How Advisors Can 'Talk Smarter' in Tricky Situations

Q&A September 28, 2023 at 11:57 AM

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For your next presentation or speech, "embrace informality: Being stiff and distant … can be off-putting" argues Matt Abrahams, founder and principal of TFTS Communication, in an interview with ThinkAdvisor. "More colloquial, less formal, tends to be more connecting."

A lecturer on communication at Stanford University School of Business, Abrahams, who authored "Speaking Up without Freaking Out," has published a new book: "Think Faster, Talk Smarter: How to Speak Successfully When You're Put on the Spot" (Simon & Schuster-Sept. 26).

It can help financial advisors, and others, to more effective spontaneous speaking in a variety of situations.

This will "bolster your credibility; and people's perception of you will be one of trustworthiness and expertise," he maintains.

In the interview, the host of "Think Fast Talk Smart: The Podcast" provides practical ways for advisors to excel at spontaneous speaking.

What's the biggest mistake advisors make when speaking off the cuff? Abrahams reveals it.

He also talks about why many advisors put down small talk as "a necessary evil." But "small talk is about making connections. There's an art to it," he insists.

Abrahams also delves into how to calm a client who's upset, as well as dealing with challenges that crop up in meetings with clients and their adult children.

The communication expert's firm helps maximize people's effectiveness in written, spoken and virtual modes of communication (and in hybrids thereof).

Clients include Principal Financial, Google and Meta.

Before starting his current company, Abrahams, who has conducted research exploring cognitive planning as well as persuasion, co-founded Bold Echo Communications Solutions to help improve folks' presentation skills.

That followed senior posts at leading software firms, where he created and ran training programs.

ThinkAdvisor recently interviewed Abrahams, who was speaking from his base in Palo Alto.

Opening a Q&A session with "Are there any questions?" is something to be avoided, he insists, and explains why.

He also prescribes a good way to cope with performance anxiety: "Take deep belly breaths." That, Abrhams says, "slows down your fight-or-flight response."

Here are highlights of our interview:

THINKADVISOR: What's the biggest mistake financial advisors make when they speak spontaneously?

MATT ABRAHAMS: Probably, talking too much. They ramble and aren't as concise as they could be.

They need to be focused on what the client needs, then provide products and services that address those needs rather than describing products and services [beforehand].

Why is it important for advisors to know how to speak well spontaneously?

If you're confident in your communication and it comes across as authentic and with fluency — instead of saying all those "um's" and "uh's" — you bolster your credibility, and people's perception of you will be one of trustworthiness and expertise.

Most people have learned how to give a pitch or presentation but not how to handle talking spontaneously.

It's critical to be comfortable speaking spontaneously because, for example, a client might ask for feedback on a particular stock or plan they want.

Or you might just be making small talk as you get to know a client.

What's your advice about speaking off the cuff when giving investment recommendations?

One of the [most important] keys to being successful speaking in the moment is to leverage a structure, which is nothing more than a logical connection of ideas — not a list.

I have a great structure of three questions to package your information: "What?" "So what?" "Now what?"

The first: What is the advice or information you're sharing? The second addresses why it's a good fit for the client. Third: "Let's talk about an initial investment and what the terms and conditions are."

How much small talk is OK when interfacing with clients?

Small talk gets a bad rap. I think it's very beneficial — but not too much of it. There's an art to it, a rhythm to get into. The amount of small talk is really hard to [pinpoint]. It's more a feeling that tells you.

But you should have small talk to get to know people.

Why does small talk get "a bad rap"?

People feel that it's worthless, a waste of time. Or they feel pressured because they want to do it well and don't know how. Small talk is all about making connections, not about accomplishing any particular goal.

There are advisors who look at small talk as a necessary evil.

They just want to jump right in and sell the product, get to the decision. They don't want to chit-chat.

But if you [start selling] too quickly, it's transactional, and people aren't going to like that.

Is it useful to tell anecdotes and jokes?

Stories that are appropriate and concise can be very helpful.

But jokes are tricky. Humor is a way to connect, a great way to break the ice. But humor is [subjective].

Try to make the humor self-deprecating. Comment about yourself and common things, which aren't personal attributes that [clients] might feel awkward about [or offended by].

For example, you could talk about not feeling [industrious] because you haven't had your third cup of coffee yet.

Try out your jokes on people you know to [gauge] how funny they are.

One part of your 6-step "Think Faster, Talk Smarter" method is listening deeply to what others are saying. Please explain.

The first step to listening well is to be present and to focus. Think about what the bottom line is of whatever the other person is saying. [That is], if you had to distill it, what's the key essence?

The second step is to paraphrase: "What I heard you saying is [so and so]." The person could say, "Right" or "No, that's not what I meant."

So you're asking follow-up questions, which is a way of signaling that you're very concerned.

If you aren't correct, that can be helpful too.

Clients can become angry because, say, an investment didn't go well. How do advisors defuse a situation in which a client is upset?

When emotion is involved, you should acknowledge the emotion without naming it: You don't want to say, "Oh, you're angry."

Why? Because the client might say, "I'm not angry; I'm frustrated." So now you're arguing over the emotion.

Simply say, "I hear a lot of concern," or "I appreciate that you have some negative feelings."

The next step is to acknowledge the emotion by paraphrasing it. That's not agreeing — it's just showing that you understand.

Often when people are upset, they want the other person to understand their state of being.

What should the advisor say, then?

"I hear that you're very concerned about this particular investment — it didn't perform well last quarter."

Acknowledging and paraphrasing will often put the person who's upset into a more collaborative, calmer state.

Then you can have a discussion about the next steps to take.

When apologizing for making a mistake, be sure to tell the person how you're going "to make amends," you write. Please elaborate.

To truly show that you've learned from your mistake, you should suggest what you'd do differently next time.

This shows that you've really thought about it, and there's actually been a change in your behavior.

At what point do you make the apology?

If it's something that happened in the moment, apologize in the moment. But if it happens after that, depending on its significance, you might reach out and apologize or wait till the next time you're scheduled to speak with them.

You have to make that judgment of how significant the infraction is that you're apologizing for.

If an advisor has arranged a meeting with a client and their adult children, what can be challenges? And what do you advise to deal with them?

Do a lot of pre-work: Talk to the client about what their goals are for the meeting. What are they trying to accomplish?

If issues come up during the meeting that are challenging, the advisor can simply paraphrase: "I heard some concerns over power of attorney" or 'I heard that not everybody's on the same page with the estate plan."

Then ask questions about what the next steps could be.

If cold-calling prospects, should new financial advisors use a script?

I'm not a big fan of scripts because they put something between you and the person you're speaking to.

You should use a list of questions instead. That's not a full script. Questions are very conversational and get the other person talking.

Anybody who teaches sales will tell you, "You'll do better if the other person speaks more than you do."

Questions set up the person to speak more.

"Embrace informality" when giving a talk, for instance, you write. Why is that effective?

The people we trust most are those with whom we have deep, meaningful conversations. Most conversations are informal.

I don't mean that you're slapping [people] on the back or using curse words. I mean you're casually having a conversation where I elicit your input and you elicit my input.

Some people are very reserved or even stiff. It might be difficult for them to embrace informality in a business setting. Right?

Being stiff and distant isn't ingratiating and therefore can be off-putting.

But you also want to be authentic to yourself. So for somebody that's very stiff who tries to be informal, it's more awkward than helpful.

But in general, more colloquial, less formal, tends to be more connecting.

Too much perfection in a pitch can "backfire," you write. Please explain.

If your pitch is too perfect, people are going to try to look for holes or problems. If it's not too perfect, it feels more natural and conversational — and more likely for the advisor to lead [clients] to "yes."

In both conversation or public speaking, why is taking a pause important?

It lets the other person finish what they're saying. Generally, we interrupt and jump in too soon.

A pause also allows you to think and collect your thoughts. It's just taking a moment or two to be more concise and focused.

In a Q&A session after a presentation, why shouldn't you open with "Are there any questions?"

I prefer that you set a boundary. So instead, say "Are there any questions about [the particular program or investments] that I presented?"

This gives you the ability to defer questions if they don't fit within the boundary, and it makes you sound more credible because you're asking for something specific.

You write that speaking spontaneously is a opportunity, "not a threat." Please explain.

For example, in a Q&A, many [speakers] feel they have to defend their position. That makes it adversarial instead of collaborative.

If, instead, you see this as an opportunity — even if you disagree — to better understand somebody, that's going to help you.

It's about seeing the potential rather than trying to protect yourself because when we get defensive, our tone changes. We get curt. Our body position tends to be tighter.

None of those things are good for building relationships.

But if I see it as an opportunity, my tone is more collaborative, and my responses are a bit longer: I might be more open.

What's an effective way to cope with performance anxiety?

If you experience physical nervousness, like shaking, sweating or rapid heartbeat, take deep belly breaths — distend your abdomen as you inhale — before you pick up the phone or click on Zoom. That slows down your fight-or-flight response.

Many of us get nervous because we think we're not experienced enough or that other people won't take us seriously.

But if we remind ourselves that we do have knowledge that can be helpful, it can help us orient toward the people we're speaking to.

Often, when there's a request for questions in a Q&A session, no one in the audience responds. How does one best handle that?

Nobody wants to go first. In that situation, ask yourself a question, like: "A question I'm often asked is [such and such]." Now you're asking that first question, and people will feel more comfortable asking their own questions.

What if you're asked something but don't know the answer?

Say, "I don't know, and I'm going to follow up with you in [this] way."

You never want to answer a question you don't know the answer to because if you're wrong, you lose your credibility.

Pictured: Matt Abrahams. Credit: Nancy Rothstein

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