I hope you get value out of this blog post.
With years of education, specialized certification courses, and hands on experience under your belt, you bring a wealth of expertise and insights to each client you serve as a financial advisor. After all, that’s what they’re paying you for, right?
While that expertise is the core of the value you provide, it can also lead to a cognitive bias known as the “curse of knowledge.” The more you know about a subject, the harder it is to remember just how little someone who isn’t a trained professional in the field knows. For financial advisors, this curse can lead to communication problems with your clients because you might assume they’re on the same wavelength as you when they’re actually struggling to keep up.
The curse of knowledge can be a real problem that creates a serious disconnect between you and the person you’re talking to. Once you know something, it becomes all but impossible to imagine not knowing it.
In a client meeting, incorrectly assuming your client has the financial background knowledge to understand the topic can make them feel confused and insecure. If you’re talking about it as if everyone should just know already, they might not feel comfortable asking for clarification because they don’t want to look like they’re lacking knowledge.
Once the meeting is over, that client is also more likely to forget the bulk of what was discussed — either because they didn’t really understand it in the first place or because they could only vaguely follow along but couldn’t really absorb the information fully.
The more this happens, the more difficult it becomes to capture your value completely. A client who doesn’t understand what services you’re providing won’t understand the full value of those services. Moreover, a client who doesn’t understand the advice you’re giving might not act on that advice.
It’s an easy to trap to fall into because you deal with this subject every single day so it all feels familiar and common sense to you. But taking a few simple steps to ensure that you’re on the same wavelength as your client can go a long way toward making your client feel confident and satisfied with your service.
The best way to avoid making your client feel lost, confused, or uninformed is to be aware of the difference in knowledge level between you and your client. Put yourself in your client’s position by trying to remember what you did and didn’t know back before you’d taken a single class.
Another strategy for staying aware of your knowledge is to be alert to your client’s mood and behavior during the meeting. Are they talking, asking questions, and otherwise acting engaged in the conversation? Or are they generally staying quiet and passive?
If it’s the latter, there’s a good chance it’s because they’re not fully understanding what you’re talking about but don’t want to look like they’re lacking knowledge by asking for clarification. Take that as a sign that you need to simplify and maybe go back over some concepts to bring them up to speed.
Regardless of your client’s knowledge level, the best way to steer clear of the curse of knowledge is to avoid any jargon terms. Often, simply rephrasing a concept using more common language is enough to make it understandable.
Instead of saying “efficient frontier,” for example, use more general language like “optimal portfolio.” It may not be quite as specific but it’s much easier for a client to grasp regardless of their knowledge level.
Even if you do everything you can to put yourself in your client’s position and explain topics during the meeting in a way that they understand, it can still be an overwhelming amount of new information for that client. Combine that with the forgetting curve phenomenon and you have a recipe for diminishing understanding—even if the client was completely following along during the meeting.
The best way to make sure your client understood and feels like they’re involved in the financial planning process is to send a follow up email after the meeting. A brief summary of the key points you covered in the meeting reinforces their understanding of what you spoke about. It also serves as a reference in case there was a particular point they wanted to learn more about on their own time so that they can feel confident in their understanding of the financial steps you’re recommending.
If the idea of sending a follow up email summarizing every meeting with every client sounds too time consuming, it doesn’t have to be. With Pulse360, you can automate the process and get that follow up email written and sent in minutes. You can create email templates and then simply drop in items from your notes by using tags like “follow up” or “review” to identify the points that need to be included in that summary.
The follow up email after your meeting is important. But if you really want to take your service to the next level, take a minute to create and send a meeting agenda before the meeting, too. This gives your client a chance to prepare for what will be discussed and review any topics they might not feel as confident about in advance.
Again, Pulse360 can streamline this process just as it does for those follow up emails. All you have to do is use a “next meeting” tag in your notes to identify the topics you and your client plan to talk about in the next meeting. Then, use an email template to automatically pull all those tagged items into the email. Now you’ve got a full meeting agenda written out and ready to go!