Active listening holds the key to better relationships

Exploring how better listening can forge stronger connections

Imagine this scenario: A client is recounting a story about her parents’ rocky relationship with money. As he’s listening, the financial professional reads a post about a strategy that could work for the client and thinks about how to pitch it. As the client pauses in her story, the rep jumps in, not realizing he has missed the main message.

If this feels at all familiar, you’re in good company. While 96% of global professionals surveyed consider themselves good listeners, more than a third (36%) say the many distractions of today result in a lack of focus.

The lost art of listening

So why don’t we listen well? Biology plays a role. On average, people can speak at a rate of 125-175 words per minute; however, our brains can process between 400-800 words per minute. This extra bandwidth allows us to follow a variety of other thoughts on the side, which can distract us from a speaker’s message.

"...people can speak at a rate of 125-175 words per minute; however, our brains can process between 400-800 words per minute."

People tend to confuse hearing and listening, believing both occur naturally. Hearing is the automatic process of sound entering our ears. No action is required. Listening, on the other hand, is the deliberate and active process of understanding and interpreting what is said. It requires focused attention to the content being shared and how the speaker delivers it. In short, it takes work.

Listening is harder than ever in today’s 24-hour information cycle and continuous social media and instant messaging chatter. The financial professional who can reclaim and refine this skill can build trust and connection and set themselves apart.

The power of listening on purpose

Active listening involves the conscious decision to put personal thoughts aside to absorb and understand what someone is saying, without judgement. It involves listening to 100% of what the speaker is saying and any emotions behind the words, using verbal and non-verbal cues to show your attention, such as eye contact, open posture and facial expressions.

Listening in this way enables financial professionals to offer financial advice that is not only relevant but also deeply resonant with their clients’ individual aspirations, notes Jake Claver, a Qualified Family Office Professional and CEO of Syndicately, which helps investors, funds and family offices create deals through special purpose vehicles.

“When clients feel genuinely heard, they are more likely to develop a sense of trust and loyalty,” he adds. “This not only leads to higher client satisfaction but also fosters long-term successful client relationships.”

Brush up on listening up

Good listening is not a skill people are born with, but with practice you can hone your efforts to better engage and connect with clients. These key steps can help you listen up.

• Be present: Give your undivided attention to the conversation to process the information clients share.
• Take notes: Stay focused by capturing essential points, concerns, or questions. It shows your client you are committed to accuracy.
• Reflect: Summarize what you heard to confirm the accuracy of your understanding. If any part of the message remains unclear, ask questions to get to the heart of what they mean.
• Explore: Ask questions that require detailed responses to gain more insights.
• Empathize: Acknowledge client fears and dreams, sharing any similar feelings you’ve experienced.
• Avoid interruptions: Allow the client time to complete their thoughts. It’s better to have a brief period of silence than to interject.

Turning conflict into opportunity

In any business, challenges will arise. Active listening effectively can help mitigate the impact on client relationships. As the owner of Complain.biz, a complaint resolution platform, Tom Bok deals with customer complaints from all industries, including financial services.

“In the world of complaints, active listening is not just a nicety, it’s a necessity,” says Bok. “In our experience, even when faced with a complaint or a negative review, financial professionals who employ active listening can turn a potentially negative damaging situation into an opportunity for growth and relationship strengthening. It’s about showing clients their voice matters.”

Connecting across all generations

From baby boomers to millennials, active listening has value, helping people feel understood, even if their goals, values and outlooks differ. Bok notes that baby boomers, for example, may appreciate a more personal approach. Gen Xers, juggling careers and caring for children and/or parents, may want efficiency as they address their needs. And millennials value authenticity and transparency.

“It's a cornerstone of successful financial advisory practice,” says Scott DePeralta, President, Scott DePeralta Consulting LLC. “Whether I'm working with Boomers, Gen X or Millennials, active listening helps me connect on a deeper level, build trust and deliver a service that truly resonates with my clients.”