Steve Jobs once said that simple can be harder than complex. Financial advisors know this all too well. When discussing a client's plan, it's easy to use financial jargon.
Parts of these plans are complicated. Outlining the pros and cons of specific products such as cash-value life insurance or types of digital currency tests an advisor's ability to educate.
"Speaking in plain English is a hurdle for many advisors," said Zachary Bachner, a certified financial planner at Summit Financial Consulting in Sterling Heights, Mich. "The challenge is breaking it down" into easy-to-digest bits.
When reviewing a client's financial plan, Bachner likes to start with overview statements. From there, he will drill down gradually and adjust his approach to ensure the listener is able to follow along.
"Oversimplifying is the best option," he said. "No one gets offended if you start simple. So we start with a one-sentence explanation."
As he amplifies each point, Bachner often checks in. After introducing a concept, he might ask, "Can you repeat that back to me?"
"It shows me that they understand," he said. It also prevents him from reeling off too much financial jargon at once — and losing his audience.
He also likes to sprinkle questions into his presentation of the financial plan. Stopping to find out what the client is thinking prevents him from talking too much and lapsing into jargon.
Financial Advisors Ask Questions
The trick with asking questions is extracting valuable insight from the answers. An advisor who tosses around technical terms may periodically ask, "Do you understand?" or "Am I making sense?" Respondents may nod sheepishly for fear of admitting they're lost in a muddle.
Instead, Bachner opts for open-ended questions. When suggesting a certain action step, for instance, he might ask, "What intrigued you most about that?"
"I want them to give me a reason why they like a recommendation," he said. "Or at least give me a sense that they understand," and raise any concerns if they're unsure.
Another way to avoid jargon is to create a glossary of terms. Keep a running list of acronyms or technical terms that you use. Define them one by one, writing plain-English descriptions.
Armed with this list, you'll know when to translate what you say into familiar language. Your listener can then confirm understanding before you move on.
Using stories to convey complex ideas also works well. Short, snappy anecdotes can drive home your key point. Advisors who are clear communicators can attract more clients.
Joe Piszczor, a certified financial planner at Stein Wealth Advisors in Canonsburg, Pa., developed his storytelling skills by reading "Storytelling for Financial Advisors" by Scott West and Mitch Anthony.
"It's one of my favorite books," Piszczor said. "It speaks to the value of giving real stories" that resonate with prospects and clients.
Avoid Jargon By Drawing
Some people prefer to hear a story. Others learn by seeing what you're trying to say.
When reviewing a financial plan, Piszczor appeals to visual learners by engaging in what he calls "chalk talk." He illustrates his point by drawing as he speaks.
To explain the difference between a stock and a mutual fund, for example, he might draw a series of boxes and grids that represent each investment type and how it works.
"Not only do they understand me better," he said. "But it's also fun to see them react when I write upside down," a skill that Piszczor has perfected over the years to enable clients to easily see what he's drawing from across the table.
New advisors face a greater risk of overdosing on jargon. Eager to showcase their knowledge, they might regale clients with reams of information on investments. Or they might delve into some aspect of the financial plan, like how a credit shelter trust works, without putting it into a larger context.
Observing others' nonverbal cues provides clues about their level of engagement. They might not interrupt you if they're confused by your use of financial jargon. But their eyes may glaze over.
"If I sense they are drifting, I look at their body language," Piszczor said. "And it helps to watch for changes in how they listen."
Someone who nods and smiles to signal understanding may suddenly appear still and tense. That's when Piszczor might stop and probe to gauge the client's comprehension — and if he needs to simplify his message.
