John [00:00:07]

Hey, Julie, You may remember a few years ago, we did a study with the MIT Age lab that looked at the values and characteristics of advisors that their clients said they most appreciated. And two of the top things that came out of that study were the characteristics of personalization and empathy. And I don’t know about you, but I’ve never talked to anyone who said, You know what, I’m just not a personal person. I’m just not a I, I don’t have empathy skills. I think everybody thinks they have them to an extent, but it’s oftentimes hard to gauge whether we do or not or how we could even further develop those skills. Have you seen that in the advisors that you’ve worked with?

Julie [00:00:49]

Absolutely. And I think sometimes those gauge theirs is maybe having a little bit better skills than they do, or conversely, they don’t gauge their skills as as great as they really are. And I think our guest today, Penny, has some interesting insights in how to really assess where you are on that scale. One of the things that she shared about emotional intelligence that I thought was really insightful was it doesn’t mean sitting there and crying alongside of your client. And I think sometimes we hear that word and it it it can equate some sort of, you know, emotional moment. And that’s not necessarily what we mean. And I just love the way that she framed it and really gave some actionable ideas and in a question framework that financial professionals can use with their clients. I don’t know if you agree with that, but I really liked the way that she positioned it.

John [00:01:42]

I agree with that. The other thing I really liked was when she talked about you think about the distracted world that we live in today, right? How do we really clear the decks and our minds and prepare ourselves to have a conversation which may be really, really important to that client across the table from us. Yet if we’re not there mentally with them, it may actually wind up damaging our relationship. So I thought it was a great time to have Penny Phillips on the podcast today. So why don’t you share with our listeners a little bit about Penny, who she is, and kind of why we invited her on the podcast?

Julie [00:02:18]

I’d love to. Penny is the co-founder and president of Journey’s Strategic Wealth, a $3 billion national registered investment adviser built for advisors seeking independence and hands on practice management support. Penny has spent her career as an industry consultant. She is sought after industry practice management speaker in the U.S. and Canada. She is a monthly contributor to Wealth Management dot com and runs a YouTube channel called Practice Management with Penny. She was named as one of 23 people who will change the wealth management industry in 2023 by financial planning.com.

John [00:02:54]

So why don’t we all listen now to what Penny has to say about strengthening our empathy skills and better listening to our clients.

John [00:03:03]

Hi, I’m John.

Julie [00:03:05]

And I’m Julie.

John [00:03:06]

We’re the hosts of the Hartford Funds Human-centric Investing Podcast.

Julie [00:03:11]

Every other week we’re talking with inspiring thought leaders to hear their best ideas for how you can transform your relationships with your clients.

John [00:03:21]

Let’s go.

Julie [00:03:22]

Welcome Penny to the Human-centric Investing Podcast. We’re so delighted to have you here with us today.

Penny [00:03:28]

Thank you for having me. It’s great to be here.

John [00:03:31]

So, Penny, we hear a lot about emotional intelligence, but I don’t really think everyone listening in our audience may be as tuned into it as you are, since it is the topic of our discussion today. Can you tell us a little bit about emotional intelligence and why you think it’s so important to earn a relationship between the advisor and their client?

Penny [00:03:53]

I love this question. It seems like such a simple question, but it’s it’s actually a really deep question because when advisors who haven’t been exposed to EQ, right, that’s the the symbol, I guess, emotional emotional intelligence quotient EQ, they haven’t been exposed to it. When we say emotional intelligence, they think some of them think, oh, I got to cry with my clients. And the reality is, is emotional intelligence doesn’t have anything really to do with being more emotional or sensitive. Emotional intelligence is all about being able to tune into whether you’ve had the same experience as the person or not, tune into what they are thinking, feeling and experiencing. And when I look at the best advisors in the business and studies prove this, by the way, what I notice about the best advisors in the business is they have what I call the X Factor. And oftentimes that X factor has nothing to do with years of experience in the business or, you know, technical competency or proficiency. It has to do with their ability to simply connect with people, all different types of people. They can go into any conversation with any human being and find something to relate with them on. Find a connection point during the conversation and really anchor them to the client and the conversation. And I’m sure I’ll talk a little bit about anchoring today. The reason why working on your emotional intelligence and it can be worked on is so important in our industry is because we are in a highly saturated over commoditized marketplace right now. Virtually every aspect of the wealth management spectrum has been commoditized to some extent. So what I’ve been saying for years is the the only true differentiator an advisor has, right? Because we all have access to the same stuff, the same products and services. We all sort of charge the same way we have access to the same tech. Our only true differentiator is the one thing robo advisors can’t take from us. It’s our brain. It’s our ability to have empathy, to connect deeply with people, to remember things, to help people shed belief systems. That’s the one thing that we have as advice professionals and so critically important that advisors work on EQ. It will continue to be the most important thing for a human advisor moving forward.

Julie [00:06:19]

Penny I love how you call it The X Factor. I think that’s that’s really interesting. How does an advisor connect without making it all about him or herself? Right, Because we’ve all been in those conversations where all of a sudden I’m trying to share with you my story, and before you know it, we’re all on your story. So there has to be an art to that, I would imagine. Can you share with us some of your insight on how to go about that connection process, where it still remains that the client is at the center of the conversation?

Penny [00:06:52]

Yes, I know for everyone listening, I’ll give you a couple of pointers. These are really easy things to implement and start working on. And what you will notice is the more you work on these really small skills, the better you get at using EQ on conversations and meetings. So it’s three things. Number one, it’s mindfulness. There’s a reason why our industry now has workshops and classes and breakout sessions at conferences about, you know, being more mindful and, you know, meditating, right? Because when we are mindful, it means that we are solely and wholly focused on the person and the conversation that we’re having. The brain literally is distracted. It’s something like every 3 seconds and we spend only 47% of our time actually in the conversation that we’re having, which means that our mind is literally like while we’re having this conversation, 10 minutes of it, by the way, people won’t be listening to. Right. Their mind will be wandering. So imagine as an advisor how much we can miss if literally almost 50% of the time we’re not present in the conversation. So a couple of things that advisors can do. Number one, train your brain to be present before going into any meeting or conversation. Ask yourself, what objective am I trying to achieve in this conversation? What are the things that I need to be mindful of? If you ask yourself that before going into a conversation, and I always tell people, think about your conversations and interactions with your spouse. That’s the easiest place, by the way, to practice your EQ skills and gain some wins. If you’re about to have a difficult conversation with a spouse or a client, what do I need to be mindful of? You’re literally cuing your brain to think about what is this person’s communication style? How should I present the information I want to present? What should I be listening for? So you’re literally training your brain to be mindful. That’s the first thing. Meditation is super helpful. Not every advisor’s on board with meditation and yoga, which is totally fine, but cuing your brain with these open ended questions can help you get centered and know what to be mindful for in a conversation. The second thing active Listening. We talk about active listening all the time. Active listening, Obviously it’s about hearing like what’s what’s underneath the surface. Advisors need to keep in mind that when they are talking to a client and they are the client is talking about themselves sharing their story, what that actually does for the human brain is it creates dopamine. It’s the reason why you can have a conversation with a friend. You will talk the whole time. They’re not talking at all. You leave the conversation and say, you know, thank you for that. That really felt great. It’s because talking about ourselves produces dopamine. Now, if we’re talking about ourselves and we have evidence that someone’s listening, it doubles the amount of dopamine. So just by listening to people leaving your phone outside of the office, not looking at your computer, not, you know, distracting yourself, you can actually create a positive physical experience for a client. Really important. The other thing is knowing what to listen for. Listen for belief systems and hindrances. Great example, really simple, silly example. If somebody says millennials are all lazy, right? My kids didn’t have to struggle as much as I did yada yada right?. That’s a belief system. It’s a belief system about an entire generation of people. It may be it may come in handy to help that client dismantle that belief system as you go through the planning process, because it may shape and shift the way in which they think about their legacy planning. The last thing is empathy, arguably the most important one. Not every adviser is naturally empathetic. Manufacture empathy through curiosity. If you find yourself not able to connect with somebody, not able to connect with what they’re sharing or feel compassion. Totally normal, by the way sometimes, ask questions. Be curious. Let your curiosity about the situation they’re sharing eventually lead to an empathy point that you could find with the client. So those are three ways to drive EQ and build deeper connections and conversations.

John [00:11:09]

So, Penny, you mentioned two concepts just a moment ago. One, you mentioned the word anchoring and anchoring to a client. And another thing I just heard you say is something about shedding old belief systems. So how does it can you give an example of of how an advisor would want to proactively help a client shed an old belief system and replace it with something that’s more productive? And maybe how we would how we would begin to get them to that point.

Penny [00:11:44]

Such a good question. So much of this is reliant on the rapport and deep trust that you build with a client right? Now, some people haven’t can do that faster than others, right? Those with high EQ who are naturally empathetic, who are great communicators, they can develop a power really quickly with client, with with clients. And so I tell advisors you want to be mindful of like where you are on the rapport and trust scale, right? But what you’re listening for from very early on in the engagement, even before you built all that deep trusting rapport is belief systems. Here are a couple of examples. Um, great obvious example is if you have a business owner client that is working with G2 to write their son or daughter is in the business. And we see I’m Greek, by the way, so I often talk about like the Greek diner owners, right? Like in New York City, refusing to give up the reins of the business to G2 and having this wonderful like, well, running business. But there’s no formal plan for how is the business going to pass on, what are we going to do if something happens, etc.. So a lot of times clients will have cultural belief systems or generational belief systems that prevent them from actually having fruitful planning conversations with their families or actually lead them to procrastinate, making powerful wealth decisions because they don’t want to give up the reins. So that’s that’s one type of belief system. Another one we often find when we’re working with two, with spouses, male, female, spouse, the male is more dominant. And again, I’m generalizing and it’s sort of stereotyping here, but we’ve all experienced it. There is a more dominant spouse. It is clear and obvious from day one that this is the person that is the one that talks the most is the ultimate decision maker. And perhaps we can even sense early on that there is a that they don’t necessarily value the other spouses judgment as it relates to finances. Right. That’s a really powerful belief system about gender roles in a relationship, in a planning relationship, an engagement, really important once an advisor has built trust and rapport. Very powerful to ask the client permission to share in observation and stepping out of that adviser role and into the coaching role. And I don’t want to say therapist role because now, now we’re going into a whole other noncompliant area. Right? But but going into that role and saying, may I share something that I am hearing and sensing and the role that your purpose in doing that is to disarm the clients and allow the less dominant client to speak. So saying once you’ve built that trust and the client’s going to say absolutely, you’re going to say, I sense that there is something that you turning to less dominant spouse want to share that perhaps you don’t feel comfortable sharing and saying to the more dominant spouse, and I want to ask your permission if it’s okay to allow so-and-so the space and time to share what’s on their mind, I think it would be really powerful. Now, what usually happens if you’ve built trust and rapport...you just change the whole dynamic of that relationship. Oftentimes less dominant spouse starts crying. We reveal other dynamics at play. Imagine being the advisor who’s able to improve and change an actual marriage in a planning engagement. You are the advisor for absolute life. Now, you got to do that when you’ve built a lot of trust and rapport. Otherwise you’re probably getting fired. But but you can do that over time. And those advisors are advisors that have the best, most loyal relationships.

Julie [00:15:20]

Penny, do you have some questions that you think really lend themselves? Maybe if the adviser isn’t quite at that level of rapport, but, you know, really kind of the types of questions that get them to build that rapport, the open ended type questions, you know, I get asked that a lot. Like what are some of your favorite questions to ask clients? If you had a handful of your favorite types of questions that really help indoctrinate advisors into that trusted relationship, what might they be for our listeners that are maybe taking notes and are really trying to change their, you know, relationship building process in their own practice and maybe even bring other members of their team into the process? You know, I know in the work that you do that those are conversations that we’re constantly having is, you know, maybe there’s one lead advisor that’s very good at this, but they’re also trying to bring others up and educate the rest of their team on the process. So could you share with us some of your best practices around some of your favorite questions?

Penny [00:16:26]

Yes. And it’s actually for me, it’s less about the actual questions and more about the framing of the questions I ask advisors to think about. And when I do this in workshops, it’s astounding how often we ask closed ended leading questions that have a bias. And some of it’s because, look, it’s no secret advisors, most of them started as salespeople to some extent and were trained to get people to a solution down a very specific pathway. Now, as the industry has evolved, as clients have demanded a different experience from advisors, some of our language has still stayed the same. And so I ask advisors to think about, and this is where the mindfulness comes in, right? Think about the last meeting that you had. Most people can’t remember what they you somebody asked me what I eat for breakfast as a test for the audio for this I could barely remember. Right. But like I think about the conversations you had yesterday. What questions did you ask the client? Did you ask more questions then made statements? I mean, I really ask advisors to reflect on this. And if you really start reflecting and recognizing your language, what you’ll notice is a lot of your questions start with or sound like and I’m totally making this up, but you’ll get the idea like, are you getting value out of this or did you get value out of this review meeting? 99% of people, maybe not 99. Most people are non-confrontational, by the way, and they’re going to say, yes, yeah, sure, it was great, even though they maybe don’t even mean that or don’t even want to address that. Or do you know anyone you might who might benefit from our services? Yeah, sure. Yeah. I can think of a couple people like they don’t want to say no or they don’t want to really get into it. And so what I ask advisors to do is spend the majority of your time asking what or how questions what or how questions are thought provoking and encourage forward movement. So, for example, how would you describe what we do for you? Right. That’s not a yes or no question. You’re actually forcing, encouraging I’ll say encouraging the person to think. And describe and articulate and reinforce your own value proposition. Such a powerful question versus did you get value out of this? How would you describe what we do for you and your family? That’s one example. Sometimes we will we will default to asking questions that are easy and get us the easy answer. Not because we’re lazy, but because our brains just want to get to the answer. And so asking questions like, What was your experience like with the previous adviser? How if you were to imagine the perfect engagement with someone helping you with your finances, what would that look like? What would you be experiencing on a monthly basis? What deliverables? Like you’re actually forcing them to give you the answer. Any question you could possibly have. By the way, as an advisor about how to run your business. What clients want lies within the client asking the what or how questions really powerful. Also asking questions like they’re stuck, right? They’re stuck in a decision. Coaching them through that with the what or how questions. Why questions, by the way? Because sometimes people want to know the why, why questions or force you to look backwards. What are how for you to look forward. What can we do at this moment to move you down the decision making process? Or what are the resources that we need to bring to you to help you feel more comfortable with this decision? All these questions promote forward movement. So that’s a really, really easy thing that advisors can immediately start doing. The other thing I’d say is feel free to let the client know that you are changing the way you’re talking. So if you ask a question and you immediately realize that it’s a leading question or a question that has bias, like, I mean, this is nobody does this anymore. But like, wouldn’t you feel better if you had your whole life insurance? Right? Like, no one’s going to ask that anymore. But but again, if you notice that you ask something that has bias, you tell the client, I want to ask that question so it’s more powerful for you and re-ask it. Those are my tips.

John [00:20:52]

So Penny, As I think about it, I tell my wife all the time that the ability to focus is both a blessing and a curse. Right. So when we talk about getting ready to go in to meet with a client, oftentimes, let’s face it, the world is swirling around us. You mentioned kind of meditation or at least that like what are the what are the practical, implementable steps that you would take getting ready for a client meeting? And I guess second secondary to that is I know we’ve talked before about listening hindrances and how should I audit myself to know the kind of things that will hinder my ability to deeply listen to that client?

Penny [00:21:33]

Yeah, I mean, such good that so many ways I could take this out and I’m brevity is not my strong suit by the way. But I’ll try to I’ll try to summarize. The first thing is, you know, breathing exercises. Not everybody has time before meetings, but especially if you’re a stage speaker like I am, the breathing. Just focus on breathing. Even if it’s for 2 minutes. It’s wild how much it changes the way in which you feel when you’re then have to be on in a conversation or meeting. So deep breathing, even if it’s for 2 minutes in and out, just focus on the breathing will clear your mind. The other thing I mentioned this earlier, being not only focused on or understanding what you want to achieve in the conversation, but start the meeting and the conversation with the client by asking, What do you want to achieve today? We have an hour together on this zoom or You’re in our office. So great to see you. What’s the one thing you want to make sure we accomplish or talk through? You just created the agenda for your conversation. You just teed up your focus. You know what to focus on. You know what they want to accomplish. They’re going to walk away feeling great. So co-creating the agenda with the client by asking that question on every conversation, even if it’s with a team member, by the way, they come into your office, they want to talk to you. What’s the one thing you want to make sure we cover today? Very, very powerful to do that. The other thing I’d say is. Give yourself permission to pivot and adjust in meetings and do that by asking the client what powerful role you can play. So if you’re finding you’re getting that feel like maybe I’m not adding a ton of value, ask the client what would be most helpful to you? Do you want me to listen? Do you want me to share feedback, etc.? Right. That automatically helps you focus on the role you have to play. Ultimately, the goal is to get the client feeling good and like they’ve accomplished something. And so asking that question focuses you and helps tee that up.

Julie [00:23:33]

Penny first, someone that’s wanting to make an adjustment in their process and maybe doesn’t even know which way to take this and loves all of the ideas that you’ve just shared. If you had to pick one place to begin based upon all of the great guidance and ideas that you’ve shared, what do you think is the best first step for an advisor to take?

Penny [00:23:58]

I have like four steps, which is so indicative of how I give advice. Right. Couple of things. Read up on emotional intelligence. Like emotional intelligence. 2.0 is sort of the holy grail of EQ. There’s a ton of training resources for advisors that are sort of around this topic. Shaping wealth is a great platform that helps you, teaches you how to build rapport with clients and getting certified. I have a certification in behavioral analysis. It’s been tremendously helpful in helping me navigate conversations with people. Tons of resources out there and also come to me. I’m happy to direct you.

John [00:24:36]

Well, Penny, now’s our chance to get some some deeper listening going with you. As we know, this is the Human centric Investing podcast. And one of the things that Julie and I enjoy doing is learning a little bit more about our guest and and sharing that with our audience. So if you’re game, we’re going to fire a series of questions at you just to get us to know Penny just a little bit deeper. So are you ready? If so, Julie will lead us off.

Penny [00:25:04]

I’m terrible at this, but yes, go ahead. Sure why no?

Julie [00:25:08]

Just remember, there’s no right answer. It’s all about you. So there we go. Okay. So we’ll start with my favorite question. On a scale of 1 to 10, how good of a driver are you?

Penny [00:25:20]

Okay. Driving record. Not great. I will see a ten. I think I’m great. I’m a New Yorker. Learn to drive in New York at the parallel Park ten.

Julie [00:25:27]

Love it.

John [00:25:28]

How about what is your favorite city in the United States?

Penny [00:25:32]

Come on. New York City. Born and raised. Best City on earth.

Julie [00:25:36]

What’s the best age?

Penny [00:25:39]

Oh, man. 17. 17. You don’t know, you know, unless you’re me. I was saving for a mortgage from, like, 15 years old.

Julie [00:25:51]

I was too Oh, my God. love it.

Penny [00:25:51]

. I was always in my own worlds, but.

Julie [00:25:55]

No we were there together.

Penny [00:25:57]

Yeah.

John [00:25:59]

Would you rather binge a TV show or watch a movie.

Penny [00:26:03]

Or TV show? Yeah.

Julie [00:26:05]

What’s the ideal outside temperature?

Penny [00:26:10]

You guys are going to think I’m weird, but like, 80 degrees.

John [00:26:13]

Wow.

Penny [00:26:15]

Yeah.

John [00:26:15]

Warm blooded.

Penny [00:26:16]

Exactly. I’m Greek. I’m from. My parents are born in Greece. Come on.

John [00:26:21]

So, related to my last question, what’s the last TV show that you binge watched?

Penny [00:26:25]

I’m embarrassed to say this. I don’t think I want to say this.

John [00:26:28]

Well, how about the second one?

Penny [00:26:31]

The second one’s not good either. It’s The Real Housewives of New York. Okay, so everyone, just give me a break. I work alot okay.

Julie [00:26:39]

Are you messy or are you neat?

Penny [00:26:46]

I’m just, messy neat, which is acceptable, I think. Yeah.

John [00:26:50]

That works. Yeah. How about that? Would you rather read a book or listen to Audible?

Penny [00:26:54]

Oh, no. Listening. I’ve never listened. I will listen to this podcast. Books and physical books. Paper books.

Julie [00:27:01]

Well, Penny, thank you so much for allowing us to get to know you a little bit better and to learn more about how Journey supports independent advisors. You can visit Journey SW advisor dot com. You can also find Penny on YouTube under her channel practice management with Penny or on LinkedIn or Twitter. Again, Penny, thank you so much for all of your insights today on the Human-centric Investing podcast.

Penny [00:27:25]

Thanks for having me.

Julie [00:27:27]

Thanks for listening to the Hartford Funds Human Centric Investing Podcast. If you’d like to tune in for more episodes, don’t forget to subscribe wherever you get your podcasts and follow us on LinkedIn, Twitter, or YouTube.

John [00:27:42]

And if you’d like to be a guest and share your best ideas for transforming client relationships, email us. Guest Booking at Hartford Funds dot com. We’d love to hear from you.

Julie [00:27:53]

We’ll talk to you soon.

John [00:27:55]

The views and opinions expressed herein are those of the guest who is not affiliated with Hartford Funds. The MIT Age lab is not an affiliate or subsidiary of Hartford Funds.