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How to know when your financial adviser is really listening to your words

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Many financial advisers believe that to connect with clients, they must educate them, make recommendations, provide reassurance — and do most of the talking.

In truth, the best advisers build trust by listening more and talking less. By letting the client steer the conversation, they gain a better understanding of underlying concerns or fears and how to address them.

The challenge for many advisers is to know when to shift from speaker to listener. With all their financial expertise, they may feel compelled to dispense knowledge. That can lead to over-explaining the technicalities of investing or lecturing about wise saving or spending habits.

On average, people speak at a rate of roughly 125 words per minute. Yet most of us can process about 500 words per minute when we listen, leaving lots of extra mental capacity to daydream if a speaker isn’t captivating.

Attentive advisers don’t let their mind wander. Instead, they harness all their mental energy to retain what they hear while observing speakers’ nonverbal cues. They keep quiet and let clients open up, gently prompting them to elaborate by asking follow-up questions.

When Dawn Doebler, a certified financial planner in Bethesda, Md., conducts discovery meetings with prospects, she enlists an aide to take notes so that she can devote her full attention to the speaker. “The scribe frees me up to really listen and focus,” Doebler said. “And it makes it easier for me to follow up and find commonalty with the prospect.”

In these meetings, she finds that clients do 80% to 90% of the talking. She credits having a prepared list of more than 40 questions that she likes to ask. Examples include, “What are your best and worst financial moves?” along with inquiries about a client’s family and religious beliefs. “Having the list reminds me to do less talking,” she said. “You have to keep moving and complete all the questions. It also gets the client used to doing more of the talking.”

Like Doebler, Mike DiNuzzo strives to limit his speaking when getting to know prospects. A certified financial planner in Beaver, Pa., DiNuzzo and his colleagues have a rule where they only talk 10% of the time in their first few meetings with new clients. To adhere to that rule, DiNuzzo is mindful not to talk over the respondent to insert his opinion, tell a story or answer his own question.

“We don’t give an opinion unless we’re asked,” DiNuzzo said. “When we do speak, we start by repeating what we heard in our own words to confirm understanding” before proceeding.

Perhaps the toughest part of keeping quiet for most of the conversation is handling pockets of silence. Advisers who ask a lot of questions come to realize that some clients take their time formulating a response. “With most people, give them enough time and they will give you an answer,” Doebler said. “Sometimes, they’re not sure what to say. The trick for advisers is to wait and be comfortable with that silence.”

More: Here are the average retirement savings by age: Is it enough?

Plus: Why the 2020s could favor market-timers over buy-and-hold U.S. stock investors



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‘I could live on my Social Security and still save money’: This 66-year-old left Chicago for ‘calming’ Costa Rica — where he now plans to live indefinitely

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Editor’s note: This article was first published in September 2019.

A school break changed 66-year-old Martin Farber’s life forever.

In 2007, his daughter — who at the time was attending Illinois State University — decided she wanted to spend a college holiday volunteering in Costa Rica and staying with a local family, he explains. She came home raving about the experience, so, in 2008, Farber — who at the time was living in Evanston, Ill., just outside Chicago, and selling cars — took his first trip there.

“It was a big surprise to me — bumpy roads, dogs barking in the streets,” he says. “I wasn’t enamored at first.”

But as his daughter began traveling there more and eventually moved there for a year, he took additional trips to Costa Rica. It quickly grew on him — in particular, the people. “The Costa Rican people are warm, open and friendly. I felt less invisible in a strange country in a strange town where I didn’t speak the language than I did in Evanston.”

And the more time he spent there, the more it impacted him: “On one of my trips there, I thought: My daughter’s life makes more sense than mine,” he says. “There was nothing wrong with my life, but I felt that my life was out of context with who I’d become. … I would have bills and make money to pay them, but that had ceased to be satisfying,” he recalls. “I knew I needed to change my life — there was no more joy in what I was doing.”

What’s more, when he’d return from his Costa Rica trips, people noticed. “I would come back, and my friends and therapist would say: You seem better after you go,” he says with a laugh.

A view from the hot springs near Martin Farber’s home in Costa Rica.


Martin Farber

So in 2014, he packed up and moved to Orosi — a picturesque, lush small town with waterfalls and hot springs a little over an hour’s drive from San Jose — promising himself he’d stay for two years. It’s been five, and he now plans to stay in Costa Rica indefinitely. (Though Farber notes that, to him, “it’s not a retirement; it’s a chance to lead a new and different life.”)

Here’s what his life is like, from costs to health care to residency to everyday life:

The cost: While many expats spend way more living in Costa Rica, Farber says: “I could live on my Social Security and still save money.” He says “a person can live on $1,200 per month, two people on $2,000.” The key, he says, is to live more like he does and as the Costa Ricans do — in a modest home, eating local food and purchasing local goods.

Indeed, Farber himself spends just $300 a month for rent (he rents a home from a friend who moved recently and gave him a good deal), roughly $225 a month on groceries and just $50 a month total on water and electricity (the temperate climate in Orosi means you rarely need heat or air conditioning). The veteran Volkswagen
VOW,
+0.96%

 
VLKAF,
+0.98%

salesman saves money by not owning a car (those over 65 ride municipal buses for free), which can be a significant expense in Costa Rica; for his cellphone, “I pay as I go … roughly $10 may last me a couple weeks or more,” he says, adding that “many people handle there their cellphones this way. You can get them recharged anywhere.”

His major expense is travel: He goes back to the U.S. to visit his mother in Florida several times a year and lately has spent part of the summer in Chicago helping out a friend with a dealership there. He also spends a good amount of money on health care. He says that while flights can be had for as little as $350 roundtrip during offseasons, the cost can be much higher the rest of the year.

In the saddle.


Martin Farber

Health care: Farber, who has permanent resident status in Costa Rica, says he pays about $90 per month to participate in the country’s health-care system — adding that the health care he’s received has been very good. (A 2018 study of health-care quality and access in more than 190 nations ranked Costa Rica No. 62.)

When he developed a detached retina, though, he paid for the procedure out of pocket so that he didn’t have to wait for the required surgery, he says — adding that the entire procedure cost him about $5,000. “I would have had to have waited four days,” he says, if he had not paid to expedite matters. “That might have been fine, but it might not.” And he adds that the quality of care depends on where you get it in the country.

Lifestyle: Though Farber says that he “moved here with no goals and no agenda,” he’s found plenty to do. “I take Spanish lessons two days a week for two hours a day. It’s been great. I never thought I would acquire a usable language in my 60s,” he says. He also rides his bike all around the area, does some writing and belongs to a community group that undertakes projects to improve the area.

And he often simply takes in nature, which he says has been an essential part of why he feels calmer and more relaxed in Costa Rica than in the U.S. “I live at 3,000 feet but in a valley surrounded by coffee fields and lime trees and water. At night, if I open the windows, I can hear the river rushing by,” he says. “It is very calming … hundreds of trees everywhere … you know the Earth is alive.”

The historic Iglesia de San José de Orosi.


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Cons: “I don’t want to overglorify. It’s not without its problems,” Farber says of Costa Rica. “There are social problems and downsides.” He notes that crime and petty theft can be a problem (“I am cautious,” he says of his approach) and seem to have increased since he moved there, and adds that he misses out on some cultural things because of where he lives. And, he says with a laugh, “I can’t order Thai food at 9 at night.” But, he adds: “These are trade-offs — in the afternoon, I get to walk in the coffee fields and see flocks of parrots.”

Residency: To qualify for Costa Rica’s pensionado visa, expats must prove that they have a pension of at least $1,000 coming in each month. (Here are the details of that program.) Once you have lived in Costa Rica for three years, you can apply for permanent residency. Farber used a lawyer to help him figure out the ins and outs of residency options; his entire path to permanent residency took about a year, he says.

The bottom line: “After five years I am still amazed and surprised that I made the decision to lead a life I never thought I would,” he says. And while he may not stay in Orosi forever — “the town doesn’t have an ambulance, [and] I don’t know what it will be like to be 80 there,” he says — he does plan to stay in Costa Rica in no small part because of the people and sense of community. “I have the feeling that life is good here,” he says. “It’s hard sometimes, but we are all in it together.”



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Mutual Funds Weekly: These money and investing tips can help you read the market’s signs and stay on your path

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