{"id":9245,"date":"2024-01-08T08:00:14","date_gmt":"2024-01-08T08:00:14","guid":{"rendered":"https:\/\/emoneyadvisor.com\/blog\/?post_type=thought_leadership&p=9245"},"modified":"2024-01-04T15:55:37","modified_gmt":"2024-01-04T15:55:37","slug":"3-essential-insights-into-the-human-side-of-advice","status":"publish","type":"thought_leadership","link":"https:\/\/emoneyadvisor.com\/blog\/3-essential-insights-into-the-human-side-of-advice\/","title":{"rendered":"3 Essential Insights into the Human Side of Advice"},"content":{"rendered":"

Advisors are beginning to wake up to the fact that their value lies not just in financial planning but in establishing trust, understanding clients\u2019 values, and ensuring they act on advice. I call this the human side of money. If you’re seeking guidance on integrating this human element into your practice, you’re not alone. Here, I offer three practical insights on this topic.<\/p>\n

Insight #1: Know What Actions Build and Maintain Trust<\/strong><\/h2>\n

I truly believe that trust is the foundation of success, both for clients and for advisors. To be successful in this business, you have to be able to build trust\u2014studies like this one<\/a> have shown that it\u2019s a key component in the advisor-client relationship.<\/p>\n

As an example of how trust can be a differentiator, I\u2019m going to use my son\u2019s pediatrician. We’ve been going to his office for the past five years. He\u2019s an incredible, board-certified pediatrician and knows his stuff. So, there\u2019s the first element of trust: credibility.<\/p>\n

The second element is reliability. Our pediatrician is reliable. When I think about one of the situations where I lose trust, it\u2019s when someone says they’re going to do something and then they don’t. I know they’re busy. I know they have things going on. But if I can’t lay my head on the pillow tonight and trust that you’re getting something done for me, that takes away from trust.<\/p>\n

Then there\u2019s a third element, the human element. So recently my wife and I took my son to the pediatrician\u2019s office, and our regular doctor wasn\u2019t there. Instead, my son saw a different pediatrician. She does an amazing job asking me questions about what has been going on with him. Then she had to put an instrument in his ear, which he hates. She notices that, acknowledges it, and says, \u201cHey, do you want me to try something else? I’ll go find something else. You let me know if it hurts.\u201d He didn’t cry one time, which was a miracle.<\/p>\n

I immediately thought, \u201cI want to switch pediatricians.\u201d This new doctor was just as credible and reliable, but she spent the time to make us feel understood and cared for in a way that the other doctor never had.<\/p>\n

There are things that are table stakes for trust, like reliability and credibility. These are important but not as much of a differentiator as the third element. Can you make someone feel heard and understood and like they’re in a safe place where they can open up and tell you things that are important? Whether it’s a doctor or financial planner, this element of trust is crucial, and it must be maintained over time.<\/p>\n

Insight #2: Study Hostage Negotiators and Therapists<\/strong><\/h2>\n

To better understand the building blocks of a trusted relationship, I\u2019ve looked to professions that rely heavily on their ability to build trust. The two I kept coming back to were therapists and hostage negotiators. The negotiator is communicating with a stranger to get them to change their behavior, and they have to demonstrate trust and understanding under trying circumstances.<\/p>\n

As for the therapist, they must be able to get a client to feel comfortable talking about some of the most personal, intimate details if they’re going to do their job well. They have to be able to build trust almost right out of the gate. Research shows<\/a> that the number one predictor of success in a therapeutic relationship is the alliance and the connection that you have with the client.<\/p>\n

So, in these two professions, what do they do to build trust? They ask really good questions. They demonstrate that they’re listening, and they understand where you’re coming from. A Harvard study<\/a> found that just simply asking someone more questions and focusing on them led to higher levels of trust and likability. That doesn\u2019t mean interrogating a client is the right way, because it\u2019s not just about asking more questions. It\u2019s knowing how to ask questions, or when to ask questions. It takes practice, but it\u2019s worth the effort.<\/p>\n

Insight #3: Make Room for Human Connection with Tech \u00a0<\/strong><\/h2>\n

More space and time for the important discussions\u2014that’s what technology provides us.<\/p>\n

A recent study<\/a> of households that use robo-advisors, human advisors, or both shed light on the fact that clients say they want technology to do the things that it does best: analyzing cash flow, financial planning calculations, storing documents, and keeping details from being overlooked. They want a human advisor to help them feel heard and understood, build a relationship, and have empathy for their needs.<\/p>\n

I think financial planning technology helps to create more financial clarity: clarity around your situation, and the decisions that are on the horizon. The tech creates clarity, clarity creates confidence, and confidence creates contentment.<\/p>\n

Leveraging technology frees you up to do what you do best, which is deliver on the human side of advice. It allows you the time and space to realize when a client isn\u2019t implementing, and to say, \u201cYou\u2019re not following through on this recommendation. Let\u2019s explore that a bit. What might be getting in the way? What\u2019s the next best step you can take?\u201d The more you can leverage the efficiencies of technology, the more opportunities you will have to amplify the benefits of the human side of advice.<\/p>\n

Taking It a Step Further<\/strong><\/h2>\n

If you\u2019re interested in learning more about mastering the human side of advice, I invite you to look at my resources on my website, Wired Planning<\/a>. There, you\u2019ll find articles, podcasts, and courses that can help you build a human-first planning process.<\/p>\n

Sources:<\/p>\n

1.\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 Journal of Financial Planning<\/em>. \u201cThe Science of Building Trust and Commitment in Financial Planning,\u201d December 2022.<\/p>\n

2.\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 \u201cThe Alliance in Adult Psychotherapy: A Meta-Analytic Synthesis.\u201d\u00a0Psychotherapy<\/em>\u00a055 (4), 2018.<\/p>\n

3.\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 \u201cIt Doesn\u2019t Hurt to Ask: Question-Asking Increases Liking.\u201d\u00a0Journal of Personality and Social Psychology<\/em>\u00a0113 (3), 2017.<\/p>\n

4.\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 Kitces.com<\/em>. \u201cThe 3 Domains of Financial Advisor Value,\u201d May 2022.<\/p>\n

 <\/p>\n

DISCLAIMER: The eMoney Advisor Blog is meant as an educational and informative resource for financial professionals and individuals alike. It is not meant to be, and should not be taken as financial, legal, tax or other professional advice. Those seeking professional advice may do so by consulting with a professional advisor. eMoney Advisor will not be liable for any actions you may take based on the content of this blog.<\/p>\n

The views and opinions expressed by this blog post guest are solely those of the guest and do not necessarily reflect the opinions of eMoney Advisor, LLC. eMoney Advisor is not responsible for the content, views or opinions presented by our guest, nor may eMoney Advisor be held liable for any actions taken by you based on the content, views or opinions of the guest.<\/p>\n","protected":false},"author":163,"featured_media":9247,"template":"","thought_leadership_cat":[95],"class_list":["post-9245","thought_leadership","type-thought_leadership","status-publish","has-post-thumbnail","hentry","thought_leadership_cat-advisor-perspectives"],"acf":{"left_sidebar_ads":false,"right_sidebar_ads":false},"yoast_head":"\n3 Essential Insights into the Human Side of Advice<\/title>\n<meta name=\"description\" content=\"Advisors are beginning to wake up to the fact that their value lies not just in financial planning but in establishing trust, understanding clients\u2019 values, and ensuring they act on advice. 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