Appreciative Inquiry: Getting Clients to Act on Their Own Vision

by Randall Luebke RMA, RFC on October 4, 2011

By Elaine Floyd, CFP

Get clients to make their own predictions for the next year through a technique called appreciative inquiry. Ask them a series of questions that will help them visualize how their year will unfold. The better clients are at predicting their own future, the more likely they are to take the actions necessary to make that vision a reality.

Prognostications are big this time of year. Investors want to know what the
future holds, while investment strategists make big bucks publishing their
forecasts. It’s a marketing match made in heaven. Never mind that the forecasts
are all over the place or that they usually turn out to be wrong.

For financial advisors who don’t get paid for making predictions but who are
often put in the position of having to do so, the January exercise of fortune
telling is a no-win situation. If you get sucked into the “you’re the expert;
tell me what to do” request and actually share your beliefs with clients, you’ll
be castigated if even one part of your forecast is off. This is why most
advisors pass the buck by reviewing the various conflicting forecasts with
clients and coming up with a strategy that’s diversified enough to hedge
everything but the occasional black swan.

Given the events of the past couple of years, it would seem that making
macroeconomic forecasts is sheer folly. However, I believe there is a way to get
a handle on the future, and that’s by doing a step-by-step visualization of
events as they might transpire.

You start out by saying, if this happens, then that is likely to happen, and
if that happens, it will lead to XYZ, and so on. This process is not likely to
give you a number on the Dow, but it can give you a richer sense of the future
as you play out the possible scenarios in your mind, especially if you apply it
to individual clients.

Tell me a story

I got this idea from listening to a broadcast of This American Life.
The theme of this
episode is predictions for the coming year, and two stories were about
people who described their vision of 2010 in minute detail. The first story was
about a man whose neighbor was dying of cancer. The second story was about a man
whose wife was expecting a baby girl in March. In both stories, they walked
listeners through the days and weeks leading up to the events in question and
then described what they saw happening afterward, all in painstaking detail.

When you let the future unfold as a story, it’s not such a stretch, because A
leads to B, which leads to C and D and E. This makes E easier to arrive at,
because it occurs as a natural consequence of A, B, C, and D, not as some
isolated occurrence you plucked from thin air. I realize that economists and
strategists may take this approach in their analyses, but because they’re
dealing with so much information and so many unknowns, being off a bit on A or B
can make E entirely wrong.

Clients usually have a better handle on their own situation. The mini-trends
they are forecasting for their own lives are better known to them and somewhat
within their control, especially compared with national and global events that
make up the investment strategists’ macroeconomic predictions. Clients can
actually make A happen the way they see it, and if they do it right, B will be a
natural consequence. And then C.

So the idea here is for financial advisors to help clients see into the
future by walking them through the process of getting to the future in their
minds. Once you’ve identified a major event, like retirement, divorce, or even
death (if you dare), you ask the client questions to help him visualize how it
will play out. Since so much of financial planning relates to actions the client
takes (as opposed to the economic events that drive the markets), the better the
client is at predicting his future, the more likely he’ll be to take the actions
necessary for success.

Appreciative inquiry in financial planning

Appreciative inquiry is a methodology for effecting change through the
gathering of positive stories and images. It was developed in the 1980s by David
Cooperrider of Case Western Reserve University for use in organizations, but the
principles have been applied to many areas, including personal financial
planning. “The seeds of change are implicit in the first questions we ask,” says
his groundbreaking
paper on appreciative inquiry.

Courtney Pullen, Ph.D., wrote about appreciative
inquiry in the October 2001 issue of The Journal of Financial
Planning. A former psychotherapist who was tired of focusing on the
negative, Pullen became a coach and business consultant who helped clients put
their attention on the outcome they wanted, not the problem they were trying to
get rid of.

“Simply put, change occurs in the direction of our attention,” Pullen says.
“We create change by paying attention to what we want more of, not to the
problems that we want less of. This wisdom applies to all aspects of our lives.”
Here’s how Pullen contrasted problem solving with appreciative inquiry:

Problem solving	Appreciative inquiry
Identification of problem	Appreciating and valuing the best of “what is”
Analysis of causes	Envisioning “what might be”
Analysis of possible solutions	Dialoguing “what should be”
Action planning	Innovating “what will be”

Guidance toward productive outcomes

More recently, Edward A. Jacobson, Ph.D., wrote about appreciative
financial planning in the November/December 2009 issue of Investments
& Wealth Monitor, published by the Investment Management Consultants Association.
Jacobson says an appreciative advisor is one who “intentionally adopts an
appreciative mindset, incorporates appreciative questions into client
conversations, and guides conversations back from the brink toward productive
outcomes.” He says appreciative financial planning:

Creates a closer client-advisor connection
Elicits deeper, more meaningful client information on which to base the
investment strategy
Generates mutual (client-advisor) commitment to the strategy and to the
relationship
Stimulates greater client motivation and engagement, and consequently more
sustained implementation and deeper loyalty

An additional benefit is that advisors often find their work more uplifting,
energizing, and rewarding.

According to Jacobson, there are four principles to appreciative financial
planning:

Positivity principle. Positives lead to more positives.
Anticipatory principle. Our behavior is guided by our view
of the future.
Simultaneity principle. Change begins to occur when the
first question is asked. Thus, inquiry and change are simultaneous, rather than
distinct, processes.
Constructionist principle. Reality is not fixed, objective,
and “out there.” We co-create or construct our reality by our language and
conversations.

Visualizing what comes next

When implementing appreciative inquiry, the most important factor is topic
choice. So you might start your conversations by asking clients which areas of
their lives they want more clarity in. Then you go deeper into that topic,
asking questions that help clients visualize what comes next.

For example, let’s say a client tells you he is thinking of changing jobs. He
feels stuck in his present job and doesn’t know how to move on. A series of
questions like these might help the client visualize next steps:

What do you see yourself doing?
What skills do you have that you’d like to employ?
Can you imagine yourself in your ideal job?
What does that look like?
Where are you working?
What are you doing all day?
What have you accomplished at the end of the day or week?
How much are you earning?
How do you feel about yourself in this job?
How do you feel when people ask you what you do for a living?

Also consider bringing in the collective imagination of the family by
including the client’s spouse and children in the conversation. Ask them to
imagine the client in a new job. What would their lives be like?

If a client gets stuck and says “I don’t know” to any of your questions, just
say, “If you did know, what would it be?” You’re not going to hold the client to
any of the scenarios he is playing out in his mind—you are simply helping him
ruminate on the possibilities. When understood with the simultaneity principle,
considering these questions themselves is part of the change the client seeks.
The client’s shift in his thinking will begin to move him toward the result he
wants. But you have to really drill down and walk through the detailed steps so
the client mentally puts himself in the place he wants to be. These thoughts and
images are the seeds of change.

While you’re thinking ahead to later this year, try using this process on
yourself. Assume you can make 2010 turn out any way you want. You may not have
much control over the economy or the Dow, but you can bring the forecasting
process down to your own life and work by imagining, in the most minute detail
possible, how events will play out. It doesn’t matter if you’re wrong. What’s
important is deciding how you want things to be.