If your clients are confident in their financial skills, they’re more likely to seek your help.
That’s the conclusion of a York University study completed last year, which reveals financial stress alone is not enough to motivate someone to seek financial help. Instead, self-efficacy — a client’s belief in their ability to succeed — predicts help-seeking behaviour. A confident client takes action.
“Financial planners play an important role in not only guiding Canadians’ financial futures, but in educating them about their finances and helping them to become more confident,” says Cary List, president and CEO of the Financial Planning Standards Council (FPSC), which provided data for the study. “By enhancing their clients’ confidence, qualified planners play a key role in positioning them to take positive steps toward reaching their financial and life goals.”
Researchers suggest four ways to increase clients’ confidence:
- Keep it simple. Keep financial strategies simple and straightforward, so clients understand the strategies and feel confident they can succeed with them. For example, the ability to manage limited savings plans may lead to larger savings plans. Likewise, a modest debt repayment strategy creates incentive to save excess monthly cash flow.
- Show them what success looks like. Clients succeed when they observe others — who are similar to themselves — succeed. Use appropriate commercials, public service announcements and other communications to show clients success stories.
- Be a coach and cheerleader. Encourage clients; tell them you have confidence in them. Illustrate to clients the benefits of goals achieved or priorities met.
- Reduce client stress. Nervous, anxious people tend to doubt themselves and may therefore struggle with confidence. To reduce stress, get clients to commit to a plan and offer to take on tasks for them. For example, arrange meetings with insurance or legal referrals or help complete a budget to begin the planning process.
Read the full study here.