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As I have said before on this site, the model where emotions and finances are in separate corners just isn't working anymore, for clients or for planners. What I know, as a psychologist specializing in the psychology of money, is when we talk or think about money, very powerful feelings come up in everyone.

Of course, clients come to advisors for financial advice, not counseling, but feelings are in every interaction between advisors and clients, and I do mean every interaction.

And it is likely that advisors are the only ones who clients ever talk to about money, the most stressful of topics, in a serious way. Actually, talking about money is so difficult that many people can't even get themselves to an advisor. So those who do overcome these emotional barriers and walk into an advisor's office want empathy (in addition to sound financial advice and guidance). An empathic advisor understands clients more holistically, including their emotions, and makes talking about this topic easier. Simply put, clients need and want an advisor who they trust, can confide in, and connect with; an advisor who approaches the relationship with empathy.

What is empathy?

"Walking a mile in their shoes" embodies empathy. Empathy puts us in the situation of the person we are with. It is different from sympathy, though often confused. Where sympathy is feeling compassion, sorrow and pity, empathy is much more than that.

Neuroscientist Giacomo Rizzolatti, M.D., along with his colleagues at the University of Parma, identified specific brain cells, mirror neurons, designed to help us "read" other people, i.e., feel empathy for them. Mirror neurons do the following: when we "see" others experience an emotion through their words, facial expressions, voice and body language, our neurons send signals to help us feel and know what we perceive their emotion to be.

Empathy is so essential to human communication, connection and overall functioning that we have many mirror neurons. We are born with the "tools" to be empathic. It is now thought that between 10 and 20 percent of our neurons have mirroring functions. That means up to one-fifth of our brain is involved in empathy and in helping us understand and relate to people's feelings and thoughts through verbal and non-verbal channels. And what is even more encouraging is that with practice and use, mirror neurons grow and develop.

Simply explained, empathy is a two-step process.


Step 1: Understanding and knowing the person in front of you

At the core of empathy is listening, but listening to more than just the spoken words. Words actually communicate only 7% of meaning in conversation; yes, only 7%.

I call this the 93% rule. 93% of meaning is communicated non-verbally, that is through the following:

  • facial expression — overall, eye contact and mouth position
  • voice quality — tone, intensity and pace
  • body language — position and gestures

So, when listening, we need to actively notice non-verbal communications, in addition to words, or we are missing the boat and not fully hearing what the other person is feeling, meaning and communicating.


Step 2: Reflecting back, mirroring, feelings

Once you listen and understand more about what your client is feeling, now the connecting step of empathy occurs. At this crucial step, you tell your client how you understand what he is feeling, to check in on understanding and correct where necessary, and importantly, so he feels that you understand and know him.

This is where deeper connection takes place. The beauty of reflecting is you don't have to be right, because checking and correcting your understanding is empathic and helps you get to know the person better. Phrases like "I think you're feeling worried about your retirement, can you tell me more?" or "I'm hearing you feel scared to move ahead with this plan. What are your thoughts on that?" are reflections. I suggest more phrases at the end of this article.

I know these phrases may feel and sound foreign or stilted, but even so, most people still appreciate your efforts to understand them and end up feeling more connected. And I promise, the more you practice, the easier and more fluid it gets.


Why do financial planners/advisors need to be empathic?

When we say we need to understand and be empathic, how exactly does this work with your clients?

Fast-forward to a client meeting. Your clients are not only what they present to you outwardly. Your clients come to you with lots of different feelings, thoughts and behaviors, and all of these feelings influence and shape their experiences and reactions with you. These underlying feelings also influence what they do both now and later.

These inner feelings are not necessarily outwardly expressed and known to you or to your client at the start. For many reasons, we present ourselves in different ways and share different feelings in varied situations. Think of how you act, feel and what you share with your family versus your boss, your clients or friends at a party.

As an advisor, it serves both you and your client to better understand and speak about these inside feelings. If not recognized or known better, these feelings will impact what the client does without you knowing it. For example, he or she may agree with you in the moment and then go home and do something else entirely.


Practicing empathy can improve your business, for the right reasons

Studies have shown what makes intuitive sense: increasing empathy can lead to a more successful business.

And importantly, by working on the relationships and connections with your clients, which empathy can support, your work can be more meaningful. It can help keep clients with you during the inevitable downturns in the markets and the economy. And importantly, it can help prevent burnout, since your relations with clients will be stronger.

Tips for Practicing Empathy: Deepening Authentic Trust, Confidence and Connection with Clients

1. Adapt your mindset:

  • Recognize and focus on the personal and relationship side of planning. It's key to effective planning and to growing your business.
  • Practice Empathy. Understand your client holistically; that is, understand his/her feelings. Then communicate your understanding back to your client. This is key to connecting.
  • When you connect person-to-person, clients trust you and act on your recommendations (increased sales), stay with you longer (loyalty) and send their friends, family and colleagues to you (referrals).
  • Intentional focus on empathy and the personal side requires attention but little capital investment, and is enormously impactful.

2. Every client transaction is shaped by your relationship

  • Every client transaction is an interaction
  • Each contact is personal and interpersonal

3. Listen and connect personally first, talk product later

Focusing on transactions too soon is off-putting. Listen more, talk less. This seems counter-intuitive to giving advice, but it truly does develop connection.

4. Empathy: Active listening/active reflecting of feelings

Step 1. Understanding and knowing another's feelings through active listening;

Step 2. Reflecting back, mirroring, feelings to the person to check if you understand the feelings correctly and so s/he genuinely feels known, understood, heard and seen by you.

Active Listening. The 93% Rule. "Listen" to Non-verbal and Verbal Communication

Non-verbal Communication. Facial expressions, voice (tone, pace and intensity) and body language communicate 93% of your client's feelings, thoughts and meaning; words communicate only 7%.

Verbal Communication Questions. Words are still important, and here are some questions to help you better know and understand your client. (See last article for other helpful questions)

  1. Who's in your extended family? Tell me about your work? Outside interests? Communities or groups important to you? What do you hope for and worry about in life- for yourself? your children? your partner? your parents? your communities? others important to you?
  2. What important life events are coming soon? later? and much later?
  3. How can we connect your personal and family hopes, worries and events with your financial plans?
  4. When do you find you need financial advice? When would financial advice help (i.e. before college, retirement, bonus time, weddings)?


Active Reflecting

  1. "I think you may be feeling [describe feeling]; can you tell me more?"
    For example: I think you may be feeling worried about your retirement; can you tell me more?
  2. "I'm sensing you may feel [describe feeling]; can you tell me about that?"
    For example: I'm sensing you may feel confused about our next step; can you tell me about that?
  3. "I'm hearing [describe feeling]; Does that sound right or wrong?"
    For example: I'm hearing excitement about moving ahead with this purchase. Does that sound right or wrong?

How to use empathy in a client situation

  • What is your client's face telling you? Is he or she smiling, frowning, or neutral, and how do their expressions change depending on the topic?
  • Does her eye contact show connection and comfort, or is she looking away, perhaps communicating avoidance or discomfort with a recommendation?
  • What is her voice tone, pace and intensity telling you? Is she using words that indicate she agrees with your suggestion, but her tone of voice is bland and quiet, indicating disinterest or lack of conviction?
  • What are his body position and gestures? Is he leaning in, thereby showing interest? Shaking your hand with both hands, showing trust and connection? Or are his arms crossed over his chest and his body position turned away from you, likely communicating a block to something going on? Are his hands unconsciously covering his mouth, perhaps indicating hesitation to speak about something you are proposing?

The views and opinions expressed herein are those of the author, who is not affiliated with Hartford Funds. The information contained herein should not be construed as investment advice or a recommendation of any product or service nor should it be relied upon to, replace the advice of an investor's own professional legal, tax and financial advisors. Hartford Funds Distributors, LLC.

Hartford Funds is not responsible for, and does not validate, any information, opinions, assertions, or statements expressed within these articles, or the identity or credentials of the individuals communicating through the site. Some of the articles may contain links to information created and maintained by other, unaffiliated organizations and individuals. Hartford Funds does not control, cannot guarantee, and is not responsible for the completeness, accuracy, timeliness, or the continued availability or existence of this outside information or the information presented herein. This material is intended for use by financial professionals or in conjunction with the advice of a financial professional.


About The Author

Clinical Psychologist, Ph.D., expert and speaker, specializing in the intersection of money, psychology and life. Dr. Nusbaum works with individuals, families and organizations on the impact of the emotional/psychological side of money.

She has appeared as an expert for The New York Times, CBS News, Forbes, The Wall Street Journal, Bloomberg, Money Magazine, and DailyWorth.

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