An Aspect of Communication

Passing in basketball is like communicating a financial plan.

In my high school, there were never enough players for the senior basketball team. You need ten to practice so there was always one or two who were not quite ready.

I  recall a game where we were ahead by about 80 points with three minutes left to play.  Coach decided that the lead was safe even with the extras on the floor.  Early on I grabbed a rebound and made the outlet pass to one of them.  It hit him in the chest and went out of bounds.  Next stoppage coach pulled me.

“C’mon coach.  It hit him in the chest.  Not my fault.”

“Yes, it was.  You should have known he couldn’t catch it.”

An interesting lesson.  Communication must work at both ends of the line.  Like a 50-page financial plan.  If the client does not catch it, it is the advisor’s fault.

With financial plans, good communication requires several things:

  1. Deliver an accurate, clear portrayal of the problem/opportunity
  2. Deliver more than one method to deal with it
  3. Point out the solution you prefer and the reasons for that choice.  (An important aspect is how it attaches to the client’s objective)
  4. Describe the solution in terms of the client’s experience and skill set.
  5. Make it as simple as it can be, but neither mislead nor trivialize the problem or its solution.
  6. If you cannot meet those five, spend time on improving the client’s skills.

When you communicate with the client at their level, you get decisions they remember and can implement even if the underlying assumptions change a little.  They are willing to participate in reviews and know how to allocate new resources.  They are part of the process.  Those conditions all benefit both the client and  the adviser.

Communication is important in all aspects of life but especially so with financial things.  People sometimes miss the details and the myriad options available.  Some think they know more than they really do.  The advisor is playing a difficult game.

In any communication, as in basketball, the sender of the communication is solely responsible for its completion.  If you are relying on the other person to fill in the blanks, you are doing it wrong.

Don Shaughnessy is a retired partner in an international public accounting firm and is presently with The Protectors Group, a large personal insurance, employee benefits and investment agency in Peterborough Ontario. Contact: don@moneyfyi.com  

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