A good conversation is gold. It inspires confidence, promotes trust, motivates action, and creates rapport. Show me a financial advisor on top of their game and I’ll show you someone who has superior conversational skills. Problem is there’s not much guidance as to what constitutes a “good conversation”. Until recently that is. Earlier this year I was introduced to a fascinating philosophy called Conversational Intelligence (C-IQ). It takes communication and leadership in a brand new direction. I’d like to share one key insight with you. It explains why some conversations work for us and some don’t. These insights will totally transform the way you have your next conversation…
C-IQ explains that conversations take place on three levels. Each level is not necessarily good or bad – it depends on the context and purpose of the conversation itself. Bad results occur when level is not aligned to purpose. When we are mindful about what we want to achieve and employ the appropriate level, great things happen. We connect. We develop trust. We give ourselves the best chance of achieving the desired outcome.

I’ll briefly describe each level and illustrate how a conversation held at that level will influence the outcome of a typical early stage advisor-client meeting.

Transactional, persuasive and transformational conversations

Level 1 conversations are transactional. My intention here is to exchange information, facts and updates. We will focus on what we need to get from each other. Little trust is created.

Inexperienced financial advisors tend to have Level 1 conversations. The bulk of the conversation is focussed on populating the fact find and then providing information about product and possible strategy. Where the advisor is frustrated with an absence of progress there is a tendency to tell more.

Level 2 conversations are persuasive. In Level 2, I enquire about your beliefs and values so that I can influence you to my point of view. Trust is conditional at this level. If my prospective client believes I’m acting in their best interests they will move to a higher trust level. If there is some doubt, they won’t.

Many, if not most, financial advisors hold Level 2 conversations. We are trained to identify the deficiencies in our client’s current position and then to motivate them to take action by exploring the (unpleasant) consequences of failing to act. Whether we build or destroy trust depends on how the client interprets our intention. If they’ve arrived in our offices thanks to a referral from a trusted source, the conversation could lead to a constructive next step. But thanks to the uncertainty created by adverse media coverage and the high profile response of both regulator and government, trust is relatively scarce and Level 2 conversations can easily provoke suspicion and resistance.

Level 3 conversations are transformational. Here we explore each other’s viewpoint. You have your positon on certain matters and I have mine. We are both open to influence. We don’t ask questions simply for information and we certainly don’t ask questions to find angles to influence. We ask questions to better understand each other’s positions and in that way jointly explore and co-create possible solutions. Trust is maximised because there is little doubt about the advisor’s intent – it is to serve their client in a way that is respectful, transparent and constructive.

I strongly believe that our nascent profession will be able to fully express itself when the Level 3 conversation becomes the norm. We are at our best when we equip our clients to discover the risks they face and the opportunities available and then team up with them to consider a range of possibilities and options. Our highest purpose is to empower our clients to make wise decisions and to choose their own path.

If you’re keen to find out more about Conversational IQ, click here. There are some excellent articles and videos on the topic.

Couple more thoughts…

On “robo-advice”… The Level 3 conversation is the clearest message that we can give to our market that robo-advice, call centres and 1800 numbers can only go so far. Without an expert guide to provide a clear and complete understanding of the status quo – and then a thorough examination of all the courses of action available  – our clients cannot ever be sure that they have addressed and optimised their position. The Level 3 conversation is the ultimate validation of the future of financial advice.

On meetings generally… Leaders who align level with purpose will experience better outcomes. I think back to some difficult meetings where the purpose was to get the team onside to promote a disruptive change. I cannot help but reflect how much better these tricky conversations would have gone with a Level 3 approach, “Team, we have a problem. As you all know we’re well behind target. As a group I’d like us to explore three tactical solutions to close the gap”, as opposed to the Level 2 approach, “Team, we have a problem. As you all know we’re well behind target. If we don’t get up to at least 90% I’ve been told that there will be serious consequences. Specifically…”.

Acknowledgment. Conversational Intelligence is the brainchild of Judith Glaser. Judith has been pioneering this thinking for several decades. She has written some excellent books on the topic including Conversational Intelligence and creatingWE. She also has an excellent website which can be found at www.conversationalintelligence.com

Dani Peer of CreatingWe