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By Paige Jones Outreach

The Five Money Languages You Need to Speak to be a Successful Financial Advisor

11 minute read
The Five Money Languages You Need to Speak to be a Successful Financial Advisor Featured Image

Christine B. Whelan

Today’s guest blog comes from Christine B. Whelan. Christine Whelan is a clinical professor in the Department of Consumer Science at the University of Wisconsin-Madison. She is the director of the Money, Relationships & Equality Initiative at Wisconsin’s School of Human Ecology. Dr. Whelan received a doctorate from the University of Oxford for her research on the quest for self-control and self-improvement in American since the 1950s. 

She continues to research behavioral change literature and programs, incorporating aspects of applied sociology into her teaching. As a nationally recognized expert in the field of self-improvement, Dr. Whelan has authored two books on best practices for emerging adults — Generation WTF (Templeton Press, 2011) and The Big Picture (Templeton Press, forthcoming) — and has published op-eds in The Wall Street Journal, The Washington Post , USA Today, Chronicle of Higher Education, and quoted as an expert on self-improvement in Forbes, SELF, City Journal and many others.money languages financial advice

What are they thinking?

That’s what all financial advisors want to know about their clients – and robust academic research has emerged in the last decade as academics learn more about how people think, feel, plan, argue and stress about money. And financial advisory firms of all sizes are taking notice: Behavioral finance is a hot topic.

Here’s the way it’s supposed to work: Advisors develop thoughtful and well-researched plans and, in general, clients are successful when they follow their plan. It’s a win-win for everyone.

But here’s what ends up happening: More than 70% of people don’t follow the recommendations their advisors propose.

Perhaps the clients don’t understand the plan. Perhaps, as recent research suggests, they never even opened it. And since only 30% of Americans have a formal financial plan, this formula doesn’t even apply to most Americans.

This isn’t just a financial services problem – it’s a challenge in medicine, business, physical therapy, and many other fields. People don’t follow the professional advice they are given.

So what is going on? Why is simply getting people to follow through on good advice the biggest obstacle professionals face?

We had a suspicion that something was getting “lost in translation” – that financial planners and clients just weren’t speaking the same language.

My partners and I realized that while lectures and inspirational talks about financial behavior change are terrific, it was time for a practical, data-driven behavioral finance tool to help individual advisors and large firms put these ideas into practice.

That’s why we created Money Languages.

Money Languages is designed to increase the impact and use of financial plans by clients by helping advisors speak their clients’ language. Using Money Languages leads to enhanced financial well-being and long-term financial success for clients –and a larger, more successful and more loyal client base for financial professionals.

At the core, we understand that delivery matters: Money Languages helps financial planners identify the strengths of a wider spectrum of the population, recognizing how to best harness the tendencies and rhythms of different personalities. As a result, financial experts have a more successful way to deliver recommendations to their clients – using the right language to connect a financial plan with the intrinsic motivations of the individual client.

The Research

In my work as a Clinical Professor of Consumer Science at the University of Wisconsin – Madison, and as the director of an initiative on Money, Relationships & Equality, I teach and research self-improvement, gender, relationships formation and purpose throughout the life course. I believe it’s crucial to create bite-sized, accessible and applied programs from the burgeoning academic research on financial behavior.

Linguistic sociologists study how to deliver bad news in a manner that is likely to be most readily accepted and understood, but few people have studied the successful delivery of good news or forward-looking plans, especially not in the field of finance. We wondered… How could we help financial planners connect the dots between the plan the financial expert wants to propose and how the person will hear it best?

Drawing from the findings of sociology, psychology, and statistics, Money Languages combined the expertise of interdisciplinary researchers and practitioners of consumer science and financial security. We looked at studies that examined how people think about their financial life. Based on this research, we developed questions to categorize people according to what motivates them. We then created a large-scale nationally representative sample of more than 1500 people ages 18 and older, with a special focus on married individuals from the same household.  The result was a scientifically validated Money Languages assessment test that enables financial planners to recognize how to best harness the tendencies and rhythms of different personalities regarding money.

With Money Languages, financial experts have a more successful way to deliver recommendations to their clients – using the right language to connect a financial plan with the intrinsic motivations of the individual client.

Research finds that we are more likely to achieve goals if they are in keeping with our values. A tailored linguistic approach will allow a client to better receive the financial plan … and achieve their goals. Money Languages allows financial experts to align their recommendations with the client money type to better “speak the client’s language.”

In our research, we discovered five money languages.

1. Planners

Confident, balanced and optimistic about financial issues, Planners are clear-eyed and skilled in their approach to money and have good saving habits.  They are well positioned to thrive in the current system of financial advising but can benefit from being challenged to dream bigger and recognize opportunities that they may be missing.

2. Worriers

Always on the lookout for potential problems, Worriers feel better when they can anticipate challenges before they materialize. Worriers have a well-honed radar system for possible money problems, although their radar may not have clear financial guideposts that tell them how they’re doing. In some cases, this ability limits the enjoyment they get from their money because their radar system is always on.

3. Believers

Generous, creative and possessing a positive attitude about money, Believers have an optimistic outlook that can be a powerful resource for financial success. Believers love big ideas and exciting opportunities, but generally, lack the ability to connect the dots between the small actions today that lead to big rewards tomorrow.

4. Seeker

Generous, optimistic, spontaneous and willing to experiment in order to find the best way to approach their finances, Seekers understand that saving is important but they are excited by new ideas about spending and saving. In general, the details and minutia around finance don’t interest them.

5. Tracker

Careful, organized and systematic about issues surrounding their finances, Trackers are detail-oriented and very aware of their current financial situation. Though they are on top of the location and amounts in their accounts right now, they often struggle to see the larger, long-term financial picture.

The general population is pretty evenly divided into one of these five money languages – and each type has its strengths and opportunities for growth. Our testing repeatedly showed that everyone has their own unique mix of ingredients. There are some pure types and there are people who are multilingual.

But guess what? Most advisors only speak to Planners. That’s only 20% of the market. With Money Languages you can connect to all five types, opening your business to a much wider array of clients.

Money Languages is about making advisors multilingual – and helping them grow their client base with satisfied clients who know that their advisor “speaks the same language” when it comes to financial planning.

When you and your client speak the same language, you are better able to connect with them, creating more value for the client from the relationship. And that leads to an increased return on investment.

If you’re ready to take the next step to apply the burgeoning research of behavioral finance to your advisory business, let Money Languages help you acquire and retain clients by learning to speak in the clients’ native tongue.

To learn more, visit https://moneylanguages.com. To receive access a free assessment to see if Money Languages is right for your business, email your request to info@moneylanguages.com and put “Twenty Over Ten” in the subject line.

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