Navigating clients toward financial clarity

Making informed decisions about one's financial future can be a daunting task for anyone. Financial advisors, through the implementation of various strategies, can empower prospects to navigate their decision-making processes and make well-informed choices aligned with their long-term financial goals. Discover how three MDRT members from Malaysia navigate this terrain to assist their prospects and clients. 

Ask the same question but in different ways 

“Prospects can sometimes hesitate to reveal crucial details that could complicate financial planning,” Cindy Tan Sheu Chen, a 13-year MDRT member from Petaling Jaya, Malaysia, says. She emphasizes that to understand your prospects' needs thoroughly, advisors must vary their approach to fact-finding. This involves covering various aspects of the individual's life, including daily routines and their cultural background.  

She shares a real-life example where a prospect initially disclosed nothing about her upcoming marriage. However, by consistently revisiting the topics of lifestyle and aspirations through different lenses, Tan eventually learned about the crucial detail of her plans to tie the knot.  

She notes, “Financial advisors can ask the same questions multiple times by paraphrasing them. To one’s surprise, prospects may reveal different pieces of information each time. For example, even after asking 'What is your daily routine like?' I would come back to this and ask, 'What would you change in your daily life?' or even 'If you had a soundtrack for your life, what would it be?'” 

These indirect and engaging questions encourage prospects to reveal deeper insights about their priorities, lifestyle pace, and even hidden concerns.  

Share financial wisdom with your clients 

"Financial advisors often encounter hesitancy from prospects, which can impede the prospects from solidifying their financial plans.” David Ooi You Wai, an 11-year MDRT member and four-time Court of the Table, from Penang, Malaysia, emphasizes financial literacy and understanding is a gradual process. When prospects acquire a comprehensive understanding of financial concepts, they are better equipped to make informed decisions. 

Financial literacy empowers them to scrutinize investment options, comprehend risk profiles, and assess the associated benefits. This knowledge not only cultivates a collaborative relationship with advisors but also encourages active participation in the decision-making process. 

Ooi explains, “Being on the same human level, such as mirroring their communication style, fosters open dialogue. This ease makes prospects feel heard and understood, encouraging them to ask the questions that truly matter. After meeting with them, I give them a few days to digest the information and then reach out to them again subtly to assess their understanding of the plan.” 

Also, Dina Mashida binti Masron, a one-year MDRT member from Kuala Lumpur, Malaysia, highlights her proactive approach. “I maintain regular communication with my prospects through WhatsApp messages over time. Frequently, they pose follow-up questions, which could signal hesitancy in finalizing a plan. When prospects lack a comprehensive understanding of the suggested services and benefits, it often leads to hesitation in their decision-making process.”  

Studies have indicated that having a higher level of financial literacy positively influences investment decisions for the average individual, promoting better financial behaviors. This understanding of financial concepts can lead them to establish more effective collaboration with financial advisors, fostering trust and resulting in deeper, more enduring relationships. 

Overcome their present bias 

Procrastination, a common human trait, is often exacerbated by present bias—the tendency to value the present more than the future. A study by PIDM, a government agency established under the Malaysia Deposit Insurance Corporation Act, has highlighted this inclination, noting that people tend to avoid challenging decision-making, possibly contributing to the common oversight of financial protection. 

Tan emphasizes the inevitability of clients delaying feedback and suggests financial advisors counteract this tendency by instilling a sense of urgency. This can be achieved by sharing real-life experiences and key learnings from other clients. One poignant situation that left a lasting impression on her involved a prospect who postponed deciding on a financial plan until after a trip abroad with her husband. Unfortunately, during the trip, the prospect's husband suffered a heart attack and passed away, leaving her with unexpected liabilities from their business together.  

“This was one of the most heartbreaking experiences I've had with clients. Sharing this story with prospects puts things into perspective and serves as a wake-up call to the realities of life. Of course, I provide a fair warning before sharing the story; our role as financial advisors is to educate, not to instill fear.” 

Dina reinforces this perspective by stating, “I remind clients that they reap what they sow. It's always better to have a safety net, to prepare for a rainy day. I share stories from clients with backgrounds or experiences like the prospect I am speaking to. 

Guiding prospects in deciding on a financial plan involves a multifaceted approach, including effective prospecting strategies, personalized communication, and the ability to address and alleviate uncertainties. By comprehending the unique needs of each prospect and providing tailored guidance, financial advisors empower individuals to make well-informed decisions that align with their long-term goals. 

 

Contact: MDRTeditorial@teamlewis.com