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AICPA Personal Financial Planning (PFP)
The Power of Client Communication: 4S Framework for Financial Planners {PFP Section}
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- [00:00]
A
Welcome to the AICPA's Personal Financial Planning Podcast. This is Kerry Sinnott. On behalf of the AICPA Personal Financial Planning Division, the home for professional personal financial planners, we're happy to bring you thought leadership from experts in tax, retirement estate practice management, investment risk management and client relationships. Be sure to Visit us@aicpa.org Pfp to find more resources and tools designed to help you deliver premier financial planning to your clients. Today we're joined by Mark Gochnauer, head of Global Client Services at Dimensional Fund Advisors. Mark leads the charge in crafting and delivering Dimensional's premier client experience, including the flagship Dimensional360 service designed to empower financial professionals and investments, communication and organizational strategy. Mark, with a career spanning over three decades, your journey began at Deloitte in the 80s, right before transitioning into corporate finance and joining dimensional over 25 years ago. So you've been there for a while. Mark's a CPA and a cfa and he brings a wealth of expertise and passion for positively impacting financial professionals and investors alike. So get ready for an enlightening conversation with a true leader in the financial services industry. Mark, can you lead us into a discussion about what makes client communication so valuable?
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B
Absolutely. And hey, thanks for the reference. On my Deloitte days too. I am a CPA at heart and always will be and so there's fewer and fewer of us, it seems, out there. Always proud of that though.
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A
Yeah, absolutely.
- [01:47]
B
I love the topic communication. I guess in my experience it's fundamental to everything in life, whether when things are going well, you probably communicated properly, when things probably aren't going as well, you know, it probably wasn't there as well as it should have been. And by that I mean your family, your kids, spouses, coworkers, whomever. I think it's just core to what we do in our day to day lives as it applies to our businesses. It is so incredibly important. And I loved how we were even just talking about it. Like, why is it so important? I think two things jump out to me on that one. I think one is just the fact that you have a message you want to get across to your clients and it doesn't matter the business or service or product you're selling or delivering, you have to get a message across. So you gotta figure out ways to where it comes across, where it's understandable, digestible, makes sense, and it's what they're looking for. I think the other part of this, which is incredibly important too, is it allows you to engage with Your client. It allows you to deliver who you are as a person and what you care about and why you're doing what you're doing and so passionate about it, which I think is incredibly important when it comes to closing a prospect or just even keeping that relationship with your clients. They want to know who you are.
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A
That human connection.
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B
Right, human connection. Spot on. Spot on. And I think, and we'll come into this a little bit more, but I think in today's world of, particularly in the financial advisor, financial planner side of the business, you think about all the different ways that's being delivered in terms of the channels, whether it's an independent advisor, maybe through a broker, dealer, banks. So much of what all say investors are hearing, it all sounds the same. Similar services, similar products being used. How do you differentiate yourself then among that marketplace? And I think communication is the key to be able to do that.
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A
Excellent. How do CPA financial planners really focus on their client communications? What things should they be thinking about?
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B
Let's start with, I think, the challenges that we all have in it. And I think inherently we all know it, it's just really difficult to overcome it. I say difficult because it does take a lot of time and practice and thought to become an effective communicator. But if you think about the things we struggle with, here's what's always top of mind for me, and I'll say it's the same thing I've been through myself, is we have a tendency just dive into the details. And that may not be necessarily what I'll say all clients or prospects are looking for. I love the word you used earlier, which is experts in financial planning, tax, investments, whatever it is. And as experts, we just love to talk. We love what we are interested in and we want to show that excitement to others. And that's usually a challenge when it comes to effective communication because it's usually too deep, it's usually too technical, and it's not necessarily what a client's looking for. So I think that's always got to be top of mind is what is it that's going to engage? What is it the ultimate client's interested in? Not necessarily what we're interested in, in communicating. So I think that's really the key is just being careful about not going too detailed. There's that great analogy of an iceberg. You see an iceberg, most of it's underwater. Just a little bit of it's above water. And I think that's a good framework for thinking about communication. Start with above the water start with the high level stuff. And if a client or prospect wants to go deeper, they'll let you know. But I wouldn't start down too deep. So I think just be careful not to get too technical. I think the other thing that you gotta be careful about is not using too much industry jargon. We're talking among our peers and things like that, and we use jargon that way, that's okay. But a lot of times people don't know what jargon means to them. We've done some studies here at Dimensional around that where we've gone out, we've engaged some folks to go out there to end investors and say, hey, what do these words mean to you? And one of them was active management, passive management. And the investor said, give me a positive rating, I don't know what it means or a negative reaction to it. And so the idea of, okay, active management, do you think people react positively to that or negatively to it? Pretty positive, because it sounds good, it sounds like something's happening. We ask the same question for how do you react to passive management? And in most cases, like two thirds of the case, it was a negative reaction because it sounds like nothing's going on. Another one we asked, now this is one thing that I've observed over the years that is on websites, it's on conversations, dialogues. Everything that I hear investment professionals communicate is we are fiduciary. That's what we do. We are fiduciary. And we asked that question in that same study. What's your reaction when you hear the word fiduciary? And I'll just ask the audience is if they're right here now, what do you think the response was? In the high majority of cases it was, I don't know what that means. Everything that we do. So just, we got to be aware of that kind of stuff and put the words into something that's going to be meaningful for our client or our prospect.
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A
So that makes so much sense. If I'm a prospect, if I'm at somebody's office or we're just meeting virtually and they're talking about a technical aspect of what's important to me and using jargon, I can't really, it's hard for me to understand what is the solution in my life. So what I heard you say and just correct me if I'm wrong here, is really taking that technical information, that jargon, and making sure that it's understandable to the client, maybe moving above that technical level and just talking about the big picture until you need to dive into the more technical aspects. Is that right?
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B
Absolutely. Make sure it's understandable, make sure it's relevant to them on what they care about. And I totally agree with what you just said. There is. If it's too technical, then they're going to say, this person's not hearing me and what's important to me. And then secondly, I find people tune out when it starts to get a little technical. They just drift off and thinking about other stuff and not paying attention. So what can you do to become a more effective communicator? What can you do to become engaging and again, build that rapport that we talked about earlier? So we've been at this for a while here at Dimensional, and I feel like we've created a framework that is incredibly effective to think about how to become a better communicator. It was designed by our colleague here at Dimensional in our London office, a guy named David Swanik. And the framework, I believe, works for any industry, any service, any product, as a way to prepare yourself to communicate whatever it is you are wanting to communicate to your client or your prospect. So we call it the Forest Framework.
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A
Oh, yes, I think I've heard about this framework. It's a real game changer in the way that we communicate with clients. I'm excited. Tell me the 4S framework.
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B
Oh, it absolutely can be. So there's 4S's to it. The first one is scripts, the second stories, sketches and then supplements. So let me just walk through each one here. So the first one is scripts. And what do I say when I want to deliver a message or my value as a professional? What do I say when I get certain questions? How do I answer those questions? There's a tendency when you hear the word script as if it's memorized. That is not at all what we're saying. But you've got to be prepared for whatever question comes in. You just got to know your two or three bullet points and how you're going to address that particular question.
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A
So really just thinking about what you're going to be saying to pretty normal and common questions that come up and have that prepared rather than winging it.
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B
Absolutely. And that's the key, is you got to be prepared, which means you got to invest the time, the mental capacity. You got to do some dry runs with your colleagues, your staff, your spouses, whomever, to get practiced up. That's a big part of it. To get really good at it is to practice and practice so you're ready to Go. When you get these questions, the next one is storytelling. And this is for me, and what I've experienced dives into how do you become more engaging? How do people understand who you are and why you care about what you're doing? So there's a couple aspects to that. One is telling your personal story. Hey, here's a story that happened to me that got me so interested in this profession. And if you'll bear with me, I'll even tell you my own personal story, why I'm so passionate about the role of the advisor. I'm so passionate about what we do here at Dimensional because I've seen it firsthand when you get bad advice, when you have a bad investment experience. So I'll just tell you my quick story as an example of how you can use something very quickly. When I was a kid, I grew up in Idaho. My dad was an orthodontist, and my mom and dad were tremendous savers, very disciplined with their saving. They were certainly that borderline of cheap to frugal.
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C
They.
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The only place they spent money was on their home. It was a dream house. They had it built. It was on five acres. It overlooked the valley, right on the Boise River. It was a beautiful place. When I was in high school in the early 80s, my dad got in business with this guy. They created a partnership, brought up a bunch of properties. The guy did some fraudulent things. Turned out my dad was a general partner, and so he was liable for all this stuff and ended up losing a million bucks.
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A
Wow.
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B
A million bucks today is a lot of money. A million bucks back in the early 80s was a whole bunch of money. And I'll never forget sitting around the dinner table, there's my mom and my dad and my brother and sister, and obviously me and my dad just walking through, here's everything that happened. Here's how much money we lost. Here's what's going to mean for the family. He goes, but I think we're going to be able to keep our dream home and not lose the house. And he just had that bewildered look of, I did everything right. I worked hard, I saved hard, I made one bad decision, and this whole thing is unraveled. And you think about that million bucks. If he had a member of your audience, one of the advisors, financial planners, that actually got him away from doing something that he did into, we'll just call it a balanced portfolio, half stock, half bond, be worth over $35 million today. And if they had that, the stress, the anxiety, the worry they went through, didn't have to happen. What they could have done from philanthropy could have been really cool. Most importantly, 35 million divided by three siblings is a big number. So they hosed us. But I share that story because again, that's why I have so much passion around what advisors do and why they are the most important part in somebody's financial success. I'm so passionate about what we do here at Dimensional, about delivering outstanding investment solutions, because I've seen firsthand the impact it has on families when it goes the wrong way. So to me, that's an example of a personal story. Now, here's why I think it's so important for professionals to share their personal story is because I suspect maybe you, Carrie, maybe folks in the audience, when I was telling that maybe they thought about their own family members, maybe thought about one of their clients or somebody that happened to have and also a bad experience. That's the beauty of storytelling, is when you're doing that, you insert yourself into the story, the audience. When that happens, then it becomes more emotionalized. And when that happens, then decision making becomes easier, then decision making to okay, this is why we have to go get this document signed, or this is why you have to stick with your plan and stay in the market even though it's a tough time and not go to cash. Those are decisions that are being made there. So that's where storytelling can be incredibly impactful and it's how our minds are wired anyway over time. Thousands of years before there were books and people were illiterate, that's how information was passed down through stories and drawings. So that's why I think our minds are aid to it. So storytelling, again, it's a way to communicate who you are and why you're passionate. It's not just, hey, this happened to me or somebody I know in a personal story. It could be also about how you got into the profession, but also why you stay in the profession. Maybe you just got the job, but there's something you've seen that you care about is why you care about this job. And you come in every day and you're passionate about what you do for your clients. So that's the power of storytelling. We're actually going to I'll mention this. We are hosting the AICPA Summit in our Charlotte office in January. I'll be out there. My colleague Jake De Kinner is going to be out there and we're going to do some sessions on effective communication and spend quite a bit of time on your personal story.
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A
This is wetting our appetite for even a deeper dive. I think the summit is January 26th through 29th and of course you can sign up on the AICPA website. Thank you, Mark, so much for hosting the event. Looking forward to being able to dive deeper into having your script ready and how to prepare your story and really just share from the heart. The human connection is so important. There are two other S's too. I don't want to miss those.
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B
Yep, the storytelling. And then the third one is sketches, which is how can you effectively draw with a client or prospect. Get out a yellow pad of paper, draw a few things. Maybe it's up on a wall, whatever it is. But that can be very engaging because it allows you to co create the story together again. I think our minds are wired that you go back in time, there's always these drawings on the walls of caves and things. Just because that's how information was passed along. It's a great way again to keep people engaged, stop, ask questions. And then the fourth one I'll mention here is just supplements. There's still a time and a place you want to hand something out to a client, something tangible they can put their hands on or visual aids and stuff like that. So supplements, incredibly important. So that rounds out the four S's and we'll dive into that a lot more there in January, particularly around the personal side of storytelling.
- [15:13]
A
I am excited about that and to hear more detail about that and how to maybe even practice on each other at the summit by sharing our story and why we're passionate about doing this job. That sounds pretty great, Mark, and it's pretty powerful. I'm sure you've seen where implementing this framework of the 4S has made a difference. Can you tell us a little bit about that?
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B
We have certainly now one of the things we will do. And by the way, thanks for mentioning those dates. And I'll say thanks to the audience for those that are traveling out there. We appreciate you coming out and we'll make sure it's a great use of time for you. One of the things we'll challenge everybody on is I think we all have a tendency to say, I've done hundreds of meetings, I just go back to my normal here's what I say and here's what I do. But we're going to try to push people a little bit to say, come out of that box and really spend the time and effort and thought to how do I get better and better and differentiate what I do? Because we owe that to our clients and we like to give the example of for most of us that have had kids, you haul them off to practice, whether it's sports, dance, cheerleading, whatever it is, two, three times a week and then they perform on a weekend. Are we putting that kind of practice into what we do every day as professionals? I think most of the case we don't. We just do what we do. But I think we all owe it to our clients to practice on each other, get better in our craft and in what we do. So we're going to do some of that. And you're absolutely right. We're going to do some breakouts. We're going to have people practice their personal story with different people and ask for volunteers to share it because again, that is how you can connect with an audience. And we've seen it firsthand with that we've had anecdotal stories. I see notes that prospects and clients have written to advisors saying thank you for sharing that with me. It just really resonated on X, Y and Z because we all come from a different place. And again, I think in today's age that's how people want to know who they're working with. As a professional, what makes you tick. I think the other thing and I just had this happen to myself, I do a talk around my personal story, my parents story, more of an investment journey and happened to have a. There was a writer for the New York Times happened to be in Saw that day and they ended up doing article on my parents and they specifically said we hear the concepts all the time but to be put it in a story that's going to be relatable to our audience, that's what we're looking for. So again, to me that was just an example I've had too on the power of story because that's what engages with people.
- [17:37]
A
Absolutely. And of course that's what people remember. They're not going to remember every detail of the technical information. That's what we get paid for. They're going to remember your story and how it relates to their lives and that you are a human that cares and can be connected with and also provide a really valuable service. Mark, thank you so much for sharing with our community of listeners. Our hope is that our listeners get a valuable takeaway. And of course, if you'd like to check out the show notes, you're going to find resources including information about the summit that's happening in January. Thank you so much to Dimensional for hosting and to do that you can go to the AICPA pfp section@aicpa.org pfp and we'd love to know your speaker and topic ideas for future episodes, so feel free to send an email to financial planningicpa.org if you get value from this podcast. We'd appreciate your support by following the podcast in your favorite podcast app. So thank you for listening and I look forward to next time. Mark, thank you so much. Look forward to seeing you at the Summit in January.
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B
Absolutely. Thanks for your time. I appreciate you having me on. I look forward to seeing everybody else out there as well. Take care.
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C
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