Hard truth about soft skills: Invaluable insights for financial advisers

Personal financial coach Kelley Long, CPA/PFS, recently worked with a client to come up with a three-month plan for paying off credit card debt.

As the meeting wrapped up, the rapport that Long had built with the client paid off.

“After all is said and done, she says, ‘Oh, we’re going to Europe in July, and I opened a new credit card and put the trip on there.’

“Fortunately, she confessed because that changed the whole plan. If she hadn’t said that to me, we may have never met again.”

Had the client not divulged the vacation expense, common logic might have been to blame the client. However, during an AICPA & CIMA ENGAGE 25 session, “What Your Clients Aren’t Telling You Can Hurt You (and Them),” three CPAs discussed the responsibility that lies with financial advisers and offered advice on how to assure that miscommunication doesn’t lead to missed opportunities.

“Early on in my career, I became fascinated by the fact that although I had been really well trained on technical matters, I was absolutely baffled by the amount of psychology involved in the work we do,” session organizer Jean-Luc Bourdon, CPA/PFS, said. “I think we all quickly come to the realization in our career that we’ve been trained as technicians, but then it involves so much more.”

Session moderator Sridhar Ramamoorti, CPA/CITP/CFF, CGMA, Ph.D., an accounting professor at the University of Dayton who holds a doctorate in quantitative psychology, explained how several tenets of psychology relate to the role a financial adviser must play in order to be successful, but he boiled it down to the role that human nature plays.

“We are all human beings first before we are accountants,” Ramamoorti said. “The one thing we have to remember as CPAs and practitioners is, clients don’t care how much you know until they know how much you care. Meaning, they want to know that you have this sincere interest in their well-being and that you’re going to be protecting their situation and doing all the right things for them. In that sense, your behavior is trust-enhancing.

“That is completely from psychology. Completely.”

While psychology comes naturally to Ramamoorti, that’s not the case for all CPAs.

Each panelist offered a key consideration for connecting with clients on a human level.

Jean-Luc Bourdon: The power of query

“More than ever, I think we’re really paid for asking good questions.”

Bourdon recalled meeting with a prospective client who shared only that she wanted to talk about “financial security.” Sensing stress and apprehension, Bourdon posed a question with what little he had to go on: “What would it really take for you to gain peace of mind?”

The meeting flowed from there, opening up a chat in which the client detailed concerns about whether her longtime partner actually had recorded a will that would gift her the house they shared but that only he owned.

“Then instead of creating a financial plan or an investment plan, we created a communication plan to have that conversation with her boyfriend where he would take action steps to provide her the security she was looking for,” Bourdon said. “Just by coming to the right question, the elephant in the room showed up.”

It wasn’t just about the question that Bourdon asked — it was how he asked it.

“The first order of business,” he said, “is to make them feel comfortable, make them feel welcome.”

Kelley Long: Strip away shame

Long acknowledged the challenge of making sure clients share all pertinent information when many are predisposed to feel uncomfortable: She said that people seeking financial advice often are self-conscious about their own financial literacy in front of an expert in the field.

“They had worked with a financial adviser in the past, and the adviser said, ‘Get a Roth IRA,’” Long shared. “But they didn’t invest the money because the person they were working with didn’t take the next step and tell them that you need to actually choose investments.

“There’s a lot of shame. Like, ‘How did I not know that?’”

Long’s story stressed the importance of not assuming anything when dispensing advice to a client, but it also stressed the importance of making it clear that success for the client depends on the client’s comfort.

“There needs to be an explicit statement of, ‘This is a shame-free space, and I’m not going to judge you,’” Long said, adding that she often breaks the ice by sharing a self-deprecating story about how she personally has faced and overcome debt. “You have to make it clear that the client telling me who they are at their core is not wasting my time. It’s helpful.”

Sridhar Ramamoorti: ‘He who cannot smile must not open a shop’

“A Chinese proverb. Very interesting,” Ramamoorti said, sharing a simple yet powerful pointer for advisers to take home from ENGAGE.

“If you can’t smile at your customers, nobody is going to come,” he said. “Let me tell you, if you keep a dour face, that’s the end of your business right there. With just a smile, you can make the client feel more comfortable.”

Editor’s note: Those who purchased an all-access pass to ENGAGE can view this and other archived sessions and attend a new lineup of live ENGAGE+ sessions on Thursday for additional CPE. If you didn’t attend ENGAGE, you still can access this session.

— To comment on this article or to suggest an idea for another article, contact Bryan Strickland at Bryan.Strickland@aicpa-cima.com.