 
By Lisa Wahlgren
Active listening with the goal of understanding how clients feel about key financial issues is much more “the art of our business than the science of it,” says Ira Hermann, CLU, ChFC, financial advisor with Northwestern Mutual in Newport Beach, Calif., and a member of Orange County AIFA. An MDRT member for 21 years, (the past eight as a Top of the Table member), Hermann has mastered this art. “In our industry, there is a tendency to try to sell a particular product or to try to educate clients on the latest and greatest financial-planning technique,” Hermann says. “There always seems to be a ‘hot product’ that captures the attention of advisors as the optimal solution to a wide range of client needs.”
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| Clients want to be understood before they’re educated or sold on something.
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The problem Hermann sees with this approach is that it’s more focused on product, than client. He’s convinced that clients want to be understood before they’re educated or sold on something. The key to a lifelong relationship with clients is empathy. “Clients really appreciate when you take the time upfront to ask a lot of questions—questions that probe beneath the surface and demonstrate a genuine concern for their needs,” Hermann says.
Not just the facts
Because feelings, not facts, often guide (or misguide) financial behavior, the questions you ask clients need to get at more than the facts, says Hermann. He often sees this when he works with clients to help them fund their children’s college education in the most tax-efficient manner possible. Once in a while, some clients say they don’t intend to fund their children’s education—that it’s their child’s job. Rather than presenting opposing arguments, Hermann simply asks more questions to help clients better understand why they feel as they do. “I never disagree. I simply ask more questions. Everybody’s situation is different,” he says. “The older I get, the more I have learned about not being judgmental. I try to ask a lot of questions and put myself in their shoes—whether I agree with them or not.” Hermann developed this approach intuitively and has refined it with the help of guides such as Larry Wilson’s Counselor Selling Program.
Digging deeper
The consultative approach shows commitment to clients, especially those who enter into a conversation already convinced of their needs. “I’m not a very good order taker,” Hermann says. “When a client says he needs a million dollars in life insurance coverage, he might, in fact, not need any additional coverage. On the other hand, a $1 million policy might be sorely inadequate or perhaps there’s a more appropriate solution than life insurance. Hermann says he can only determine such needs by asking a lot of questions.
Ties that bind
While a basic factfinder can serve as a starting point, empathy stands at the heart of effectively assimilating all information necessary to develop “solid, ironclad cases,” Hermann says. “When I meet with someone, I say to myself, ‘What can I do to help this person to be in a better place than he is today, regardless of the issues that he is dealing with?’”
Hermann listens to clients intently to offer solutions. “Sometimes the solution is based on a financial product, sometimes it’s a referral to an attorney, a CPA, a physician or another professional,” he says. Even if the client walks away without making a financial transaction, the time is far from wasted; empathy and connectedness have a far-reaching impact on clients, even when the benefit isn’t always immediate. “When it comes time to do what you do best, you can count on the fact that clients will value the solutions you offered and will think of you,” says Hermann.
Lisa Wahlgren is a contributor to Advisor Today and YAT Chat.
MAY 2006
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