Active Listening Helps Clients Feel Valued

By MARGUERITA CHENG
For AdvisorNews

In an age of incessant texting and instant messaging, we lack the ability to listen to what others are saying. Studies have shown people spend between 70 and 80 percent of their day engaged in some form of communication, and about 55 percent of their time is devoted to listening. With loud ringtones competing with job and family demands, are we listening as closely as we should?

Have you ever had someone walking past you ask, “How are you?” and before you can manage to answer they are long gone? Or you do answer, but they move on in the conversation and don’t acknowledge what your answer was?

Active listening is about making the other person feel heard and thus feel valued as a friend, patient, relative, colleague, and client—simply put, as a human being.

The U.S. Department of State defines active listening as a valuable skill for teachers, police officers, counselors, ministers, rabbis, and priests. It is a skill we can all learn and practice. To begin being an active listener, we must first understand the four rules of active listening:

1. Seek to understand before you seek to be understood
2. Be nonjudgmental
3. Give your undivided attention to the speaker
4. Use silence effectively.

As a financial advisor, patience, sensitivity, and empathy are crucial qualities for working with clients. Their life experience has shaped their views on money. According to Kathleen Burns Kingsbury, founder of KBK Wealth Connection and author of Breaking Money Silence, money is the most awkward conversation topic of all. Kingsbury asserts that 44 percent of Americans say their personal financial situation is the most difficult topic to discuss with loved ones, ranking above death, politics, and religion in its unpleasantness.

One example was a woman who wanted to retire at 60. It’s true that she would receive a slight reduction retiring at age 60 instead of age 62. She wanted to spend time with her husband because he had some health challenges and was 9 years older than her. By listening to her concerns, I helped her reach her goal. She took the pension at 60 but will defer Social Security until her full retirement age of 66. When I actively listened to my client’s concerns, I understood her priorities and helped her feel confident about planning for her future. 

What Not To Say

• Fight the urge to ask why a person made a choice or decision. It puts them on the defensive and may shut the conversation down.
• Being patronizing is not helpful—for example, saying, “You poor baby, don’t you worry”—especially when it is about finances; this makes them feel dismissed.
• If a person hasn’t specifically asked for your advice, don’t give it. A client meeting would be over if I started out with, “I think you need to stop spending so much money,” or said in a preaching manner, “You need to stop…”
• Interrupting people when they talk makes them feel disrespected, or that you believe your opinion is more important than what they are discussing.

How Good Interactive Listening Works

When meeting with a client, I prepare for each meeting by asking leading questions, such as what he or she would like to address first. If a couple answers differently, that’s okay. I let them determine their first priority.

By soliciting input from the client to discuss their most pressing issue, they understand that I am practicing active listening. I thank them for allowing me the opportunity to help them plan for their financial future. During the session, I take notes but maintain eye contact. I follow up with open-ended questions to further the discussion.

For example, let’s say I have a client who is a stay-at-home mom who is concerned about life insurance but does not know how to approach the subject with her husband, whose first priority is college savings. In meeting with the couple, I learned to ask the right questions about their goals, dreams, fears, and concerns. I asked each spouse to list their top three priorities for their financial well-being. While their top three concerns differed, asking them to identify and prioritize their goals and concerns gave both of them the opportunity to communicate their concerns with one another. As their financial planner, I facilitated this important discussion. As a result, they saved for college and retirement and addressed life insurance. Active listening helped both of them understand that I understood their concerns and would guide them take the appropriate course of action to achieve their goals.

How To Practice Active Listening

An open-ended question would be, “What is the most important item you want to discuss today?” When clients are talking, I don’t interrupt. If I have to, I say “pardon me” or “excuse me” to interject.

I restate what they said and ask reflecting questions: “It sounds like your children’s future is very important to you both; what specifically concerns you?”

As an active listener, I use emotional labeling, especially because the topic of money causes a range of emotions. If a person becomes upset, I say, “I’m sensing you feel worried about how your children will be taken care if both of you were to die.” By actively listening to both clients, they feel comfortable planning for their future. In this situation, each client feels listened to and valued. It’s important that clients feel validated and appreciated. I often remark on how much I appreciate their candidness and willingness to discuss such a personal topic. Without empathy, it’s difficult to establish the emotional connection necessary to build trust in advisory relationships. Advisors who understand the feelings behind their client’s story do more than provide financial solutions—they build confidence, which is a win-win situation for the client and advisor.

Empathy is the cornerstone of active listening because we as listeners are constantly being mindful and not judging. By being an empathetic and active listener, we are making clients feel validated, valued, and, most of all, heard.

Marguerita M. Cheng is the Chief Executive Office at Blue Ocean Global Wealth. Prior to co-founding Blue Ocean Global Wealth, she was a financial advisor at Ameriprise Financial and an analyst and editor for Towa Securities in Tokyo, Japan.