Communication Essentials for Financial Planners: Strategies and Techniques

By John E. Grable and Joseph W. Goetz

Exploring the Human Element of Financial Planning

Communication Essentials for Financial Planners tackles the counseling side of practice to help financial planners build more productive client relationships. CFP Board’s third book and first in the Financial Planning Series, Communication Essentials will help you learn how to relate to clients on a more fundamental level, and go beyond "hearing" their words to really listen and ultimately respond to what they're saying. Expert coverage of body language, active listening, linguistic signals, and more, all based upon academic theory. There is also an accompanied set of videos that showcase both good and bad communication and counseling within a financial planning context. By merging written and experiential learning supplemented by practice assignments, this book provides an ideal resource for any client-facing financial professional as well as any student on their pathway to CFP® certification. 

Counseling is a central part of a financial planner's practice, and attention to interpersonal communication goes a long way toward progressing in the field; this guide provides practical instruction on the proven techniques that make a good financial planner great. 

• Build client relationships based on honesty and trust
• Learn to read body language and the words not spoken
• Master the art of active listening to help your clients feel heard
• Tailor your communications to suit the individual client's needs

The modern financial planning practice is more than just mathematics and statistical analysis—at its heart, it is based on trust, communication, and commitment. While interpersonal skills have always been a critical ingredient for success, only recently has this aspect been given the weight it deserves with its incorporation into the certification process. Communication Essentials for Financial Planners provides gold-standard guidance for certification and beyond.

• Language: English
• Publisher: Wiley
• Release date: Feb 2, 2017
• ISBN: 9781119350774

Book preview

Introduction

The CFP Board Center for Financial Planning is pleased to begin the first in a series of books intended to expand the body of knowledge for financial planning. We envision this series as a platform for discussion for the entire profession, including practitioners, faculty, students, and researchers. We are excited about the opportunity to exchange ideas, validate and challenge assumptions, and help theory inform practice and conversely, practice to inform theory. This series will embody the characteristics of a practitioner-based profession, in which researchers learn from practitioners; practitioners learn from researchers; and ultimately, the profession is even better prepared to help all Americans achieve their financial potential through competent and ethical financial planning.

Although this series is a large step forward, it is not CFP Board’s first effort working within the financial planning body of knowledge. For decades, CFP Board has conducted the Job Task Analysis, the largest quantitative study of financial planning practice, to develop a framework for many of the requirements for CFP® certification. CFP Board has also collaborated with hundreds of colleges and universities that house CFP Board Registered Programs, working together to not only meet rigorous curricular standards, but also to enhance student achievement and program sustainability in a variety of institutions, program types, and instructional delivery methods. We also worked together to develop two editions of the Financial Planning Competency Handbook, a seminal work that outlines both the breadth of the body of knowledge of financial planning, as well as the interdisciplinary nature of this profession. All of this work, a decades long collaboration and strengthening, is vital to the profession and we look forward to continuing it in the years to come.

We begin the series with Communication Essentials for Financial Planners: Strategies and Techniques. We were purposeful in starting with communication, given the importance of client engagement, and all of the actions associated with it, to financial planning practice. Dr. John Grable, CFP® and Dr. Joe Goetz are ideal for this first publication. They both are the embodiment of leaders of a practitioner-based profession: strong researchers who have added relevant theory to the body of knowledge; master educators who have prepared hundreds of current practitioners; and scholars whose work brings tangible impact to financial planning practice. They are respected colleagues and good friends that I have had the pleasure of collaborating with on this important work. I believe this book fills a needed void in the library of financial planning, as it is intended for both future financial planners as well as experienced CFP® professionals both in better engaging the most important element of the financial planning process: the client.

I hope that practitioners who read this book will reflect upon their own client communication and maybe discover ways to perhaps challenge and refine past approaches. Practitioners in a supervisory role may find this book as an effective induction instrument for new hires in their practice. And last, but not least, I hope that students will not only learn some important communication techniques in serving future clients, but also be further motivated to begin a life’s work that can be so impactful on the lives of many.

So let us begin our journey together. The intent is not for the reader to passively accept the ideas and theories in this book series. Rather, I hope these books—refined discoveries from the past and incubators for ideas for the future—help practitioners, researchers, educators, and students do their work in making this maturing and evolving profession even better.

Charles R. Chaffin, EdD

Editor

CHAPTER 1

An Introduction to Applied Communication

INTRODUCTION

The primary premise of this book is that the financial planning process can be significantly enhanced through the appropriate application of communication theory. By theory, we mean one or more models based on a set of premises that lead to explanations and conclusions. In the preface to this book, we introduced a nine-step framework as a way to conceptualize how financial planners interact with current and prospective clients. A key assumption embedded in this framework is the notion that financial planners who understand and practice the process of communication will be better prepared to help clients reach their financial goals. If you are a student enrolled in a CFP Registered Program, the nine-step process of communication may provide new insights into better ways to communicate with others. If you are already a financial planner, you may find that the framework validates much of what you are currently doing when working with clients. That is, the framework—and communication theory in general—can be used to endorse many of your current practices while providing information to help improve other aspects of interpersonal communication.

Consider the following example. Begin by visualizing a financial planning office. A prospective client makes an appointment to meet with a financial planner. On the day of the meeting, the prospect arrives 10 minutes early. She is seated in the office waiting area. At the appointed time, she is escorted into the financial planner’s conference room. A few minutes later the financial planner arrives. She sits down across from the prospect before introducing herself. So far, in this imaginary scene the financial planner has yet to say a word to the prospective client. The question at this point is: Has communication taken place? A novice financial planner might say, No. Someone who has more experience probably will say, Yes. Communication theory would support the experienced financial planner’s insight.

Let’s evaluate what communication has occurred thus far in this scenario. We know that the prospective client reached out to the financial planner in one way or another to make an appointment. This might have occurred online, through email, or through a phone call. It is also possible that the client made an appointment in person. Regardless of the method, some interaction between the prospect and the financial planner and her staff must have already occurred. This interaction set the stage for further dialog. It is also reasonable to assume that initial conversations laid the groundwork for what the prospect expects from the financial planner. After all, early in the client–financial planner relationship, when a client has only a small amount of information from which to make assumptions, the content of communication is arguably even more important. In general, people tend to overmagnify the meaning of information when only a small amount of information is available. For example, let’s assume the prospective client reviewed the financial planner’s website, and then initiated a phone call to the planning professional to ask some questions.

Prospect: Hello, could you tell me a little about the services you offer.

Planner: Sure, we provide investment management and retirement planning advice. Would you like to set up an appointment?

Prospect: Oh, okay. I guess that would be all right.

At this point, the website and quick phone call served as communication tools to deliver a certain message to the client. What has the financial planner communicated on this short phone call? Did the prospect really want to know about the services offered? Maybe, but maybe she also wanted to know if the people within the firm would be approachable and take the time to listen to her. These first-impression messages can be quite powerful and have a lasting effect. Research suggests there may be some truth to the old adage: You never get a second chance to make a first impression.1 Given the persistence of first impressions, a financial planner should choose to be intentional in their initial communication with a