Financial planner Vanessa Martinez kicked off a discussion about the emotional, neurological and psychological sides of the profession with a simple question: How many audience members had experienced a client crying in a meeting?
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Many attendees raised their hands during the session at The American College of Financial Services’ Conference of African American Financial Professionals this week in Chicago. For the few who didn’t, Martinez called them “very brave” and posed a challenging follow-up: “Did you not notice that it was about to happen, or did you stop it from happening?”
Martinez, the CEO and founder of Chicago-based registered investment advisory firm Expressive Wealth and a co-founder of the SER Summit for Latinos in Financial Services, said financial triggers can be anything related to money and wealth — anything that makes them think about what is really happening in their lives. While many advisors may resist allowing clients to be so vulnerable, she said advisors have no choice but to study such emotions.
“I know there are many advisors that think, ‘No, that’s going too far. I don’t want to get in that type of relationship with my clients,'” she said. “The issue is you are, regardless of if you want to or not.”
Questioning the conventional approach
Acknowledging and learning about these aspects of planning represents an important aspect of professional and business growth for advisors, according to Martinez and her sister, Patricia Villarreal, the founder and executive director of therapy provider Holding Space for Psychological Wellness, as well as the chief clinical officer for Martinez’ firm.
For some advisors, that means grasping key neurological concepts, engaging in a little self-reflection and outright rejecting the industry’s conventional approach.
For instance, Villarreal has held that novel advisory practice role of “chief clinical officer” since Martinez launched her RIA about two years ago, adding her psychological background to client meetings in a way that her sister views as providing a better understanding for everyone involved of the underlying dynamics at play with tough topics like death, divorce or inheritance. She and Martinez weren’t suggesting advisors become psychologists.
Rather, some basic knowledge about “the neuroscience of what’s happening, almost reflexively, in our bodies as we walk into a room, especially when we’re talking about such a loaded topic like finances,” can inform advisors’ service to clients and help their business, Villarreal said.
“Most people make decisions based on emotion, and that informs how they determine the logic in their decision making,” she said. “Yes, we may be emotionally driven, and so maybe the person sitting right across from you will be a very emotionally driven person. But that doesn’t mean that it’s not a logical decision that they’re making.”
By communicating more deliberately and providing analytical clarity, advisors can better connect with the emotional side of a client’s decisionmaking process in a way they previously may not have been ready to do.
The financial side of the brain
More advisors are seeking training to build skills in the many psychological aspects that fall under the common umbrella term “behavioral finance.” The CFP Board added the psychology of planning to its list of principal topics covered by its examination five years ago, and advisors might consider pursuing the “certified financial therapist” designation among other resources.
Martinez and Villareal’s presentation offered advisors some practical advice to keep handy in the meantime. They shared five “communication habits of elite advisors,” which called for planners to ask better questions, listen more closely, speak “second or last,” slow down and sum up the most important takeaways for clients. To make that list more succinct, one of the last slides of the talk included the contention that, for advisors, “The questions you ask can demonstrate your intelligence more than the answers you give.”
Villareal took that discussion even deeper by explaining the intersection of financial advice with the parts of the brain called the amygdala and the mirror neurons, as well as the hormones of cortisol and oxytocin. The amygdala is “the part of our brain system that is most impacted by trauma” and the section “that stamps emotion to our memories,” she said.
“I’m not suggesting that we need to think through a 20 million-line checklist of how we can potentially prepare for that, so that we can be as neutral as possible, because that’s not realistic,” Villareal said. “However, we do need to consider that things as small as a scent, a candle burning in the background — whatever it is, what I’m wearing today, how I’m greeting someone — can impact someone’s openness and their feeling of safety, depending on their lived experience.”
For some clients, she said, talking about money may not feel safe because of how they grew up or because of negative experiences with a previous advisor.
To round out the other concepts, Villareal said that cortisol is “a stress-managing hormone” that is “very helpful in moderate doses, but, when we’re living in chronically stressful environments, can be destructive for us, can cause a lot of health complications for us.” Oxytocin is a “hormone most commonly experienced by birthing women, nursing women and in loving relationships,” that can occur in micro doses in situations where someone feels safe and loved. It can also help people develop trusting relationships. And scientific studies suggest mirror neurons are “the reason that we are able to feel empathy in a room across from someone — when someone is having some kind of painful experience, we can almost put ourselves in their shoes.”
By way of explanation, she returned to Martinez’s example of a client crying in a meeting and the possible concerns advisors may have about that.
“Well, we don’t want to embarrass this person, make them cry, so I’ll change the topic in order to be able to lessen their felt sense of embarrassment,” Villareal said. “Is that about them, or is that about us, in our discomfort with whatever may be happening across from us? That’s what we have to ask ourselves.”
It’s important for advisors to understand the “why” behind those choices, she said. And recognizing the role of the brain and hormones can help advisors improve their own emotional intelligence, self-awareness and self-regulation.
Business implications of brain science
That level of analysis by advisors about both sides of a client conversation, Villareal and Martinez said, can lead directly to better service to customers and potential business opportunities. In some cases, it calls standard industry approaches to advice into question.
Martinez said that while advisors typically plan for a client’s children, they often miss an important part of the planning puzzle: what clients’ parents may need.
“Typically, as advisors, we’re like you, your immediate family and down a generation. How many of us go up a generation?” Martinez said. “Who’s going to take on the burden of your parents? You. Well, we haven’t talked about that. That’s not in my plan. So that’s a huge piece that we need to talk about — that, as advisors, we’re like, ‘Insurance, the houses, the retirement accounts, the trust account, the accounts for the kids.’ But we’re all going to be in a sandwich era at some point.”
In such cases, any hesitation on an advisor’s part to discuss everything intertwined with a client’s parents may hurt their business amid “the giant wealth transfer happening because of the boomers,” Villarreal pointed out. Many advisors could have understandable qualms about broaching the topic of the aging and death of their clients’ parents.
“They’re going to start needing to care for them,” Villarreal said. “They’re going to start needing to think about end-of-life things, the stuff that people like to avoid because it’s dark and it’s morbid and, like, I don’t want to be bringing up something that’s going to make someone sad again for that same reason. Yes, of course, end-of-life planning is difficult. It’s difficult to talk about, especially if someone is anxious to talk about it and you may have already known that or experienced that with that client. But that’s especially why we need to be able to lean into that.”
Advisors need curiosity and authenticity, not a doctorate
Advisors can learn more about when they should consider referring clients to a psychiatrist and keep in mind that they “don’t need to know everything ahead of time,” she said. While they’re experts in planning and investing, rather than therapy, no one from any field can present a client with a plan on “how to make your life perfect” through a “step-by-step process” leading to long-term happiness, Villarreal said. But advisors who have cast off some of those doubts about establishing deeper relationships can make a big difference in clients’ lives.
“I think it’s critically important to not lose ourselves as a human being in the room across from anybody,” she said. “That’s a really hard thing to do, to be as authentically ourselves as possible.”
For Martinez, two realizations — “We have to be ourselves to be able to connect with other people” and “You have to be curious before you make the conclusion” — came as she advanced in her career. The seemingly unrelated ideas may prove especially challenging for Black, Latino or other minority advisors who are underrepresented in the field.
“If we are guarded, then it’s impossible that I’m going to try to build this trust situation in the room,” she said. When she first started as an advisor, she wore pearl earrings instead of her preferred hoops, worried that she didn’t look the part.
“But now I’m like, ‘No, I need to be me to let you be you,'” she said. “And that’s hard because of the environment that we’re in.”
Advisors who can conquer those underlying fears and gain more appreciation for the neurological factors related to wealth will stand a better chance of creating multigenerational relationships with families and earning client referrals, Martinez said. She told the story of a client who scaled a steep mountain with friends and, to the friends’ surprise, called Martinez from the summit. At that point in a client relationship, referrals have nothing to do with investment or trust strategies.
“We’re building these relationships so they’re strong enough that, when future things happen, you’re still their advisor, you’re their kids’ advisor and it goes from generation to generation,” Martinez said. When a client calls you from a mountaintop, you know you’ve reached a level of connection that ensures a long relationship. “Those are the real, real, real referrals,” she said.
