Have you ever heard someone say, “This is just my two cents’ worth, but…”?
When you hear this phrase, what does through your mind? Are you looking forward to what comes next? Or bracing for it?
The phrase, “two cents’ worth” (or “two cents”) first appeared in the New Testament as an example of commitment – the extremely poor widow gives her only two cents, while the wealthy donate a pittance of their wealth.
Today, the phrase mostly precedes advice that Clients are not expecting and haven’t asked for. Millennials (and hip parents) will also recognize the modern, texting version IMHO (In My Humble Opinion).
Example: I was recently at an event discussing strategies for managing beta (downside risk) in investment portfolios. The Advisor I was chatting with, upon learning about my current strategies, said, “My two cents, but you’ve got a lot of hidden credit risk in your domestic bonds. You should consider diversifying.”
He was right – I do need to tweak my bond strategy to manage beta. But in the moment, my first reaction was to silently argue and discount the advice!
Two Cents’ Worth = The Market Value of Unsolicited Advice
You might say, “This is my two cents’ worth,” but Clients hear, “WARNING: UNSOLICITED ADVICE AHEAD.” And clients tend to deeply discount advice they haven’t asked for.
Why? It’s partly volume – we all receive so much unsolicited advice every day, any given piece of advice (“BUY THIS! ACT NOW!”) is lost in the noise. It’s also partly trust – if someone offers you advice you haven’t asked for, are they really in tune with you?
Even when you’re a trusted source, your unsolicited advice has less value than you’d like. You can tell this is true by how often Clients ignore, discard, or fail to follow it.
What kind of advice do Clients Value most?
- Advice they’ve asked for
- Advice they’re secretly looking for
- Advice they’re receptive to
The Hard Part: Delivering Challenging Advice
The key is receptivity. Clients, like all of us, experience Confirmation Bias – we seek opinions that agree with our beliefs, and we tend to discount competing opinions. For example, if the Client is convinced they have enough life insurance, even showing them data to the contrary doesn’t necessarily change their mind.
So how do you get Clients to pay attention to your advice when it challenges their beliefs? Top Advisors use a combination of strategies to increase receptivity.
Use questions and data to expose an issue, gap, or concern. When clients see a problem, they’re more likely to be receptive to advice on solving it.
Ask questions that develop the need for change. Are they satisfied with status quo? Or do they want a different result?
Test for receptivity. The Client’s reaction to the question, “Would you like to discuss ways of addressing this situation?” yields valuable insight into their receptivity.
Use high-trust examples and stories. One way to preface your advice is by sharing a story of a Client who solved a similar problem.
Offer options to consider instead of a prescription. Choice equals control, and Clients like control.
Use “could” instead of “should.” The former puts Clients in control, and the latter is preachy.
Ask Clients to advise themselves. If you’ve exposed the problem, developed the need to change, and offered options, you’ve put Clients in position to hear advice from the source they trust most – themselves.
Summary: Deliver Advice Clients Value
When you can preface your challenging advice by saying, “Because you asked,” or, “Based on the needs you shared,” you know you’re delivering advice Clients value more than your “two cents’ worth.” And that’s higher-value advising.