Financial advisers walk a fine line in casual conversations between talking shop and talking too much shop

Advisers eager to attract clients can profit from casual encounters with friends and acquaintances. By radiating authenticity and integrity — and sharing freebie financial planning tips — they leave a lasting positive impression.

Yet there’s a fine line between showing interest in others’ financial concerns and showing off. Advisers are used to demonstrating their investment savvy and mastery of everything from budgeting to home buying to retirement planning.

“People want to feel comfortable,” said Alajahwon Ridgeway, a financial adviser in Lafayette, La. “They don’t want to feel talked down to. So you have to tiptoe around trying to bombard them with financial terms they can’t relate to.”

After eight years working for a large financial services company, Ridgeway launched his own firm in 2020. He’s on the hunt for clients, but he finds them by listening more than he speaks when interacting with prospects.

He tries to convey friendly curiosity to build rapport and learn about their concerns. If they mention what steps they’re taking to address financial matters, he withholds advice. Instead, he likes to ask questions such as, “Have you considered…?” and “What does your spouse think about that?” He might also suggest that they research certain financial products or strategies.

“This approach isn’t salesy,” he said. “It’s indirectly showing your value. Only a person who knows the answer will know what questions to ask to get it.”

Some advisers can’t resist going a bit further and educating prospects in more detail. They may figure a quick demonstration of their technical prowess can beget a new client. Yet dishing out concrete advice can backfire. If individuals misunderstand an adviser’s instructions or recommendations, the odds of costly repercussions soar.

Leo Marte, a certified financial planner in Huntersville, N.C., launched his firm in 2020. He says it’s natural to talk about money with others, and he’s happy to help them by providing food for thought.

When a friend recently asked his opinion about buying a home, Marte spent about 15 minutes providing guidance. “There is a risk when talking to friends about money because you don’t know their entire financial situation,” Marte said. “It depends on the topic. ‘Do I have enough to buy a house?’ is relatively simple and I can offer some expertise. But some people come to me with what they think is a simple question, and it’s more complex.”

Advisers who share financial insights with non-clients know to stop short of giving too many do-this, don’t-do-that directives. But here’s what they may not realize: Even if they plant seeds of awareness in someone’s head by giving general input, the results can take years to blossom.

Derek Delaney, a certified financial planner in Owatonna, Minn., recalls chatting with a relative at a family gathering in 2018. The conversation turned to retirement planning, and Delaney mentioned ways to convert investment assets into income.

Recently, the relative contacted Delaney and said, “Remember when you talked about retirement planning awhile back? I’d like to talk more about that.” They met and the relative became Delaney’s client.

“The lesson is don’t devalue those subtle pieces of information you give to prospects,” he said. “To me, I made a simple statement in passing that I didn’t even remember making. But my relative remembered.”

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