Your Client Isn’t You

By Stuart Erskine and Paul Resnik (PlanPrompt)
Featured article

Moving from understanding clients to understanding relationships

We spend a great deal of time trying to understand investor behaviour. Why do people become nervous when markets fall? Why do they chase performance? Why do they hesitate over apparently sensible decisions? Why do emotion and instinct sometimes appear to overcome careful financial planning?

But there is another human being in every client conversation: the financial professional. MFDs, RIAs, wealth managers and others who work directly with clients bring their own experiences, preferences, assumptions and ways of making decisions into every conversation. That raises an interesting question: How much of what we think we know about our clients do we actually know, and how much have we interpreted?

We Don’t Simply Observe People

Imagine a client says, “I’d like some more time to think about it.” What does that mean? Perhaps they have not understood the recommendation. Perhaps they are nervous, disagree with you or need more information. Perhaps they want to discuss it with their spouse or family. Or perhaps they simply prefer taking time before making important financial decisions.

We observe the behaviour—the client wants more time—and almost immediately our minds begin constructing an explanation. That is perfectly normal. Human beings constantly interpret incomplete information. The potential problem comes when we forget the difference between what we observed and the explanation we created for it.

“I’d like more time” can quickly become “They’re nervous,” and eventually, “They’re a nervous client.” An interpretation has quietly become something we believe to be a fact about the person.

Two simple questions can help: What do I actually know? What am I assuming or interpreting? Think of a client you regard as cautious, demanding or highly analytical. What have they actually said or done to support that description? Your interpretation may be completely correct. The point is whether you have ever checked.

Your Client Isn’t You

We do not enter client conversations as neutral observers. We bring our experience, beliefs, communication style, attitude towards uncertainty and even our own relationship with money. Psychologists describe one aspect of this as social projection: our own characteristics and preferences can influence what we expect of others.

If I like detail, I may naturally provide clients with lots of detail. If I make decisions quickly, I may become frustrated when somebody else does not. If data gives me confidence, I may assume more data will give my client confidence. If I enjoy having several alternatives, I may assume clients will appreciate more choices.

It is a little like seasoning food. You may prefer a certain amount of salt and, after years of eating food prepared that way, that amount simply tastes “normal”. But it is not objectively normal; it is your preference. Someone else may find the same food too salty or not salty enough.

Client conversations can work in much the same way. The amount of detail, reassurance, evidence, choice or time that feels right to us can quietly become our idea of the “right” amount. The mistake is not using an approach that works for you. It is assuming it must also work for the person sitting opposite you.

Your client isn’t you.

Is the Client Really “Difficult”?

Think about a client relationship that requires more effort. Could some of that difficulty arise from the interaction between how the client approaches decisions and how you do?

Imagine a financial professional who prefers structure, preparation and relatively quick decisions, working with a client who likes exploring possibilities, asking questions and taking more time. Neither is behaving badly, but together the relationship may require more effort. Another financial professional with a different style might experience exactly the same client very differently.

Perhaps we should not always ask, “What is this client like?” Sometimes the better question is, “What happens when this client’s approach meets mine?”

Client × Financial Professional × Situation

Behaviour does not happen in a vacuum. The same client may behave differently in different circumstances. A routine annual review when markets are rising is very different from watching a portfolio fall sharply. Investing an annual bonus is different from deciding what to do with a life-changing inheritance. Planning retirement ten years away is different from retiring next month.

A useful way of thinking about financial behaviour is:
Client × Financial Professional × Situation

The client brings something. The financial professional brings something. And the situation matters too.

Consider a sharp market fall. A financial professional who personally responds to uncertainty by seeking evidence may instinctively send a detailed market report. But the client may simply want a short conversation to ask, “Does this change my long-term plan?”

Same market. Same recommendation. Different needs. How do we know what the client needs? We ask.

Don’t Diagnose. Ask.

Understanding someone’s financial personality can provide useful clues, but personality provides context, not certainty. Clues should become questions to explore rather than assumptions about what somebody will do.

The purpose of structured behavioural information should therefore not be to diagnose clients or put them into boxes. A profile should generate curiosity, not certainty. Otherwise, we risk replacing one assumption with a more sophisticated one. Instead of saying, “They’re cautious,” we might simply say, “They’re an Analyst.” But unless we explore what that means for the individual, we have not necessarily understood them any better.

The profile should be the beginning of the next question.

From Insight to Action with PlanPrompt

There is a practical challenge. Knowing that we should ask better questions is one thing; knowing which question to ask at the right moment is another. A financial professional cannot reasonably carry an entire behavioural science textbook into every meeting.

This is the gap PlanPrompt is intended to address: recognising a possible behavioural pattern and knowing how to explore it without turning that pattern into a conclusion. It uses structured behavioural information to suggest conversation prompts linked to the situation being considered. The professional can use the prompt to explore areas such as decision-making, information preferences or involvement of others, and then listen to the client’s response.

For example, if a client appears to value evidence and evaluation, the conclusion should not automatically be, “This client needs more data.” A better question might be: “What information would help you feel comfortable making this decision?” The question tests the assumption rather than embedding it into the advice process.

This does not replace professional judgement. It provides a practical way to make that judgement more deliberate and consistent. Technology should help the financial professional discover the client more fully, not decide who the client is.

Standardise the Process. Personalise the Person.

Experienced financial professionals may reasonably say, “But I already adapt.” And many do. Over the years, professionals can develop remarkable intuitive knowledge of their clients. The challenge is not whether individual expertise exists. It is whether a firm can make that expertise more explicit, consistent and transferable.

When important client knowledge lives primarily inside one professional’s head, what happens when another professional conducts the meeting? What happens as the practice grows, when the founder retires or when the next generation of the client’s family becomes involved?

The opportunity is not to standardise client relationships. It is to make the process of understanding clients more systematic.

Standardise the process. Personalise the person.

The goal is not to replace human judgement with a questionnaire or algorithm. It is to give human judgement better prompts to work with.

The Relationship Is Part of the Advice

Look at your own client relationships. Think about a few that work particularly well and a few that require more effort—not “good” clients and “bad” clients, but relationships. Ask yourself: What have I actually observed? What do I think I know? What have I checked? What might I simply be assuming? Then turn the question around: What might I be bringing to this relationship?

Knowing a client’s assets, goals, time horizon and attitude to investment risk does not necessarily mean we understand the person behind the money. There is another layer: the relationship itself. A client’s response is shaped not only by who they are, but also by who they are speaking to and what is happening around them.

The practical questions are remarkably simple: What have I actually observed? What am I assuming? What could I ask to check?

The goal is not to categorise clients more confidently. It is to recognise when our interpretation may be wrong and create enough space for the client to tell us.

Understand more. Assume less. Ask better questions.

Paul Resnik
Co-Founder and Chairman of PlanPrompt. He has more than 30 years of international experience in financial services, including developing and successfully exiting wealth-management businesses. His work focuses on investment suitability, investor behaviour and the practical application of behavioural science and technology to financial advice.

Stuart Erskine
Co-Founder and CEO of PlanPrompt. His work focuses on the practical application of behavioural science and structured client discovery to help financial professionals better understand the people behind financial decisions.