Putting Your Clients in Control

Mitch Anthony

How many clients do you have that feel they are in charge of their financial lives? How many feel like they are being swept along by a set of personal and financial circumstances that are beyond their control? Are these clients taking responsibility for their financial decisions, or do they simply acquiesce to the advice you provide them? Many clients need to assume a greater sense of leadership over their financial futures—and loosen the grips of denial, fear, and complacency in the process. 

The degree of power people feel over shaping their financial lives is both objective and subjective in nature. This sense of empowerment is determined by three important characteristics: locus of control, personal responsibility, and self-confidence. All three are critical to the success of both you and your client.

Locus of Control

Locus of control is a psychological term that describes the belief system of individuals regarding the primary point of control in their lives. Those who believe the primary point of control is outside of them have an external locus of control. These individuals feel that outside forces (such as luck or fate), institutions (the government), or other powerful individuals (a boss) have more control over the direction of their lives than they themselves do. Consciously or subconsciously, they believe that they are victims of their circumstances and are bystanders to the course of events surrounding them. In other words, they don’t believe they can have much impact on outcomes in their own lives.

On the other hand, individuals who believe the primary control of their lives is within themselves are described as having an internal locus of control. They feel they can influence the course of events that surround them and the outcomes of their own lives. Because they have a strong sense of personal power, they tend to not give in to trials and tribulations and instead are proactive in making things happen for themselves. Individuals that possess an internal locus of control are more likely to see how they themselves have shaped their own financial lives and understand how they can affect and improve their sense of financial well-being. It’s important that your clients have an internal locus of control and understand that they need to be a part of the decision-making process.

Personal Responsibility

Encourage clients to look for evidence in their own lives that indicates whether they possess an external or internal locus of control. If they want positive change to take place in their lives, they will want to be open to the truth about themselves. As people become more aware of their own personal power and potential, they will mentally shift to an ever-stronger internal locus of control.

Along with this change will come a greater sense of personal responsibility in all areas of their lives. This is the attitude that if it is to be, it is up to me.  Clients need to be continually reminded that if there is any aspect of their financial lives that is successful or unsatisfying, they have the power to bring about change. Rather than blaming other people, their background, the economy, or whatever for the state of their financial lives, they can focus on what they can do to gain a sense of financial well-being. With a strong internal locus of control comes more personal responsibility—and self-confidence.

Self-Confidence

Self-confidence is an individual’s evaluation of his or her abilities to accomplish a given task. “Stepping outside my comfort zone” is a phrase many of us use to describe how we feel in situations where we don’t know how well we will perform or how others will respond to us. It is the level of your self-confidence that is likely to determine what goals you will set and actions you will take.

Many individuals are self-assured in other areas of their lives, but not confident when it comes to money management and financial planning. You probably hear those clients say things like, “I was never good at math,” or “I’m just not good with numbers.” Other emotional responses might include feeling intimidated or uncomfortable talking about financial matters. In addition, these clients may hesitate to share all the information necessary so that you can help them develop a plan that makes sense for them.

The best way to build self-confidence in any area of life is to take action. Each step your clients take will give them confidence to take action. If your clients lack confidence in their financial lives, they should start with first things first. Encourage them to start by doing seemingly simple (even mundane) tasks like balancing a checkbook, organizing records, or opening an IRA or 401(k) account. You may be surprised to find out how many of your clients are doing these things. If they have already mastered these beginning steps, great—you can encourage them to do more. Simple action steps will give them the courage and motivation to tackle other areas that are obstacles to their financial well-being.

Clients can break down big goals like refinancing a mortgage or developing a budget into bite-sized pieces. To the uninitiated, the whole process can seem confusing and overwhelming. However, when viewed step by step, it’s really not that big a deal. In your clients’ financial lives, success begets success. Successful completion of one step toward a financial goal is what gives them the confidence and motivation to move on to the next step.

Excerpted from Your Clients for Life: The Definitive Guide to Becoming a Successful Financial Life Planner, Second Edition by Mitch Anthony.  ©2006 by Mitch Anthony. For more information, click here.

Mitch Anthony is the founder and president of the Financial Life Planning Institute, the leading provider of financial life planning tools and programs. 

For more than a decade, Mitch and his team have provided training and development for both individual advisors and major organizations throughout the world. Mitch personally consults with many of the largest and most-recognizable names in the financial services industry on both financial life planning and relationship development.

Mitch has been named one of the financial services industry’s top “Movers & Shakers” for his pioneering work, and is interviewed by the media on a regular basis. The Institute is partnering with both Texas Tech University and the University of Georgia to develop financial life planning programs for their undergraduate programs. Mitch is a popular keynote speaker, columnist for Financial Advisor magazine, and host of the daily radio feature, The Daily Dose, heard on over 100 radio stations nationwide.

Mitch is also the author of many groundbreaking books for advisors and consumers, including perennial bestseller StorySelling for Financial Advisors, cited by “Financial Advisor” magazine as the number one “must-read” book for financial professionals. Mitch’s other books include Defining Conversations, From the Boiler Room to the Living Room, The New Retirementality, Your Clients for Life, Your Client’s Story, The Cash in the Hat, and The Bean is not Green. For information on these books and more resources, click here.

© 2011 Mitch Anthony