Why is it important for advisors to uncover emotions behind the money? Presentation shared with woman in financial and insurance industry February 2018.
2. Observations
Financial advisors benefit
from having uniquely
different conversations to
attract and retain desired
clients
Client satisfaction rises
when authenticity comes
into the conversation
3. Agenda
• Emotions behind money
• One’s “Money Story”
• The overwhelming task of trying to take control
of finances
• What keeps clients stuck
4. Think about your current money situation …
What emotions come up?
5. Myth
• Money is money
• Emotions are emotions
• Emotions and money are two separate things
IN FACT, MONEY IS EMOTIONAL!
8. Have you ever had a client
you help consolidate debt,
only to just end up right
back where they started?
9. Have you ever had a client
you help consolidate debt,
only to just end up right
back where they started?
They never
dealt with
the emotions
that got
them into
debt in the
first place!
10. What about the client, sitting
on cash, paralyzed to reenter
the market even though they
know they should?
11. What about the client, sitting
on cash, paralyzed to reenter
the market even though they
know they should?
Help them uncover the
emotions that feed
their fears!
12. Or the client that earns
large annual bonuses,
but never seems to have
money for things they
truly want?
13. Or the client that earns
large annual bonuses,
but never seems to have
money for things they
truly want?
You can guide the client to
soul-search, uncover their
true goals, and set a plan!
16. Fostering an honest
discussion of emotions
with your client:
• Makes you more
valuable to the client
• Gives you a
competitive edge
17. Fostering an honest
discussion of emotions
with your client:
• Makes you more
valuable to the
client
• Gives you a
competitive edge
• Engenders trust and
deeper, higher-
quality relationships
21. Why uncover
money story
Part of
identity
Solutions that
address
money story
Couples have
different
money stories
22. Questions to
uncover the
money story
• What is your first memory of money?
• What did your parents teach you about money?
• How does that play a role in your financial
decisions today?
• What is your financial mulligan (do over)?
• Describe your current financial situation
• Describe your ideal financial situation
27. Client must juggle…
Budgeting
Needs versus wants
Budget savings
Intentional spending
Income
Glass ceiling
Assets
Categorize money
• Short Term: Working Capital, Incidental, Joy,
Emergency
• Intermediate
• Long term
28. Client must juggle…
Budgeting
Needs versus wants
Budget savings
Income
Glass ceiling
Assets
Categorize money
• Short Term: Working Capital, Incidental, Joy,
Emergency
• Intermediate
• Long term
Debt
• Perception of debt
• Save your way out of debt
• Stabilization
• Elimination
• Debt Free
29. Client must juggle…
Budgeting
Needs versus wants
Budget savings
Income
Glass ceiling
Assets
Categorize money
• Short Term: Working Capital, incidental, joy
and emergency funds
• Intermediate
• Long term
Debt
• Perception of debt
• Save your way out of debt
• Stabilization
• Elimination
• Debt Free
Core Emotions:
Joy, connection,
rejuvenation
OR
Fear, scarcity, deprivation
30. Next Steps
• Define your own money story
• Ask clients questions to
uncover their money story
• Start asking open-ended,
probing questions for authentic
conversations:
• Why is that so important to
you?
• Tell me a little more about
that.
• I’ve heard a lot of people
say that … can you explain
it to me?
31. Coaching &
Training
Resources
If you like what you heard here
today, share my information
with your friends and
colleagues to have me talk to
your organization.
Training CoachingLiz Kitchell
Liz@lizkitchellcoaching.com
(513) 638-1942
Notas do Editor
Thank you for taking to hone your skills. Some of you will learn things for yourself today, others will learn things to utilize with your clients, and hopefully all of you will do a little of both.
In my 25 years of working in the financial industry, I have made many observations. The observations listed on this slide are the most unique.
Women advisors are in a great position to have authentic conversations. It is a great way to attract new clients and well as increase your client satisfaction, especially with your female prospects/ clients. Millions of dollars is about to land in woman’s hands… there is a reason people are saying the future is female.
Authentic conversations could also separate you from your competition, since not everyone is doing this.
As advisors/agents, what do you think? Do you think YOUR job satisfaction could rise as well?
(Use this slide as a white board or have participants grab a piece of paper)
Think about your current money situation. What emotions come up as you look at it? Write them down.
Now, look at each emotion. Label each emotion as an emotion closer to Joy or Fear.
What do you see?
Emotions that are closer to fear are worry, overwhelming, fear, jealousy, greed, powerless, victim, insecure, not worthy, blame
Emotions that are closer to Joy are hopeful, enthusiastic, empowerment, freedom,
Feelings can be temporary about money (like getting a raise making you happy) but emotions stem from long seeded thought patterns from family and society. Thoughts like there is never enough.
Many people think that
Money is money
Emotions are emotions
Money and emotions are two separate things and emotions need to be kept out of money but in fact, money is emotional.
Let me tell you a story
My husband is a research professional who started his career long ago with a sweepstake company and I bet you can guess which one. He basically did statistical analyses, plus qualitative research where he'd interview customers and prospects about their mailers, their television commercials, online content, all sorts of things. There was one project that stood out most to him: a set of one-on-one interviews that sought deep understanding of why people entered sweepstakes. Now, however you feel about contests and sweepstakes, the main finding was one that shook him up: one after another, these people said it. People enter sweepstakes with the hopes of erasing mistakes in their lives. You'd probably get the same feedback if you ask those who play the lottery. How emotional can you possibly get about money: hoping for a giant windfall to somehow make up for all the criticism they've piled on themselves over the years. Think of the rabbit holes people go down, the guilt associated with money, and the joy at the thought of somehow paying back debts that may not even exist in reality.
Let’s take a look at why we should acknowledge our client’s emotions behind the money.
You could ask a client what emotions do you have around money but they may not be able to answer or find the question weird. So instead hover over their money story which will give you insight to the emotions behind the money.
What is a money story?
When similar events are repeated over and over, they create stories we believe to be true, our perspective. We consider these perspectives to be true and are surrounded by deep feelings that created unchanging beliefs in our lives.
Example:
I must work really hard and give up my work life balance to make that kind of money
The more money I have the happier I will be.
It is more important to be safe and secure than happy.
Their money story is part of their identity (whatever story they believe, they have believed for decades and you will not be able to change their perspective in 1-2 meetings) so it is every important to understand their money stories and build a solution that addresses it.
If partnered or married, rarely do both parties have same money story and you need to make the plan work for both people. Many couples do not talk about money much less their money stories. So as you discover their money story, follow up with questions like “Why is that so important to you” Tell me more” This way the other spouse can hear the narrative their spouse tells themselves. It increase a level of understanding and help when you present solutions or even become your alley when presenting solutions.
There are many more questions than these to gather a money story but this is a good place to start. As I read the above questions, think about how you might answer them.
It might be necessary to look at both parents (of your client) philosophies about money, spending patterns, income potential, and overall did they live in abundance mindset or scarcity.
Children will often take the same thought patterns as their parents. It is also possible to make a vow to be completely opposite of their parents. Whatever they tell you is their money story, this is something they believe and you will not convince them otherwise in 1-2 meetings. So your solution has to address this money story.
You have to do it for yourself first – you can do this on your own – it’s helpful for you, and will prevent biases.
Define your own money story
How would you create a solution if you were your own client
Check your money story when talking to clients so you not project – proceed with a “sociological imagination,” or the idea that everyone has different formative experiences
As I mentioned earlier, whatever we discover about their money story, needs to be addressed in the solution we put together for them. Their money story has been with them their entire life and you will not be able to convince them otherwise in 1-2 meetings.
Money Stories are beliefs and show up in many areas of their life. Let look at several areas where they may show up.
We are going to talk about 4 money categories that clients (but really everyone) must juggle… emotions and money stories can play a role in each of these.
Budgeting is really about consciously spending and writing everything down. There is something powerful in realizing everything you can buy and do with your money. Budgeting is not going on a diet but consciously making healthy changes in spending habits. No more unconscious spending but transition to intentional spending.
Needs versus wants – As advisors / bankers you know this conversation better than anyone yet some “wants” really should be “needs.” Example. Eating out (story). When you see a client who spends significant money on something, ask them what the purchase gives them? Then follow up with asking “why is that so important to you?” So when a financial advisor tries to help a client save more money a month, they often look at eating out budget first and as we heard that does not always work. Once we know the core emotion (joy, connection, rejuvenation) being met by the spending, then brainstorming how to meet that need and save money can happen.
Be intentional about spending and learn to prioritize – end unconscious spending. Often times people need the newest iPhone, beautiful shoes etc. If we make the purchase but then feel guilt 5 days later or that purchase make us feel deprived than we unconsciously spent. Sometime we spend the money to fill a hole in our life. That thing is not going to fill the hole. Instead, do something that makes you feel connected to people…that is more likely to fill the hole.
The only thing you need to know here, is that people have ideas (not always conscious ones) about how much they SHOULD be making.
Some people feel like if they earn too much money, they’ll be ostracized from their social group, potentially seen as an income source for others, or maybe even a “sellout, working for the man.”
Others might feel stuck at an income level for years – they basically plateau – without the realization that with some simple coaching, they could earn more and realize their true potential. I have helped many advisors break through their plateau.
Just like budgeting, assets takes some discipline to get it right. Most people get their first job, open a checking account and if they do it right start saving for retirement. Eventually they get emergency accounts but they do not always save money in the intermediate accounts (money that you may use within 2-10 years) unless they are financial savvy or work in the industry. This is where true freedom comes.
To make it easy to save in those intermediate accounts, it would be great to get people to budget so they can automatically invest in those taxable accounts and to do that, we often need to help them organize and label their short term accounts.
You are pretty familiar with aligning accounts with goal for intermediate and long term goals but lets look at the short term…the money that will be used within 2 years aka working capital.
People benefit from having 4 accounts in the short term category:
Working Capital – Income in, bills out
Incidental – allows you to save weekly or monthly for annual bills and budget for servicing the car once a year or unexpected expenses like house maintenance
Joy – allows you to budget saving for vacations, education classes, anything that brings you joy, rejuvenation and connection
Emergency – 6-12 months living expenses
If people do not have enough money to have 4 accounts and not be charged fees, they obviously need to combine accounts.
When it comes to debt, one of the first questions is, what is the perception of your debt? Listen for emotions and stories.
Not all debt is bad, some debt was meant to build dreams which otherwise would not have been possible. Yet over time, this debt might weigh someone down. Sometimes, we just have to help clients change their perception of debt.
If after the perception conversation, the debt is still weighing someone down, like credit card debt. Understand the emotions that got them into debt in the first place, help them stabilize debt, establish debt elimination strategy and stay debt free. The emotions that got them into debt in the first place need to be addressed in the debt elimination strategy.
Saving your way out of debt in a great strategy. It is about creating an incidental account while stabilizing debt. The secret is to aggressively save in the incidental account while paying the minimums on all debt so you have cash available if an incident occurs. Once there is a significant amount in the incidental account, lower the monthly savings into the account (unless you have an incident than raise the deposits again to aggressively save again) and spend all other extra cash on your debt elimination strategy.
In each of these categories there are money stories that play a role as well as emotions that can keep people stuck…. Hovering in conversation and asking the questions “tell me more” and “why is that important to you” helps you figure out how to move the client away from being stuck. Once you know what is keeping them stuck, you can brainstorm ways to fix it, like the eating out story I told earlier.
We talked today about the why.. Why is it important to understand clients emotions around money. If you want to hear more about the how and what to do with that information, reach out to have me talk to your organization.
Training: Sales, Best Practices, Emotions and Investing, How to mentally & financially preparing for retirement just to name a few
Coaching: Coach producers or managers to have their best year and remove any blocks from breaking their personal glass ceiling