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Using The ACE Framework When a Client Wants to Sell Everything · Root Ready

• 0:00
  SPEAKER_00: A client calls in during a sharp market downturn, and their first words are, I want to move everything to cash.
• 0:07
  SPEAKER_00: As an advisor who feels responsible and feels intelligent and feels like they know a thing or two, the temptation is to quickly jump into the stats, the data.
• 0:16
  SPEAKER_00: The don't you know the best days in the market happened during a downturn?
• 0:20
  SPEAKER_00: The don't you know the forward-looking return from this point on is whatever percent it might be.
• 0:25
  SPEAKER_00: And advisor does that.
• 0:28
  SPEAKER_00: Client says, okay, I'll think about it, and then emails the advisor a couple hours later saying, please sell my positions and send email confirmation when it's done.
• 0:37
  SPEAKER_00: And the advisor scratches their head, saying, Well, what on earth?
• 0:39
  SPEAKER_00: I had the perfect data, I knew exactly what's going on, and they cannot figure out why they lost that battle, why they lost that scenario.
• 0:48
  SPEAKER_00: And so that's what we're going to talk about today on the Root Ready podcast.
• 0:51
  SPEAKER_00: And Eden, we had the uh root financial sequoia summit a few weeks back now in Austin, Texas.
• 0:57
  SPEAKER_00: We it was hosted at the Dimensional Funds headquarters.
• 0:59
  SPEAKER_00: You and I were just talking.
• 1:00
  SPEAKER_00: There was a particular session that that stood out to you.
• 1:03
  SPEAKER_00: What was that session?
• 1:06
  SPEAKER_01: Yeah, so it was one of our first sessions, I think on our first day.
• 1:10
  SPEAKER_01: And I think I noticed everybody's pens clicking writing this one down.
• 1:14
  SPEAKER_01: And it was a discussion about a framework to handle these types of conversations.
• 1:20
  SPEAKER_01: And it's called the ACE framework, which is an acronym that stands for acknowledge, clarify, explain.
• 1:28
  SPEAKER_01: Simple concept at a high level, much more difficult to master.
• 1:32
  SPEAKER_01: And I think we all felt the difficulty of actually mastering this framework because we ended up doing a guided role play session in this exact situation.
• 1:44
  SPEAKER_01: Clients super nervous and they're feeling really scared about where the market's at.
• 1:49
  SPEAKER_01: They want to sell everything and they call you.
• 1:51
  SPEAKER_01: And that was the exact scenario for this role play.
• 1:55
  SPEAKER_01: And when we first heard this ace framework, I was like, okay, this will be easy.
• 1:59
  SPEAKER_01: Yeah, I know how to do that.
• 2:00
  SPEAKER_01: Got it.
• 2:02
  SPEAKER_01: In that role play, there was a large discomfort sitting in the A and C sections of this framework.
• 2:11
  SPEAKER_01: And I felt that knee-jerk response immediately to jump to the E.
• 2:16
  SPEAKER_01: Explain, explain, explain, statistics, data, everything I know, CFP.
• 2:20
  SPEAKER_01: I know all this stuff.
• 2:21
  SPEAKER_01: This is what I want to talk about.
• 2:23
  SPEAKER_01: And I sensed in our entire role play that everyone else also was feeling a little bit of that discomfort with actually approaching the conversation through this framework.
• 2:33
  unknown: Yeah.
• 2:34
  SPEAKER_00: Love it.
• 2:35
  SPEAKER_00: So let's walk through that.
• 2:36
  SPEAKER_00: Let's walk through why it's uncomfortable, why it matters, what's on the other side of doing it well and doing it right.
• 2:42
  SPEAKER_00: And again, just for people listening, the ACE framework even just went through it.
• 2:46
  SPEAKER_00: But A is acknowledge, uh, C is clarify, E is explain.
• 2:51
  SPEAKER_00: Jake DeKender was kind of walking through this.
• 2:52
  SPEAKER_00: He's uh one of the Dimensional Funds team.
• 2:56
  SPEAKER_00: And you said you felt discomfort.
• 2:58
  SPEAKER_00: So we were role-playing and you were doing this exercise, and the individual you were role-playing with um said, I'm scared.
• 3:07
  SPEAKER_00: What walk me through that?
• 3:08
  SPEAKER_00: What was uncomfortable about walking through the ACE framework at that time?
• 3:14
  SPEAKER_01: So I think I didn't even realize that this was going to be a knee-jerk instinct.
• 3:19
  SPEAKER_01: I'd like to think that I have this element of emotional knowledge, um, some EQ.
• 3:26
  SPEAKER_01: And my first instinct to overcome the fear was not to sit in that fear, better understand the fear.
• 3:35
  SPEAKER_01: It felt like the best way to overcome this fear is to tell them why they shouldn't be scared.
• 3:40
  SPEAKER_01: That was just the initial, like, first reaction when I was actually in the position to be the advisor.
• 3:47
  SPEAKER_01: Hypothetically, this client calls and says, I'm really scared.
• 3:50
  SPEAKER_01: I'm thinking about moving everything to cash and I'm kind of leaning towards doing that.
• 3:54
  SPEAKER_01: It felt not wrong, but just uncomfortable to shift into more of that softer side.
• 4:02
  SPEAKER_01: Even though this is a softer conversation, we want to lean into the emotions more.
• 4:07
  SPEAKER_01: I certainly felt this kind of advisor hat-on knee-jerk response to okay, the best way to calm this person down is to start talking about the market and statistics and history.
• 4:19
  SPEAKER_01: That was just the initial response.
• 4:22
  SPEAKER_01: And it was difficult to just lean into the emotions and sit in the emotions and dig a little bit deeper into the I'm scared feeling.
• 4:32
  SPEAKER_00: I'm curious from your perspective.
• 4:34
  SPEAKER_00: So, as Jake was walking through that in his presentation, why did it seem so so we you just mentioned, yeah, I'm an advisor.
• 4:43
  SPEAKER_00: And hey, by the way, I'm also an advisor that's fairly good with the EQ sides.
• 4:46
  SPEAKER_00: Like I can do those things.
• 4:47
  SPEAKER_00: It felt uncomfortable.
• 4:49
  SPEAKER_00: But what resonated about like why did Acknowledge resonate when it was like, hey, this is the first step?
• 4:56
  SPEAKER_00: What was the the reason that you felt like, oh, yeah?
• 4:59
  SPEAKER_01: I think at the most base level, people and especially clients want to be heard.
• 5:07
  SPEAKER_01: They just want to be heard.
• 5:09
  SPEAKER_01: And that is exactly what Acknowledge is saying.
• 5:12
  SPEAKER_01: Validate the feeling, make them feel heard.
• 5:16
  SPEAKER_01: You're hearing, I'm scared, I want to move everything to cash.
• 5:21
  SPEAKER_01: Acknowledge really takes that.
• 5:23
  SPEAKER_01: Let's hear the client, let's make sure they feel that I am acknowledging this fear.
• 5:28
  SPEAKER_01: I heard what they just said.
• 5:30
  SPEAKER_01: I'm not just gonna jump right in the numbers.
• 5:32
  SPEAKER_01: I heard what you just said, and I want to pause and take a minute to make sure you're feeling heard.
• 5:38
  SPEAKER_01: And I really liked the way that Jake presented it.
• 5:41
  SPEAKER_01: And if that was part of it that felt like easy.
• 5:43
  SPEAKER_01: Okay, it's easy to just take a moment and acknowledge, but it was much harder in practice to take that minute and just make sure this person was feeling heard.
• 5:54
  SPEAKER_01: Yeah.
• 5:55
  SPEAKER_00: Yeah.
• 5:56
  SPEAKER_00: I it's the perfect, it's it's a difficult way to start until you get good at it.
• 6:01
  SPEAKER_00: It takes reps, of course, but it's that.
• 6:04
  SPEAKER_00: It's the classic Dr.
• 6:07
  SPEAKER_00: Seuss, people don't care how much you know until they know how much you care.
• 6:11
  SPEAKER_00: Which sounds trite, sounds childish, sounds what, but but it is the truth.
• 6:15
  SPEAKER_00: If people do if I'm calling Eden because I'm terrified, and Eden immediately goes into the data and the math and how long it typically takes to recover and why our portfolio is built for this.
• 6:27
  SPEAKER_00: Like I'm gonna I'm not even gonna say like I get it, but you're talking to the wrong part of my brain.
• 6:34
  SPEAKER_00: Because a scared brain doesn't care about the data.
• 6:36
  SPEAKER_00: A scared brain doesn't care about the math.
• 6:38
  SPEAKER_00: A scared brain needs to be held.
• 6:41
  SPEAKER_00: And not, you know, not in a condescending way of, oh, you're just scared little client, let me hold you.
• 6:44
  SPEAKER_00: But like, no, truly, this is a scary moment.
• 6:47
  SPEAKER_00: And I think that one thing that's been helpful for me is we as advisors sometimes don't feel that fear because we're so in it, we're so like, yeah, we just this is part of it.
• 6:57
  SPEAKER_00: We do this all day, every day.
• 6:58
  SPEAKER_00: So we we short, like, you know, we skip over that step because we just don't feel what the client is feeling.
• 7:05
  SPEAKER_00: But if you can try to put yourselves in the shoes of what's a what's a situation where you wouldn't be scared, and how important that acknowledge, clarify, explain framework would be.
• 7:16
  SPEAKER_00: Like for me, if it's if my four-year-old daughter or two-year-old son woke up with some horrible thing and like I took them to the pediatrician, the pediatrician just said, Oh, it's this, I'll give you a prescription.
• 7:28
  SPEAKER_00: Like, no, like you it because I'm in a new scenario and it's scary and I don't know what health thing is going on, like I can see in that situation how, yeah, someone, a pediatrician that would acknowledge and be like, hey, wow, this is this is really scary.
• 7:40
  SPEAKER_00: Let's make sure we figure out what's causing her to act that way, what's causing him to act that way, or why that's that's a situation where this can resonate more because I don't know the first thing about pediatric health and the services that they do.
• 7:54
  SPEAKER_00: We are so in this world, though, as advisors, that we lose sight of the fact that like these market downturns that we just see every day because there's not a day that goes by that we don't look at the market or what's happening, or we get a refresher or a reminder of why we invest the way we do or why we plan the way we do.
• 8:09
  SPEAKER_00: We can't take that for granted.
• 8:11
  SPEAKER_00: So put yourself in a position where you would be scared.
• 8:13
  SPEAKER_00: I think it's easier to see how that works.
• 8:17
  SPEAKER_00: Now, a couple, a couple things that I found helpful on this is so acknowledge, and again, this is not a technique.
• 8:23
  SPEAKER_00: The less we can think about this is like, here's a technique, here's the script, as much as a framework to say, be a human, but have a framework in the back of your mind so that you kind of know how the conversation is going to be guided, and that frees you up to be fully present with the person in front of you.
• 8:39
  SPEAKER_00: Um feel it, resonate with it, connect with it, acknowledge it.
• 8:45
  SPEAKER_00: This can get borderline.
• 8:48
  SPEAKER_00: Don't do this too long.
• 8:49
  SPEAKER_00: You know, if Eden, if you call and say, Oh my gosh, I'm terrified, I want to go to cash.
• 8:53
  SPEAKER_00: Hey, Eden, let me, I it's scary.
• 8:55
  SPEAKER_00: I get it.
• 8:55
  SPEAKER_00: Let me tell you about the time that I was scared.
• 8:58
  SPEAKER_00: Let me tell you about the time I was like, you can take that too long.
• 9:00
  SPEAKER_00: Like this doesn't need to be a super long thing.
• 9:03
  SPEAKER_00: It just needs to be this thing that there's a little bit of a disarming effect and a comforting effect when the first thing a client hears isn't, hey, this two shall pass, just wait it out.
• 9:15
  SPEAKER_00: But here's, wow, yeah, I can imagine how this would be very scary.
• 9:19
  SPEAKER_00: I know if I just retired and the market was down 20%, I would also have some serious concerns.
• 9:24
  SPEAKER_00: Where I would go from there.
• 9:26
  SPEAKER_00: So it's instead of just going A C E and thinking that, I would say, um, at least what's helped been helpful for me when I would have these conversations.
• 9:34
  SPEAKER_00: There is, if I'm talking to you, I say, hey, Eden, thank you for sharing that with me.
• 9:39
  SPEAKER_00: I fully hear you.
• 9:40
  SPEAKER_00: And if I retired and immediately saw my portfolio drop, like I would be, I would be terrified too.
• 9:44
  SPEAKER_00: Like I get it.
• 9:46
  SPEAKER_00: Do you mind if I ask you a few questions before I give you my thoughts?
• 9:50
  SPEAKER_00: Because I do have some thoughts about this, I've been thinking about it, but do you mind if I ask you a few questions?
• 9:54
  SPEAKER_00: And what that does is I know, at least from my personality type, if I got on the call with someone and I was scared about something, and they just kept saying, just acknowledging and asking questions and acknowledging, hey, at some point I want an answer here.
• 10:08
  SPEAKER_00: Like I do want something to grasp too.
• 10:10
  SPEAKER_00: So by almost like taking that concern out of their head, hey, even I do have some thoughts, and I've actually already put together some thoughts.
• 10:19
  SPEAKER_00: Do you mind though if I share if I ask you some questions first before we get there?
• 10:22
  SPEAKER_00: Kind of removes that question the back of their mind of are they actually going to give me feedback here?
• 10:28
  SPEAKER_00: And not just, you know, ask me questions, ask me questions, ask me questions.
• 10:32
  SPEAKER_00: So I found that to be helpful because you're telling them an answer is coming, and then you're giving them full permission to actually go deeper and to clarify.
• 10:42
  SPEAKER_00: Um any questions so far on your experience where we were doing the role play that this came up, or any any experience that would connect to this.
• 10:52
  SPEAKER_01: Yeah, I think just hearing the way that you just said that and imagining myself being the client, I felt like a sigh of relief almost before you even said anything about the market and the data and your accounts, like just saying the words of I also would be feeling nervous and this is a really valid concern.
• 11:13
  SPEAKER_01: Like exhale.
• 11:14
  SPEAKER_01: That was just an exhale moment where you've just removed this fear that the client's like, Am I being irrational?
• 11:20
  SPEAKER_01: Am I being totally crazy, being scared?
• 11:22
  SPEAKER_01: No, you're not.
• 11:23
  SPEAKER_01: And that's the whole point of the acknowledge.
• 11:25
  SPEAKER_01: And I like what you said too.
• 11:26
  SPEAKER_01: This doesn't have to be five minutes, just that one sentence is perfect.
• 11:30
  SPEAKER_01: I felt relief imagining myself being that client.
• 11:34
  SPEAKER_01: So I like that.
• 11:35
  SPEAKER_01: Just keep it concise, make sure they feel heard and also clarifying if it's all right to ask some questions because maybe they don't want to be asked a bunch of questions and they just want to hear the answer.
• 11:44
  SPEAKER_01: But I like that initial framework for this acknowledge piece.
• 11:48
  SPEAKER_00: Yeah.
• 11:49
  SPEAKER_00: Yeah, love it.
• 11:51
  SPEAKER_00: The next piece to me is that's the is the core of it, the clarify.
• 11:55
  SPEAKER_00: If you recall when we're going through this, Brendan actually had a really great example of inflation.
• 12:01
  SPEAKER_00: He said, Yeah, a client called in about inflation.
• 12:03
  SPEAKER_00: What do you do?
• 12:04
  SPEAKER_00: Well, you you can hey tell tell me more about that.
• 12:07
  SPEAKER_00: Is it concerns that your, you know, the prices of what you're paying for are going up?
• 12:11
  SPEAKER_00: Is it concerns that your portfolio is gonna get whacked with inflation?
• 12:15
  SPEAKER_00: And it was such a perfect example because we hear the question, oh, clients' concerns about inflation.
• 12:21
  SPEAKER_00: Well, hey, it's it's even let me tell you, it's like, yeah, inflation's whatever.
• 12:26
  SPEAKER_00: Um, it doesn't impact what the markets can do.
• 12:28
  SPEAKER_00: Let me show you these stats of like when inflation's high, the market does this.
• 12:31
  SPEAKER_00: When inflation's low, the market does this.
• 12:33
  SPEAKER_00: Like, it's really and I'm like, James, what are you talking about?
• 12:36
  SPEAKER_00: Like that that wasn't my concern was can I afford groceries in five years from now if this keeps happening?
• 12:42
  SPEAKER_00: And if we don't clarify, we all have these blinders on.
• 12:47
  SPEAKER_00: Like I hear, I hear inflation, I think I know what your concern is.
• 12:49
  SPEAKER_00: I hear market drop.
• 12:50
  SPEAKER_00: I I need to ask.
• 12:53
  SPEAKER_00: I need to clarify.
• 12:55
  SPEAKER_00: A rule I would personally use when I'm doing this, I have a three-question rule.
• 12:58
  SPEAKER_00: If there's a situation like this that's happening, I do not give any answer until I've at least asked three questions.
• 13:05
  SPEAKER_00: And there's nothing magical about three, but this is for a couple different reasons.
• 13:08
  SPEAKER_00: Well, number one is what I just said of eating, you come to me and you're terrified about inflation.
• 13:15
  SPEAKER_00: That like there's different ways that that shows up.
• 13:17
  SPEAKER_00: And if I assume that it's inflation and the impact on your portfolio, I might be missing your actual concern.
• 13:23
  SPEAKER_00: And when I go right to the explaining without diagnosing the real concern, it's not that I just missed the question.
• 13:29
  SPEAKER_00: I just really, like, not to be over dramatic, but in some ways, I just broke a lot of trust with you.
• 13:35
  SPEAKER_00: Of oh, my like my advisor's giving answers, but he doesn't even know, she doesn't even know what's the real concern.
• 13:42
  SPEAKER_00: Like they're not taking the time to hear me, and they're just giving these prescriptions.
• 13:47
  SPEAKER_00: That can do a lot of damage to the relationship.
• 13:50
  SPEAKER_00: Number two, the reason I did this, I you know, sometimes you hear studies or you hear these things, these stories, and it's like I don't know if it's true or not, but still directionally, I think like there's a good point to it.
• 14:00
  SPEAKER_00: And so this is one of those examples of I don't know if this is true or not, but I heard there was a study, and this study, I think it actually had to do with like portfolios of you know, you go into a room and there's five tables, and at the first table, they ask you one question.
• 14:18
  SPEAKER_00: Eden, um, how old are you?
• 14:20
  SPEAKER_00: Okay, cool.
• 14:21
  SPEAKER_00: Here's your portfolio recommendation.
• 14:22
  SPEAKER_00: It's called a 60-40.
• 14:24
  SPEAKER_00: At the second table, they ask not Eden, but a different person, like um Tony, um, same question.
• 14:32
  SPEAKER_00: How old are you?
• 14:33
  SPEAKER_00: And how much do you want to spend in retirement?
• 14:35
  SPEAKER_00: Okay, cool.
• 14:36
  SPEAKER_00: Tony, here's your portfolio recommendation, also a 60-40.
• 14:39
  SPEAKER_00: At the third table, they ask the third person, Elizabeth, hey Elizabeth, how old are you?
• 14:43
  SPEAKER_00: How much do you want to spend in retirement?
• 14:45
  SPEAKER_00: And what's your comfort level with the risk?
• 14:47
  SPEAKER_00: Okay, cool.
• 14:48
  SPEAKER_00: They give Elizabeth a portfolio also a 60-40.
• 14:52
  SPEAKER_00: So they do that five times.
• 14:53
  SPEAKER_00: And the point was every single recommendation was the same.
• 14:56
  SPEAKER_00: Every single one was a 60-40 portfolio.
• 14:59
  SPEAKER_00: But then they surveyed all the people that received those recommendations and said, How well did you feel that recommendation fit you personally?
• 15:08
  SPEAKER_00: And the person at the first table said, not at all.
• 15:12
  SPEAKER_00: The people at the last table, where there was five questions asked before feedback was given, said, I felt this was very highly personalized to me.
• 15:21
  SPEAKER_00: And the reality was there was one single recommendation delivered to all those people, but the number of questions that was asked before the prescription was given, before the advice was given, that was the single factor that decided how much that person trusted that recommendation, how much they felt it was in tune to them.
• 15:39
  SPEAKER_00: So there's a couple things you're doing here.
• 15:41
  SPEAKER_00: When you're asking questions, you are actually getting to the heart of the issue, which is the biggest thing, because it's very rarely the first presenting question.
• 15:48
  SPEAKER_00: But number two, you're setting yourself up so that when you actually explain something, it's gonna land all that much more.
• 15:56
  SPEAKER_00: It's gonna land when Eden says, Oh, okay, James, James took the time to actually ask some deeper questions.
• 16:02
  SPEAKER_00: So I know that when he's given this explanation, it's to Eden.
• 16:06
  SPEAKER_00: It's not a generic thing.
• 16:08
  SPEAKER_00: And the reality is that's true.
• 16:09
  SPEAKER_00: Like it is to Eden because I might tweak some of the recommendations I give and I might tailor it to what you're saying.
• 16:14
  SPEAKER_00: But a lot of times, we're ultimately going back to write what you started with in the beginning.
• 16:18
  SPEAKER_00: We're given the data, we're given the we're given the market history, we're given that, but it doesn't land the same if you haven't first asked those questions to clarify how they're feeling and for them to feel like it's personalized to them.
• 16:31
  SPEAKER_00: Does that resonate at all?
• 16:33
  SPEAKER_01: Yeah.
• 16:34
  SPEAKER_01: And I I really just couldn't agree more on the importance of finding the real question.
• 16:41
  SPEAKER_01: And you can't do that if you just jump into the financial data response.
• 16:47
  SPEAKER_01: And even if you give that financial data response to your point, James.
• 16:51
  SPEAKER_01: That may not even answer the question.
• 16:53
  SPEAKER_01: You may think that you just totally answered the question by diving into the data, but they maybe didn't even they weren't even concerned about historical market downturns or historical inflation data.
• 17:04
  SPEAKER_01: That's not what they were coming to you concerned about.
• 17:07
  SPEAKER_01: It was something else entirely.
• 17:08
  SPEAKER_01: And it's a pitfall to just jump into kind of the the financial market data script.
• 17:14
  SPEAKER_01: And I think it's very important to have some patience, especially in the clarify section of this framework.
• 17:22
  SPEAKER_01: And this was an area where I did feel some of that discomfort in the role play is a lack of patience and really being present with the client, because this, I think it's important to sit in this particular section and make sure you're asking tailored, thoughtful questions to help get to the core of the issue.
• 17:41
  SPEAKER_01: And it does require some patience, but will help guide your final answer a lot better than just jumping right in.
• 17:48
  SPEAKER_00: Yeah.
• 17:49
  SPEAKER_00: Yeah, absolutely.
• 17:51
  SPEAKER_00: This to me is the most important question.
• 17:54
  SPEAKER_00: The acknowledge makes them feel heard, makes them feel like you care.
• 17:57
  SPEAKER_00: And by the way, this isn't a script, you do care and you do hear.
• 18:00
  SPEAKER_00: So none of this can make up for an advice that doesn't actually care or that doesn't actually have empathy for their clients.
• 18:06
  SPEAKER_00: I'm making the assumption that I know everyone at the root team does, and everyone who's listening, I'm making the assumption that you actually care.
• 18:11
  SPEAKER_00: Okay, if you don't, that's stop listening to this episode and learn how to care.
• 18:15
  SPEAKER_00: But once you do, that acknowledgement shows that it conveys that.
• 18:19
  SPEAKER_00: The clarify, it draws them in, it feels deeper.
• 18:21
  SPEAKER_00: And then as I was doing a little bit of research before this episode to um to record this, there was a study in 20 or 2007 that was done.
• 18:30
  SPEAKER_00: And it was done at UCLA in the psychological science department.
• 18:34
  SPEAKER_00: And this study, it scanned people's brains.
• 18:37
  SPEAKER_00: And what it found is that putting a feeling into words would dampen the activity in the amygdala, which is that part of your brain that feels the fight or flight, it feels the panic, it feels the threat.
• 18:51
  SPEAKER_00: And it was really interesting because sometimes there's this fear of I'm terrified of the market.
• 18:55
  SPEAKER_00: And it okay, that's super broad.
• 18:58
  SPEAKER_00: Aidan, do you mind what you like sharing with me what you mean by that?
• 19:00
  SPEAKER_00: Do you mean you know you're concerned about um you know what's happening in Iran right now?
• 19:06
  SPEAKER_00: You're concerned about like just putting it back in your core to clarify some of those concerns.
• 19:11
  SPEAKER_00: And because there's this when things are vague, it feels like the sharks are circling.
• 19:15
  SPEAKER_00: It feels like, oh, I don't like I that's the scary part.
• 19:18
  SPEAKER_00: You but when you actually start to name your fear, oh yeah, I'm I'm scared about um, I don't know, am I gonna have enough money to survive the rest of it?
• 19:30
  SPEAKER_00: Okay, you you've you've already started the process of moving past that just by defining it.
• 19:38
  SPEAKER_00: Because it's no longer the part of your brain that's fight or flight and that's panicking and cannot make rational decisions, you're starting to calm that part of your brain, which means the other part of your brain that is more logical, that's more measured, that's more long-term thinking, it starts to take over.
• 19:54
  SPEAKER_00: And once that part of the brain starts to take over, because you've asked questions, because you've asked people to clarify, and I do that all the time.
• 20:01
  SPEAKER_00: Could you clarify what you mean by that?
• 20:03
  SPEAKER_00: Tell me more about that.
• 20:04
  SPEAKER_00: And I'll keep doing that and keep digging until it's like, okay, the fear, the specific fear has been named.
• 20:10
  SPEAKER_00: Now we'll go to step three, which is the explain and only now.
• 20:15
  SPEAKER_00: But Eden, if I haven't made you feel heard, if I haven't asked you to clarify exactly what you mean, which just by the you know, the process of you clarifying, you're gonna start to feel better and I'm gonna have a better sense of what to actually talk to.
• 20:29
  SPEAKER_00: Now I can explain.
• 20:31
  SPEAKER_00: And I can say, okay, Eden, thank you, thank you a lot.
• 20:33
  SPEAKER_00: That that's super helpful for me.
• 20:35
  SPEAKER_00: Um would it be okay if I now kind of give you some feedback on your initial question?
• 20:40
  SPEAKER_00: Yeah, James, you of course.
• 20:44
  SPEAKER_00: What's happening in the market is scary.
• 20:46
  SPEAKER_00: And if you remember, when we first designed your portfolio, it was not under the assumption that the market was only gonna be green and rosy and everything was gonna be perfect.
• 20:55
  SPEAKER_00: We knew that something like this would happen.
• 20:57
  SPEAKER_00: We didn't know when.
• 20:59
  SPEAKER_00: We will never know when, but we knew that something like this would happen.
• 21:02
  SPEAKER_00: And if you remember, Eating, we took 80% of your portfolio, and 80% of your portfolio is invested in the market.
• 21:08
  SPEAKER_00: And it's growing.
• 21:09
  SPEAKER_00: And it's and by growing, I actually mean the reverse.
• 21:11
  SPEAKER_00: Right now it's going down.
• 21:11
  SPEAKER_00: Like this, this the stuff with Iran, the stuff with tariffs, the stuff with inflation that you know, you filled the blank, whatever it is.
• 21:19
  SPEAKER_00: It's gotten hit.
• 21:21
  SPEAKER_00: But Eden, we put 20% of your portfolio and 20%, and I'm just obviously making this up, these these numbers, but 20% of your portfolio is about$200,000.
• 21:31
  SPEAKER_00: That's how much we know that you need over the next five years to be okay, to be able to supplement your social security and be able to take the trips, do the things you want to do with your family and enjoy your retirement.
• 21:44
  SPEAKER_00: We needed to protect a portion of that and we put it in something that is not going down right now.
• 21:49
  SPEAKER_00: In fact, your root reserves are up about 1% right now.
• 21:51
  SPEAKER_00: And that's not gonna make you rich.
• 21:53
  SPEAKER_00: That's not its job.
• 21:55
  SPEAKER_00: Its job is to say, even when this happens, and by the way, this is gonna happen a number of times.
• 22:00
  SPEAKER_00: Over the course of your retirement, we don't need to be concerned.
• 22:03
  SPEAKER_00: We don't need to be having fun, but we don't need to be concerned because we have money that's set aside in your root reserves, which is short-term, very high quality bond investments, money market investments that you're going to live off of.
• 22:17
  SPEAKER_00: As your income's coming out now, it's not coming from the thing that's down 20, 30%.
• 22:22
  SPEAKER_00: You have that thing, but we have enough here to make sure that you're good.
• 22:26
  SPEAKER_00: And here's the next piece I don't know how long this downturn is going to last.
• 22:31
  SPEAKER_00: This might be over in six weeks.
• 22:33
  SPEAKER_00: This might be over in six months.
• 22:35
  SPEAKER_00: This might be over in three years.
• 22:39
  SPEAKER_00: I do know that on average, a bear market happens one out of every four or five years.
• 22:44
  SPEAKER_00: And on average, it takes two and a half years to recover.
• 22:47
  SPEAKER_00: So we put five years of these types of investments in your portfolio.
• 22:51
  SPEAKER_00: So even if it's double average, which is right about the longest we've seen it happen, you're going to be okay.
• 22:59
  SPEAKER_00: So as we see this, just I just want a reminder that we engineered your portfolio on the front end, knowing this would happen.
• 23:07
  SPEAKER_00: And now it's our job to make sure that where your income's coming from is switching and we're delivering that.
• 23:13
  SPEAKER_00: But when it comes to my biggest concern for you, Eden, which is, are you going to be okay for the next 30 years of your life?
• 23:21
  SPEAKER_00: You are going to be okay.
• 23:22
  SPEAKER_00: I feel very confident about you being okay for the next 30 years of your life because we're invested in planning in a way that a downturn like this isn't going to derail your ability to live the retirement you want to live.
• 23:34
  SPEAKER_00: And now when I say that after acknowledging, after clarifying, how much better are you going to receive that than if I jumped right into the data?
• 23:47
  SPEAKER_01: I think it's worlds of improvement.
• 23:50
  SPEAKER_01: And it it just lets you tailor that explain part.
• 23:55
  SPEAKER_01: Because I think we all have, you know, we we live in this world every day.
• 23:58
  SPEAKER_01: We know the history, we know the scripts, we know the story, we know it.
• 24:02
  SPEAKER_01: But it's not just going to be that same answer over and over again.
• 24:06
  SPEAKER_01: Even if it's the same question from two different clients, the answer is probably not going to be exactly the same.
• 24:11
  SPEAKER_01: And I think that is really powerful too.
• 24:15
  SPEAKER_01: The fact that you spend the time clarifying really helps tailor the explain piece of this framework because it really shouldn't necessarily be the exact same answer for every single client, even if they're coming to you with the exact same question off the onset.
• 24:30
  SPEAKER_01: It's probably not exactly the same concern.
• 24:32
  SPEAKER_01: And I think it's really valuable to spend that time figuring out what the real concern is.
• 24:37
  SPEAKER_01: So you can build that trust, tailor that answer to this client specifically.
• 24:42
  SPEAKER_01: And I really felt that just imagining myself being the client on the other end of that explanation.
• 24:47
  SPEAKER_00: Mm-hmm.
• 24:47
  SPEAKER_00: Mm-hmm.
• 24:48
  SPEAKER_00: Yeah.
• 24:49
  SPEAKER_00: Yeah.
• 24:49
  SPEAKER_00: So that will let's let's leave uh listeners with a couple of practical takeaways.
• 24:54
  SPEAKER_00: Did you play sports growing up?
• 24:56
  SPEAKER_00: Yes, I played volleyball.
• 24:58
  SPEAKER_00: Volleyball.
• 24:59
  SPEAKER_00: Okay.
• 24:59
  SPEAKER_00: Um, what's like the name of a move you did in volleyball?
• 25:05
  SPEAKER_00: Like a surf.
• 25:06
  SPEAKER_00: Let's say let's say you're learning a new serve or you're learning a set or whatever.
• 25:10
  SPEAKER_01: Nice new jump surf.
• 25:11
  SPEAKER_01: How about that?
• 25:11
  SPEAKER_00: Jump surf.
• 25:12
  SPEAKER_00: Okay, you're learning a jump surf.
• 25:14
  SPEAKER_00: How natural is it the first time you go to try that new jump surf?
• 25:19
  SPEAKER_01: Horribly awkward.
• 25:21
  SPEAKER_01: You might not even make contact with the ball.
• 25:23
  SPEAKER_01: You might totally miss.
• 25:24
  SPEAKER_00: Exactly.
• 25:25
  SPEAKER_00: Now, now that you've done it, when you're if you were to go jump surf today and you've mastered your craft at it, like what's now what's the thought going through your mind?
• 25:35
  SPEAKER_00: Got it.
• 25:36
  SPEAKER_00: Easy done.
• 25:38
  SPEAKER_00: You're not even like you're maybe you're thinking like where exactly do I want to place this?
• 25:41
  SPEAKER_00: You're you're you're kind of seeing the formation of the other team.
• 25:44
  SPEAKER_00: You're like you're you're able to fully focus on what's in front of you.
• 25:47
  SPEAKER_00: Whereas the first time you try that jump surf, like all you're thinking about is the mechanics and how awkward they are and how you can't get your hand to spin over the ball the way you want it to, or how you're stepping with the wrong foot to jump, or how it's going to be the same with this.
• 26:00
  SPEAKER_00: It's not, and now I would say like it's gonna be easier to master this framework than it is to master a jump serve.
• 26:06
  SPEAKER_00: But role play, like the best thing you can do.
• 26:08
  SPEAKER_00: I love that you role-played with the team there.
• 26:11
  SPEAKER_00: I would way rather look foolish in front of a team member who cares about my success and wants me to get better than look foolish in front of someone who's retired and terrified that their life savings is going to uh run out.
• 26:24
  SPEAKER_00: So this is something like when you're when you're trying something new, if you don't have that, if you if you like, if you haven't practiced this enough, rehearsed this enough, mastered this enough, like your mind is going to be shifting to, okay, what's next?
• 26:37
  SPEAKER_00: Okay, they they're saying this.
• 26:38
  SPEAKER_00: I'm trying to, I'm already trying to think of my next question.
• 26:40
  SPEAKER_00: I'm already trying to think of where, which by definition means I cannot be focused on the client.
• 26:47
  SPEAKER_00: To do this effectively, you need to be focused on the client.
• 26:50
  SPEAKER_00: To be focused on the client means you cannot be focused on the framework.
• 26:53
  SPEAKER_00: To not have to focus on the framework means you need to be like Eden after she had done a thousand jump serves and now could just be fully focused on where do I want to place this and what's the formation of the other team.
• 27:03
  SPEAKER_00: So, role play, go through this, come up with scripts, come up like just pull someone aside who wants to get better at this too.
• 27:10
  SPEAKER_00: Just by going through, it doesn't take that much, but that drilling, you're gonna be able to be there much better for your client because you want to be fully present, you want to be fully focused.
• 27:23
  SPEAKER_00: If it sounds like a script, your client's gonna see thread.
• 27:26
  SPEAKER_00: If it sounds like, okay, Eden's this, I mean, this is a little patronizing, Eden.
• 27:30
  SPEAKER_00: Like you're yeah, I can tell you're just asking this to check the box so you can move on to the net.
• 27:33
  SPEAKER_00: Like that's going to come through.
• 27:35
  SPEAKER_00: But if you can practice this a few times, it's going to be uh much better.
• 27:40
  SPEAKER_00: The other thing, kind of as an aside, is when this is happening, the message that we deliver is important, but so is the messenger.
• 27:52
  SPEAKER_00: So if we can show up very calm, if we can show up very you're it's gonna feel tempting sometimes to match their energy.
• 27:58
  SPEAKER_00: They're frantic, they're frenetic, they're they're they're you know, they're kind of they're and you we start talking faster.
• 28:03
  SPEAKER_00: We start it like it creates this frenzy of like, ah, like a uh, you know, an anxious ball of energy.
• 28:08
  SPEAKER_00: It's like we need to be that calm, reassuring, stable presence for them.
• 28:16
  SPEAKER_00: That's also gonna happen through role play, but it's also just say, as you're doing this, take a breath.
• 28:22
  SPEAKER_00: Don't be afraid to pause.
• 28:25
  SPEAKER_00: Don't be afraid of that white space here.
• 28:29
  SPEAKER_00: Like those are actually the moments that we're trying to de-escalate here.
• 28:33
  SPEAKER_00: We're trying to make our client feel heard, clarify some of their fears on their own.
• 28:39
  SPEAKER_00: That's going to start this process.
• 28:40
  SPEAKER_00: Okay, the weight's falling off their shoulder.
• 28:42
  SPEAKER_00: What we're doing is we're priming them to be able to receive our advice.
• 28:45
  SPEAKER_00: Our advice is meaningless if it cannot be received.
• 28:51
  SPEAKER_00: So we're setting the conditions by which that advice that we full, fully and wholeheartedly believe in it can't be received if we haven't done the work here.
• 29:00
  SPEAKER_00: And part of that work is the acknowledge and the clarify.
• 29:03
  SPEAKER_00: Part of it is also just the way you show up, being able to talk slowly, being able to be reassuring, being able to remain calm while still empathizing and acknowledging that it's very normal for them to be feeling the way they're feeling.
• 29:16
  SPEAKER_00: If you can do that, you know, we talked about our last episode, AI, and what's that going to look like for the future of the industry.
• 29:24
  SPEAKER_00: I mean, this is not going to be replaced by AI.
• 29:28
  SPEAKER_00: Someone who can stand there, have the presence to have these conversations that are difficult and can be challenging.
• 29:36
  SPEAKER_00: This is where the value of an advisor is 10 times whatever the fee advisor is charging lives, is in these moments.
• 29:44
  SPEAKER_00: So it is very important.
• 29:46
  SPEAKER_00: And the more you can role-play it, the more you can practice it, the better you're going to be able to show up for your clients when it happens.
• 29:53
  SPEAKER_00: Any final thoughts or questions on any of that, Eden?
• 29:58
  SPEAKER_01: I would just reiterate that role-playing is super important.
• 30:02
  SPEAKER_01: And I think you not only better yourself by taking those reps, but I felt this.
• 30:08
  SPEAKER_01: We did a group role play in this situation, and it was a mix of associates, and our lead advisor in the group was Carrie.
• 30:15
  SPEAKER_01: So shout out, Carrie.
• 30:17
  SPEAKER_01: I learned so much just observing the way that Carrie tackled this situation.
• 30:23
  SPEAKER_01: She nailed it.
• 30:24
  SPEAKER_01: She had that very calm level voice, took pauses before she even asked her next question in that clarify section.
• 30:34
  SPEAKER_01: She wouldn't just immediately ask another question.
• 30:36
  SPEAKER_01: She'd take a minute.
• 30:38
  SPEAKER_01: Hmm.
• 30:39
  SPEAKER_01: Okay.
• 30:40
  SPEAKER_01: And then formulate a question.
• 30:42
  SPEAKER_01: She had that patience, that presence.
• 30:44
  SPEAKER_01: And I learned so much just watching her go through the exercise.
• 30:48
  SPEAKER_01: So I think you can learn a lot from your peers too by doing the role play.
• 30:51
  SPEAKER_01: It's not just about bettering yourself and getting the reps, but you really can learn a lot from observing others and especially people in the lead advisor space and how they tackle this situation.
• 31:02
  SPEAKER_01: So it's not rocket science, but it's not as easy as you would think off the bat.
• 31:06
  SPEAKER_01: And I think there's a lot of room to really get more comfortable with this by taking that leap, do some role play, be uncomfortable with your peers so that you can be comfortable with your clients.
• 31:18
  SPEAKER_00: Love it.
• 31:19
  SPEAKER_00: Absolutely.
• 31:20
  SPEAKER_00: Step one is having the framework.
• 31:22
  SPEAKER_00: Step two is practicing and rehearsing and developing your skill set within the framework.
• 31:26
  SPEAKER_00: So when the time comes that you need to apply it, you're ready to go.
• 31:30
  SPEAKER_00: Well, Eden, thank you.
• 31:32
  SPEAKER_00: Uh, thank you also to everyone who is listening or watching.
• 31:34
  SPEAKER_00: If you have not already done so, please subscribe, please like, please leave a review, whatever else uh you can possibly do with a podcast or video.
• 31:42
  SPEAKER_00: So thank you everyone for watching, and we will see you all next time.