Empathetic listening means paying attention in a caring manner. It encompasses compassion, feeling, insight, and emotional identification and helps us understand where the other person is coming from before we react.
Emotional connection shows someone we grasp how they feel. And it is critical to financial advice today. As human financial advisers compete with passively managed index funds and robo-advisers, those who embrace empathetic listening can differentiate themselves and add value for their clients.
We all have experienced moments when we thought something we said was devalued or dismissed. It doesn’t feel good. So people who ask us for financial advice are showing both courage and vulnerability. They are demonstrating the trust they place in us and we need to affirm that trust by doing our best to hear them out. Empathetic listening helps accomplish this.
How to Listen in an Empathetic Manner
1. Offer Maximum Attention
When someone approaches you for advice, many factors came into play beforehand. They weighed the risks and the benefits and decided you would be a good person to consult. Nonverbal cues help show them that they made the right choice. Let them dominate the conversation. Be a patient listener. Don’t multitask and then try to refocus on what they are saying or they may not share their whole story.
2. Nonverbal Reading
Pay attention to the speaker’s emotions. Do their words signal anger, frustration, pain, fear? Make and maintain eye contact. Are they fidgeting or adjusting their hand position? Pay attention to their body movement. All these signals will help you decipher their underlying feelings.
3. Ask Questions
Pose neutral and thoughtful questions. Don’t make the conversation feel like an interrogation. Look the person in the eye as you make your queries, and use a caring, gentle tone. Avoid questions that express an opinion or judgment or that could hurt or belittle. Ask specific but open-ended questions about the particular issue: “Would you mind sharing more about that incident?” Be reliable and open.
Be nonjudgmental as you listen. Encourage the speaker to be forthright. Nonverbal cues such as eye contact, nodding the head, and matching their facial expressions can help draw them out. Rephrase their words and encourage them to open up emotionally. When it’s your turn to speak, summarize their story.
Silence is essential to empathetic listening. It adds depth and weight to a conversation. Though it may feel awkward at times, it provides space — for the listener to deliberate and the speaker to reflect on their internal processes and contemplate a solution to their dilemma.
6. Follow Up
After the session, you must follow up with the speaker. It shows that you take the issue they raised seriously and have a stake in its successful outcome. It demonstrates that you care.
Benefits of Empathetic Listening
Empathetic listening can help untangle conflicts and solve disagreements. Among other benefits, it:
- Creates Trust: People know that empathetic listeners will hear them without judgment and will help solve conflicts and create harmonized relationships.
- Boosts the Speaker’s Confidence: The speaker knows that their concerns are valid, that someone is listening, and that they have an ally in their corner who is willing to help.
- Fosters Teamwork and Cooperation: Cooperation begins when people listen to and understand each other. Empathetic listening creates an environment where people can tell their stories and reveal their emotions as they seek collaborative solutions.
- Shares Diverse Thoughts and Ideas: Empathetic listening helps build a platform for exchanging insights and perspectives, spurring unconventional and out-of-the-box thinking.
- Reduces Tension and Stress: Empathetic listening lowers the blood pressure and reduces the temperature. Conflicts are much rarer.
Impersonal robo-advisers cannot address a client’s anxiety as well as a professional human adviser. While robo-advisers are great at analyzing investments and opportunities based on computer-generated algorithms, they cannot connect on a human level or provide the reassurance that stressful situations require.
When people make critical decisions about how to manage their money, the human touch is essential. Clients need to have their fears and concerns heard and addressed. They need to vent from time to time, and they want to be a part of the solution.
A human adviser who harnesses empathetic listening can address those needs.
If you liked this post, don’t forget to subscribe to the Enterprising Investor.
All posts are the opinion of the author. As such, they should not be construed as investment advice, nor do the opinions expressed necessarily reflect the views of CFA Institute or the author’s employer
Image credit: © Getty Images/ Craig Smallish
Marguerita M. Cheng is the CEO of Blue Ocean Global Wealth. Prior to co-founding Blue Ocean Global Wealth, she was a financial adviser at Ameriprise Financial and an analyst and editor at Towa Securities in Tokyo, Japan. Cheng is a past spokesperson for the AARP Financial Freedom Campaign and a regular columnist for Investopedia and Kiplinger. She is a CFP® professional, a Chartered Retirement Planning CounselorSM, a Retirement Income Certified Professional® and a Certified Divorce Financial Analyst. As a Certified Financial Planner Board of Standards (CFP Board) Ambassador, Marguerita helps educate the public, policy makers, and media about the benefits of competent, ethical financial planning. She serves as a Women’s Initiative (WIN) Advocate and subject matter expert for the CFP Board, contributing to the development of examination questions for the CFP® Certification Examination. Marguerita also volunteers for CFP Board Disciplinary and Ethics Commission (DEC) hearings. She served on the Financial Planning Association (FPA) National Board of Directors from 2013 – 2015 and is a past president of the Financial Planning Association of the National Capital Area (FPA NCA).
Cheng is a recipient of the Ameriprise Financial Presidential Award for Quality of Advice and the prestigious Japanese Monbukagakusho Scholarship. In 2017, she was named the #3 Most Influential Financial Advisor in the Investopedia Top 100, a Woman to Watch by InvestmentNews, and a Top 100 Minority Business Enterprise (MBE®) by the Capital Region Minority Supplier Development Council (CRMSDC).