2 Most Important Things You Can Do With New Clients

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BRASELTON, Ga. -- Why don't clients do what advisors tell them to do?

They sometimes do, of course. But in a session Tuesday afternoon at FPA Retreat, financial planning professor John Grable shared his research on the connections between physiological responses, to show their impacts on client action, or lack thereof.

"What I'm most interested in is the physiological reaction in clients that's causing them to take action or run away," Grable explained, connecting "fight or flight" responses to financial planning decisions. At his University of Georgia lab, he said, "we hook people up to really cool machines" -- which measure perspiration, skin temperature, heart rates, even brain waves -- "and then we put them in a room with a financial planner."

For consistency's sake, the experiment used the same planner, wearing the same outfit and asking the same questions from a memorized script.

The goal, Grable said, to figure out what level of financial anxiety and physiological arousal would lead a prospective client to engage in proactive planning ability.


Researchers put the subjects into four categories, and then assessed the level of "planning intention" for each group. The results were surprising, Grable said:

  • Low anxiety, low physiological arousal -- slight planning intention
  • Low anxiety, high  physiological arousal -- highest planning intention
  • High anxiety, low physiological arousal -- least planning intention
  • High anxiety, high physiological arousal -- moderate planning intention

He had hypothesized that the prospects with the greatest levels of financial strain and anxiety -- defined by a set of quantitative metrics -- would be most likely to engage in a financial planning effort.
Instead, he found, it was those subjects who had lower levels of financial anxiety but higher levels of physiological arousal that had what he defined as the "highest planning intention."


The results offered two clear takeaways for advisors, Grable pointed out.

"Job one is to shift that anxiety down," he said, noting that for either amount of physiological arousal, the less anxious client was more likely to take action.

One suggestion he offered was a rethinking of the office environment. "If you want to manage stress, remove your desk," he said -- particularly if clients are largely below 50 or primarily female. "And don't have CNBC running in your office" -- or Bloomberg or Fox Business, he said.

Advisors have a second lever once stress is reduced, Grable said: increasing physiological arousal.

To do so, he said, ask other planning-related questions. For instance, ask prospects "to clearly articulate their knowledge and experience in the financial markets," he suggested. Have them "articulate their goals, their dreams," Grable added -- or ask them about their risk tolerance.

One thing to avoid, however, is traditional scare tactics.

"Do not panic your clients; do not scare them," he said. "That's not the arousal that you want."

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