How can psychology help Financial Advisers have better client conversations?
Author: Paul Hogg, 8AM Global
Recently I spent some time with Peter Thomson, a clinical psychologist and organisational consultant who works with a team called Careers in Depth. Peter has spent nearly thirty years helping individuals ensure that their work is aligned with their core values, skills and interests.
When we discussed how psychology can help Financial Advisers, we noted that Independent Financial Advisers (IFAs) do not need direct experience in the field of psychology to be effective when communicating with their clients. Most IFA’s invest considerable effort in getting to know their clients through KYC procedures and fact-finding and gather a huge amount of direct and indirect information about their clients.
Peter, frames two simple, but crucial client communication tips below;
- To be very curious: Peter hypothesised that the greater the curiosity the more effective the financial planning. We discussed how advisers can understand better, ‘where the client is coming from, their expectations, what they want to know and achieve’ by asking thoughtful ‘W’ questions (What, Why, When, Where). The task is to uncover both the objective facts and the subjective values which, together, inform more tailored financial planning. Note that the focus is all about the client, not the IFA.
- To listen at different levels: Clients may not always articulate their needs directly. Advisers need to listen not only to what is said, but also to what is unsaid—such as concerns about financial loss, legacy planning, or the balance between wealth generation and ethical investing. For instance, tools like ethical investment questionnaires might unintentionally put pressure on clients to give ‘socially desirable’ responses. Understanding the nuance behind these answers is crucial.
“Acknowledge that you’ve clocked what they are worried about, and what can you do together to mitigate those risks.”
Peter Thomson, clinical psychologist
This idea aligns with a point made in our recent 8AM Insights webinar, Leveraging Consumer Understanding for Better Outcomes, where Andy Kirby of Money Alive discussed the importance of recognising clients’ preferred learning styles:
- Visuals – images and diagrams,
- Auditory – listening to lectures & discussions,
- Reading & writing – text & essays,
- Kinaesthetic – hands on experience and physical activity.
Adapting communication to suit a client’s learning style can enhance their understanding of the recommendations and foster ongoing trust.
Peter also stressed the importance of avoiding labels. Terms like “greedy,” “unethical,” or “depressed” can shut down meaningful engagement. Instead, these should be seen as prompts to explore further: what drives this behaviour or concern? How does it manifest in their life? By digging deeper, advisers can move from assumption to genuine understanding.
Incorporating this way of thinking into practice can help financial advisers build stronger, more empathetic relationships with clients, and ultimately deliver greater value, as well as positive financial outcomes.
To conclude, consider the importance of curiosity and layered listening in understanding clients beyond surface-level facts. Advisers are encouraged to explore clients’ expectations, values, and emotional cues, which often reveal more than standard fact-finding alone. Recognising clients’ individual learning styles—visual, auditory, reading/writing, and kinaesthetic—can further improve communication and comprehension. Avoiding reductive labels and, instead, investigating underlying motivations, supports a deeper, more empathetic relationship, ultimately leading to better financial planning and outcomes.
Peter, along with Stewart Grant, hosts a fun podcast entitled The Psychology of Almost Everything.
Paul Hogg, Head of Distribution
This content is intended for financial professionals only. These are the author’s views at the time of writing and may be subject to change. This content is not intended to provide the basis for any investment advice or recommendation. Any forecasts, figures, opinions, tools, strategies, data, or investment techniques are included for information purposes only.
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