Welcome to Barron’s Advisor’s The Way Forward podcast. Working with challenging clients in any field is never easy but can be especially daunting for advisors.
Clients care most about health and family, but it often takes money to lend support in these areas. “So advisors are working in these very emotionally charged environments,” says Beverly Flaxington. “And now we’re saying, you better pay attention to all these other interpersonal dynamics that are going on if you really want to be successful.”
Listen to this podcast or read the transcript below to learn how advisors can establish enduring, productive and harmonious long-term relationships.
Greg: My guest today is Beverly Flaxington, a practice management consultant and co-founder of The Collaborative, a professional development consulting firm in Massachusetts. Beverly, the last time you were with us, you spoke about the importance of EQ for advisors. But this week we’re going to turn the tables a bit and talk about how to identify EQ in clients and discuss strategies to help advisors. Start on a high level by telling me why EQ matters in terms of the clients and the whole advisor/client relationship.
Beverly: Think about when you were in any sort of a relationship with someone and especially an important relationship like advisor to client. Here the advisor has the keys to the client’s financial success, in theory. And the client wants the advisor to be able to help them. If I’ve got a client with very low EQ, right, that emotional intelligence. They are not self-aware. They do not self-regulate well. They don’t have good social awareness. This is going to make my job as an advisor much more challenging. And what often happens is when you have a client with lower EQ, it translates into what we might call that difficult client. So being able to recognize along the way, what’s the level of EQ that I’m dealing with, I think helps the advisor to figure out what’s my best engagement process and approach for working with this person, this couple, this family, et cetera.
Greg: And to be clear, if they have low EQ, they’re not behaving in ways that people ordinarily would, right? There’s a little bit of a disconnect between what they really are thinking and feeling and what you think they’re thinking and feeling.
Beverly: Yeah. So you’ll have scenarios. Sometimes we’ll do a mini kind of workshop inside of a workshop where we talk about difficult clients. So let me just use some of those examples. So advisors might share with us, I have a client who does nothing but call up and yell at me no matter how well their portfolio is doing or how great the plan is. They just call and they yell at me. I can’t even have a conversation with them. Or we might have somebody that says they’re threatening me. They’re saying you ruined my family. You’ve destroyed everything. You want us to have these conversations and these family meetings, and it’s caused all this upset. So the idea being that the client blames the advisor for something that’s going on.
Beverly Flaxington
Photo Illustration by Staff; Rick Bern PhotographyBeverly: Now, you think about it. So that is an example of low EQ on the part of the client. But then, Greg, what often happens is the advisor asks what’s going to happen to me? I’m the advisor. I’m going to get defensive. I’m going to get upset. What? You have no business accusing me. So now my EQ is lower because rather than try to figure out what’s happening with this person I’m dealing with, I’m reacting. And so this is why I think it’s important to almost assess what sort of client this is. Where are they potentially on the EQ scale, because I, as an advisor, could get drawn in and my own EQ suffers if I’m not paying attention to this. But those are the sorts of ways that a lower EQ can play out. Or, I’m not going to trust you. I’m not going to give you information you need, et cetera. This makes the advisor’s job much more difficult.
Greg: So would it be fair to say a good strategy then is until an advisor really has a better handle on this person’s constitution that they should just strike a more neutral tone and be really discerning, looking and listening and trying to read the tea leaves to understand where this person’s coming from? Because like you said, you don’t want to jump to the incorrect conclusion or get defensive or emotionally engaged needlessly,
Beverly: There’s something that we talked about, Greg, in our last podcast, and it’s this idea of staying curious, right? The advisor staying curious. And I would underscore that with what we’re talking about here, to the degree that you can be interested in, who is this person? You can ask more questions. You can really listen. How does this client describe something? How do they talk about things? What else do they refer to? We give ourselves away all of the time, our communication style, what we care about, how we think about things. But the problem is that oftentimes advisors aren’t listening for it. They’re just listening for, what age do I want to retire? Do I want to have my second home? Are my kids speaking to each other? And so will the estate be easy to settle? And those things are all important. Don’t get me wrong. But we’re not often listening for the way somebody shares something or how they reference something. And if you can listen for those things, that’s where you’re going to get some insights into who I am really dealing with here and what sorts of challenges I might face.
Greg: I’m sympathetic to the advisor’s challenge on this count. How many times have people started a new job and on the first day or two, they encounter someone who’s just really unpleasant or nasty. And they’re like, oh my God. It’s very jarring. What have I done? And then they’d tell maybe their boss, there’s this guy, Jim. And then he’d say, oh, that’s just Jim. He’s always like that. And then it’s like, oh, thank goodness. I was worried. And they’re like, nah. Everyone sees that. That’s what he’s like when you meet him.
Beverly: So what a great scenario you just went through because again, if my tendency as the advisor in that situation, and say Jim was my client, is to start to think, what am I doing wrong? See, that’s such an example of lower EQ because it’s like, wait a minute, why am I having a reaction to Jim right now? What do I need to learn about Jim? Or what do I need to learn about my reaction to Jim? And this is what I do think is challenging, Greg. And when I talk about this work, I never diminish it and say hey, just do a better job of listening and self-regulating.
These are challenges for human beings in general, but I think they are particularly challenging in a profession that is so technical and you have to have so much knowledge. But that also is so emotionally loaded for the people that you’re dealing with. What’s closer to us than our health and our family? It’s our money. And the first two, we can only support with money. So advisors are working in these very emotionally charged environments with technical information. And now we’re saying, you better pay attention to all these other interpersonal dynamics that are going on if you really want to be successful.
Greg: And to use the example of Jim from company X, someone at the company could just tap a colleague’s shoulder and ask what’s the deal with this guy? And you’ll get the lowdown instantly. It’ll be told to you discreetly. But as an advisor, you’re on your own. You can Google the person, but you can’t pick up the phone and get a reality check on someone.
Beverly: Absolutely. And we talk a lot about behavioral style and differences in communication approaches. And so think about that. So here, I’ve got this newish client across the table. Perhaps as an advisor, my style is to be very direct, ask the hard questions, really try to get at the root of things. But I’ve got somebody who’s very stoic. They’re uncomfortable opening up. They’re not giving me information. If my EQ is not there and I perceive the client’s EQ to be low, we’re going to get stuck in that dance together because I’m not modifying and they’re not modifying. So I think advisors in that kind of scenario could start to say, it’s about me being curious to learn more about this person. So maybe I need to approach them more like the way they are and see if I can get them to open up as a result. A lot of times, if you start to match their communication style a little bit, the client feels like you get me and they might be a little bit more willing to open up and make it a little bit easier on you. But if you ignore all those dynamics, you are presenting yourself with more of a challenge than you need to.
Greg: Right. I may be mistaken, but I believe there’s a term called mirroring for that. And I think it’s often recommended for job interviews. So it’s kind of like if the person interviewing you speaks very quickly, then you should speak a little bit quickly too. You see some of it with crossing legs or in terms of tone and demeanor. It’s almost subliminal in effect I suppose if you’re not too obvious about it. Is it just kind of getting on that person’s wavelength a bit to try to get them to open up and be a little more forthright?
Beverly: Yes. And actually that’s a good way to bring it up because you think about it in classic sales, sometimes we’ll teach people to mirror behavior and the person crosses the legs. You cross the legs. They lean forward, you lean forward. And that’s not really what we’re talking about here. It’s more like if I’ve got this slow paced person who needs to process and really needs to think about things and I’m faster pace. I probably need to slow my cadence down or vice versa. I’ve watched advisors as an example, Greg, in meetings where you’ve got this entrepreneurial driving person on the other side of the table and the advisor is flipping through the book one page at a time and you can visibly see this person getting irritated by the fact that the advisor is not adopting their sort of style. And so yes, there is a mirroring aspect, but I like to try to make the distinction. It’s not imitating someone. It’s trying to match tone and pace.
Greg: And I guess there’d also be an aspect of just emotional appropriateness, if you will. I mean, you could have a client come in who might be grieving, a widower or what have you. And if the advisor walks in buoyantly and extends his hand, saying hey, how are you doing? Have a cup of coffee, it’s like, whoa, you’re not reading the room. This isn’t right. Can you talk about that? Examples of people doing it right or not.
Beverly: So I’d say a couple things too. There’s also, when we think about it from an EQ lens, I was just in my mind thinking about the example you gave. The advisor has to also be aware. Am I comfortable with the fact that this person is grieving? Can I kind of match their emotional state or does the fact that they’re grieving upset me? Which again, that’s my emotional EQ lens. Right? Self-awareness. And so yes, it really, is about the way we talk about empathy. It’s impossible really to get in someone else’s shoes, so to speak. You don’t know their background, their history, their life, but you can try to understand the lens through which they’re looking. And that’s, I guess, maybe the best way to try to talk about what we’re saying here, which is what’s the lens of this person who’s grieving? What might they be experiencing? What do I want to know about them? What do I need to understand about them? I think that’s what we’re trying to get to. And because I might be the advisor, here I’m coming in. I’m uncomfortable. I want to shut this down. And so I don’t want to open up something that might make me feel ill at ease, but that’s where the depth of these relationships that last forever throughout generations come into play, I believe.
Greg: I’m curious about the idea of perception being reality in the advisor client relationship. That’s kind of cutting to the chase, but for the backdrop, let’s say you have an advisor who’s by every account brilliant, accomplished, et cetera. And he or she has a very high opinion of themself. And a new client comes in and gets a sense that the advisor might be a little bit arrogant and just resting on their laurels or thinking that this person should be thrilled to be with them. Can you just talk about how it’s really the optics that matter, because they’re just judging you in many ways, based on how you’re coming across. They’ll be aware of your credentials and what you’ve accomplished, but the interpersonal element has got to be massive and the chemistry. Do you leave and go home and tell your partner or significant other, I really liked him or her or we didn’t click. And that’s so important. It’s not just about talent and credentials.
Beverly: Such an important piece that I feel we miss so often in this business. There’s all of this research and I kind of laugh when I say it, because legitimately all this research has been done that shows that in life we buy from people that we like. And who do we like? We like people like us. And I think that this gets missed so often by advisors that we do a lot of marketing work and how do you stand out in a crowded market? And when I talk to advisors they’re all saying essentially the same things. There’s a lot of table stakes in this business, but I try to point out that the differentiator is what is it like to work with you? What’s different about working with you to go through my planning process, to help me get to retirement and to put together my estate plan. And I think that personal element is the differentiator. And so often that’s not the focus. The focus is more like here’s a laundry list of everything we can do for you and how long we’ve been doing it. And that passion, that care, that excitement about why me, it just gets ignored. And it’s kind of the root of why somebody is going to choose you and oftentimes why somebody is going to stick with.
Greg: Absolutely. That’s all true. increasingly it’s table stakes. It’s almost like a nuclear arms race. You have to keep having A, B and C. You have to offer more and more services to keep up with the proverbial Joneses in the advisor world. But having more services is increasingly not a differentiator. It’s going to often boil down to something tangible, that sense of servicing the client in a genuine way that’s palpable.
Beverly: I would even go one step further with what you said, Greg, which is, if you think about how daunting the financial discussions are that advisors have with people, my retirement, my legacy, what I’m going to pass to my kids, family dynamics. We’re talking about some pretty heavy decisions that get made like life altering sorts of decisions. And yet I often will see the materials advisors put together or the way they present. It’s this laundry list of all these things you need to be thinking about, or you should be doing. And so what happens to us as human beings when there’s something emotional and now you’re telling me here’s this laundry list of everything, my tendency is going to be actually to go into paralysis. Now I’m freaked out. I can’t deal with all of this, right? So you just bowled me over with all these things you can help me with, but all you did was scare me because now I realize how much I haven’t done. So it backfires, it’s actually not to the advisor’s advantage. What’s to the advantage is, ask me a whole bunch of questions. Find out what matters to me. Then almost ease me into it by showing me with the things that matter to me, how can you help me? And then let’s build from there.
Greg: What you’re saying, sounds very logical. Kind of intuitive. Why doesn’t it happen more? To what extent is this inertia, if at all? Like year after year it was done a certain way and the ball keeps rolling. They pay a little lip service, but not much actually changes. Can you speak to that?
Beverly: I do think about that question a lot, Greg. It’s a very good one. Because again, what we’re talking about here can so dramatically change the way you do business, the way you interact with clients, the way you understand clients. But I think that number one, we’re not taught a lot of this. And in fact, if you’ve got financial acumen and you’ve come into this business because you really do enjoy numbers, the markets, technical pieces, you probably never had a chance along the way to learn any of those human dynamics, if you will, that we’re talking about. So in fairness, a lot of it is, what is this? And where do I even start with it? I think number two, there’s also, you consult with, say, someone and you maybe get bad advice.
Beverly: And by that, I just mean, take the marketing lens we were talking about. Somebody might tell you, oh my gosh, you do all these things. We’ll put that all on a one-pager. So they’re not thinking about the way people’s minds work, right? They’re just thinking about the information we have to convey. And again, no judgment. It’s just a different approach. And then the last thing I think is you have to in a way put yourself out there to be able to do some of the things we’re talking about, to listen with empathy, to engage with a client when they’re in an emotional state to refrain from solving the problem right away. And it takes a little bit of risk. And so in fairness, I think fear of the unknown, fear of what’s going to happen, is this really gonna work? I think that absolutely holds advisors back.
Greg: Absolutely understandable. Fear of the unknown causes many people to continue doing what they have been doing. Do you have any final thoughts, Beverly, because we’re almost out of time and I do have a question for you. I’d like to ask for one piece of actionable advice before we wrap up. Can you name one thing advisors can do to hone their thinking about the client experience?
Beverly: The biggest thing I think is that when you’re having internal meetings and you’re talking about the client, or you’re doing a client review, or you as an individual are doing a client prep in addition to everything about their plan, their portfolio, their products, talk about, even if it’s just to yourself, what you know about this person. What do they value? How do they think about this process? What do they most care about with what you’re doing? And if you can’t answer those questions.. super quickly, way back, in my early days, I was in executive recruiting. And in order to set someone up for an interview, you’d want to tell them, well, here’s what this person likes, what they don’t like, stay away from these words, this sort of thing is a trigger to help the candidate really get across to this interviewing individual. Well, it’s very similar in that we don’t talk about the softer elements sometimes with clients. It’s all about the process, the products, the portfolio. So start making a conscious effort to talk about some of those softer pieces. See what you know about the person, what you need to know, and then make sure you’re incorporating questions to get at some of the things that you probably haven’t learned yet about them in each and every interaction.
Greg: And when doing this, to what extent should an advisor base their opinion based on what they hear—the words said—compared to how things are said, and the amount of passion behind the things said? Or do you look at both and make a holistic judgment based on all of it?
Beverly: So what’s important with the words people use is that we will use certain words that give us a way. It was interesting. I was doing something yesterday with an advisor and he talked about efficiency, yet his whole team is all about the people. They’re interested in the social good. They want to help clients. And he kept talking to efficiency, efficiency, and to him that ROI is important, but then it finally came out. They said, we get offended by this word efficiency. Because it’s like you’re looking at our clients as a thing, not as people. And so it’s things like that. If you listen to the words we use, it will show the way that we’re thinking about something and the delivery for sure. Research tells us less than 10% of what we take away from an exchange is actually what someone said versus how they said it. So paying attention to all of those other nuances is really important, but I enjoy so much listening for word choice because it will always give me an insight into how does somebody really make a decision or think about something. So word choice is an important thing to focus on.
Greg: That’s excellent advice, Beverly. I want to thank you genuinely for taking the time. To our listeners, go to Barron’s Advisor’s podcast page and you could see my previous interview with Beverly. It’s been a real blast. Thank you very much for joining us.
Beverly: My pleasure, Greg. I enjoyed it a lot, myself.
Greg: Thanks so much. My guest again has been Beverly Flaxington, co-founder of The Collaborative.
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