Episode 50 Transcript – Moira Somers

Participants:

Steve Wershing
Julie Littlechild
Moira Somers

Steve:
Welcome to Becoming Referable. The podcast that shows you how to become the kind of advisor people can’t stop talking about. I’m Steve Wershing. On this episode, we talk with Moira Somers, clinical neuropsychologist on faculty with the department of clinical health psychology at the University of Manitoba, a Marshall Goldsmith certified coach, and founder of Money, Mind, and Meaning in Winnipeg.

She’s also the author of the book, Advice that Sticks. Advisors face twin challenges. First is providing the right advice and second is getting clients to act on that advice. We have lots of training and resources for the former, but precious little for the latter. That’s where Dr. Somers’ book is such a gift. In our conversation, we talk about obstacles clients face on taking advice. Many which originate with you, the advisor.

We talk about the five contributors to financial adherence; the curse of knowledge, how it’s impossible to motivate someone from the outside, but how you can stimulate someone’s internal motivation, and how you can create policy-driven guidelines to keep clients on track. In the end, clients who accomplish things provide more and better referrals than ones who simply get good advice and this is where Moira’s advice can help build your business through creating better outcomes. I hope you enjoy our conversation with Moira Somers.

Julie:
Moira Somers, welcome to the Becoming Referable podcast. So pleased to have you here today.

Moira:
Lovely to meet you.

Julie:
Absolutely. I’m excited about this conversation because we’ve been looking at your work. It’s such rich content that you are sharing with the industry. Before we even dig in on some of the specifics, I was wondering if you could give us a little bit of background on you and your path here and I know you’ve come out with a book recently, so would love to hear about how all of that came together.

Moira:
Sure. I am a clinic neuropsychologist. I’m based out of Winnipeg Manitoba where I’m also a professor at the University of Manitoba. I have long had an interest in the things that influence, whether or not people follow good advice. Whether that’s medical advice or lifestyle advice or financial advice. A few years ago I became quite fascinated by the field of neuro economics and how it is that people make decisions. Both through the work that’s being done in neuro economics and behavioral economics, there’s just a fascinating body of literature out there that’s, combines with what’s been coming out of the medical field for decades now that I thought would be an interesting fusion and that it would be of value and interest to the financial services industry.

Julie:
Maybe you can go a little deeper on where you saw the crossover, what you expected that crossover to be between the two communities.

Moira:
I think that there are very few forces in secular society that really urge things like delay of gratification and impulse control. In fact, I think there’s a whole lot out there that encourages just the opposite, the buy now, the do whatever feels good for now. Medicine and financial services share this focus on not only stabilizing what’s going on right now in the present, but also setting people up for a really good future. Because of that commonality, they share some predictable and fortunately in some ways, preventable problems where we run flat up against temporal discounting or the tendency for people to really focus on the now versus the future.

Turns out there are some really valuable strategies that can be adopted in all domains of life that help people get past that immediate focus. There are also commonalities between the two areas in that sometimes the advice that we have to give is unpleasant. It may actually be painful in the present moment to implement medical advice and financial advice. Again we are starting to understand more and more about what allows people to embrace the advice despite the discomfort.

Julie:
You talk about these common, or all too common but preventable, and by the way, I’m thinking about parenting as you’re talking too, by the way. Because I think there’s some click ability here, but what are some of those common, I don’t know, is it behaviors or habits or what have you that really stop us from thinking longer term?

Moira:
A lot of it is simply competing demands on our time and energy. A lot of people feel like the day has got a lot in it already without thinking about the future self and what he or she might need. There can be, quite frankly, just scarcity. Financial scarcity in people’s lives. That it’s hard for them to think about freeing up money for the future. Sometimes though, it’s not even about the investment stuff, Julie and Steve. It’s about the having challenging conversations. Having difficult conversations. You mentioned parenting, Julie. Often times, I just came out of some coaching sessions today with some clients who are not aligned in their marriage with how they should be supporting their late adolescent and early adulthood children as they move forward with their education and lifestyle decisions.

As a result of that nonalignment in the marital union, avoidance becomes a really easy and almost addictive default. Let’s not talk about that and lo and behold we immediately feel better than we did a second ago.

Steve:
As you were talking about the natural forces, I was thinking to myself, as I’m laying on the couch just trying to persuade myself to pick up that cattle bell and lift it up a couple of dozen times and it’s the whole paradox of do I put this $10 away for my retirement or get the pizza today? First, how do you get people to overcome that kind of resistance and then how do you apply that same idea to that couple who’s going to have the incident reward of avoiding an argument by not talking about it now and get them to talk about it now?

Moira:
The brain just goes in a gajillion different directions as I think about … There were a lot of questions contained in that comment, Steve. I think the best approach is really kind of a multifactorial and a multidisciplinary approach that we have to approach the problem at all levels. The individuals, the familial, as well as in some ways the cultural. What have we set up as defaults? Then, of course, for purposes of this interview, I wrote a book about what advisors themselves can do to influence the outcome of some of these things to really understand what their own teams could be doing better or differently to help ensure follow through with financial advice.

Getting beyond the individual financial advisor you think about this multidisciplinary approach that can be helpful. When I was working as a therapist, there were many times when I knew that I had to call in people from other disciplines. Whether it was bringing in estate lawyers to make sure that couples got a will put together, bringing in financial advisors, bringing in accountants, bringing in family therapists if that was necessary. The more diverse your referral network, the more you can be of service to your clients.

Julie:
You dangled out there that you had written about what advisors can do-

Steve:
Let’s mention that, right.

Julie:
… which sounds awesome. Presumably what you just talked about is a little bit part of that, but can you expand on what advisors can do?

Moira:
I often find that it’s helpful, Julie, to start with what we can stop doing. Because sometimes it’s more important that we stop doing something and that allows some really good things to start flowing. At the risk of offending your listeners-

Steve:
Go for it.

Julie:
Go ahead. They’re adults.

Steve:
We’re all about that.

Moira:
They’re tough. The biggest thing, the most important thing in this industry that I’ve found is that it’s really important that they learn how to hush. To just stop talking so darned much. This is a problem that we also have in medical schools by the way and really any time we’re working with smart experts. Their initial impulse is to begin to educate and influence and they forget or they don’t know yet, that the most important thing is to seek to understand and that’s the most important thing for a couple of reasons.

There’s the really pragmatic one; how can you give advice if you don’t really understand what the client’s concerns and situations are? The other one is that, especially in the initial meetings, client satisfaction is directly related to how much air time the client gets. If you, as the professional spend all your time talking, trying to impress or influence them, you are really creating the risk of driving them away.

Steve:
Let’s drill into that a little bit. Can you give us an illustration of what an advisor might do as an alternative to talking too much? Transferring too much information.

Moira:
Sure. It’s really starting with open-ended questions like tell me what brings you here and what is it that you’re hoping to accomplish in our meeting today? What would make this time together be the best use of your time and energy and indeed, money?

Steve:
In your book, you talk about doing that not just when a client, when someone comes in new and thinking about being a client, but you talk about doing that when an established client comes in for a review meeting.

Moira:
I coach executives and often have meetings with them weekly, sometimes even biweekly, Steve, and I ask that question at the outset of every single meeting because a lot can change between the last meeting you had and this one. Something may have risen to the forefront of their heart or their mind that really is the burning issue of the day. If you just launch, especially if you’re dealing with very polite clients, they may not interrupt you. They may just kind of go with the flow, but be left with dissatisfaction and an itch that still needs to be scratched. They’ll scratch that elsewhere if you don’t give them the chance to really deal with it in your session. In your meeting with them.

The other really challenging thing, and we get this at the medical schools, is even with the best intention to listen, we interrupt at a frequency that is ridiculous. At the medical school for example, despite explicit instruction in the importance of not doing it, it takes the average physician just about 15 or 16 seconds to interrupt the average patient.

Steve:
Wow.

Moira:
Those are people who have had training.

Steve:
Right, right. What was it before that? Right. Exactly.

Moira:
What my experience has been is that many of the people who are attracted to frontline work as financial professionals, they really have the gift of the gab. Many of them have come out of a sales environment where they are really reinforced for holding the floor. What we know is that if that ever was effective and I’m not really sure that it was when we look at client dropout rates and referral rates, if that ever was effective, it’s certainly not going to be effective with millennials who have been raised with the assumption that their opinions matter. It’s not a good way to treat people.

Steve:
Sure. Besides interrupting clients and talking too much, what are some of the other things that advisors do that compromise the effectiveness of the advice they give?

Moira:
At some point we can talk about what advisors do well if you would like.

Steve:
Nah. Let’s dwell on the negative. Let’s accentuate the negative.

Moira:
Alrighty. Alrighty.

Julie:
You raised it by saying there are things we need to stop doing first, then let’s look at the start.

Moira:
The other thing that needs to stop, and it’s harder than you might think, is to use the specialized, highly educated vocabulary that is second nature to anybody who’s been schooled in anything. Whether we’re talking about mutual funds or carburetors, it’s so hard for us to understand that when we come to know something, we are changed by the knowing of it. It’s equally hard to appreciate the fact that many people don’t know what we know also. What starts to happen is that that highly specialized and technical vocabulary creeps into client sessions and we assume that they understand what we mean.

Again, clients are pretty much socialized to smile and nod. Everybody hates admitting that they don’t understand something. It takes a fair amount of courage and assertiveness to say, “I don’t have a clue what you just said to me.” But what I will tell you is that in the work that I do, particularly with high net worth women, they talk about that as being one of the biggest turn offs that they encounter.

Steve:
I’ve seen that a lot of times with advisors and I think one of the challenges is that after you’ve been in this or any technical business for a long time, you forget what people know and what they don’t know. Words that seem like basic English to you are actually jargon. What would be a good way for an advisor to test that or to adjust it to make sure that they’re speaking at a level that their clients can relate to?

Moira:
We’ve had some fun with this one. It’s a problem that’s been dubbed as a curse of knowledge. Some of your listeners may have read that term before. One thing that I’ve done with some of the firms that I consult to is I get them to print off everything that they might give to a client. Nominate five or six people that they would say are fairly representative of their client base and give them a highlighter. Say, “Would you please understand anything that you don’t understand?”

Sometimes we get entire pages that are colored. You and I have experienced that a lot when we look at the terms and conditions of any agreement that we look at on a computer program or an app. You just kind of glaze over and you click yes because you want to get on to the darned Internet. Increasingly, regulators are not allowing people to tuck and draft behind a checked off box. Increasingly, regulators are demanding that clients actually be able to understand what it is they’re agreeing to.

That’s in every domain. It’s in engineering, it’s in medicine. It’s in law even. Law practices are being really pressed to speak plain English. Just doing that exercise helps you to understand what of this vocabulary that is second nature to you, is not, even to highly educated people. Another fun thing that we sometimes do is have sessions where we have clients agree ahead of time to raise their hand every time you use a word that they don’t get. I was shocked when I did it myself because I do a lot of financial therapy as I mentioned and I often get right into people’s money with them, and so saying to clients, today I want us to have a good look at your assets and hands would go up. I’d say, “What?” They’d say, “What’s that mean?”

Julie:
Interesting.

Steve:
That is interesting, yeah.

Moira:
Oh, really? What your creditors might have or let’s do a credit check and another hand would go up. You think, wow. You really come to understand that we do have a crisis of financial literacy on this continent. Indeed, even in Europe. Young people are not being given the vocabulary to understand money. In Canada, the federal government did a task force a while back and found out that between 50 to 60% of Canadians don’t have the level of financial literacy required to understand their own credit card statements or cell phone bill. It’s really important that we become understandable for our clients and the payoff is that they love us for it.

Julie:
I think there’s the other very practical implication is a lot of about what this podcast is about which is referrals. At what point do you say to someone, “You should really talk to my advisor. I understood about a third of what he said, but it sounded really smart.” If they can’t articulate and if we’re not using their language, they’re never going to share that information.

Moira:
One of the biggest problems in terms of why clients don’t show up for second meetings or why they don’t agree to take you on is that they did not have a good experience, of course, in the first meeting, and a great deal of that is that they did not understand. They were made to feel stupid. If somebody makes you feel stupid, you don’t have a sense that they have your back. Knowing that somebody gets you because they’ve actually listened to you and knowing that you get them because you understand what they say, that’s really foundational for doing work in the future and especially for doing the hard work of helping to change people’s financial behaviors.

Steve:
Moira, in your book you talk about an interesting idea about taking the focus off of compliance, meaning or not calling clients following your advice compliance, but calling it adherence. Can you tell us a little about the difference between those two things?

Moira:
Compliance carries with it this notion that you know what’s right and they should just darned well do it. If they don’t do it, they’re being noncompliant. Whereas the move towards the word nonadherent or adherence partner came out of medicine 30 years ago now. There’s still some resistance to it, but the notion is that you’re trying to get people to co-create a plan. It’s on both of you to help make adherence a possibility. For example, you don’t send people home to do some assignment that is completely outside of their ability to do so. Or that would bring so much family disapproval raining down on their head that they would be punished in the attempt to do whatever it is that was advised in the office. The notion is that together you work to find advice that will stick, that people can adhere to, and that it’s part of the job of the professional to figure out how to make that happen.

Steve:
Walk us through a sample conversation. So, you have a client in your office who is giving way too much money to their kids to help support their lifestyles and you, as the financial advisor can see that it’s really going to compromise their ability to provide for their own retirement. You’ve got this difficult conversation that you’re going to have. How would you navigate that with the client as opposed to just telling them, “Look, you’re going to have to do this or you’re stupid.” How might a conversation like that go where you can co-create something so that you can obtain that client adherence?

Moira:
I think one of the first things is not to jump too soon into giving the advice. Much of the time clients understand already that this is a problem. If they don’t, you indicating that they’re doing too much for their kids is likely to rally resistance and you don’t want to harness resistance. That’s the last thing you want to harness. Spending some time really exploring, what is their understanding of this, do they see this as a problem? What has led to it? What would their assumption be about what would happen if they stopped doing it, for example? Because they do know a lot about their family, much more than you do and so they may understand that for example, there is an addiction and they are giving this money to the spouse of the addicted partner because without that, bread and milk are not available for the children. Or they may be scared that if they cut off this child that the child may experience unbearable stress and be driven to hurt him or her self.

You really have to be careful about giving advice before you fully understand the situation. By the way, that excessive giving to adult children is probably one of the top two things that drives advisors crazy. It’s so stressful. It’s matched right up there with people who are over spending and sort of torpedoing their own retirement because of their own over spending. It creates an anxiety in advisors and then ultimately it can create a contempt or disdain in advisors. An anger. “Well if you’re not going to follow my advice, then to heck with you.” Or “Aren’t you stupid because you’re not …”

Really exploring what it is that led to this situation in their family, asking whether they feel that there’s any degree to which this is a problem, either for the child or for their own lives in the future. Their lives as a couple, their retirement plans, if it’s an individual whether he or she will be able to manage and fund healthcare up until the end of their life. Really exploring what their understanding of it is and then through your knowledge of the client, being able to ask permission to address a challenging topic which is your concern that at this rate they’re giving to their children is unsustainable. Are they willing to have a look at that with you?

Julie:
Just … Oh, sorry. Carry on.

Moira:
It’s sort of this funnel approach where you start with what’s their understanding. Are they willing to hear a little bit of input from you about what your concerns are? Then, in the book I go through a whole series of readiness questions where you assess whether the client is ready, right now, to do something about this problem. If the answer is no, then you need to learn how to handle that yourself. You need to learn how to make that be okay and to help the client harness his or her own wisdom and insight about what they are ready to do right now. Be willing to postpone that. Timetable that for later and think about what else can be done. To exercise a kind of mental agility in dealing with what is the best current agenda for this client. That’s what extraordinarily good advisors know how to do. They’re kind of good dancers. They know how to pivot when pivoting is required.

Julie:
This may be related to that example that you were just giving there, but I think we’re all aware and some of us have experienced that talking about money, either between a couple or within a family can be difficult. Do you see that playing into some of the challenges that advisors might have in getting adherence?

Moira:
The fact that is that we don’t talk about money to many people much of the time. It’s kind of a weird thing to do. In fact, in many circles it’s quite taboo. That does vary between cultures, somewhat, and it’s kind of refreshing to be able to encounter people who have different values and different norms around this stuff, but I would still say the majority of North American, the cultural norm is still to not talk about money too much. That includes going right into marriage where people may not know what the assumptions are that their beloved holds of how what’s important, what’s unimportant. What they own. What they owe, what they make.

I’m working with some very high net worth kids in a couple of families right now who are of marrying age and who are about to make the commitment and they have not spoken to their partners about anything around trust fund or prenup requirements and they don’t begin to know how to have those conversations. Similarly, when financial circumstances change in a family, we also have to be able to have those conversations then. This was the rule before or these were the guidelines that we ran under before, but now our circumstances have changed, either for the better or for the worse. We need to figure out how to make this work as a family now. Another domain where it can be challenging is in having parents talk to their future heirs about what the plan is with the estate. Many times they avoid that conversations unto death and leave real complications for the survivors.

Julie:
I assume that you also see examples of advisors who are tackling these issues and have found a way to facilitate. I always feel a great advisor is one who can walk into this mess and help couples and families really come together.

Moira:
Absolutely. You don’t want an advisor to rush in where angels fear to tread. There’s certainly some family circumstances that are volatile and the fact that those discussions are not happening with future heirs, for example, that that’s there for a very good reason. Again, developing your own referral network, making sure that you’ve got really good estate attorneys and therapists that you can punt to when families are ready to do that. That becomes a really important value add for you.

Julie:
Can I just pick on something you just said? You talked about therapists and having a network. One of the things that I often hear and I’m sure you do as well is a real discomfort. It’s usually articulated as I don’t want to become their therapist. In fairness, you shouldn’t become because there’s people who study for a very long time to do that work. Do you feel it’s a matter of understanding yourself and your own limits and then being able to move beyond those or do you think there’s something that advisors need to ask themselves about where that line is?

Moira:
Yes, I think advisors can become facilitators of difficult conversations in their own office. But they do have to develop some skills that aren’t typically taught in the technical aspect of the training. For example, if an advisor can learn how to cultivate warmth, they will have much better outcomes. If an advisor can learn how to cultivate what I, talk about the curse of knowledge, the $64 word, equanimity or a kind of-

Julie:
I’m raising my hand.

Moira:
… being able to be calm and unruffled in the face of strong emotion. That is a really important advisory skill because when do clients come to you? They come to you disproportionately. Like 70% or 80% of new clients come to you because of a major life transition. We’re not talking here they’re coming to you because they just bought this great new blouse. They’re coming to you because there’s a baby on the way or because they’ve just received an inheritance. Not only is their money in motion, but there is meaning in motion. There is identity in motion. There is a heck of a lot of emotion in motion as a result.

Learning skills for dealing with that aspect of being an ace advisor is really valuable and that doesn’t turn you into a therapist. That just turns you into somebody with great presence.

Julie:
Do you talk about these skills in your book or are there other resources for advisors who feel like they could use some support there?

Moira:
Yes, I do talk about that in the book. There are programs that get into the personal side of advising in considerable depth. They teach advisors how to have those conversations. I’m on faculty, for example, with the Sudden Money Institute or the Financial Transitionist Institute as it’s called now, and we do a-

Julie:
Yeah, you do great stuff there, by the way.

Moira:
Yeah, we do a lot of work at helping advisors learn where that ethical boundary is. Where advisors, in pretty much every profession, not just the financial services one, but there’s this disproportionate number of complaints that come before regulatory bodies that aren’t about sort of slathering psychopaths who are out to rook their clients. That isn’t how the ethical violations occurred. A really high number of ethical violations occur because the profession was trying to be helpful. They went beyond the scope of their licensure or beyond the scope of their professional training.

Beyond the scope of what is considered ethically advisable, all in an effort to be helpful or useful or to address clients’ pain and so again, that skill of equanimity of knowing how to deal with your own emotion as well as clients emotions is really important if you’re to stay on the side of the angels.

Julie:
We do talk about client experience and becoming referable and it’s so refreshing to go deeper on this piece of the puzzle because I … it gets lost in talking about process and tactics and strategies and these are such important conversations. Make sure we put a link to your book in the show notes. I think this is a must read for everyone. But, and while I could go on, I know we’ve gone over our time.

Steve:
Can we get Moira to tell us where people can find her and we’ll put those in the show notes as well?

Julie:
Moira, where would people actually reach you?

Moira:
Through my websites. Moneymindandmeaning.com or email DrSomers@moneymindandmeaning.com.

Julie:
Wonderful. We’ll make sure we include those links as well. Moira, thank you so much for your time today.

Steve:
Thanks, Moira.

Moira:
Thank you. It was lovely to speak to you.

Julie:
Hi. It’s Julie again. It was great to have you with us on Becoming Referable. If you like what you’ve been hearing, please do us a favor and rate us on iTunes. It really does help. You can get all the links, show notes and other tidbits from these episodes at becomingreferable.com. You can also get our free report, Three Referral Myths that Limit your Growth and connect with our blogs and other resources. Thanks so much for joining us.