How to give advice that sticks

How do you get your client to follow your advice? Tailoring it to your client’s mindset is a good place to start.

That was part of the message delivered by Moira Somers, a neuropsychologist and executive coach who spoke at the second annual ETF Summit co-hosted by Investment Executive and Advisor’s Edge in Toronto on Tuesday.

Somers, the author of Advice that Sticks: How to Give Financial Advice That People Will Follow, has spent the past decade studying why clients don’t follow advice, and has found that advisors are often to blame.

Clients need to agree with your advice, feel motivated to follow it and be confident about overcoming any obstacles they may encounter, she said. Knowing your client’s mindset will help you give them advice that will stick.

Somers explained that there are two primary mindsets: prevention and promotion.

People with a prevention mindset are primarily concerned with avoiding negative outcomes. “They go through life like goalies in a hockey or soccer game, alert to all the ways in which something potentially bad could get past them,” Somers said. “They strive to make sure they’ve taken every step to prevent regret or catastrophe.”

People with a promotion mindset are “motivated by the awesome experiences they want to have,” she said. “Rather than being vigilant to possible threats, they are always on the lookout for wonderful opportunities. They’re the ones running down the field hoping to score.”

Somers noted that most people will have a combination of the two mindsets, but they typically lean more toward one than the other.

Knowing not only which way your client leans but also which way you lean could be the difference between whether or not your client follows your advice.

Somers cited a case study of a hockey prospect (“Jason”) and his mother, both with prevention mindsets, who had been paired with an advisor (“Deborah”) who had a promotion mindset.

In this case, Jason — who had been ripped off by a previous advisor — was wary of being taken advantage of again, and found Deborah’s promotional outlook “a little bit cheesy,” Somers said. Conversely, Deborah found Jason and his mother’s outlook to be “excessively negative and pessimistic.”

“Her initial recommendations to this family were perfectly sound, but [the recommendations] didn’t tap into [the family’s] primary motivation to protect Jason from harm,” Somers said.

When Deborah changed her approach and proposed a detailed plan to ensure that Jason would never get ripped off or be exploited again, Jason “loved the idea” because it was more in line with his mindset.

“[Deborah] became a deeply trusted thinking partner with him and his family because she was willing to speak their language,” Somers said.

Somers emphasized that although advisors are expected to impart technical knowledge to their clients, clients expect more than just technical expertise from advisors.

“People want to come away from their encounters with you feeling something different, not just knowing something different,” she said.

Somers recommended that advisors develop the personal side of their expertise in order to build stronger connections with clients.

“It’s the personal side that drives clients’ decision-making,” she said. “It’s things like self-esteem, relationships and meaning that determine how and why and when clients enter your book of business — and, less happily, how and why and when they exit.”