Helping Clients Make Small Changes for Big Results with Warren Ingram

So grab a coffee , sit back and let's get ready to blast off . I'm your host , fransjo de Toij Warren . Warm welcome to the Propulsion Live show .

But just briefly for those of you who may not know Warren , warren has been around longer than I have , not only in years , but I mean in the profession , so I only joined in 1998 . He's been around since 1996 .

So he also started the business Galileo Capital with Hugh Foster back in 2005 , I think Warren , if I recall correctly , and he was also the financial planner of the year in 2011 and also media award winner in 2013 . So he's really got a lot going on .

And , as if that is not enough , he's also written four books , and the latest one is sort of the one that we're going to be talking about a little bit today . But , warren , just thanks for your time . I really appreciate it and I want to just jump sort of straight into it , if you don't mind , and ask you know if we think about changing money behaviors .

You know why do you believe it's such a crucial thing for us to do and specifically for financial planners to focus on helping clients to change their behaviors .

I think when I started in the industry , I kind of focused a lot on building my technical knowledge , understanding as much of the regulatory environment as I could , and then understanding as much as I possibly could around investment markets and what worked and what didn't work .

And my business partner when we started was the chairman of the Institute of Behavioral Finance in South Africa and that's Theo , and Theo and I spent a lot of time trying to build into our financial planning practice the sort of basic principles of behavioral finance around framing clients and getting them to understand , you know , the impact of volatility on the

investments and understand the impact of their emotions on their money . And it always felt to me that we would get it reasonably right most of the time . In other words , sometimes we would , you know , right most of the time . In other words , sometimes we would , you know , kind of find a client .

But my biggest problem , franchot , is that the people that you know build up enough assets and have enough money and then live a severely compromised life because they just never feel that they've got enough . They're always terrified that they're going to run out . They've got enough . They're always terrified that they're going to run out .

And no matter what I did through my career , I wasn't regularly able to land with those people a sense of comfort , a sense of contentment that they could live a reasonable lifestyle and have enough money . And so for me it felt a little bit like medical terminology I'd be like a radiologist , we would do a great MRI .

A little bit like you know medical terminology I'd be like a radiologist , you know , we would do a great MRI , we would analyze the issue , we would figure out that the person's got a broken hip and , you know , we would know exactly what the issue was . But the fixing the issue wasn't always reliable .

And so eventually , after I think you can probably correctly accuse me of being a slow learner , but after nearly 30 years of doing this I figured out that some of this is helping people to identify their own behavioral issues and then help them to start moving their lives in a different direction .

And to quote Rob McDonald , you know the only expert in the room on someone's behavioral issues is the client , it's not me . So it was my job to kind of help them find that path . Long answer to the short question , franchois .

I think it's a worldwide issue , but in South Africa there's been a massive , massive focus on financial literacy teaching people about money , letting them know how to budget and do all of these different things , and also just the sort of tool that I alluded to in the beginning as well . It's a fantastic tool that does all sorts of weird and wonderful things .

But I think let me ask it this way Like , why is that not enough ? Like giving tools to clients in the sense of oh , see how much you can actually save , how much cost you can cut if you do these little things , but then also just teaching them about money . Why is that not enough ? Because you've done so very successfully .

I mean , your first book , I think , was around become your own financial advisor . So I mean , why are those things just not enough ?

And yet how many thousands of people around the world start smoking and continue smoking every single day , every single week , every single month , every single year ? And I have sympathy with people that are smokers . It's very difficult to stop . That I appreciate .

But to start knowing 100% , with 100% certainty , there's no question that smoking , nicotine , is really bad for you . And yet millions of people do it every single year . And so tell me that education would help in that situation , and I would say it doesn't help at all . That's a behavioral issue .

There is a deeper , underlying psychological issue , and I'm not saying that they've got psychological problems , but there is something , there is a driver there that needs to be addressed . And it's not the same . I'm not saying every smoker has the same emotional thing . You know , each of us will respond to our emotional traumas , or whatever it is , differently .

But you can't tell me that giving them another textbook or showing them an X-ray of another set of lungs or whatever is going to stop people from starting to smoke . There is something else , and bring that back to money . I think it's exactly the same , absolutely . Financial literacy is important .

I would love it to be taught at a very basic level as part of the school curriculum and every kid that goes through any kind of tertiary education being taught how to calculate percentages and understanding sort of the basics of what higher purchase is and how much interest costs you . All of those things .

It's critical , but all of us , if you've dealt with investments for a long period of time , you would have come across chartered accountants , financial planners , fund managers who have behavioral issues around money and financial literacy is not solving the issue . There is something else , and I think it's .

You know , understanding the kind of deeper emotional drives is the key here is the key here .

And we can chat a little bit later about exactly you know sort of maybe a process to do that , but where's the line when do you know not to get involved and to rather refer them on to to do that ?

But , but but where's the line when do you know not to get involved and to rather refer them on to a professional that deals , like you say , it's not to say somebody has psychological issues , there's just a psychological driver for something , uh , but but where's that line where you're going to overstep as a planner ?

My perception was always I need to be an absolute professional , I need to be rational , objective , clear in my communication and not ruthless is the right word but absolutely driven to help this person or this couple to achieve their goals and not be swayed by emotions .

And you know , I think that that was probably the very opposite of what I needed to do was , you know , I needed to be there in the room or in the hall with them and to be , you know , an empathetic ear , not someone telling them to stick to the plan and stick to the process .

So I think it's maybe just in some ways understanding that for some people you just need to ask them certain questions , you just need to kind of allow them to go down a journey themselves .

And very often there is a light bulb moment , and it really is a light bulb moment where they all start to go down a journey themselves and very often you know there is a lightbulb moment and it really is a lightbulb moment where they all start to go oh hang on , I'm doing this for totally the wrong reason , I'm spending this money in this particular way or

not spending it , you know , for probably not great reasons , and your only job there as an advisor is just to keep to stay in the room with them and to keep asking the right questions to help them realize .

However , sometimes there is a much bigger issue and a much deeper issue , and there's absolutely nothing wrong with saying to a client you know , I think that there is some work that you need to do here and I'm not , I'm not capable , I'm not the right person to help you with this .

And then referring them on , and I think maybe 20 years ago certainly 20 years ago , but maybe even 10 years ago wouldn't have been great to say to someone maybe you need to spend some time with a coach or maybe you need to spend some time with a therapist , but I think nowadays people are understanding , especially after COVID , that it's okay .

It's okay to go and figure out what's at play and to help you solve your problems . So there is a line , and in no way am I encouraging financial planners to become psychologists . I think that's a very hard job and our jobs are really hard enough . We don't need to take on a new one .

But I think we just need to kind of approach the financial questions much more differently than we've done in the past .

It took two very painful years for him and obviously caused enormous trauma for the family and especially his wife . And coming out of that I met her in that time and didn't know who she was before the cancer and so the person I met was just kind of who I thought she was and it took me quite a long time working with her and trying to help her .

Her issue was she was overspending . And it took me so long I'm so frustrated that I don't learn quicker to kind of realize that the overspending wasn't a literacy issue . It wasn't about understanding her budget or anything like that . This was her coping mechanism because she was depressed . She really was .

You know , not in the kind of cliche way that I think she had clinical depression . And there you know kind of realizing that someone is behaving in a particular way . You know you can't be their enemy . You can't just keep saying to them don't do this , don't do that . You know they're going to run from you and you also can't be an enabler .

And in that instance you know it's a case of bringing in the family . You know , helping them to help understand that there is an issue here and helping them to get her help . And absolutely you know , when you're dealing with depression or something like that , you're not unless you're a psychologist .

You're not capable and probably might be quite destructive in terms of trying to help them out of that . Yeah , I think that's a fantastic example .

Youance , you know , and you know it's quite stressful if you live in a big city in South Africa . Just , you know , driving to work every day is , is , is an adventure , and and then you know dealing with , you know massively volatile politics , you know crime hopefully no more load shedding , but possibly still load shedding all of those things .

It raises our level of awareness and vigilance around our personal safety , et cetera .

And then you add the fact that you know we've got major economic volatility and huge unemployment and a lot of people , especially those that have started to accumulate money , they live in this constant state of what . If you know what happens if this happens , you know , shouldn't I just get all my money out of the country ? Why do I own properties ?

So they live with this kind of fear radar going all the time and you know , in kind of physiological terms , the lizard brain is active . You know they're getting adrenaline all the time to kind of do something , take action , protect the family , you know , protect the money , do and all that .

And they're living in uh , you know the dog whisperer would talk about the red zone .

They're living in the red zone all the time and so , you know , trying to get them to go out of that that state of hyper vigilance to kind of calm and and and to get them to the ability to kind of look forward and have a slightly longer investment uh , time horizon is is key .

Otherwise you just find those clients on the phone , on on the email , on the WhatsApp , constantly saying change this , move my money to cash , send it offshore , buy gold , and they're absolutely destroying their financial position through fear , through trying to avoid risks that they foresee that maybe other people can't .

And the problem with people like that is that if they're very intelligent and hypervigilant , they think you're stupid because you can't see the risks that they can foresee and they're so used to being the cleverest people around that there is no one else that can foresee what they can foresee .

And so helping them to kind of get to a state of calm for a period of time and changing that mindset is key . So I think that that's one . The other one which which again is not , you know , it's very obvious in South Africa , but certainly not unique to our country is is , you know , people who overspend to to kind of project an image you know so .

So a lot of the time , you know , imposter syndrome is a real thing . You know , we , we , we , we , many of us will will . I mean , I'm sitting on this call knowing that there are , you know , lots of financial planners .

I can see their names there and , and you know , I'm sitting here thinking , you know I'm , I'm not the person to be telling these people anything . They all know better than me . And that sort of insecurity , you know , is there and hopefully it can be a positive , motivating force to learn more and to do better and to keep growing .

But equally , some people compensate for that by buying expensive clothes , expensive watches , expensive handbags or shoes or cars and projecting an image of great success to try and make themselves feel that they deserve to be where they are and deserve the accolades that they're getting or the promotion that they've received , etc .

And we see that a lot in our country and people you know , you kind of , if you sit with someone who's you know in that state where they've got imposter syndrome and you tell them to stop spending , that's not going to help , you know that does nothing for them .

You've got to help them identify that they're spending for a particular reason and then help them to be comfortable with who they are and then move on . So I think that that's one , and then the last one will be . The first one I spoke about is , you know , people who have that scarcity mentality . They've come from nothing .

You know their families might have been incredibly poor and they've arrived at their own lives with a measure of financial success , but always with this burned memory in their brains that everything can be taken away from them .

And so they live in the state of fear all the time that they don't have enough and that they can't spend and that they shouldn't spend , and so they live really compromised lives , even late into retirement , because they're so terrified of running out . And maybe those are three good ones for you , franchot .

You know that's definitely driving some past behavior and some current behavior , so these things are really , really powerful . As financial planners , though I mean , you mentioned like it's really important to be able to ask great questions . So how do we learn to ask better questions with the intent of understanding what's driving the client's behavior there ? Warren ?

In particular , you know what , where , when , who and how . So that's why the four whiskeys and the Heineken nice way to remember . And if you start your questions with those , what is this about ? When did this happen ? Who are you doing this for ? How did you get here ?

Those kinds of very open-ended questions are key in a situation like this , and when I meet people for the first time , especially if they're working incredibly hard in you know long hours and slogging away and saving , you know I always want to know why . So so one of the things I'll ask them is what is the purpose ?

What's the purpose of all of this work that you're doing ? What's what's driving you to kind of work for a goal ? Because they'll give you some kind of an initial answer and it's not wrong , it's just not the real answer you know their answer will be I want to provide for the family . And you know you could take that at face value and most of us would .

But I want to understand a bit more . So I'll just say to them , as a follow-up , you know , can you tell me a bit more ? And inevitably that you know , asking the follow-on question and staying with the client around that answer is the

gold . Because you know , I mean recently had one of those with a very successful CEO who's driving himself , you know , kind of deep into his 60s , working incredibly hard . He doesn't need to , and for me , you know , it wasn't good enough just to show him a spreadsheet to say you're fine , you're okay , you can retire now . So I asked him what's the purpose ?

And he just said I want to provide for the family . And then the follow-up can you tell me more ? And then you realize his father died when he was 17 and the family were really in financial difficulty and this man doesn't want to ever be in a position where his family would end up in the same , you know , financial position .

So , being open to the questions and staying in the room with him and not just providing answers to the first sort of shallow answer that you know , providing solutions , sorry , to the first shallow answer I think is important answer I think is important and for me , if I'm dealing with a new person for the first time , if we're going to chat for an hour , 45

minutes of that is my goal is to get them to talk about themselves and for me to say as absolutely little as possible other than asking a few open-ended questions and kind of just listening and not sitting there glazed eyes thinking , okay , I need to sell them a living annuity , I need to do a cash flow projection and a risk tolerance , because I'm not listening

, I'm not focusing on the human being that's across the table from me and I think they pick that up . So getting the deeper kind of layers of emotional drivers is key and those questions for me are a great start , francois .

They just assume that you've done this now a few times and you're sort of comfortable with this and you're having good success with other clients , but now you find there's one client that just doesn't want to open up . They don't want to talk about themselves , for whatever reason . What do you do at that point ?

Does that mean that maybe this client is not a good fit , or is there then another strategy that you follow ?

The purpose of that chemistry session is to figure out can we work together ? And in my mind it's one of the things I'm thinking about when I meet a new client is I don't care how big they are , how much they've got and what their assets are , what their position is , their title , all of those things .

I'm looking at them and I'm thinking there is a likelihood that we have a 30-year relationship together . If they're 60 and I'm projecting that they live to at least age 90 , we could be working together for all of that time . And I need to be able to work with this person .

I need to be able to take their phone call when the markets are down or go and sit there with them if their husband or their wife dies and want to be there . So chemistry for me is important and I think a lot of advisors that are successful . That's one of the things I've noticed is they're very good at turning away people that they feel uncomfortable with .

So I think that that's one . But secondly , if there is chemistry and the person is not ready to have a deeper conversation with you , that's okay , you know .

I think that if you're focusing on a long-term relationship with someone and they're sitting in front of you with a particular need gee , worried that you know they're about to go travel the world because they've been listening to Quibus and says you know , work from anywhere and they need life cover you can't have a 30 year conversation about their goals and

aspirations . Deal with the need and maybe , you know , in six months time or in a year's time you can have a follow up conversation where you get to the deeper issues . You know building trust is a two-way street .

So so I think that you know , be sensitive to where they are and meet them at their level , wherever they are , their emotional level , and then work with it . But equally , I think a lot of us , once you've been in the industry for a few years , you know whether you really like the person you're dealing with .

And that was a painful lesson for me was you know . Don't take on people where there's no chemistry , because that just causes you pain in the months and years ahead yeah , um , and I think that's such a hard thing sometimes for people to actually do and make that decision .

And probably you know the easiest route , like you know , I've seen this before and the more you do it , the more comfortable you become with it , which is also quite a phenomenon , warren , let's talk a little bit about the book . It's called Small Changes for Big Results , can I ?

Just you know you will find it . But , Warren , tell us a little bit about why you wrote this book and sort of maybe just one takeaway from it .

As a financial planner , I realize there's a whole lot more that I need to learn and one of the things that I do with my books is that all the money I make from the books goes to Serendipity Trust , which is an education charity that my wife and I set up .

So I have to keep writing books Franchot , because there are lots of kids that need to go to varsity and school that we help with . So I'm not going to stop . But I can't write about cooking because I know nothing about that .

So I'm going to be writing about the things that I know and as I learn more about the industry and the gaps , I try and fill those gaps with a book . And what we've been talking about now for me is kind of like a huge gap that I always knew was there , but I didn't . It's kind of , it's almost like a black hole in space .

You can't see it and you don't know about it , but something's missing , and so I'm hoping that , you know , this is another kind of segment to fill that , that , that hole . So so that is the , the , the constant motivation for me to to write books . And I think we get a lot of questions .

I get a lot of , you know , emails and nowadays , social media kind of messages from people asking questions , and and those questions guide what I , what I write about and what I talk about .

And , and I think this book is no different I had to bring in a co-author this time , mark Kragashnik I know you weren't going to say his name because it's a tough one and and the reason for that is that he's , you know , he's a doctor of psychology and certainly this , this was , you know , a book that needed to kind of have a framework for helping people .

And I think by the time we finished the book I realized it was written for end clients , end investors , and actually my financial planners in my business all find value out of this , all recognize themselves , their parents and their clients in the book . So I've realized it's actually got a lot of application for my fellow industry professionals .

And you know there might be tears or there might be anger or whatever it is . You know it's easier just to stay on the spreadsheet or stay on the on the planning tool , it is easier . But . But if you really want to make a big impact on people's lives , you have to be empathetic .

You know you have to understand them a little bit better and and you can't mess this up by by asking clients questions about themselves and about their lives . That's the most authentic thing you can do is , you know you're not pretending to be an expert on anything other than being interested in in the client , and and and .

So , you know , ask one open-ended question , do one thing , one small little action to kind of . You know , find out a bit more about a client and you'll be surprised as to how that improves your conversation . And you know , try it . You know , if it doesn't work , go back to your old ways . If it does work .

Go back onto Propulsion Live and thank Francois for putting the show together . Thanks very much , warren .

So thank you so much . All righty , fantastic . So next up , before we do the lucky draw , let me just quickly run through some comments . There's been some good ones . Some people have said I see Terrence here actually also asked the same question that I wanted to ask about you know what about if somebody is not willing to open up , et cetera .

So , terrence , I hope you got a bit of an answer there . We've got . Let me just see quickly . We've got . Let me just see quickly . We've got Frank saying thank you so much , warren , for taking us into a deeper place of thinking about how to guide our clients as they trust that advisor .

Willem Bester says that you know the chemistry is so important in a working relationship . Needed to hear that Thanks . And Liana also saying we should remember we have two ears and one mouth , ask the right question and really listen . And then Frank also saying we should remember we have two ears and one mouth Ask the right question and really listen .

And then Frank also said I really like your approach in terms of finding a mutual fit based on relationship values . So thank you very much for that . And Quiver said well , said Warren , financial planning is a matrimonial relationship . Make sure there is a match before a divorce . Always love those little anecdotes . So thank you so much .

So , ladies and gentlemen , thank you very much . I really appreciate you being here Next week . My guests are the financial plan of the year finalists for 2024 . So looking forward to introduce them to you and having a bit of a chat and getting to know them better . I'm not going to focus so much on the process of the financial planning .

I want to get into knowing each one of those finalists and to help you get to know who they are if you don't know them . So looking forward to a great conversation next week . So until then , stay safe , be blessed , prosper and continue to raise

the bar . Love you Bye-bye . All right , folks . That's a wrap for this episode of Propulsion . I hope you got as much out of this as I did . Remember to tune in every Friday at 8 am South African time for our live show called Propulsion Live . You can find it at wwwpropulsioncoza forward slash live and , trust me , you don't want to miss it .

If you enjoyed this episode of the podcast , hit that subscribe button or the follow button and share it with your friends , colleagues and else who you think would get something out of it . Thanks for tuning in and I'll catch you in the next one .