do not function in a vacuum – they are part of a complex social and cultural network that greatly influences their behaviour, often to a far greater degree than we do. It is important for both client and advisor to try and identify such influences so that they can be harnessed or mitigated accordingly.
Each one of these five dimensions of adherence exerts its own influence on follow-through, but none of them exists in isolation. Each domain interacts with the others, increasing or decreasing the likelihood that your clients will act in alignment with agreed-upon recommendations. In real-world practice, then, the FACTS model of adherence looks less like a uni-directional clock, and more like a spider web or a dream catcher:
There is a tendency for professionals from all walks of life to place heavy emphasis on the factual correctness of their advice, and to then blame the client when things don’t happen. The FACTS model corrects that unhelpful oversimplification. My hope is that you will return to this diagram with a spirit of curiosity and openness any time that you encounter adherence challenges in the future.
Refuse to be surprised
Upon learning that I am a psychologist, it is not uncommon for people to say something along the lines of, ‘I bet there’s nothing that surprises you anymore about people.’ Oh, yes there is! Two decades into this line of work, I am still routinely gobsmacked by the ridiculous, tender, grasping, harsh and thoughtful things our species is capable of. But the one thing that does NOT surprise me anymore is the difficulty all people have in bridging the gap between their good intentions and the actions that will accomplish their aims.
The authors of Changing for Good3 (a classic book on behaviour change) claim that, at any given time, only 20% of us are ready to bridge that intention–action gap. That is, only one in five people who freely admit to having a problem is truly committed to taking corrective action on it in the immediate future. Once this minority begins the journey towards goal achievement or problem resolution, they are usually then beset by additional challenges that further reduce the likelihood of success. With this in mind, then, non-adherence is best understood as the norm, not the exception. From here on in, you, too, should refuse to be surprised by the emergence of non-adherence; in fact, you should anticipate it, in order to head it off at the pass.
Advantages of giving advice that sticks
Why is it important for you to get better at helping people complete an agreed-upon course of action?
There are the obvious client-relevant reasons:
1. If they don’t adhere to the plan, clients may court some serious troubles: impoverished retirements, family disputes, legal troubles, bankruptcy, etc.
2. When they do adhere, clients are more able to reach deeply cherished goals: seeing the world, making charitable contributions, moving out of their parents’ basement.
3. Clients’ self-esteem and sense of integrity are diminished when they don’t keep their promises. Non-adherent clients frequently become dispirited and embarrassed by their lack of action.
4. Clients who feel bad about themselves and their lack of follow-through are less likely to attend subsequent appointments or comply with additional requests. They often go AWOL and fade silently away. Non-adherence begets non-adherence.
Then there are the factors that more directly affect the advisor:
5. Adherent clients have lower drop-out rates. It is much less work to keep existing clients for the long term than it is to have to continually recruit new ones.
6. Non-adherent clients can pose logistical, relational, or even legal problems for an advisor. They require more frequent phone calls and e-mails to nudge them along; they call more often in a panic (once their procrastination has reached crisis proportions) and demand immediate attention; they miss key deadlines and fail to provide legally required documentation.
7. Clients who are positively engaged with their own financial plans tend to be more satisfied clients who refer friends and family members. Non-engaged clients rarely do so. Non-adherence thereby has very real financial implications for the advisor.
8. Advisor satisfaction increases when clients are keeping their commitments, and decreases when they’re not. Let’s be honest about this: Some clients take a toll on us. They leave us feeling stressed, inadequate, worried, and frustrated. In the words of the American spiritual writer Anne Lamott, such clients are enough to ‘make Jesus want to drink gin straight out of the cat dish’. The more effective we can become in helping clients make important changes and avoid regrettable actions, the more we’re doing for our own well-being. (Plus, the cat gets to keep its dish. Everybody wins.)
And finally, there are regulatory issues:
9. As I write this book, the Fiduciary Standard is poised to become the standard of the financial planning profession in many jurisdictions. This standard brings with it not just the duty of loyalty but also the duty of care. Advisors will be obliged to demonstrate that the advice they give is, first and foremost, competent advice. While there are bound to be disputes over what, exactly, constitutes competence in advice giving, there can be little doubt that it will have to include elements of being tailored to the individual, of being understandable, and of taking into account all aspects of the client’s life circumstances. These elements of competence are also key elements of adherence.
10. Helping people reach their goals is what we’re being paid to do; therefore, taking money from people who are not fulfilling their part of the bargain has implications for our continued work with them. Financial services author and editor Bob Veres argues that we have an ethical obligation to end the advisor–client relationship when the client is chronically unable or unwilling to carry out recommended actions.4
Good advice, skilfully delivered
Advice-giving is a complex skill all on its own, one that merits training all of its own. That’s what this book aims to deliver. Giving good advice well requires three things of us: (1) that we understand and harness our clients’ motivation and concerns; (2) that we help provide them with clear direction on how to reach their goals; and (3) that we have a plan for dealing with the inevitable obstacles that will crop up along the way.
There are a few assumptions that undergird this book. The first assumption is that your advice is technically sound. A second is that your advice is ethically beyond reproach. A third is that your technically correct, ethically impeccable counsel is a good fit for the situations of your particular clients. Put somewhat differently:
Some advice is bad. That, I can’t help you with.
Some advice is badly given. That, I can.
So let’s dig in. But first, take a break and go use some mouthwash. (It’s really not a bad place to start.)
Why People Seek Advice
Throughout this book, we’ll be considering the question of why people frequently fail to implement excellent financial advice – the kind of advice that has the potential to benefit lives, permanently and profoundly. But before we dive into those troubled waters, we’d be wise to back up a few steps and consider a more fundamental question: What leads people to seek your advice in the first place?
The question is so fundamental that it often gets overlooked. Getting in touch with the answers can transform how you show up for your clients. It can tell you when to put a relative emphasis on client experience versus technical expertise at differing points of contact with them. Not incidentally, it can also be used to guide your marketing efforts, making sure that they’re targeted at the issues of concern to your potential clients.
Your own reasons for seeking advice
Think of some recent times that you reached out for some counsel. What were you hoping for?
Maybe