings mentality became hard-wired as a child
- The “Zoom Out/Zoom In” approach he uses identify emotional barriers
- Why confidence and clarity are crucial for improving financial behaviors
- How to create small wins that lead to big momentum toward goal attainment
- An example of how “self-talk” can prevent clients from completing action items
- The big mistake that every advisor makes that demotivates clients
- What Robinhood can teach us about the influence of data visualization on behavior
- How he presents budgets to avoid inducing anxiety and overwhelm
- The critical difference between “disseminating” vs “communicating” information
Related: A Toolkit for Changing Client Behavior and Improving Follow-Through of Advice