Most financial advisors thrive on the feeling of success that comes from guiding a client through discomfort, helping them stay rational and true to their values as they achieve their goals. Many advisors are also well-acquainted with that visceral feeling of failure and discouragement that comes when a client’s stress or fear of uncertainty affects their decision-making, disrupts their progress and leads them off track.
As an advisor, you want to be a leader, and clients hire you to lead them toward their goals — as they align their real selves more closely with their ideal selves. That’s the foundation of the behavioral finance approach: helping clients clarify their values and make financial decisions that can empower them to realize their vision for life.
While it’s human nature to try to make sense of others’ desires, it’s more productive to focus on the role of core values in making steady progress and facing the sometimes uneasy feelings that life can bring, so that you can grow as a leader — and in turn, help your clients stay the course toward their goals.
The closer you move toward your ideal self as a leader, the more effectively you can support clients’ progress toward their goals, too.
Growth Requires Leaving Your Comfort Zone
It’s a paradox of the human condition: While most of us claim to prefer growth over stagnation, as humans we’re wired to seek comfort and avoid situations that make us uncomfortable. The trouble is, those tough moments are often growth opportunities. That’s according to Think2Perform Senior Vice President Ray Kelly, speaking with Make Your Ideal Real host Ryan Goulart.1
That discomfort is a real, neurologically driven, physical experience in our bodies. Think of the last time you stood near the edge of a cliff, or peered down from the window of a tall building. Those physical feelings — clenching muscles, even nausea or vertigo that accompany stress, anxiety and fear — are the body’s way of telling us to seek safety.
Effective leaders understand that unaddressed discomfort can derail people’s progress toward their goals. Recognizing when your client’s rational mind needs encouragement, and when the irrational needs to be calmed, requires you to keep a clear and rational mind yourself so you can step in with confidence and have the tough conversations that clients may need to persevere through discomfort and grow.
WDYWFY: What Do You Want For Yourself?
If you want to empower your clients to more closely align their real and ideal selves, it’s important first to understand and articulate your own most closely held core values.
The core value sorting exercise demands a level of reflection and self-examination that can help lead you to a better understanding of what’s really important to you. That self-knowledge can inform your own growth goals, and help you put words to your ideal self, so that you can communicate your life vision and goals to a mentor who’ll help you achieve it.
Since we’re all humans, financial advisors and clients are as diverse as you might imagine: From education to money, from independence to helping others, and from pleasure to power, each individual derives meaning in life from a unique set of core values.
By taking the time and effort to reflect and better understand your own core values, and by enlisting the help of leaders and mentors to help you stay on your desired growth track, you’re doing more than talking the talk. You’re holding yourself accountable, just as your clients are trying to do when they enlist your help as a financial advisor.
You’re also stepping outside your own comfort zone, so you can better understand how clients may feel.
Permission to Lead
After you guide clients through the sorting exercise and get a deeper understanding of the core values that drive their goals, you can help them understand the ways fear, stress and anxiety feel, and how those feelings can sometimes interfere with clear decision-making.
If you see leadership as helping people to achieve their goals, then it makes sense to help them understand the neurophysical effects of stress and recognize when their decision-making could be negatively impacted. Remind them that you’re there to offer guidance and help them feel empowered by asking their permission to lead.
Your ability to speak candidly about emotions and their impact may help deepen trust between you and your clients. In the context of an advisor-client relationship built on trust, you can ask clients to allow you to respond to these two types of behaviors:
- When their decisions and actions align with their values and ideal self, you have their permission to point out and encourage that positive behavior.
- When their reactions and choices are out of alignment and may disrupt their progress toward goals, you can intervene and recommend choices that align with their values and goals.
Just as a mentor would encourage your personal and professional growth, your intervention with clients can help them recognize their stress or fear reaction, refocus on their core values and lean into the discomfort that can sometimes come with change. And, over time, both you and your clients can continue making progress toward realizing your ideal selves.
To get a deeper understanding of the behavioral finance approach, take some time to review An Advisor’s Guide to Behavioral Finance below. You can find information on helping clients identify biases and motivating values that affect their financial decisions, so you can help them navigate with purpose and confidence.
1Making the Ideal Real, “How to use values to achieve your goals,” November 19, 2019.