Decoding client behaviour

Recent scandals have led mainstream media to grouse about the trustworthiness of financial professionals. But pundits aren’t the only ones who have the right to play the honesty card.

Some prospects are too polite to explicitly express lack of interest, and you’re stuck chasing dead leads. And while most clients are truthful, some may inadvertently leave out important information during meetings—be it debt, a difficult family member, or a disagreement among members of a couple. And other clients may deliberately hide key facts that can derail their whole financial plan.

How can you prevent these types of surprises? Learn to detect human emotions by properly interpreting both body language and verbal cues in client meetings.

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“First, you need a sense of a person’s normal behaviour so you have a reference point for identifying changes that may arise at various points in the conversation,” explains Pamela Meyer, author of Liespotting: Proven Techniques to Detect Deception. “You’re looking for deviations from the baseline.”

Try these techniques

Conversation starter

• Start meetings with open ended questions, such as “What’s your attitude toward investing” or “What’s your first recollection of a money experience?” This lets the client set the conversation’s pace, and gives you context for any difficult, specific questions you ask later.
• Don’t start with narrow questions; they can exclude important information. Ask a client if she learned about personal finance in school to gauge her financial literacy, and she could just say no—even if she had a job as a bookkeeper.
• Ask only one question at a time. You won’t get a good answer to, “When did you first learn about investing, who taught you, and how did that make you feel?” Instead, ask each question individually so you can see how the client responds each time.
• Avoid including judgmental language. If you preface a question by saying, “If you’re comfortable talking about X, tell me…” you’re cueing the client to feel uncomfortable or ashamed about the topic. Or, if you say, “You don’t have any issues with debt, do you?” the knee-jerk response will be no, even if the answer is yes. Avoid this, or you’ll never learn anything.

BODY LANGUAGE BASICS

Dr. Lillian Glass, a former communications professor at the University of Southern California and author of the book Talk to Win, looks at the client’s posture. For example, if clients lean back, that may signal discomfort with the advisor. “They don’t want to get close to you. As an advisor you need to watch your own body language, and that means you need to lean in.”

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Meyer suggests looking for multiple signals. “A single indicator doesn’t mean much on its own, but becomes significant when it’s part of a larger pattern.”

Other indicators of discomfort include a client stiffening his upper body, rubbing or touching his eyes, tugging on his ears, and curling his feet inward.

Brian King, chairman of the investigations division at CKR Global, notes when he starts asking questions that cause his interview subjects to become nervous or unsettled, they tend to lean toward the door because they want to get out of the room.

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“You also need to pay attention to their feet,” says Glass. “If their feet are pointing in your direction, it can mean they’re comfortable. But if they’re pointing toward the door, it’s a sign they want out.”

Yet, if a client’s head is cocked to the side, it usually means he’s questioning something. “Take the opportunity to explain your point again,” Glass suggests.

King looks for changes in activity apart from the baseline. If they’re scratching, rubbing, wringing or massaging their hands, and they weren’t before, it’s a sign of major distress. “The key component is changes in their body language during the line of questioning,” he says.

Getting vocal

Advisors should also listen carefully to the client when he talks.

King listens for the pitch of the subject’s voice. When people are angry, you’ll often hear a higher pitch in their voice, while a lower pitch can indicate a sad or gloomy demeanour. Inappropriate laughter and over-the-top politeness are also signs someone may be lying, he says.

“Another thing to look for is conversation stalling. It usually means they’re trying to decide whether to continue lying or to be truthful,” he explains.

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Surroundings matter

“I make sure the person I’m interviewing is in a room that doesn’t have any distractions. If you ever watch police interrogation videos, you’ll notice there’s very little or nothing on the walls,” says Brian King, chairman of the investigations division of CKR Global.

While advisors shouldn’t clear out their offices, the busier the room, the more opportunity the client has to lose their focus on the matter at hand. It can be hard to resist soaking up the scenery in an office cluttered with exotic ornaments, fascinating art and rows of picture frames.

A lightly decorated office is the way to go.

Clients may even start manipulating their physical surroundings to distance themselves from an uncomfortable series of questions.

“If you’re sitting across a desk from someone, the objects on the desk may serve as what we call barrier objects,” Meyer says. “The client may take an object and put it between himself and his interviewer as a way of feeling more secure (see sidebar, “Surroundings matter,” right).

DETECTING DECEPTION

Most clients don’t set out to mislead. But when they do, liars are often cognizant they’re giving off signals of deception.

“A person telling a lie may use excessive eye contact as a way of overcompensating,” says Meyer.

Repeating the question is another signal of deception. When clients answer, you might even see them nod “Yes” even though they mouth the word “No,” and vice versa.

Advisors can try a trick used by law-enforcement interrogators. “They look for post-interview relief,” she says. “Interrogators often falsely signal an interview is over to see if it triggers a shift in the interviewee’s posture.

“Then they’ll go back to interviewing and watch for whether the interviewee stiffens back up. They’ll do this in 15-, 20-, and 30-minute increments.” Your client meetings may not go on that long, but advisors can adopt a version of this technique by referring to a sensitive subject multiple times in the same meeting, touching upon it from different angles, and seeing how the client reacts each time.

King explains, “Often when someone is about to confess they turn their palms up and droop their shoulders. And 99% of the time there’s a sigh.”

How to know a client is uncomfortable

• Sweaty palms
• Tugging ear
• Dry mouth
• Knitted brow
• Rubbing nose
• Stiff upper lip
• Rubbing or touching eyes
• Rubbing, wringing or scratching hands

Meyer also suggests listening for qualifying statements like, “To tell you the truth” or “As far as I can recall” or “Let me think.” Qualifiers aren’t surefire signals of deception, but are red flags that should encourage you to ask more questions.

Then there are facial micro-expressions—“those little flashes of emotion. You’re trying to mask an emotion but it manages to leak through,” Meyer explains.

One micro-expression that’s easy to detect is the sneer that accompanies contempt. “It’s the only asymmetrical expression that comes across the face. When you see it, it’s a big warning sign. In law enforcement, if interrogators discern contempt on the part of the subject, they take themselves off the case because they’re not going to get anywhere.”

If you see a sneer when you’re making your sales pitch, try one more thing before you pack it in. “Ask an open-ended question, such as, ‘You seem a little bit uncomfortable. What information do you want to share with me?’ ” suggests Meyer. “If you give people enough room and time to talk, they’ll usually tell you what’s on their mind.”

FEET CURLING INWARD OR TOWARD THE DOOR

“The biggest indicator of fear or discomfort is rubbing of the nose. If you’re in the middle of an interview and someone starts to rub their nose, it’s a sign the person is probably worried,” says Brian King, chairman, investigations division, CKR Global.

If your client has cotton mouth—you’ll see him licking his teeth and lips—it’s because his autonomic nervous system is kicking in and his saliva is drying out. Standing erect, with hands in pockets is often a sign someone has a dominant or aggressive personality. Someone with a more submissive personality will tend to stand slouched over with their head down and their arms crossed, which is a more defensive posture.

Mythbuster

Normal eye contact is only 60% of the time, so when someone averts their gaze, that doesn’t necessarily indicate lying.

WHO’S THE DOMINANT MEMBER OF A COUPLE?

Look for the following in combination:

• Who initiates physical contact with you
• Who does the majority of the touching in the couple
• Who takes up more space, e.g. by leaning in
• Whose hand is on top if the couple is holding hands
• Whoever speaks first
• If one member interrupts you or the other person

The submissive member will, in contrast, minimize physical space with crossed arms, legs and/or ankles. Nodding, bowing, and other physical manifestations of demurring are also evidence.

Finally, watch to see if the client’s voice changes when speaking with you versus the other member of the couple.

Of course, says communications expert and author Dr. Lillian Glass, you could ask the clients. But if the answer surprises you after assessing these factors, someone’s probably lying—or delusional.