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23rd August, 2022 - Webinar replay

How to communicate effectively with clients in tough times with Brian Portnoy and Neil Bage

Phil Bray 0:00
Good evening, everybody. And welcome to today’s webinar. I’m just gonna take the screenshare off a second. And as I say, welcome to today’s webinar. And if you regularly attend Yardstick webinars, we’re delighted to see you again. If it’s your first time with us, you really are very welcome. I’ll introduce our guests in a second. But today we’re going to be talking about communication, in these toughest of times. So, I’m aware that we’ve got a lot of guests on from in the US today. But here in the UK, this week, inflation was predicted to rise to 18%. Interest rates are predicted to go up past 5%. Utility bills are eye wateringly expensive and expected to get worse. And that’s all leading to a cost of living crisis, that many of us… the likes of which many of us have never seen. And then add in stock market volatility, and doomsayers on both traditional and social media, which I’m sure Neil and Brian going to talk about in a bit. And you’ve got some understandably nervous people out there. And that means those people are going to be looking to you as their financial adviser, their financial planner, for reassurance that everything’s going to be okay. And in our view, you need to be there for them. Back in March 2020, we saw some advisers shrink from that task. They put their fingers in their ears, they put their tin hat on, and slid under the table, until the storm had passed. And luckily, at least in the context of stock market volatility, that storm didn’t last very long. But right now, I think is different. The current issues we’re facing aren’t going away overnight. That means advisers have got two choices – to step up or slide under. And I’m delighted that today we’re joined by two formative experts and behaviour and communication, Neil Bage, and Brian Portnoy, from Shaping Wealth, to help everybody step up. So, I thought without further ado, we’d start by introducing both of them. Brian, let’s start with you if it’s okay. Tell us a little bit about your background, and the story behind Shaping Wealth and what you’re doing now.

Brian Portnoy 2:25
Yeah, sure. And Phil, thanks for arranging this. Thanks for having us on. So real quick, my background in the industry is mostly on the investment and portfolio management side. So I spent 15 plus years, mostly in the hedge fund industry, managing portfolios of complex assets. And probably the biggest takeaway of that experience is that no one really knows anything. It’s impossible to predict the future. And bottom line, it’s behaviour and decision making that really drives outcomes. And so, I stumbled and bumbled toward pivoting my career toward more of a writing focus. So fast forward to now, I have published a few books in the field of behavioural finance. And one of them, The Geometry of Wealth, seems to have landed well with audiences. And in particular, the idea that what we all really want in our money life is funded contentment. This idea that true wealth is the ability to underwrite a meaningful life. Shaping Wealth, the company that Neil and I co-founded, is basically the transformation of that book and that idea, into an all out coaching and content programme platform, focused mostly on working with financial advisers. So effectively coaching the coaches.

Phil Bray 3:52
Thank you, Brian. And then Neil, same question to you. What’s your background? Tell us about your background, and maybe some of your aspirations for Shaping Wealth?

Neil Bage 4:02
Yeah, gosh, my background. So I’ve been in the industry for a while. I know, I look very young, but it’s at least 20 years – maybe more. And, you know, I’ve worked in big corporate FTSE 100 companies, and I was formerly had a strategy for a FTSE 100 company, left the setup on my own, founded and exited a very successful Behavioural Insights technology company, only recently, before I joined forces with Brian to kind of bring together Shaping Wealth. And you know, regarding Shaping Wealth, I have a tonne of aspirations. But one of the things that struck me when Brian and I initially kind of went on this journey together and if you kind of move back and look at the broader Shaping Wealth team, you know, every day I kind of pinch myself because across the team, you know, there’s experts in sociology, psychology, physiology, neuroscience, communication, technology, education. And everyday I get to work in that environment. And it’s absolutely amazing. It really is. So, continuing to do that and continuing to bring that expertise to the offices of advisers and their clients is something that gets me out of bed every day, Phil. But I guess in a more succinct, onpoint way, you know, the modern adviser, spends their life hoping to be, the core, the pivotal point of their clients relationships. And ultimately, that’s what we’re trying to do with Shaping Wealth, but the other way around. We want to be there for the adviser, and do work with them very closely, and help them elevate their relationships with their clients.

Phil Bray 5:48
Cheers Neil, thank you very much. And then just finally, to complete the set, for anybody who doesn’t know The Yardstick Agency. We’re a marketing agency based in the UK, we specialise in working with financial advisers and planners to be honest, it’s all we know, we don’t know anything else. And whilst we’re based in the UK, and we’ve got a lot of clients in the UK. We’ve also got clients in the US, Europe, Far East and Australia. And our services include marketing strategy, website development, newsletter comms, social media management and branding, amongst other things. But nobody is here to hear from me today. We want to tap in to what’s in-between Neil and Brian’s ears. And we do want today to be incredibly interactive. So please do put your comments, feedback, challenges, and above all questions in either the Q&A or the chat. In the Q&A, or the chat. And both Neil and Brian have said that they’ll stick around as long as necessary, to answer any questions that we’ve got today. And then finally, before we dive in, some of this you’ll see Abi, from The Yardstick Agency lurking in the background. And Abi will send out a copy of the recording tomorrow, a couple of links, contact details for myself, Neil and Brian, etc. So we’ll get that out to you tomorrow morning. So let’s get into it. Let’s get into what we’re here to talk about today. Neil, let’s start with you. I want to start by – if we can – defining the problem. What are consumers… What are clients of advisers and planners in the UK specifically worried about right now?

Neil Bage 7:36
Gosh, Phil, I think you kind of set the scene at the top of this webinar, right? Cost of living, petrol, gas, electricity, train fares, stock market volatility, interest rates, inflation. I mean, Covid, the environment. It’s kind of like – where do you go on? We are in a perfect storm of, you know, dozens, if not more, big issues that are entering our brains on a daily basis, that we have to try our hardest to deal with. And, ultimately, those things that you know, life, they all actually boil down to one question that’s on every client’s mind. So you know, gas, electricity, travel, everything that I just mentioned, all boils down, it’s funnelled down to one question, and that one question is, am I going to be okay? Now, by I, I mean, me, my loved ones, the people I care about. That ultimately is on every single client’s mind, whether you’re in the UK, the US, Asia, wherever you are in the world. That that question is ever present. You know, the cost of living petrol, gas, electricity, they’re kind of just timely challenges, they… popped up, they are of the time, we have to deal with them, and we will get through them. But that question, “Am I going to be okay?”, it’s just a timeless question. It’s like it’s always there. Throughout life, it’s always at the forefront of our mind – am I going to be okay. And the way that we deal with the timely and the timeless from a behavioural perspective, is different. It really is. Especially when it comes to communicating with clients, and helping them try to navigate this landscape of life.

Phil Bray 9:24
And Brian, Neil’s talked about, you know, a universal question. Would you agree there with that in the US? Anything that you would add to that? Specific to what you’re seeing in the US right now? And then to move the conversation along, how do advisers and planners develop a really deep understanding of the specific issues that each individual client that they work with, might be worried about right now?

Brian Portnoy 9:55
So, um, contrary to Neil, in the UK, everything in the US is great! Everyone’s getting along. Everyone loves each other, just a lot of, you know, a lot of brotherhood over here. No inflation, stock markets are pretty smooth and easy to predict… No. I mean, the economic challenges, the timely economic challenges, that we have are identical to the ones being experienced throughout the world – and the US economy being as big as it is, a lot of the trends here drive trends overseas as well. So you know, from a timely problem perspective, yeah, it’s the same stuff. But I’ll point out that, if you take a wider lens on economic history, there’s always something. There’s really never a moment in time, where it’s blue skies, you can look backwards and say, “Oh, well okay, it all worked out for them, but it’s not going to work out for me.” The fact is that you can go year by year, quarter by quarter, really over centuries, and identify things that had people pretty freaked out. So in a sense, there’s nothing new under the sun. The old line that history doesn’t repeat, but it rhymes, I think’s very true. And, Neil articulated something that’s really important for the way we do our work at Shaping Wealth, which is to recognise that there’s a bridge between the timeless, and the timely. The timely is the shiny ball, and we get wrapped up with the headlines. But there are timeless issues that tap into our evolutionary psychology. So, we were built in order to survive, and then to thrive, and we’re never more than a stone’s throw away from that evolutionary two-step. I mean, you asked me a second question in terms of, how do you deepen the understanding – how does an adviser deepen the understanding of what’s on a client’s mind? And I’m not being cheeky when I say that, you could just summarise it by saying ask them. Ask them what’s going on, and what they’re feeling. And, you know, I’m really not trying to be coy or clever. The art of conversation, and the art of asking people the right questions in the right way, is also a skill that we see some people have more than others. And so, when someone comes into your office, and they say, “I’m worried about inflation.” “I’m worried about COVID.” “I’m worried about the stock market.” or whatever the matter is – well, that has to be taken seriously on its face. But there’s also an element of the understanding the question behind the question. So what are they really getting at? The fact that the price of gasoline, which you would call petrol, has gone through the roof over, the last, however, many months or year or so, even though it seems to come back down a little bit? You know, this is a very timely question. To what extent is that actually impacting someone’s ability to pay their bills, and to achieve their financial goals? Versus, is it just a source of alarm? And, you know, is it something to worry about? And so when they say they’re worried about inflation, are they actually worried about that? Or is there a question behind the question that you can dig into, and create an open space for that dialogue? So, there… as financial planning soars as a profession, and broadens throughout the world, this art of asking questions is becoming more and more germane.

Phil Bray 14:13
I mean, Brian, we weren’t… we weren’t born to ask questions in an effective way. My daughter’s learnt it by the time she’s nine. But we weren’t born to ask questions in an effective way. So how do we learn to get… how do we learn to ask better questions?

Brian Portnoy 14:34
Well, you know, this taps into the topic of empathy. And, if there’s an emotional centrepiece to the way we’ve built the Shaping Wealth coaching programmes, it’s around this idea of empathy. And empathy is, in a sense, the superpower of the modern adviser so what is empathy? Well, it’s it’s not sympathy. It’s not feeling bad for somebody, the root of the word and the root of the practice of empathy is feeling with someone. That doesn’t mean you drown in the same emotions. There’s something known as emotional contagion, which we want to avoid. And we’ve all experienced that you feel so badly for somebody, that you sort of drown in the pool with them. But this art of, and skill of empathy, puts you in a position to be with someone, feel what they’re feeling, listen, give them space, create space for them to express, because often we’re not… none of us are so articulate that you’re going to say exactly what you feel and why you feel it on the first go. So creating that space for someone to truly describe what’s going on in their head and their heart, is something that we can all work on. I’ll wrap up, you know, comments on empathy, by saying that it’s both a trait, and a skill. So, some people were born more empathetic than others, just like some people are born with a high vertical leap versus not, or they’re good at chess or not. But these are all skills, to some extent, that we can become better. So when we think about empathy, the idea here is not to try to become Oprah or Brené Brown, or one of these empathetic masterminds. It’s to be self aware enough to know where you are now, and how you can be slightly better at that.

Phil Bray 16:40
Neil, you’re nodding. What would you add to the topic of empathy?

Neil Bage 16:46
There’s not a great deal I can add to what Brian has just said, Phil. It’s bringing… when you bring empathy, and great conversation, our great questioning skills together. The world’s your oyster. But both of those things, require training, require you to build those skills and, get the reps in, as Brian would say. You need to keep practising it. It’s not something that you can just turn on and just… you are the superhero. No, you need to understand the foundations of both of those things, and develop those skills. But when you develop them, bring them together in a relationship with another human being… magic happens.

Brian Portnoy 17:33
Phil, can I just jump in and say, you know the word that neither Neil or I, have used so far is the word “trust”? And, great financial advice, financial planning, relationships are based on some element of trust. But trust doesn’t happen overnight. And so I would argue that empathy is one of… one very important skill, that allows us to create a trusting environment, where people can share with us what’s truly on their mind, so that we can answer the question behind the question.

Phil Bray 18:05
We talk a lot about empathy to advisers when we’re building their website, and just the importance of empathising with the reason that people are there on their site. Too many advisers, too many planners talk about what they want to talk about, you know, above the fold on the homepage, rather than showing that empathy. I couldn’t agree more with what you guys have said that. Neil, just going back to… I saw on your presentations, not so long ago. And this really plays into the current climate. And one of the things you talked about, which I was fascinated by, was the fact that we are hardwired to negative stimuli. We’re hardwired to negative stimuli. And I’m sure Brian’s the same. There’s no shortage of that in the UK right now. And how does that predisposition to look for the negative, both in, traditional media and social media, affect how advisers and planners should communicate with their clients?

Neil Bage 19:13
So, let’s take a step back for a second. And let’s look at the process that goes on in the first place, because that gives us a context for me to answer this question. So, I see a negative stimuli, whether that be social media, mainstream media, a conversation I have with somebody. It doesn’t matter how that enters my brain. I am exposed to something that is deemed to be negative. Now, what happens is, the brain in essence is a prediction machine and it will process that information before we even become consciously aware of it being processed. The brain does a tonne of stuff in the background well before consciousness kicks in. So, the stimuli hits the brain, the brain is processing what it’s been exposed to. And it creates… it prepares an appropriate response to what that stimuli is. If there isn’t an experience of this stimuli, by the way, then the brain has the most amazingly ability at just creating a best guess, of what it’s experiencing, and how we should respond. At the same time, emotions are triggered. And that could be mild worry, through to full on fear. And ultimately, what the brain is designed, and is there to do, is to create a strategy for dealing with the stimuli. And, if it feels that the stimuli that is receiving is a threat, defined by us and our experiences, by the way, then it will create a strategy to mitigate the threat. And running away from that threat is a very valid, human strategy. That’s why we have what’s known as our “fight or flight” mechanism. You either stay and face the threat full on, till, potentially to death, or you get the hell out of there. And that’s how we’ve evolved right? Fight or flight is still with us. It’s known as our sympathetic nervous system. It’s still with us today. And it’s ever present in the way we navigate the world. And whilst once upon a time walking across the Savanna, and being exposed to the lion will trigger our fight or flight mechanism, modern day “lions” so to speak, are things like red lines on a chart, when you look at the stock market falling. It triggers the same, you know, kind of primordial responsiveness of fear. So if that’s the situation, if that’s the person that you’re dealing with, if they are on that scale from mildly worried through to full on, full blown fear, then you should always be kind of a calm, confident, and empathetic voice. Yes, be reassuring. Yes, be approachable, all of those things. But like I said earlier, it’s about bringing empathy, and great conversation together. And, you can start so the advisers on this call, you can start by, before you even engaged with the client, you could start by asking yourself the question, “What can I do or say, that will help my client feel reassured? What do I need to do or say, that will allow them to understand that I understand?” So it’s about being sensitive to their emotions, and not pathologising kind of any emotional response that they may have. But ultimately, Phil, something you said, a few minutes back. One of the things that we should avoid, like the plague, and it’s a comfort blanket for advisers (and I’m just speaking freely here) is to use our technical training to guide clients down a certain path, because we know that that’s the right thing to do. And that’s why I say, we shouldn’t be pathologising their emotional responses to what’s going on in the world. And we definitely shouldn’t be putting our technical skills and the right thing to do in the driving seat, at the expense of a client, who was doing nothing other than being a human being.

Phil Bray 23:30
And how… question, by means, guys, questions, feel free to put them in the chat and the Q&A. We’re lucky to have Neil and Brian on today. So get those questions in, that feedback as well for Neil And Brian. We’ve got a question from Paul, and Neil, you might want to take this, Brian, you might want to take it, or fight between the two of you to dive in first. “20 years ago, 25 years ago, the news cycle was not as faster as it is now. Clearly, with social media, you can dip into negativity whenever you so choose. So how would that change things? How has that changed how we we look out for negative stimuli?”

Brian Portnoy 24:13
I mean, I’ll take a first stab at this. And I suspect Neil will have something to say as well. I’d say headline is things have gotten worse. That we are being bombarded with such a volume and breadth of information, that it’s easy to feel to actually be on tilt. Um, you know, look, you could go back 500 or so years, and read about a bunch of sort of teeth gnashing over the creation of the printing press, and movable type, and how the end of the world was nigh, because you know, these sorts of books… So every new communication technology brings a certain amount of stress into the system, okay? So that’s fine. But I think it’s fair to say that we’ve never been confronted with more information, more choice, more data at such a high velocity. Neils the neuroscientist, I’m not. But you know, so I’ll go so far as to say that we weren’t necessarily wired to be comfortable with the volume and velocity of information that we’re having to absorb – somewhat involuntarily. Yes, I guess you could turn off the internet and turn off your phone. Most of us don’t most of the time, because our livelihoods and our personal relationships are connected through these technologies. And so, I think a lot of the built in biases that we have. Those are somewhat eternal or evergreen, they’ve been with us since the evolution of the brain, more than 100,000 years ago, but they’ve been aggravated in their application. So, confirmation bias, for example, we always like to find things that reinforce the things that we already believed. It’s hard for us to change our mind. It’s physically uncomfortable, if you think about it. Well, now given the volume and velocity of information at our disposal, it’s as easy as ever to confirm whatever prior belief we already had. So to Paul’s question, I think things have gotten considerably worse. Maybe that makes me a bit of a doomsayer. But I think there’s evidence to suggest that.

Phil Bray 26:59
And Neil, as our resident neuroscientist on this, what would you add to that?

Neil Bage 27:04
I mean, the brain just… so let me backtrack. Think of this, as you know, let’s use an Aesop’s fable analogy here, The Tortoise and the Hare, loosely used. The brain is the Tortoise. It develops slowly, it’s developed over thousands and thousands of years. It doesn’t develop overnight. We don’t learn a new skill and the brains neurons rewire themselves. Although the brain has the most amazing ability to rewire itself through neuroplasticity, it doesn’t do that overnight. It’s part of the evolutionary process. So it takes a long, long, long, long time for the brain to become accustomed to the weight of the world. And yet, the Hare is modern society. It’s moving so quick. It really is. It’s really moving quickly. And the brain is just always trying to catch up. It’s always trying to process the next gadget, right? I mean, if you think about when, these things came about in the history of humankind, it was but in the blink of an eye ago, and yet, we’ve had to learn how to process this constant stream. These pings that shatter our attention or any veneer of attention that we have. So there was a great piece of research recently I read, which said that whilst we are more connected than we ever have been before in the history of humankind, we’ve never felt more disconnected at a psychological level. And it’s because we just, we’re (Brian’s already alluded to this), we are just being bombarded with stuff constantly. And that, ultimately takes its toll. And we can see that, if you look at figures on, you know, depression, anxiety, stress, worry, it just exacerbates everything else that’s going on that we have to deal with. Stuff that we talked about at the top of the webinar, you know, the cost of living, etc. So, there’s a lot to deal with. And given that, you know, the brain is coping as best as it can but ultimately, like the Tortoise and the Hare, the Tortoise will win.

Phil Bray 29:11
Question from Sarah, about the bombardment, “How do you two – personally – deal with the noise? The bombardment?”

Brian Portnoy 29:23
Not well! I’ll go first, quickly, but it’s really I don’t have a good answer or a good solution. You know, I work at a remote only company with partners and clients all over the world. There’s effectively no way to turn off my machine, without turning off my my work life. And by the same token, maintaining personal relationships, goes through technology. I can see firsthand that in-person stuff is better, but in-person stuff is hard and inconvenient. I mean, if there’s any sort of off-ramp to this, it’s habits and processes. So, trying to do a few things in my work and personal life such that, you know, things get filtered before they show up on my doorstep, ie my inbox. And as a result, I’m able to sort through things much easier, all things equal. We would prefer good habits over good decisions, because good habits are good decisions that have been almost subconsciously absorbed into what we do. And so, if we can build those habits over time, in terms of how and from whom we receive what type of information, then we can do a little bit better. But it would be wrong, and misleading for me to say that I’ve cracked the code. It’s something I struggle with all the time.

Phil Bray 31:14
Neil, what would you add to that?

Neil Bage 31:17
It’s difficult, it really is difficult. I mean, I made the conscious effort years ago, to limit my social media exposure. So I’m on Twitter, and I’m on LinkedIn, I struggle with Instagram, I just don’t get it. I’ve never have. But Twitter is where I spend most of my social media life. LinkedIn, less so. So I’ve never been on Facebook, I’ve never been on any of the other social media sites that I can’t even name, because I’ve never been on them. So I limit my social media exposure, and I consciously do that, because it can draw you in, and it can become toxic. And it can just add to the noise. And that’s never a good thing. But to the point Brian said, you know, I struggle too. It’s really difficult, when we live in a world where technology is the main way that we can connect to other people around the world, and communicate. But, so I try and limit my social media exposure, number one, and number two, when I read or see anything that someone is suggesting is a fact, or, you know, “Oh, look at this, this is true!” I always approach those things, sadly, with an err of caution, and try and find the source or make sure that it’s true. Because unfortunately, one of the things that adds to the noise, to the bombardment, are other people’s opinions and other people’s views. And we should never be, you know, we should try and navigate life and make important decisions based on fact, based on evidence, and not based on the opinions or the views of somebody else, who’s just said something to get clicks, you know, so I…

Brian Portnoy 32:56
Yeah, and Phil, maybe you’re going here next (and apologies if you’re not), you could redirect but you know, notwithstanding a deep personal failings on behalf of senior members of the Shaping Wealth team. The implications of all this for financial advice are pretty profound, because the ways in which we can choose to communicate, compel, cajole, comfort our clients, we now have more tools, but we have more problems in how to get through to them. So it’s something that feeds on itself a little bit. And, I think you see it from your seat, in terms of running this big marketing firm platform, with global clients, and and we see it in working with financial advisers all over the world, in terms of what are the best ways – and even what best means is debatable – but what are the best ways to be communicating with clients in order that everyone achieves the objectives they’re seeking?

Phil Bray 34:05
Yeah, that’s exactly where I was going next, particularly around social media. And for me, one of the things I really dislike… I think it comes back to the conversation about empathy earlier, is when the days when markets for – by quite a significant, a significant amount. And you can predict, that some advisers will head on to their social media platform of choice, whether it be Twitter, Facebook, LinkedIn, or Instagram, not that I go on there like you Neil (I think it’s an age thing, mate), and they will come out with glib statements. “This shall pass.” Yeah, that that sort of thing. And it for me, it just feels… it lacks empathy. I don’t know how you guys feel when you see statements appearing like that on your Twitter feed, your LinkedIn feed, your Facebook feed?

Brian Portnoy 34:57
It feels… it feels cheap and easy. You know, finance is just riddled with aphorisms. Some of which happened to be true and useful, but are so overused. They come across as a bit patronising, “Oh, there’s noisy markets, things are volatile, invest for the long run, you know, just stick to your portfolio.” You just sort of say things that might be technically true. Clients, but I would say human beings, they want to be seen, and they want to be heard. And this is the connection to empathy. You want – anyone wants – to be seen and heard and in a… you know, go to the relatively narrow context of a financial adviser and a financial advice client, the client wants to be understood, they want to be heard, they want to be respected. And I would say, most most advisers, obviously, the best ones, they want to hear, they want to see, they want to comprehend. And despite the fact that both parties want the same thing, there are still gaps in the communication that take place. Because it is a skill and it takes work. You know, a personal failing of mine over many years, and it’s something I still work on, which is, listening to respond, versus listening to understand. How many conversations have I been in – just ask my wife – where I’m just waiting for the opportunity to say my piece, as opposed to truly listening. This, you know, I can wave a hand and say, “Well, this is the way they are, that’s an excuse. That’s a personal excuse.” The fact is, that there’s an opportunity that we all (including me) can take advantage of to be a little bit better at those things. So remember, the context here is just the the avalanche of information, but in that, the ability to create a space in which somebody is heard and understood. And then a plan with actionable steps can be built, in order to get to a better place – man, that that’s awesome! That’s art. That is, to some extent, the height of financial planning, because you’re truly helping somebody along their life’s journey.

Phil Bray 35:24
Thank you, Brian. There’s a question come in from Emma. And again – feel free, Neil, Brian, fight over this question. “What would be your suggested social media content to keep clients calm during volatile times?” Who wants to take that?

Neil Bage 37:55
I mean, I will say, maybe not specific content or messages, but one of the things that you do need to do, is be visible – that’s an obvious thing. So you need to be seen and heard. But equally, you also need to remember that in amongst all of that noise we’ve talked about, in amongst all of that, being bombarded with stuff that anything you do is bite sized, and easily digestible. The last thing people need when they are in a state of worry, stress, panic, anxiety, fear, whatever variation of that you want to choose, is to read a 25 page PDF with charts and graphs. They don’t want it. They need quick reassurance. They need to know you’ve got the corner, something Brian said earlier, they need to trust you. And you need to be visible, be there. And I wouldn’t… I mean, for me, and this is… I wouldn’t be using social media as the way to quell their fears and anxieties. I’d be picking up a phone, and talking to them. I’d be having a conversation with them. Social media great for just kind of saying this is a message, short, bite sized, punchy to the point. But if you know that you have a client (or clients) that are struggling or worried or concerned, then the art of conversation – something we’ve been mastering over thousands of years, is the only place that you should go to help those people navigate that situation.

Brian Portnoy 39:31
Yeah, I was struck by the juxtaposition in the question of social media and calm. Those two don’t always go together. I will… I want to double down on Neil’s emphasis on bite sized content. I think that… and I still see it, lots of advisers will send out pretty long emails or PDFs with some exposition of what’s going on in the market? And maybe, maybe there’s an element of, “What does this mean for you?” but given people just a dump of facts and numbers, isn’t really going to land with them. There’s a certain theatre, to financial advice historically, that has been played out. And not particularly effective. The theatre being one person plays the the Market Strategist and economist, and the other person plays the part of someone who pretends like they care. And, you end up having a somewhat unproductive exchange between somebody who’s saying things that aren’t true – and I don’t mean that they’re lying, I just mean that we don’t know the future. I spent, you know, almost 20 years in the world of investments and due diligence and research. The idea that we know what’s going to happen is folly. But you know, we do crave certainty, we neglect probability. So, you know, one side of the table is trying to deliver some form of certainty. The other side of the table is craving certainty, and is therefore, you know, sort of present to some extent in the conversation. But you know, that’s a sub-optimal cul-de-sac, from which the industry – I think – should retreat, and try to go in a different direction, à la what Neil was beginning to say about conversation, and the power of true conversation.

Phil Bray 41:43
Neil, from a practical perspective, with all the best will in the world, if you’re an adviser, or planner with 100, 125, 150 clients, you’re not gonna be able to pick up the phone to every single one of them. So is there a dual strategy here? With timely bite sized chunks, potentially delivered by email, for example? So you can get a message out quickly, followed by targeted calls, to individuals, you know will be receptive to that type of communication?

Neil Bage 42:19
Yeah, absolutely Phil. And I think, a conversation you and I have had, there are some common messages that can be delivered, and there’s some that should be clearly avoided. But in that situation, you know, reaching out to clients, and just saying, “I’m here for you. You know, you’re not alone.” that even in itself is a great place to start. But what I tend to… I tend to err more on the side, Phil of reframing communication, as conversation starters. You know, so, actually instead of saying, “Yes, I’m here for you, you’re not alone,” just make people feel reassured that, they have been seen. Metaphorically, they’ve been seen. Reframe your conversation, you know, as a conversation starter already. And, you know, ask them, “What can I do to help you?” You know, these are the things that are going on in the world. Let’s not assume that you’re feeling this way, by the way – because I’ve no idea that you are, you might be feeling fine. But you might be sitting at home, sweating in fear. So but you can still that question. “We know what’s going on in the world.” Acknowledgement. “I’m here for you. You’re not alone.” Reassurance. “What can I do for you, to help?” Open question. They might come back and say, “Nothing – I’m alright.” Great. But they might say, “Actually…” whatever their response might be, right? So it’s about, yes, we can be visible to people on mass. “Hi, everybody, just so you know, the world’s a bit crappy at the moment, I’m here for you. You’re not on your own.” Followed up with a supplement or, if you’re feeling whatever, “What can I do to help?” It’s not about communicating a message that I want to communicate. It’s about telling the people I care for, my clients, that I’m here for them, and my door is always open. So, I don’t care how you feel. Come in, talk to me, because I’m here for you.

Brian Portnoy 44:21
And one thing I’d add to that we haven’t mentioned, you know, 45 minutes into the call is plan, and planning. Presumably there should be a plan in place, and the plan is an anchor. An anchor of multiple, multiple uses, in helping to focus the conversation, to articulate – or help to articulate – what emotions are at play. So you know, part of the evolution of the industry over the last couple generations is that it’s gone from more transactional base, to planning base. I’m not talking about fee structures in that, that’s a conversation for a different day. But generally, the move from “Okay, I’m here to sell you a bunch of investment products, and hope they work out,” to, “Okay, we’re going to talk about the life that you want to lead, and what financial well-being means to you, and build a plan around that.” and the better advisers, they just don’t build a plan, they engage in a planning mindset. They move plan from noun to verb, and they get buy in, in one way or another from the clients, that, okay, yes, we’re going to start off by maybe talking about your goals, and your dreams, and your fears, and your hopes, and all of those deeply important things. But the plan itself is going to change a lot, in the years and decades to come. And if you can get – in one way or another – depending on who you are, as an adviser, who they are, as clients, we all have personalities. And we should embrace those differences. So in whatever way is best for everybody involved, to enter the the multi-year, multi-decade process of saying, “We’re going to adapt to a world that we cannot predict.” But by virtue of having not just a plan, but an aptitude and a mindset of planning. Well, then we can focus the conversation, so that when the markets crater 20-30%, or, you know, inflation spikes in a way that we haven’t seen in decades, well, one – not the only, but one – of the things that we can do is go back to the plan and say, “Hey, are we still on track?”

Phil Bray 46:46
And that goes back all the way to what you said at the start of the hour, Neil, about, “Are you going to be okay?” and that’s what people are worried about right now. A couple of comments in from other from people. So let’s see what we make of these. Dan, Dan Jones, I think this was maybe with regards to something we were talking about earlier, and couldn’t agree more with this. “It’s information overload now with work, life, social media, etc. Our brains aren’t designed to cope with all that’s thrown at them these days, hence, mental health issues so much on the rise. They need…” I assume he mean brains need, “…rest, downtime, and a reboot. Sorry, not a question, just a contribution.” But thanks, Dan, that’s a very valuable contribution. And something from Jonathan as well, “It’s important to only focus on the things that we can control. Don’t waste energy, worrying about the things that we can’t.” I’d love to be able to do that! Any tips Neil, Brian, for how to be able to do that?

Neil Bage 47:48
No, it’s hard! Go on Brian, go.

Brian Portnoy 47:50
Well, you know, we… it may sound easy, but it’s not. We work with advisers on this topic of control versus don’t control, by just using a simple notecard, you know? It kind of has a little red line at the top, and blue lines underneath, the kind that you pick up at the local drugstore, whatever. And just drawing a line down the middle, and begin to list the things that you, the adviser are in control of you, the client are in control of, and that nobody is in control of. And, making that part of this planning process that we just referred to a few minutes ago, where you sort of brainstorm together, “Okay, here’s what we can officially control. And here are things that we’re just going to have to respond to.” We respond to the weather, we respond to the markets, we respond to a lot of external factors. And we can gameplan, we can say, “Well, it’s more or less likely that this happens, we know generally, it’s going to be colder in winter and warmer in summer.” So, you know, we can make some plans, in terms of our wardrobe or our trips, or anything like that trivial example. But, telling for financial planning, in the sense of, markets are volatile over time. Going down 10% is a quite common event. People freak out when the markets go down 10%. We know that showing them the fact that that happens, doesn’t make them feel any better. But you know, that doesn’t mean that we should just keep quiet about it. It should just be baked into this exercise where, everybody gets on the same page, in terms of, “Okay, what’s yours? What’s mine? What’s ours? And what’s none of the above?”

Phil Bray 49:50
That’s a great approach. Brian, Neil, you’ve given up your time, so generously today. Just talk for a minute if you would, maybe starting with you, Brian, about how what you’re developing at Shaping Wealth, can help advisers and planners deal with some of the issues that we’ve talked about today?

Brian Portnoy 50:09
So, I appreciate the question. What’s very clear to me after – now, many years in the wealth management industry, working with, talking to, counselling financial advisers, is that there are a lot of men and women who care deeply about their clients and want to continue to do better. So they want to invest in themselves, to be that much better, in terms of the advice they give – the coaching that they effectively give – to their clients, and to those families. What’s generally lacking however, in the industry, is sort of the the learning opportunities and the coaching to get better at that stuff. So, one very specific data point, we have the Certified Financial Planning Board, the CFP as you know, global stamp of excellence. And it was only in the past year that they added behavioural finance and client psychology to the curriculum. So until a year ago, till 2021, going back decades, the entire curriculum for being a good financial planner was 100%, the mechanical and technical pieces of building portfolios, understanding insurance, estate planning, taxes, things like that. The fact is, that the modern financial adviser, she helps people along their life’s journey, but wears two hats along the way; both mechanic and guide. And so, it’s one thing to be responsible for the vehicle and to make sure that the engine is running smoothly; the portfolio is set, the estate, the estate planning is the way it should be, you own the right types of insurance. All critically important, non-negotiable. But is the car… is the vehicle headed in the right direction? That’s the guidance piece. What does it mean to have a goal? How do you establish, and try to achieve those goals? How do you deal with the fact that once we achieve our goals in life, we tend to be not much happier than we were, before we achieved them? There’s a whole host of issues. I think what Neil and Joy and Jordan and I have shown up in the world with, is an opportunity to have deep, more… deep and impactful conversations with advisers about how they can do a little bit better. And you know, so far, the appetite seems to be just unbelievable, US, Canada, UK continent, Australia, Middle East. There’s just a lot, you know, there’s millions of “financial advisers” out there, but dozens of different types. Generally speaking, there’s a very large community with an increasingly loud voice saying, “Hey, we’re here to help these people lead better lives. We’re responsible for their financial well being. Just knowing the technical pieces to it, is insufficient.” And we’re here to help the helpers.

Phil Bray 53:24
Neil, what would you add?

Neil Bage 53:25
You know, I want to steal a line from everything Brian said, plus, my point. Brian said something to us, to me, a few weeks back, and it really stuck as a really powerful statement. He said that, financial planners – it’s back to the mechanic guide analogy – financial planners are amazing at what they do. But actually, there’s a stark reality here that one of the, you know… we are amazing at communicating, we can speak, you know? I’m speaking here, people are listening to me, but actually one of the languages we never really learn is the language of money. It’s its own language, it comes with its… the way that we speak about money – across the world, is, in and of itself, its own language. And if I can… I’m gonna do this in one minute, I’m going to do a quick brain neuroscience thing really, really quickly. So, when we speak, we… language the ability to speak, and to describe in detail my emotions, my feelings, what’s going on, gives us as a species, so a huge advantage over any other living thing. You know, I can tell you exactly what happened to me, how I’m feeling and all that type of stuff. Now. The words, the sentences that I use, really, really matter. Really matter. If I’m having a conversation that makes you feel good. It’ll trigger dopamine, cortisol… sorry, oxytocin, endorphins that’ll give you, as the listener, this sense of wellbeing. But if I use words or sentences that create a sense of fear and anxiety, then I’ll probably… I’ll likely trigger cortisol, vasopressin and adrenaline. Whatever, right? That won’t make you feel great. So, the words that we use are really important. Narrative in this context is really, really important, because that can direct and guide our attitudes, our beliefs, and ultimately, our behaviours. Now, going back to the language of money thing, you know, when we are communicating with clients, if we use a language that is familiar, then actually what happens, the brain’s neurons fire better, they’re more efficient, and it’s more likely that I’ll understand. Information flows better, in essence. But when I’m using words or sentences or stories, that just don’t make sense to me, then my brain has to work harder. And therefore, the information that I’m receiving, is often lost, ignored, or just, it’s just not absorbed by the brain, it just doesn’t know how to process it. So, our ability to process language efficiently? If that’s limited, then my understanding is limited. But if it’s not, then I’m in the best place to make a decision, based on the conversation that I’m having. So the words, the sentences, the stories that we’re exposed to shape our feelings, and then directly impact how we perceive the world. And one of the big parts of what we’re doing with Shaping Wealth, is everything that Brian said. But we’re also giving advisers that we work with the ability to learn the language of money, and figure out the best way to communicate that with clients, given everything that we’ve talked about over the last 56 minutes.

Phil Bray 56:40
And for anybody… we are going to talk about prospective clients in a minute, prospects a minute, but for anybody who wants to learn more about Shaping Wealth, whether you’re from the US or the UK, we will be putting a link to what Brian and Neil call the Inner Circle. We’ll be putting that link in the follow up, which will come out tomorrow. But thanks, guys for giving us that insight. And, I just want to wrap up by talking about… just want to wrap up by talking about prospects, prospective clients. And these are people who have made an enquiry to an adviser or planner, who for whatever reason, it’s not gone forward. The individual has not engaged the adviser, or planner yet. So they’ve not had months and years, of the benefit of working with an adviser or planner, when they’ve been trained to deal with these situations. So these prospects, they’re probably feeling even more anxious than advised clients, even more worried than advised clients. So, my question to you guys, and feel free to dive in first Neil or Brian, whoever, how can advisers and planners use the current climate, as an opportunity to demonstrate the value that they offer, while providing that comfort, that peace of mind and information, that people crave?

Brian Portnoy 58:09
Neil?

Neil Bage 58:09
It goes… You know Phil, everything that we’ve said so far, is true for potential clients, too. These people need to see and hear that we’re here for them. They’re not alone, they have been seen. But, also we need to be careful… not careful. We need to be conscious of the words, the sentences, the stories that we tell these people, to allow them and give them permission, to step forward and engage with us. Sometimes we are way too technical. We push our technical competency, we push our mechanic personality to the fore. And we say, “Look how good we are. We can solve your problems. We… look at all of our qualifications. Whatever, whatever, whatever.” Do you know what they need? They need a guide. That’s what they need. So our first engagement with them, typically, sweeping statements is one of, “Look how good we are, look how technically competent we are. Yes, we hear you.” Don’t worry, you’re not pathologizing feelings, whatever it is. We just need to be more human, and realise that these people need to be communicated with in a way that speaks to them, and their fears, anxieties and worries and dreams and hopes and aspirations as well, in a way that makes them feel that, “I’m being communicated with, by another human being who cares, who hears me and who has empathy to the situation that I’m in.”

Phil Bray 59:43
Brian, how would you add to that?

Brian Portnoy 59:46
I’d add by, you know, throwing in the unfortunate fact that I think most regular normal people, wouldn’t really recognise the last hour as a conversation about financial planning, because the industry has such a crap reputation. If you look at surveys of financial services, we are an untrusted lot. And they’re probably not making a big distinction between an investment banker and a financial planner and a portfolio manager. And, okay – there are very big differences. And maybe it’s not our job to, explicate the entire ecosystem in that way. But what we can do, as an industry, and I mean, wealth management, financial advice, financial planning – I’m using those interchangeably – is, you know, to echo some of Neil’s comments. Point out that financial wellbeing is a thing. It’s real. It has a definition. It’s important, it’s hard to achieve. And like in every other dimension of our overall wellbeing, we need help. And so, if you think about our physical or emotional or spiritual well being, we have doctors and therapists and clergy who are right there, if we want them to. We are at the beginning of the beginning of explaining to the world that, you know, some of us are actually here to help. We actually care. And that there is a craft to this, that has very little to do – maybe nothing to do – with selling you an investment product or an insurance policy, and instead, quite differently, take seriously, like, who you are and who your loved ones are. And yeah, business takes place, because that’s the nature of things, of course. But, we all even “successful advisers” on this call, have so much more work to do, explaining what is it that we’re even doing here to begin with? And, I don’t take that as something depressing. I take that as an opportunity for everyone to grow, and thrive and build great businesses about doing… around doing good things, for good people.

Phil Bray 1:02:18
I think that’s a very appropriate, motivating and inspirational place to bring this to a conclusion today, Brian, so thank you so much for that. Guys – Brian, Neil, thank you, on behalf of everybody who was on this call, and everybody who will, watch this back, and there’s huge value in watching this back. And I just want to say thank you to both of you for giving up your time today. And I really do appreciate it. And some really nice messages coming in. So we will send a copy of the recording out tomorrow, as I said, to everybody. We will include a whole load of links in there, to the Inner Circle from Shaping Wealth. Neil and Brian’s curated social media platforms, after what you guys said earlier! And we’ll put a link in there to Brian’s book as well, The Geometry of Wealth. As somebody said earlier, it’s had a profound impact on their business, and changed how they work, so we’ll put a link into that as well. Thank you again, everybody. Thank you for the brilliant questions. Thank you for everybody attending. I’ve noticed it’s gone dark outside, so I’m probably going a little bit dark. Thank you to Brian. Thank you to Neil. Thank you, Abi. See you all, everybody, soon. Cheers. Bye bye.

Brian Portnoy 1:03:42
Thanks.

Neil Bage 1:03:42
Take care, thanks everybody. Bye.