Over the course of the past four weeks, I've carried out almost a dozen video calls with clients of financial planners.
It has been both a privilege and a fascinating experience.
On many of these calls, people just listen. In others, they interact and ask questions.
The questions I typically get asked are around human behaviour, and in particular how to navigate the current uncertain landscape.
Now, because I’m not the adviser on the call, or an investment expert, I never get asked questions about financial planning or when I think stockmarkets will return to 'normal'... and this puts me in a unique position.
The empathy benefit
Because we only discuss behaviour and how people are feeling right now during these truly unprecedented times, I get to answer their questions not only with an evidence-based response or considered opinion, but also with genuine empathy.
It's a phrase we hear a lot, but we are actually all in this together.
So I get to feel what clients feel; hear what they hear; see what they see. This allows me to engage on a very personal level with them all, even though I’m meeting them for the very first time.
It gives me the ability to make an emotional connection with them and enter into their mind-space.
This is actually a significant benefit of the work I do.
I only ever talk about human behaviour and our underlying behavioural characteristics, something every human being has in common.
Being empathetic therefore allows the conversations I have with people to take a much more meaningful track, right from the get-go.
In his book The Seven Habits of Highly Effective People, Stephen Covey writes of empathy:
“When you show deep empathy toward others, their defensive energy goes down, and positive energy replaces it. That's when you can get more creative in solving problems.”
Empathy and its different guises
The interesting thing about empathy is it falls into the same categories as behavioural biases.
Behavioural biases can be split into two categories; cognitive and affective. Empathy is split into exactly the same two categories.
Cognitive empathy, sometimes called imaginative empathy, occurs in conscious thought, and is the ability to identify and understand another person’s feelings.
In essence, cognitive empathy allows me to know what someone else is feeling, but doesn’t necessarily mean I share that actual feeling.
Meanwhile affective empathy, sometimes called emotional empathy, is wholly unconscious.
It's where we share another person’s emotions, and it allows me to feel what someone else is feeling.
I would suggest that if someone is feeling anxious due to stockmarket volatility, almost every adviser I know will have cognitive empathy, but not all will have affective empathy.
The evidence suggests that when we recognise and feel what a client is experiencing, it contributes towards an accurate understanding of your client’s perceptions and concerns. Anything else is guess work.
I’ve seen this play out in front of me many times.
When I’ve stood in front of a room of advisers and told them they all have a particular bias, you can see some people becoming ‘closed’ in their reaction.
But when I go on to explain how my biases impact me and the decisions I make, and what I do to try and stop them becoming a factor in my choices, you see people accepting that and relaxing.
It's as if the realisation that being a behaviourally biased human and unique in your own way is perfectly OK. And it is!
Imagine if we can reveal accurate and meaningful behavioural insights that allow us to factor what I call 'evidence-based empathy' into the advice and planning we give.
Imagine the power of knowing that in certain situations when you're thinking something particular, 36 of your clients are likely to be thinking a similar thing. Or if you’re feeling a particular way, that 78 of your clients are likely to be feeling the same thing.
What could you do with an approach that allows you to deliver this - to accurately and quickly identify those 78 clients?
This kind of insight allows you to be completely proactive in client engagement. It allows you a depth of understanding which, until now, has been incredibly difficult to identify.
Irrespective of whether science proves that humans are the only creatures to exhibit it or not, we know that empathy is a very human trait.
To feel what someone else feels, from a position outside of their mind and body, is very powerful.
This is why I believe factoring it into the financial planning and advice process is so obvious, and why our research over the last five years has led us to a place where reporting on evidence-based behavioural empathy is core to what we do.
Knowing exactly where I'm aligned to a client, and where I may differ, allows me to adapt how I engage with that person.
It dictates the language I use, or how considerate of their feelings I may need to be. It allows me a window into their world, but through my eyes, and that can only ever be hugely beneficial to both me and my clients.
I’ll end with this quote from Daniel Pink, which sums up all of this nicely:
“Empathy is about standing in someone else's shoes, feeling with his or her heart, seeing with his or her eyes... and it makes the world a better place."
Be-IQ provides a behavioural empathy output through its BEACON dashboard. This shows advisers where their unconscious biases are aligned to those of their clients, and means behavioural empathy can become a core part of the planning and advice process. You can find out more about BEACON, and access a discount secured for Nucleus users, here.