Kevin Myeroff: 7 Simple Ways Advisors Can Improve Client Conversations
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Hello and welcome to Barron's The Way Forward. I'm Greg Bartalus and my special guest is Kevin Meyerhoff, Principal and Senior Strategic Advisor of Sequoia Financial Group and a Barron's Ranked Independent Advisor.

Today we're going to be talking about client questions and how advisors can really stand out from advisors and reframe things in a way that's meaningful and helpful to the business and their clients. So welcome aboard, Kevin. Thanks, Greg. Good to be here. Tell us why this is important and what advisors usually do and where there's opportunity for them and how they can help clients. Right. You know, advisors are trying to figure out

how they could maximize their value to clients. One, to justify the fee that we charge. And two, to be ahead of the other people, to pick up market share, to be more likely to get a referral. And so the more information that a client's willing to give you, the better you could serve them. I mean, it'd be if somebody walked into a car dealership and said, I'm looking for a car.

And you're a salesperson, you're like, can you tell me more? You know, how many kids do you have? You know, six. Well, that eliminates a number of cards, doesn't it? Right, it marks your budget, et cetera, yeah. So what's the state of play now? What are advisors generally doing and what should they not be doing? You know, generally, most advisors are sticking with the playbook that was created 20 years ago.

And they use terms like goals, objectives, risk tolerance, which are all financial business terms. And clients don't give you – what I've learned is clients don't give you everything they want to say because they're trying to think more limited than you want them to go to really hear how they feel inside. So you could respond better to them in helping them meet their life objectives. So what would – instead of that, how could you –

Kind of get a better answer while more or less asking the same thing. So instead of let's talk about goals and objectives, you know, how about saying I'm here to help you live your best life, Greg. What does that look like to you?

And you're way more excited to talk about that than something that's boring like goals and objectives. Right. So generic and nebulous, yeah. Yeah, I mean, it reframes the advisor relationship from financial to holistic. Let's go through some other examples. What else do you have? Sure. You know, instead of, Greg, what are your long-term goals? Let's try, tell me about your future dreams, Greg.

What does life look for you? What does it look like after you retire? What does it look like when your kids are gone and you're an empty nester? Because the answers to those questions will really help me understand what your inspirations are and what excites you.

and I'll be able to guide you better along our path as we go down it. Now, hopefully these answers are more specific and more expansive in nature. Do you kind of have these, I know it's going to be overlap, but are these kind of in discrete buckets? So do you have these answers provide natural segues, if you will, into other ancillary topics and whatnot? Exactly. We let the conversation flow and if answers come up, and it's really great to ask, and you're an expert at this, Greg, asking the same question in different ways.

to really get to the bottom of something you're trying to achieve. I've seen you do it many times. I've been over here when you've done it. Let's go through talking about risk tolerance. I've seen, everyone's familiar with these questionnaires, like how much risk can you tolerate? That just seems so generic and a lot of people don't really know and reality can...

present an investor to be different than he or she purports to be? How do you discuss risk in a way that would be more enlightened? Right. And keep in mind, what I've learned doing this for almost 40 years now is that people look at risk as the more risk you're willing to take, the cooler you are, you know, the better person that you are.

And so people almost always overstate the risk tolerance, especially when their spouse is sitting there is like, oh, yeah, we could handle a 20% loss. That wouldn't even bother me for a second. Meanwhile, they'll be curled up in a fetal position somewhere if that would happen. So what I go to is what are your biggest fears about money? And I want to hear, you know, is it losing it? Is it how I'm going to get it to the children and how much I should give to the children? Yeah.

Is it about volatility? Or is it not hitting a number, falling short? Yeah. Exactly. And so that leads to just much better answers. So when I'm creating portfolios, I could use the information they gave me. And when I talk about the portfolios, I'll talk about how it ties in

those dreams. What about life expectancy in terms of planning? I mean, it's a double-edged sword. People are living longer than ever before, but it makes planning all the trickier. Right. And so we're still back to a mathematical number, right? And so, you know, some people today are a little bit ahead of it. They just don't say, our financial planning software says we use a nine-year life expectancy because that's what the charts show. You know, they'll say like, you know, how old was your mom or dad when they died?

- You have a history of certain diseases. - A little history, right. And so, I tried to make it even more holistic and say, let's talk about your health, not just your wealth.

And so what kind of things can you tell me about your health, family health, children's health that may influence how I set up your assets, how we do estate planning, how long I have to assume this money's going to last. And then somebody may say, well, geez, I have a child with special needs and they're going to need money forever. And so can you help me with that? And so, yeah, we surely can help you with that. Right, right. I mean, just like a

life insurance. I mean, they kick the tires on many different inputs, right? To, to calculate your, your perspective risk and whatnot. And, uh,

Yeah, it would behoove a planner to dig deep here because sometimes people are so close to a problem, they almost forget about it. And then they share a nugget of information and your eyes blast open and you go, what? And then they're like, oh, I forgot to tell you that. So definitely... Or they assume it's not in your lane. Yeah, yeah. And for financial advisors today, there's all sorts of special tools on special needs. Right. So to that point of being in your lane, would it be helpful for your typical advisor to, you know...

initial discussion or early on to just be very clear about the guardrails, if you will, like, look, this is holistic and holistic advice encompasses A, B, C, D, E, you know, et cetera, just to set the groundwork so there are no surprises.

Yeah. I think that's very disarming to somebody where they're more likely to be relaxed and answer those questions. Not feel surprised or caught off guard or whatever. That's right. Yeah. Yeah. I will tell you to this day, people are surprised when your first question is, how much money do you have? What accounts are they in? What type of assets are they in?

And that creates a defensive response. Good point. Because it shows you're looking, you're just after their money. Like bottom line oriented. Yeah, yeah. And so they really like relax when you say, tell me about your children. How old are they? What sports do they play? So what about the sequencing then to your point? Like you talked about earlier, you know, future dreams, right? Fears of money, et cetera. Is there generally...

A sequence, you know, disarming with the low-hanging fruit, if you will, of like kids, family, et cetera, then segwaying, or is it kind of not so important to sequence, just more important to hit all these points? It's not so important to sequence, it's important to hit all the points. And I recommend a checklist.

As you go through, because you could get all over the place and go, okay, what have I missed here? Oh, we haven't talked about health yet. Yeah. And let it flow. And a lot will determine the direction is because you have that first five minutes of, hey, how are you? You know, how, especially if it's a prospect, it's like, you know, how did you find us? Where did we meet? And, you know.

Your doctor said, and then you get into the questions in whichever way is most comfortable for them. What does it take to make you feel having your rich life? I say rich in quotes, but I don't mean it as a cliche at the same time that you feel fulfilled, right? You're fine financially, but you're otherwise happy. Right. So it's the term I grew up with, lifestyle is more important than money.

Right? You know, I've had clients that had $10 million that were poor because their lifestyle was ridiculous. And I've had clients with $500,000 that were really wealthy. But when you talk about that today, people start to think budgets. You know, he's framing this in a way of budgets. So what we'd like to say now is you don't need to be rich to be wealthy. And we can help you get there. And people are just like, huh.

Thank God. Yeah. Right? Now, in the end, we're going to talk about budgets and what are you spending and everything else. But in the beginning, it just gets them to feel more comfortable and talk and not be defensive. I want to ask you this, you know, it goes back a little bit to risk tolerance, but more about volatility and the reality of how people experience it. Tell me about that. Yeah, and I'm going to take it a little broader. Anytime a client's upset...

Not necessarily at you, but the way things are going. You know, the markets are down 6% and you're down 10%. I feel like you've not been proactive enough. Do you realize this is all the money that I have? And, you know, they're expecting a recession two years ago that hasn't come yet.

And you can't say, well, I made you 15% in the last two years. That's what you have to do in any one of these is they won't listen to one word you say until you acknowledge what their problem is. You literally have to say to them, and let's say they're, you know, they're talking about returns. You have to say, I hear you. I understand you're nervous about what the results have been so far. And I know this is all the money you have. You have none anywhere else.

So it's life-altering money. And now they're like, okay, he gets it. And then you could talk about, if I talk about volatility, what people forget, and we learn this during some of the huge market drops, is that if the market falls 1,000 points,

your body takes a physiological response to that, a flight-to-flight, you know, the fight-or-flight response. And your brain's smart enough to know that when you're watching CNBC to see what's going on or listening to Barron's or reading Barron's and you're

you read it again or you see it again, your brain says, yeah, I know that. I read it a while ago. But your body has the same physical, physiological response. And so I literally have told hundreds of clients, turn off your TV. The news doesn't change all that much during the day, especially financial news. So once a day, turn it on for half an hour and move on. And I've had hugs and thank yous for giving that advice.

Yeah, I mean, that's excellent advice. I mean, in addition to avoiding the physiological stress that you alluded to, you're going to get better returns. I mean, it's interesting because if you look at...

So let's say returns, let's use the S&P 500, you know, if it's up 20% in a given year, your average investor will have done worse because people tend to sell more when things are higher. I'm sorry, buy more when they're high and sell more when they're down. So individual returns almost always lag official returns. Yeah, right. Buying high and selling low, you don't make money. You can't make it up on volume.

Anything else that you want to add that we didn't really touch on or just give a little more shape to this? Yeah, you know, I think these are fun things. They're uncomfortable at first. You may feel funny trying to talk this way. So find a peer, somebody else in your office, your wife, your brother, people to practice this with. If you just practice it two or three times and talk to somebody that you'd really like to know these answers from.

You know, tell me how you feel. You know, don't let the other person like role play. Have them answer it honestly how they feel. And I think you'll get real comfortable with it really quick. It makes for a great conversation. We get way more information, which allows us to give back more value. Excellent.

Well, that was all extremely helpful, and thank you very much for joining us. My pleasure. Thank you. My guest has been Kevin Meyerhoff. For more podcasts and the latest wealth management news, visit barons.com forward slash advisor. For The Way Forward, I'm Greg Bartalus.

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