How to Be a Good Financial Advisor

Are you sitting there wondering how you can become a successful financial advisor?  The question you should really ask yourself is how to be a good financial advisor. 

However, the question of how to be a better financial advisor requires more than simply financial advisor knowledge to answer. 

What does a financial advisor need to know in order to find success? 

Read on to learn.

Better Understand Clients’ Needs

You might be a qualified financial adviser. But if you aren’t able to discover and understand prospects’ needs, you won’t be converting many into clients. 

Every client has different financial goals. Similarly, the nuances of individual financial situations will require different financial products and services. 

So, how do you determine if your clients need estate planning or financial advice? Whether they’re interested in mutual funds or insurance products?

Ask open ended questions

A client may not necessarily know what their financial planning needs are. However, everyone has short- and long-term goals they want to meet. 

By learning about and understanding a person’s goals, you’ll be able to determine what their specific needs are. 

Here’s a short list of some questions financial planners might consider asking new clients in order to discover their needs: 

• When you think about your ideal retirement scenario, what do you imagine?
• What do you do that brings joy to your life?
• What concerns do you have that keep you up at night?
• What sort of legacy do you want to leave behind for your family?
• What are you hoping to get out of our relationship?
• Do you have any looming expenses you’d like to be saving for? (e.g. college education.)

The idea is to ask questions that will help you understand how you can serve this specific client best. 

Listen actively to clients’ responses

Active listening is a skill that basically tops the list of “things a financial advisor should know.”

The British Heart Foundation offers a fairly comprehensive guide to active listening skills. There are, however, a few core components that are absolutely essential. 

Always maintain eye contact 

Obviously, you shouldn’t be checking your email during a client meeting. If you do, you’re telling them you don’t care about what they have to say. In fact, best practice is to set your phone on Do Not Disturb so you can avoid distractions.

On the other hand, if you maintain eye contact, they’ll understand that you truly care about them. 

Notice nonverbal communication

Studies have shown that a whopping 55% of communication happens via body language. What does this mean for those only paying attention to the words a client says and how they say them? 

You’re missing more than half of the information you could be absorbing through your conversation. 

For example, if you bring up tax planning and a client crosses their arms and looks down. You get much more information about how they really feel than you would if you simply heard them say “sure.”

You want to gain as much information as possible from your conversations with clients. As such, you should be paying close attention to nonverbal cues. 

Prove you’re listening

Active listening is important for two reasons. First, it ensures that you will gain the information necessary to support a client with their specific retirement planning needs. 

It also plays an important role in the way clients see you: an essential part of building relationships and trust. 

As you listen to your clients, provide verbal and nonverbal feedback that shows you hear what they’re saying and understand. 

Nod along, say “oh my gosh, wow!” when appropriate, and adjust your facial expressions to match your client’s tone. 

Even better, chime in with your own relevant anecdotes when appropriate. Be careful about taking over the conversation, though. Never interrupt them while they’re speaking, and always be careful about making yourself the focus of the conversation. 

Your goal is to demonstrate that you care about what a client is saying. This makes it much easier to build rapport with them and earn their trust. 

Ask follow up questions

You should ask follow up questions in two scenarios. 

First, if you genuinely don’t understand something a client has said. Ensuring you have a solid comprehension of their goals is essential for you to provide services that meet their needs. 

You should also ask follow up questions if you have genuine curiosity about something a client said. Ask them to elaborate on their scuba diving trip in Australia. Prompt them to go into further detail about how they met Cher that one time. 

If a client believes you’re genuinely interested in their lives, they’ll be much more likely to open up further. This will go lightyears towards developing lasting relationships with them. 

Summarize your understanding and ask for confirmation

Occasionally, throughout your conversation, take a minute to pause and summarize your understanding of your client’s situation. 

This will ensure that the proposals you make will actually meet the client’s needs. It will also prove to your client you’ve been paying attention to them. And that you’ll make the necessary effort to ensure you understand their needs. 

Once again, this will go a loooooong way towards establishing a foundation of trust in your relationship with them. 

Engaging with people this intensely may seem like a nightmare. But, it’s actually an important opportunity to distinguish yourself from robo advisors, who still can’t read human emotions. Plus, it can be quite enjoyable. Relax and have fun with it!

Communicate 

The question of how often and in what manner to communicate with clients is a tough one. It frustrates many a beginner financial advisor; experience doesn’t even necessarily alleviate the issue, either. 

If you want a successful career as a financial or investment advisor, you’ll have to learn to communicate effectively. It will be what distinguishes you from the competition.

The trick is to maintain consistent communication with your clients without bothering them. Consider the following options to achieve this balance: 

• Host networking events at bars, breweries, or other fun locations. 
• Set up automated drip campaigns to update clients about the performance of their assets under management. 
• Write weekly (or monthly) blogs on relevant topics that would be of value to your clients. (We also publish a consumer facing blog weekly, if you just want to use that.)

Earn and Maintain Trust

If you follow the advice given throughout the rest of this article, this will happen automatically. 

It’s worth pointing out, however, that no certified financial planner or investment adviser ever had a successful career without earning and maintaining the trust of their clients. 

Maintain Your Wealth Management Expertise

Anyone interested in investment management is hoping to find a financial advisor that will make them lots of money. 

Demonstrate your passion for all things financial management. This will show potential clients that you’re the kind of person who stays up-to-date. 

First, take advantage of professional development opportunities. Then, proudly display any certificates you earn from attending such events. 

This way, everyone who enters your office (or sees your Zoom background) will see how much of your time you dedicate to maintaining your expertise. 

How to Be a Great Financial Advisor TLDR

Understand clients’ needs

Ask open-ended questions, listen actively to client responses, and take the time to summarize your understanding of their needs. This will not only ensure you have the information necessary to be of value, but also prove you care about them. 

Communicate often without being annoying

You want clients to find the communication you send valuable. So, host networking events at fun venues. Send updates about clients’ investments. Publish (or borrow) helpful content clients can use to educate themselves. 

Earn and maintain trust

If you follow steps 1 and 2, this is the result.

If your clients don’t trust you, they won’t be your clients for long. If they do trust you, they might even refer other business to you. 

Maintain your expertise

Do the work necessary to ensure you will be of value to your clients. Stay up to date on the goings-on in the industry. Attend professional development events. Develop an executive peer group to bounce ideas off of (or, join an existing one, like Plancraft.)

Then, display your certificates proudly where everyone can see them. It will “prove” you know what you’re talking about and help clients build trust.