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Financial Planning, January 1, 2003:
Different Slant Are you saying one thing and your clients hearing another? Here's how to solve misinterpretation problems. January 1, 2003 We all remember the game of "whisper down the alley." A piece of information is passed along, and it changes as it goes from person to person. Similarly, two people can walk away from a conversation with a totally different take on what was said, how well the meeting went, and even what was decided as the best course of action. The adviser may present the material in a lucid, logical, and thoughtful way, but what the client retains may not reflect what has been said. To ensure clients understand your message, advisers need to ask and answer the following questions:
Advisers and clients meet. They share complex information. Frequently clients do not fully understand the nature of the products or issues discussed. Given the ambiguity inherent in communicating difficult concepts, there are many opportunities for misperception. How can you ensure clients have retained the proper information and not changed it internally to meet their own needs and expectations? If information you are trying to convey seems to be getting lost or distorted, it is important to examine the source of the miscommunication. There are three ways information can get lost or misunderstood. First, the facts may not have been understood as well as it appeared. Second, the meaning of those facts may have been misinterpreted. Third, the facts may have been altered by the emotional needs and wishes of clients. Clients often convey that they understand the material to a greater extent than is accurate. Although they leave the meeting knowing more than when they arrived, their confusion can be greater than they realize. Obviously there is less room for "distortion" when clients clearly understand the material being discussed. But even with simplification and judicious use of metaphors to explain concepts, it is inevitable that some misunderstanding with clients will remain. Most of the time the basic trust in the working relationship is enough to manage issues of what hasn't been understood clearly. It is important to keep track of clients' capacity to absorb information, however, since it can change over time and even from meeting to meeting. Has the information been misinterpreted? Black-white thinking is extreme either-or logic. Nothing remains gray. Some people latch on to one or two pieces of information and cannot hold on to the overall financial picture. For example: You tell them they lost money in one of their aggressive funds but their other investments are doing fairly well. They hear the "black" news, and it eclipses everything else. If you notice this pattern, you need to empathize with their perspective, tell them this is a common reaction, and then remind them of the overview. Catastrophizing is when clients hear one piece of news that sets off a cascading set of fears. You tell them they lost money in their aggressive funds but their portfolio is likely to recover. They hear that this is a crisis and they should sell out or else. In contrast, minimization is when clients are given serious warnings and they don't sink in. You tell them to pull back and significantly change their lifestyle. They hear that a nip here and a tuck there is all that is needed to set them right. Catastrophizing and minimizing do far less damage when the adviser realizes this kind of thinking is common and looks for it. Clients' fears and wishes often obscure the truth. Often these patterns of thinking are strong, and more than one meeting may be necessary to correct course. Under financial stress people tend not to think their best. Emotion-driven distortions may interfere with clients' capacity to follow through on the information they seemed to understand during the meeting. As a result, there is a different emphasis, or a different slant on the consultation. It is important to realize that long-standing patterns of relating to authority figures can have a strong impact on how clients experience advisory sessions. When they leave the office and mull over the information, they may "hear" the adviser as a parent figure, a judge, or a pastor figure who will rescue them. None of these perceptions are correct, and it is wise to be alert to these patterns. Seeing the adviser as a parent may cause clients to hear suggestions and considerations as imperatives or proclamations. They may feel they are being ordered to do things, and they aren't certain they want to obey. While the adviser may be trying to empower clients, dysfunctional patterns may cause clients to feel the adviser is overbearing. When clients see you as a judge rather than an adviser, they may hear suggestions as criticism. The adviser may be explaining how behavior change can have a powerful positive impact on clients' lives, but clients may hear that they are screwing up and can't do anything right. Experiencing the adviser as a pastor or savior is particularly tricky to detect. Clients can imbue their adviser with more wisdom than is possible because of their intense wish to be taken care of. This "idealization" can quickly flip into its intense opposite when they feel let down. This pattern may be coloring the situation if the adviser senses that clients are overly dependent and seem to be regularly abdicating too much responsibility. As an adviser, you must then emphasize that your role is to help clients figure out what is the wisest financial course of action and focus on empowering them to be active participants in the decision-making process. The adviser isn't a psychologist, despite a serious invitation to act as such on the part of many clients. However, if your client's behavior is perplexing and creating problems in the relationship, understanding some of the patterns described above will be helpful. It is in your best interest to assess the client's style and try to correct course as soon as you detect possible distortions. Carol M. Kauffman, Ph.D., and Marcia C. Brier are partners in Family Legacy Services, a consulting service to financial advisers, family offices, and private client departments. They can be reached by e-mail via carol@carolkauffman.com or mbrier@mcbcommunications.com. -Carol M. Kauffman and Marcia C. Brier |
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