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Introduction

Here’s what I’ve come to believe: Most people are at least mildly crazy when it comes to money.

I can say ‘crazy’ with some authority. I am, after all, a psychologist. I know crazy when I see it. And there is nothing – not full moons or federal elections or family get-togethers – that draws the crazy out of people faster than money.

The author Geneen Roth describes it more eloquently:

It seems that money, even more than food, activates our survival instinct and makes wise, otherwise rational people behave like starving dogs. Any distorted or frozen patterns in our psyches will inevitably show up in our relationship with money, which makes it the ultimate repository for shadowy behavior.

Geneen Roth, Lost and Found

Craziness. Starving dogs. Shadowy behaviour. So … are you sure you want to work with people and their money?

If your work involves giving people financial counsel, then their crazy, conflicted relationship to money is only one of the challenges you will face. Frankly, it’s not even the most formidable one. Factors such as the quality of your relationship with clients, their level of energy and insight, and a host of other social and environmental influences all contribute mightily to what the client will do with the recommendations you provide.

Unfortunately, the odds are high that you have not received much guidance on what to actually do about any of these other influences. As a financial professional, the bulk of your training and expertise lies in highly technical domains. You know the ins and outs of taxation, pensions, investment vehicles and insurance options. You are savvy about key market indicators and the interpretation of financial data. You know a great deal about the ethics and laws governing your professional activities. You know all about the best products and services to help people reach their goals.

But most financial professionals^* receive very little training in client psychology, and in the related art and science of giving advice. Advice that is timely, palatable, and easy for clients to understand. Advice that is custom-designed not only to be technically sound, but also to be ‘just right’ in terms of the client’s ability to receive and act upon it.

This book fills the gap in that training. I want you to be able to give financial advice in such a way that three things happen:

1. your great recommendations are followed by your clients,

2. your clients’ well-being is maximized as a result, and

3. you experience a massive boost in your career success and satisfaction.

Throughout this book, I will be sharing evidence-based, practical tips with you. These are strategies that have emerged from decades of research into two intriguing questions. The first: What makes it so hard for people to do the right things for their well-being? The second: What can be done to help them make lasting, meaningful changes in their behaviour?

Most of the earliest studies in this regard were targeted at health-related behaviours (things like quitting smoking or taking medication properly). The scope of the studies has expanded greatly since then. Broader applications of research findings have had a transformative impact on fields as varied as environmental protection and elite-level sports performance. It is high time for such a transformation to take place within the financial professions.

For the past decade, I have been adapting these strategies to help bring about lasting, meaningful change in the lives of the clients I see in my own work as a financial psychologist and executive coach. The approaches have been further field-tested and tweaked by the financial professionals I consult with around the globe. I am confident that you, like them, will find that these easy-to-implement strategies make a world of difference in your clients’ willingness and ability to follow your advice.

By the end of this book, you will know how to give advice that sticks. And perhaps – just perhaps – you might also find that you have been able to address some of your own areas of stubborn resistance to change. So read on to find out what an agitated professor and a wounded lumberjack have in common; how empathy, confidence, and blueberries can all be dangerous; and what my mother being branded a tart has to do with anything at all.

Two kinds of expertise are needed

Throughout this book, I will be making a distinction between the technical and the personal sides of advising. The technical side has to do with the domain-specific financial knowledge that you are examined upon throughout your education and credentialing journey (e.g. taxation, investment strategies, cash flow projections). The personal side has to do with client psychology and life situation (e.g. goals, abilities, energy level, outlook, family dynamics). ‘Both sides are equally complex and equally important,’ maintains Susan Bradley, founder of the Sudden Money® Institute and a thought leader in the financial advising profession. Regrettably, most credentialing programmes in the financial professions seem to operate on the assumption that, once the technical stuff is mastered, the so-called ‘soft skills’ will take care of themselves.

When it comes to clients not following through with recommendations, it’s rarely because the advisor is technically unskilled or incorrect. Instead, it’s usually because the personal side of things has been neglected or misread. If you’ve been working with people and their money for any length of time, you will likely have come to the conclusion that the technical side of advising is comparatively easy. It’s the ‘soft’ side that’s the hard side!

Many financial service professionals have realized they need a different kind of training, one that addresses human psychology. Organizations such as the Kinder Institute, Money Quotient, Sudden Money® Institute, and Financial Recovery Institute have spearheaded the delivery of excellent specialized training in this regard. Interdisciplinary collaboratives and think tanks such as the Purposeful Planning Institute and the Nazrudin Project have offered further opportunities for a broad range of professionals to come together, reflect on money’s meaning and effects, and influence the evolution of their respective disciplines. Advice that Sticks merges the teachings of these pioneering financial deep thinkers with the scientific literature on non-adherence and behaviour change.

Need, opportunity and gift

This book is for any advisor who understands the NEED, the OPPORTUNITY, and the GIFT that exist with respect to delivering advice more skilfully.

Level 1: Need

You know the irony of this situation as well as I do. In an era when financial guidance has never been easier to obtain, the citizenry of the developed world has dismal savings levels and record amounts of indebtedness. Yet none of the branches of the financial services industry seem to be taking into account the fundamental complexity of human psychology. They just keep on telling people the same old messages about what they should be doing, as though more telling will result in more uptake.

The evidence by now is pretty clear that this is not a knowledge problem; it’s an implementation problem. It’s not unlike knowing that apples are better for us than chips, even as we reach into the bag for more salty, fatty yumminess. What we need instead of more information is more help in bridging the gap between correct knowledge and effective action.

This need exists, not just for the betterment of our clients’ lives, but also for the future of the various financial professions. Huge shake-ups are taking place industry-wide, but especially within the specific domain of financial planning. Faceless, interchangeable robo-advisors are taking on a bigger share of the market, and mature advisory firms are seeing slowing rates of client acquisition. The financial advising profession is having trouble attracting new recruits.

Across the broader financial services industry (which includes banks, insurance companies, brokerages, investment funds, and credit card companies), unsavoury and hidden practices are coming to the attention of the public. Legislative changes are being enacted worldwide that will increase transparency with respect to such things as disclosure of fees and debt servicing costs. These numbers are now staring consumers in the face with every credit card bill or investment statement that arrives in the mailbox. In response, consumers are becoming more assertive with service providers, insisting that they prove their worth, lower their fees, or lose the business. As a financial services professional, you need to focus on adding value to the advising relationship itself, as the profit margins for financial products or technical expertise alone will continue to be squeezed.

Level 2: Opportunity

Hidden within any threat or challenge you might be facing are the seeds of opportunity:

If you have been losing clients or assets under management, you have an opportunity to understand and reverse that trend.

If you have been longing to develop a stable, enthusiastic roster of clients that you can serve for life, there is an opportunity for you to develop expertise in client psychology that will be a strong differentiator from your competitors.

If you are curious about the burgeoning fields of neuroeconomics, positive psychology, and behavioural economics, there is an opportunity to capitalize on the exploding body of knowledge that is emerging to help shape desired behaviour change.

By embracing the challenge, you can base your work on a more complex, nuanced understanding of what it is to be and to advise a human investor and consumer. Odds are high that you will also end up lowering your own stress level and that of your team, because you won’t constantly be stymied and frustrated by clients who are not following through.

Level 3: Gift

Much has been written about the different attitudes people hold towards their work. Some view what they do merely as a job; others see it as part of a desirable career; still others, as a sacred calling. I have had the distinct honour of working with financial professionals who show up to their work each day as though it were a calling. They are the ones who get invited to walk alongside their clients on some of the best and hardest days of their lives.

Perhaps you are among them. If so, you know that such experiences are truly a gift. There is a feeling of being on sacred ground when a client shares a deeply held value or discloses a profoundly moving event from the past. It is a powerful thing to be one of the first people trusted to receive news of a pending birth, a big business merger, or a serious diagnosis. And it can be deeply satisfying to know you’ve been instrumental in helping some clients get back on their feet after setbacks, and in helping others stay grounded when they have grown overly exuberant.

How does that happen? How does one both receive and impart such professional gifts? It happens to advisors who have equipped themselves to be ‘Thinking Partners’ with their clients, co-creators of action plans that solve problems and facilitate goal achievement. Such advisors rarely give one-size-fits-all solutions, leaving the client to tug and yank at the advice until it (sort of) fits them; rather, they take the time to find out the clients’ needs and motivations and misgivings, and tailor their advice accordingly. My hope is that, as a result of reading this book, you will be inspired and equipped to make the changes needed for you to become a true Thinking Partner for your clients.

But it’s possible you won’t. That’s because the same things that make it hard for your clients to implement your great recommendations will make it hard for you to implement mine. Doing things differently is hard, especially if you try to do too much at once, on your own, or without any systems in place to remind you of the changes you’re trying to make. I’ve had more than a few such experiences, myself.

How I was undone by a blueberry

Several years ago, a prolonged bout of low energy led me to embark on a whole-health makeover. I hired a personal trainer; I started taking vitamin supplements; I began exercising more often and getting to bed earlier. And it worked! Within mere weeks, I started feeling more energetic … and maybe a little too ambitious. I decided to move on to better eating habits.

It was a time when antioxidants were all the rage, the key to eternal life and world peace. I was convinced that eating a daily dose of fresh berries would turn me into a force of nature. And that’s when it all came crashing down … because getting those fresh berries meant remembering to buy them, and buying them meant making a few more trips to the supermarket every week. That, in turn, required a couple more episodes a week of stuffing the kids into their snowsuits, and wrestling them into their car seats. Soon the whole self-improvement gig just fell off the radar. I’d tried to change too much, too fast, and as a result I ended up changing very little of anything.

How to use this book

Be wary of the Blueberry Effect, good reader! Here are some ideas to help you detour around that trap and head straight for glory:

1. As you go through the book, be sure to look over the Adherence Boosters listed at the end of the chapter (from Chapter 2 onwards). Highlight any of the recommendations that seem particularly germane to you and/or your team.

2. Once you’ve reached the end of the book, perform a triage on those highlighted areas. Identify the top two to three areas of greatest need or promise. Note that many of the changes simply involve adding in a question or two to your client meetings, but they will require dogged, consistent application to see results.

3. Choose just one of those areas to work on for the next month. Write down what you plan to do differently, and why. Tell someone else about what you are committing to do. Put a note in your calendar every 30 days to check in on how you’ve been doing and to identify what you want to tackle next.

4. Find a way to keep those change intentions top of mind. I have a practice of e-mailing myself several questions at the start of each day, reminding myself of the existing habits I’d like to maintain (e.g. emptying my inbox) and the emerging habits I’m striving to establish (e.g. practising music for 20 minutes a day). This keeps earnest but fragile resolutions from falling into the abyss.

5. Every time you try out a new strategy, give yourself credit. Notice what went well, and what needs further alteration or customization.

6. Whenever possible, enlist someone else in the cause. See if there are some advice-enhancing practices that you and a colleague would like to work on at the same time.

7. Each month, when prompted, review your progress. Determine whether you’re ready to embrace another strategy for giving advice that won’t go to waste. Then repeat the above steps.

8. If you’d like to develop your expertise even further in the personal side of advising, or look into getting additional training or coaching, drop me a line at drsomers@moneymindandmeaning.com – I’d be happy to help.