Exploring the Human Element of Financial Planning

Communication Essentials for Financial Planners tackles thecounseling side of practice to help financial planners build more productive client relationships. CFP Boards third book and first in the Financial Planning Series,Communication Essentials will help you learn how to relate to clients on a more fundamental level, and go beyond "hearing" their words to reallylisten and ultimately respond to what they're saying. Expert coverage of body language, active listening, linguistic signals, and more, all based upon academic theory. There is also an accompanied set of videos that showcase both good and bad communication and counseling within a financial planning context. By merging written and experiential learning supplemented by practice assignments, this book provides an ideal resource for any client-facing financial professional as well as any student on their pathway to CFP® certification.

Counseling is a central part of a financial planner's practice, and attention to interpersonal communication goes a long way toward progressing in the field; this guide provides practical instruction on the proven techniques that make a good financial planner great.

The modern financial planning practice is more than just mathematics and statistical analysisat its heart, it is based on trust, communication, and commitment. While interpersonal skills have always been a critical ingredient for success, only recently has this aspect been given the weight it deserves with its incorporation into the certification process.Communication Essentials for Financial Planners provides gold-standard guidance for certification and beyond.

JOHN E. GRABLE, PHD,CFP®, holds an AthleticAssociation Endowed Professorship at the University of Georgia (UGA), where he conducts research and teaches financial planning.

JOSEPH W. GOETZ, PHD, is an associate professor of financial planning at UGA and co-founder of the ASPIRE Clinic and Elwood& Goetz Wealth Advisory Group.

CHARLES R. CHAFFIN, EdD, is Director of Academic Home, CFP Board Center for Financial Planning, where he oversees all initiatives related to academic research, teaching pedagogy, and building the body of knowledge for financial planning.

CERTIFIED FINANCIAL PLANNER BOARD OF STANDARDS, INC. (CFP BOARD) is an initiativeto create a more diverse and sustainablefinancial planning profession so that every American has access to competent andethical financial planning advice. The Center brings together CFP® professionals, firms, educators, researchers and experts to address profession-wide challenges in the areas of diversity and workforce development, and to build an academic home that offers opportunities for conducting and publishing new research that adds to the financial planning body of knowledge. More about the Center and its initiatives can be found at www.CenterforFinancialPlanning.org.

Preface xi

Acknowledgments xxv

How to Use This Book xxvii

Introduction xxix

Chapter 1 An Introduction to Applied Communication 1

Introduction

Financial Planning Outcomes

Communication Defined

The Theory of Communication

The Importance of Feedback

Conclusion

Summary

Chapter Applications

Notes

Chapter 2 Structuring the Process of Interpersonal Communication 21

Introduction

Social Penetration Theory

Orientation

Exploration

Affective Exchange

Stable Exchange

Relationship Benefits and Costs

Accounting for Stress

Building Client Trust: An Appreciative Inquiry Example

Summary

Chapter Applications

Notes

Chapter 3 Structuring the Process of Communication through the Office Environment 37

Introduction

Identifying Target Clientele

Understanding the Office Environment

Stress and Communication: Bringing the Pieces Together

Summary

Chapter Applications

Notes

Chapter 4 Listening Skills 57

Paying Attention to the Client

Attending to What Is Said

Interpreting What Is Heard

Transference and Countertransference

Passive versus Active Listening and Responding

Silence: A Stressful Time for Client and Financial Planner

Responding to I Dont Know

Summary

Chapter Applications

Notes

Chapter 5 Questioning 75

Introduction

Open-Ended Questions

Closed-Ended Questions

Choosing Between Open and Closed-Ended Questions

Question Transformations

Swing Questions

Implied and Projective Questions

Scaling Questions

Summary

Chapter Applications

Notes

Chapter 6 Nondirective Communication 91

Why Nondirective Communication?

Outcomes Associated with Nondirective Communication

Clarification

Summarization

Reflection

Paraphrasing

Styles of Paraphrasing

Summary

Chapter Applications

Notes

Chapter 7 Directive Communication 109

Direction: The Essence of Financial Planning

Interpretation

Reframing

Explanation

Advice

Suggestion

Urging

Confrontation

Ultimatum

Summary

Chapter Applications

Notes

Chapter 8 Trust, Culture, and Communication Taboos 135

Understanding a Clients Cultural Attributes

Interpersonal Preference

Risk Management

Culture and Trust

Communication Taboos

A Cultural Example

Summary

Chapter Applications

Notes

Chapter 9 Politeness and Sensitivity in Communicating with a Broad Range of Clients 157

The Power of Language

Politeness

Politeness through Inclusion versus Exclusion

Sensitivity

Language Sensitivity

Summary

Chapter Applications

Notes

Chapter 10 Financial PlanningA Sales Perspective 173

Sales Models

The Challenger Model

The Consultative Model

Manipulation versus Persuasion

Consultative Selling and Compensation

Understanding Client Behavior

Dealing with No

The Ethics of Selling

Summary

Chapter Applications

Notes

Solutions 189

About the Authors 193

About the Companion Website 195

Index 197