How do you become a better financial educator?

By Mike Zarrelli

I fumbled the ball in a client meeting…or at least it felt that way. During the meeting, the client asked, “Why is there a difference between our portfolio performance and realized gains for the year?”

Eager to educate the client and answer the question, I dove into the difference between realized and unrealized gains and how they relate to investment performance. My boss was on the call, and after I wrapped up my points, he said, “Let me simplify the concept even further. When you own a home and the house appreciates throughout the year, you don’t pay taxes on the gain right away. You only pay the taxes once you sell the house. The same is true with the individual funds we own for you. Each fund is like owning a house.”

After the meeting, my boss gave me constructive feedback about reading the clients' non-verbal cues and changing my explanation accordingly. I couldn’t argue with his points. I forgot to read our client's facial expressions and body language. They needed a more simplified explanation.

What is extra frustrating about the experience is that my goal for the year was to work on adapting my presentations to better fit the clients’ personalities, financial understanding, and whether they want the high-level or the in-the-weeds answer. I’ve made progress on this throughout the year but definitely have not mastered it yet. In this instance, I got over-excited about explaining the details instead of meeting the clients where they were.

Two lessons

What can you learn from my experience? Well, two things:

Once you’ve got the knowledge and presentation skills down and are ready to take those skills to the next level, you need to determine how you best teach. You know how there are different learning styles, such as visual auditory, kinesthetic, etc.; the same is true for teaching styles.

My boss naturally uses analogies to explain the complex (hence his use of an analogy in that client meeting). In that same vein, I needed to determine my own teaching style. The following weeks, I paid attention to how I instinctively educated clients during my next few meetings. I noticed that every time I start to explain something complex, my first instinct is to pull out a pen and paper to draw an illustration.

For example, when a client asked me to explain breakeven points (referring to what age to file for Social Security benefits), I started drawing a simple graph to explain it. This turned out to be a much more effective explanation than if I only described the concept verbally.

Now knowing this, I can work on sharpening my illustration skills and ensure I have the right tools readily available during in-person and virtual client meetings. So, the first takeaway is understanding how you instinctively teach others can get you on the right path to becoming an effective educator. Utilize your strengths and the tools available!

Secondly, it is okay to have setbacks as long as you are open to constructive feedback, acknowledge your mistakes, and most importantly, learn from them. One of my firm’s core values is to be a learner, and I take that to heart. Being a learner (as opposed to being a knower) opens avenues for constructive feedback and turns losses into wins.

If my boss hadn’t had this conversation with me after the meeting, I may have brushed off the miscue and gone along with my day. Since he brought the feedback to my attention, it reminded me that I needed to continue working towards my goal for the year, leading me to this educating style epiphany.

Feedback leads to improvement

A financial advisor who is a learner will actively ask how they did during their meeting debriefs with the lead advisor because they know they can always improve their game. It is easy to get defensive when receiving feedback, but if you bring your defenses down, there are typically good intentions behind the advice to make you better at what you do!

As young financial advisors, keep in mind that your career is a long game. Just like it takes thousands of reps to bench press 3 plates, it takes thousands of repetitions of working with clients to become an effective communicator for all types of learners.

Mike is a Certified Financial Planner with Financial Services Advisory in Rockville, Md. He studied financial planning and accounting at Salisbury University. During his time at Salisbury, he was an active member of the Financial Management Association and was treasurer of his fraternity, Pi Lambda Phi.