Communication Essentials for Financial Planners: Strategies and Techniques

226 Pages·2017·2.805 MB·English

by  John E. Grable, Joseph W. Goetz

Communication
Essentials for
Financial Planners
Communication
Essentials for
Financial Planners
Strategies and Techniques
John E. GrablE
JosEPh W. GoEtz
Edited by
Charles r. Chaffin, EdD
Cover image: © olgaaltunina/istockphoto
Cover design: Wiley
Copyright © 2017 by Certified Financial Planner board of standards Inc. all rights reserved.
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Printed in the United states of america.
10 9 8 7 6 5 4 3 2 1
Contents
Preface xi
Acknowledgments xxv
How to Use This Book xxvii
Introduction xxix
Chapter 1 An Introduction to Applied Communication 1
Introduction
Financial Planning Outcomes
Communication Defined
The Theory of Communication
The Importance of Feedback
Conclusion
Summary
Chapter Applications
Notes
Chapter 2 Structuring the Process of Interpersonal Communication 21
Introduction
Social Penetration Theory
Orientation
Exploration
Affective Exchange
Stable Exchange
Relationship Benefits and Costs
Accounting for Stress
Building Client Trust: An Appreciative Inquiry Example
Summary
Chapter Applications
Notes
vii
viii CONTENTS
Chapter 3 Structuring the Process of Communication through the Office 37
Environment
Introduction
Identifying Target Clientele
Understanding the Office Environment
Stress and Communication: Bringing the Pieces Together
Summary
Chapter Applications
Notes
Chapter 4 Listening Skills  57
Paying Attention to the Client
Attending to What Is Said
Interpreting What Is Heard
Transference and Countertransference
Passive versus Active Listening and Responding
Silence: A Stressful Time for Client and Financial Planner
Responding to “I Don’t Know”
Summary
Chapter Applications
Notes
Chapter 5 Questioning 75
Introduction
Open-Ended Questions
Closed-Ended Questions
Choosing Between Open and Closed-Ended Questions
Question Transformations
Swing Questions
Implied and Projective Questions
Scaling Questions
Summary
Chapter Applications
Notes
Chapter 6 Nondirective Communication 91
Why Nondirective Communication?
Outcomes Associated with Nondirective Communication
Clarification
Summarization
Reflection
Contents ix
Paraphrasing
Styles of Paraphrasing
Summary
Chapter Applications
Notes
Chapter 7 Directive Communication 109
Direction: The Essence of Financial Planning
Interpretation
Reframing
Explanation
Advice
Suggestion
Urging
Confrontation
Ultimatum
Summary
Chapter Applications
Notes
Chapter 8 Trust, Culture, and Communication Taboos 135
Understanding a Client’s Cultural Attributes
Interpersonal Preference
Risk Management
Culture and Trust
Communication Taboos
A Cultural Example
Summary
Chapter Applications
Notes
Chapter 9 Politeness and Sensitivity in Communicating 157
with a Broad Range of Clients
The Power of Language
Politeness
Politeness through Inclusion versus Exclusion
Sensitivity
Language Sensitivity
Summary
Chapter Applications
Notes
x CONTENTS
Chapter 10 Financial Planning—A Sales Perspective 173
Sales Models
The Challenger Model
The Consultative Model
Manipulation versus Persuasion
Consultative Selling and Compensation
Understanding Client Behavior
Dealing with “No”
The Ethics of Selling
Summary
Chapter Applications
Notes
Solutions 189
About the Authors 193
About the Companion Website 195
Index 197
Preface
For financial planners . . . communication . . . is the single most
powerful antecedent to trust and commitment . . .
—Dr. Dave Yeske1
The purpose of this book is to provide financial planners with insights
on how they can improve their communication and counseling skills.
The approach presented in this book is based on helping financial planners
develop, practice, and use skills associated with the formal and informal
sharing of information between a client and the financial planning profes-
sional in an empathic manner that enhances the client–financial planner
relationship.2
This book serves as a valuable resource for students and professionals
alike. The ineffable importance of consistent and effective communication
with clients is widely acknowledged by experienced financial planners. At
the same time, few planners have implemented systems within their firms
(or personal professional development plans) to increase knowledge and
hone skills associated with client communication! This book provides pro-
fessional financial planners, as well as the leadership within financial plan-
ning firms, with a blueprint for taking their client communication to the
next level. Inarguably, increased sophistication in client communication
translates to higher client retention and a more effective financial planning
process. Thus, the ROI on time allocated to toward communication skill
development is quite high.
Those who conduct research on financial counseling and planning
also know that communication skills are the foundation to building a suc-
cessful financial planning practice. Some researchers have even contended
that, “effective communication is vital to successful financial planning.”3
Certified Financial Planner Board of Standards Inc. (CFP Board)—the pri-
mary academic standards setting and enforcement board for college and
university programs4—supports this notion, as it has identified communi-
cation and counseling skills as an essential element of financial planning
competency.
xi
xii Preface
Why This Book
Over the past two decades, myriad financial planning practitioners have
emphasized the importance of client communication to business success and
client satisfaction.5 In fact, the authors, who regularly hear practitioners
speak about their professional roles when invited by their university’s stu-
dent financial planning organization, have noticed a consistent emphasis on
client communication and relationship building as the foundation of each
presenter’s success. Many of these practitioners believe strongly that their
method of client communication is effective, and undoubtedly it is at some
level, but what they may fail to consider is whether another communication
strategy or skillset could work even better. As will be highlighted throughout
this book, the study of communication and counseling skills can assist even
those financial planners who are already quite proficient communicators to
become even more effective in their work with clients.
Current financial planning practice standards mandate that anyone
hoping to become a Certified Financial Planner (CFP®) professional must
obtain proficiency in the following interpersonal communication domains:
■ Evaluating client and planner attitudes, values, biases, and behavioral
characteristics and the impact these have on financial planning
■ Principles of communication and counseling
The CFP Board’s requirement goes beyond a theoretical understand-
ing to requiring proficiency. The role of communicating effectively with
prospective and current clients permeates the financial planning process.
Consider the CFP Board’s standards related to professional conduct and
fiduciary responsibility, disciplinary rules and procedures, and practice stan-
dards. According to the CFP Board, practice standards are intended to:
1. Assure that the practice of financial planning by CFP® professionals is
based on established norms of practice
2. Advance professionalism in financial planning
3. Enhance the value of the financial planning process
Practice standards apply to all CFP® professionals and those study-
ing financial planning in a CFP Board Registered Program. The standards,
however, also serve as a foundation for professionalism within the broader
financial services profession. Practice standards were first developed in 1987,
updated in 1994 by CTB/McGraw-Hill, an independent consulting firm,
and again in 1999 by the Chauncey Group. These standards, tied directly to
steps in the financial planning process, are shown in Table P.1.