“This is your captain speaking …”

One of the essential skills to develop as a financial planner is the ability to tailor your messages to your audience. The problem is that we become so accustomed to the technical terms and financial jargon that we use every day that sometimes we miss that our clients fail to understand us. This informational asymmetry makes it difficult for them to relate what we are talking about to their personal experience.

Not all clients speak “finance.”

Over the two decades I worked directly with clients as a financial advisor, I covered an extensive cross-section of the community – from dockworkers to doctors, actors to engineers. They all brought varying degrees of existing knowledge and experience to the table. Still, in almost all cases, I found that under the surface, they had huge gaps in their financial understanding. They lacked the requisite domain-specific knowledge that would allow them to deal with all their financial affairs. They were outside their comfort zones and they needed qualified, professional help.

I found that one of the most effective ways to connect with people, put them at ease and help them understand what I was trying to do for them was to meet them where they were at. Specifically, I would start the conversation with what was familiar to them in their world, as that was where they were the most comfortable. 

This idea – meeting them where they are – was one of the most powerful lessons I learnt from one of my early mentors. It’s the ability to connect the financial points you are trying to make with something they are familiar with in their profession. Then, you can accelerate their journey to understanding. But creating the correct analogy or extended metaphor takes a little imagination.

Planning your trip

Let me give you an example.

At a recent family wedding, I had a long, pleasant conversation with my nephew, Dan, who has been a commercial airline pilot for a few years. After telling me a few amusing stories about some of his more hair-raising experiences, we got onto the subject of finances and his somewhat rueful admission that he should be doing more to prepare for the future.” But,” he said, “I just find it all so confusing; I just don’t know where to start or who to trust.” Does that sound familiar?

Relax, Dan,” I told him, “It’s much more straightforward than you might think. You need to take a structured approach.”  “In fact,” I said, “planning your financial future is very similar to what you do for a living.”

“Really? How?” he asked.

“Well, before you even take off on any flight, what’s the first thing you must do?”

“File in a flight plan”

“And what’s on the flight plan?” I asked.

“All the information like the starting point, the destination airport, proposed route, the number of passengers, the fuel you’ll need, hazards you need to consider, weather, contingency plans. All of that stuff.”

“Right! Just like a financial plan,” I said. “You need to know where you’re starting from, where you’d like to get to, over what time, how much fuel – I mean savings – you’re going to need, and some contingency planning in case it doesn’t work out exactly as anticipated. If you work with a good financial planner, they take the time to understand your desired destination and put together the plan to give you the highest probability of getting there.”

Checking the fuel gauge

“Now, let’s think about your office. By which I mean the flight deck. Whenever I’ve looked through the cockpit door and seen all those instruments you must deal with, I find it scary. There’s just so much information you need to process. How do you even know what you need to look at? You must have a compass, an altimeter, an attitude indicator, and airspeed – I know they are all important, but what’s your most crucial dial?” I asked. 

“That would be the fuel gauge,’ he said without hesitation. “In fact, after taxiing, take-off, and landing, most of the work we do during a flight is spent on fuel calculations and contingency planning, as most of the time, the aircraft is on autopilot. But, of course, there are always times when we have to make adjustments.”

“Again, just like financial planning,” I said. “You can plan the best flight ever, but the plane isn’t going anywhere unless you have enough fuel to get you there and allow you to deal with unexpected emergencies along the way. But the key thing, like on the plane, is to ensure you put enough fuel in the tank. In a financial context, that’s your commitment to saving regularly enough. But even if you do save in a highly disciplined way, it’s unlikely that you will be able to achieve the sort of returns you need for a successful outcome without investing some of your funds in the stock market.”

Dealing with turbulence

“But that’s the scary bit, isn’t it?” Dan complained. “You can lose much money if the stock market crashes.”

“Well, yes and no,” I replied. “Again, your world gives us another great analogy. Every day you are flying people around the world and if you were to survey the people on board, what are going to find? Some of them have a fear of flying. Well, most likely it is not so much the fear of flying, but a fear of crashing!” 

“True.”

“Then, during the flight, you experience some turbulence. What does that do for our aerophobic? It confirms all their worst fears about getting on the plane in the first place. But for you, as a pilot, is turbulence a problem?”

“No, it’s just a normal part of flying. Most of the time, you aren’t really dropping much, it’s just the sensation that makes it feel like you are. Like on a rollercoaster at the fairground. Plus, modern planes are more than capable of handling even extreme turbulence,” said Dan.

“So, what do you tell people?”

“When the seatbelt sign is on, stay in your seat with your seatbelt fastened.”

“Because?”

“Because the people who are going to get hurt, or who are going to hurt others, are going to be the ones out of their seats,” he said.

Do you trust your pilot?

“Yet again, Dan, you’ve just described the typical investing journey as well. Along the way, you are going to experience turbulence – or volatility – and as financial experts, we know to expect it and deal with it. But to the uninitiated, it’s scary and confirms all their worst fears, especially about crashing. The answer, again, is to stay in your seat, and the one thing that can help here is the reassuring voice that comes over the intercom:

“This is your Captain speaking; just a little turbulence folks, things could be a little bumpy for a while, so we do ask that you stay in your seats while the seatbelt signs are on.”

The same thing applies when the markets are looking scary – the voice of calm and experience makes all the difference.

“So, Dan,” I said, “if you think about financial planning like your day job, you’ll find it easy to grasp. In simple terms:  have a plan, put fuel in the tank, don’t worry about turbulence because it’s all part of the journey and work with someone who understands the importance of regular communications and calm reassurance. And that is the point. Just as I wouldn’t expect to fly myself on holiday, you shouldn’t expect to do this all on your own. A good planner will help you get where you want to go.”

“Since you put it like that, Uncle David, it does seem pretty straightforward. I guess the next question would be, ‘Where do I find someone?’”

* * *

As a financial planner, you invest a lot of time and energy to acquire the specialist information you need to be a consummate professional. However, it is not just knowledge for knowledge’s sake. To be effective you need to be able to apply that knowledge to your client’s unique situation. The more you can tailor your messaging by building upon what is familiar to them, the more successful you can be.