Financial conversations often spark powerful emotions. While a client may come to an advisor for financial advice, many times advisors and clients end up having deep “counseling-like” sessions. In some cases, a financial advisor may be the only person with whom the client talks about his or her finances. Talking about money is often difficult, and many clients want an empathetic advisor to understand them holistically and offer them sound financial guidance and advice. This behavior will help the client trust, confide in, and connect with their financial advisor.
Empathy is the ability to understand and share the feelings of another person. For an advisor-client relationship, empathy means listening to clients. When listening, an advisor should actively notice the non-verbal communication cues in addition to the client’s spoken words in order to fully understand the client’s needs.
This form of active listening establishes a critical connection. An advisor should also communicate his or her understanding of the situation to ensure there are no misunderstandings. Again, this will serve to deepen the connection between the advisor and the client.
Empathetic advisor-client interactions can open lines of communication that may not have been present in a non-empathetic relationship. This communication can lead to better client engagement and collaboration. The client may feel more comfortable to open up about other financial worries that they may not have mentioned before. Thus, the advisor will be able to service the client better than they would have been able to in a more traditional environment.
Why is Empathy Important?
Empathy leads to open lines of communication which, in turn, leads to a positive client experience. A client who appreciates an advisor’s services and their relationship with an advisor will most likely become a “fan” who will share this positive experience with others, thereby leading to referrals and a growing client base.
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