The two aren't in opposition with one another, so why not use both to drive the planning process?
In the original "Star Trek" television series, logic and emotion often found themselves in a state of tension. Captain Kirk, the all-too-human commander of the Starship Enterprise, understood that logic had its place in the decision-making process, but he also knew that emotion – his gut instinct – came into play, especially when going where no man had gone before. Mr. Spock, the captain's trusty right-hand Vulcan, saw everything through the logic lens. Emotion had no place in making decisions. In the end, Kirk appreciated Spock's ability to point out when the captain was relying too heavily on emotion, and Spock was able to see that even what he viewed as rash, illogical decisions could lead to a logical outcome.
So which of the two fictional characters would have made the better salesperson? The consensus likely lies with Captain Kirk and his ability to use both emotion and logic, his capacity to feel and present facts. Spock might make a few sales but would gain very few clients – most people would buy simply so he would release the Vulcan nerve pinch and stop calling them illogical.
Financial advisors in the real world are faced with the yin and yang of logic and emotion every day in the planning process. Emotion is what is going to make people trust an advisor enough to work with him. Emotion will be what convinces many people that they need to do the things necessary to protect their own future and that of their spouse, children and grandchildren. Logic is what will convince them they can't afford to put off creating a plan any longer. Logic will assure them the plan put in place is the correct course of action.
"The emotional triggers have to be set," says Wayne K. Maslyk Jr., CFP, vice president of Great Lakes Retirement Group ( www.greatlakesbenefits.com ) in Sandusky, Ohio. "Then the advisor can lay things out logically."
Emotional rescue
The emotional triggers Maslyk talks about are useful in a couple of different areas. One of the areas is trust. Advisors have to make an emotional connection with people so trust is established. Nothing can be accomplished until one party trusts the other, even if the prospect is used to making cold, hard decisions.
Barron Fitz-Gerald, an advisor with Pro-Advisor Financial Group ( www.seniorestateadvisors.com ) in York, Pa., mostly works with affluent clients – average annuity case size of $400,000. He spends a lot of time working on the numbers with clients and prospects. He says, "People who have made a lot of money typically have made logical long-term decisions." But even those people have an emotional decision to make. They have to ask themselves, "Do I trust this advisor? Do I like him?"
Only by answering yes to those questions can a person feel confident about moving forward with an advisor. So advisors who want a long list of clients instead of a history of making transactions need to view building the emotional connection as a valuable and desirable activity, not as a necessary evil before closing the sale.
Maslyk says the effort to build trust through emotions begins early in the planning process. He says advisors need to ask questions that get at what people want and need and at how they make decisions.
"Early on, ask questions like, ?How did you pick your last advisor?' ?How did you decide he was right for you?'" Maslyk says. "If they had a bad experience, that is good for you; it means they are looking for a trustworthy advisor."
Maslyk asks prospects how they met, and he builds them up based on the answers they give and the things they talk about. Once the emotions get rolling, they will talk about themselves, their past, their kids, their grandchildren, who and what they care about the most, and much more. It's all part of really getting to know them on a personal level before ever talking about their money and the products you can offer.
"Once they see you are interested in them," Maslyk says, "you can see the barriers collapse. They lean back with their arms unfolded."
Advisor as catalyst
What Maslyk talks about fits into what Ray Sclafani sees as the real role of advisors in the 21st century: a facilitator. Sclafani, president and founder of Tarrytown, N.Y.-based ClientWISE ( www.clientwise.com ), says advisors must be facilitators, "not only in logical financial stuff, but also with life issues. They need to ask, ?What do you do with your time? What does the rest of your life look like?'"
Sclafani views advisors as facilitators, he says, because "the client possesses the wisdom. It is the job of the advisor to unlock that wisdom and make clients realize what they want retirement to look like."
How heavily logic and emotion play into the process depends on the situation or product being discussed. With a product like long term care insurance, numbers and statistics should make the case, but if that were true, everyone would own an LTCI policy. Too many people are able to see that they have a one in two chance of needing long term care and still say, "Yeah, but?" For whatever reason, that is the case. It makes one wonder if they would even purchase homeowner's insurance and auto insurance if those weren't mandatory, since the chances of one's house burning down are one in 1,000 and the chances of being liable for a major car accident are about one in 250.
