Research from New York Life Investments (NYLI) shows that empathy is one of the core elements of how to build relationships with clients, especially when it comes to attracting and retaining high net worth women investors. Almost half of survey respondents said that it's extremely important for an advisor to learn about them as a person—and over half said they want an advisor who takes their concerns seriously.

These may sound like basic interpersonal skills, but it's all too common for advisors to approach relationships with female clients armed with assumptions instead of empathizing with each client's unique goals, values, and emotions. More than a third of women told NYLI they feel patronized by financial advisors, and almost as many said that advisors push women out of financial conversations whether they intend to or not.

The good news is these skills can be learned and practiced. Here are three tips for how to build relationships with clients on a foundation of empathy.

1. Ask Detailed Questions and Listen to the Answers

Asking detailed questions is the first step in understanding a client's individual situation, needs, and interests. Assuming that a woman has the same concerns as their peers can be off-putting and create a barrier to communication. Build empathy by digging deeper into each client's unique objectives, challenges, family situation, and values, as these all impact their financial decisions.

When asking these questions, truly listen to the answers and observe how the client delivers them. Notice their body language and tone of voice. Do they tense up when talking about their parents? This could perhaps signal concerns about their health or problems with their relationship. Do they get excited when talking about their career? Which aspects do they get excited about? Look for opportunities to follow up with additional questions. Remember that your goal isn't to get your clients to say more than they want to but to better understand how you can serve their financial needs.

2. When Partners are Involved, Approach Thoughtfully

Empathetic understanding extends to a client's family. Some of your female clients may have partners, while others may be single, divorced, or widowed. Some may have children, while others may not. Even if they're married or have children, they may not see themselves or their financial needs defined by those relationships, at least not in the ways you might expect. This is why it's crucial to avoid assumptions. If you're unsure about something, just ask.

If your client does have a partner and they meet with you as a couple, address both partners equally. Although a couple may have shared goals, some may have spent more time discussing these in advance than others. You'll need to explore their wants, needs, and objectives both as a couple and as individuals. Watch their interaction. Where is the consensus, and where is the tension? This level of observation will help you determine if you need to meet with each one separately and reconvene, or if you need to take other steps to provide the support each person expects. In either case, understanding your client through the wider lens of those who share in their financial decision-making can only help you empathize with their needs.

3. Tailor Your Value to Your Clients' Needs

Especially where charged issues like money are concerned, grounding your client relationships in empathy can help cultivate to feelings of comfort and intimacy. But that openness can take time to develop, and it must be earned. One way to help get there is to operate on your client's terms.

Take communication. While active listening is an asset in all productive interaction, each client will have their own preferences about how they want to give and receive information. Some clients may prefer meeting face to face, while others may find a phone call or video chat more convenient and comfortable. And they may prefer to have different types of conversations in different settings.

This flexibility can apply to education, too. All clients generally want advisors who can help guide their investment decisions and financial strategy, but some come in with more financial knowledge and experience than others. Learn where each client's knowledge gaps are and whether or not they're looking to you to help them learn more. Does your client want you to explain concepts during a meeting, or would they prefer that you point them to external resources they can explore as they see fit?

Empathy is a skill that can help you create a personalized, comprehensive financial wellness strategy for each client. By practicing empathy and deepening your personal connection to your clients, you can remain a key partner throughout their financial lives.

"New York Life Investments" is both a service mark, and the common trade name, of certain investment advisors affiliated with New York Life Insurance Company.

Insights presented in this report are derived from 2019 & 2020 studies conducted by NY Life Investments in partnership with RTi Research.

The writer of this report is a freelance writer and not affiliated with New York Life Investments


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