United States
Hong KongCounseling principles: asking better than telling
Active listening, open questions, reflection and summarizing. The principle underneath is that a client is more likely to act on a conclusion they reached than one they were given, which is why asking outperforms telling.
The technique is borrowed from counseling, and the reason it appears in a financial planning exam is that recommendations only work when they are followed.
Active listening
- Full attention, without composing your response while they speak.
- Reflecting back what you heard, in your own words.
- Noticing the emotion as well as the content.
- Tolerating silence rather than filling it.
- Not interrupting to correct a factual error mid-sentence.
Silence is the hardest and the most productive. A pause after a client stops speaking frequently produces the more important half of what they had to say.
Open questions
Closed questions produce facts. Open questions produce understanding.
"Do you want to retire at 65?" gets a yes or no. "What would you want a typical week to look like after you stop working?" gets the goal underneath the number - and step one of the planning process asks for exactly that.
Reflection and summarizing
Reflecting: "It sounds like the business feels more like an obligation than an asset." Summarizing: restating the whole before moving on.
Both confirm understanding, and both give the client the chance to correct you - which is cheaper before the recommendation than after.
Where one option gives the client information and another asks the client a question, the question is usually correct. Resistance is rarely an information deficit, and giving more of what has not worked is not the answer.
Motivational interviewing
A technique for working with ambivalence rather than against it.
The core move is to have the client articulate their own reasons for change instead of supplying them. Arguing for change reliably produces the client arguing against it - a pattern the technique is specifically designed to avoid.
Asking "what would have to be true for you to feel comfortable doing this?" is more effective than a fourth explanation of why they should.
Delivering difficult information
Ask permission. Be direct rather than hedging. Give the headline first, then the detail. Pause. Then discuss options.
A client being told they cannot retire when they planned needs the sentence said clearly and then a conversation about what can change - not a softened version they will misunderstand and act on incorrectly.
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Common questions
What is active listening?
Full attention without composing your response, reflecting back what you heard, noticing emotion as well as content, and tolerating silence rather than filling it.
Why use open questions?
Closed questions produce facts; open questions produce understanding. Asking what a typical week would look like after work reveals the goal underneath the retirement age.
What is motivational interviewing?
A technique for working with ambivalence by having the client articulate their own reasons for change. Arguing for change reliably produces the client arguing against it.
What does the exam usually want?
The option that asks the client a question rather than the one that supplies more information. Resistance is rarely an information deficit.
How should difficult news be delivered?
Ask permission, be direct rather than hedging, give the headline first, pause, then discuss options. A softened version gets misunderstood and acted on incorrectly.