The One Communication Skill That Actually Changes Client Behavior

Most advisors don’t struggle with knowledge. They struggle with getting that knowledge to actually land.

This episode explores one of the most important (and most overlooked) skills in advice: why facts alone rarely change client behavior, and how storytelling bridges the gap between understanding and action. It’s a lesson James learned early in his career through Toastmasters, and one that continues to shape how the most effective advisors communicate today. 

James breaks down the difference between information, wisdom, and true transformation — and why advisors who rely only on facts often feel frustrated when clients hesitate, delay, or ignore perfectly sound advice. Through real client stories, market examples, and moments advisors will immediately recognize, this episode shows how stories invite clients into the decision instead of pushing information at them.

From retirement timing to diversification to staying invested during market chaos, the common thread is clear: clients don’t change because they know more, they change when they can see themselves in the outcome. And that’s exactly what story makes possible.

Submit a question for James here: https://rootreadypodcast.com/

-

Advisory services are offered through Root Financial Partners, LLC, an SEC-registered investment adviser. This content is intended for informational and educational purposes only and should not be considered personalized investment, tax, or legal advice. Viewing this content does not create an advisory relationship. We do not provide tax preparation or legal services. Always consult an investment, tax or legal professional regarding your specific situation.

The strategies, case studies, and examples discussed may not be suitable for everyone. They are hypothetical and for illustrative and educational purposes only. They do not reflect actual client results and are not guarantees of future performance. All investments involve risk, including the potential loss of principal.

Comments reflect the views of individual users and do not necessarily represent the views of Root Financial. They are not verified, may not be accurate, and should not be considered testimonials or endorsements

Participation in the Retirement Planning Academy or Early Retirement Academy does not create an advisory relationship with Root Financial. These programs are educational in nature and are not a substitute for personalized financial advice. Advisory services are offered only under a written agreement with Root Financial.

Chapters

• 0:00 Mary Ellen’s Core Lesson
• 5:13 Retirement Hesitation And Lisa’s Story
• 12:55 John and Dave's Portfolio Explained
• 17:30 Why Stories Change Behavior
• 20:33 Final Thoughts and Disclaimer

Transcript

SPEAKER_00: 0:00

Hi everyone, welcome back to another episode of the Root Ready Podcast. I'm your host, James Cannoll. Many of the most important lessons that I learned or that I was able to apply as an advisor, I actually learned from my time in a Toastmasters Club. And I will remember one very specific lesson. And this lesson was taught to me by an individual named Mary Ellen. Now, Mary Ellen, she was probably in her late 60s. She was part of the Toastmasters Club. She was no more than five foot three. Her voice was a little bit on the high side. And you look at this individual, you look at this woman, and there's nothing that's incredibly compelling that's going to tell you this person is going to own the stage whenever she gets up there. But every time she got up there, she completely owned the stage. She had everybody captivated and whatever she was saying, she was able to do so in a very masterful way, in a way that her point always landed. The message she wanted to get across always got across. And if I was just watching her, if I was just watching her as an observer, you know, she happened to be a professional speaker and I was watching, I'd be trying to think, what is it that she's doing so well? How is it that she's able to captivate the entire audience and able to get her point across when it doesn't seem like there's anything uniquely special about what she's doing? Luckily for me, I didn't have to guess. I wasn't just observing her as a speaker, I was part of a Toastmasters Club with her. So she was there to teach, she was there to coach. And there was one thing Mary Ellen would always say that is stuck with me to this day and will always stick with me, and it is this she said, facts tell, stories sell. So once again, facts tell, stories sell. What did she mean by that? What Mary Ellen meant by that is so often as a speaker, as a presenter, and by the way, as a financial advisor, when you are talking to your client, you very much need to embrace that is it exactly what you are. When you are speaking, when you're presenting, when you are a financial advisor working with clients, we have this tendency to want to tell information, tell clients what they should do. We have your best interests at heart. Let us tell you what you should do, but it's not compelling. What is compelling is a story. The story is what sells it. And as an advisor, there's almost three different layers to your evolution as an advisor of how effective you can be. There's layer number one, which is you get into this industry and you start to think that your job as an advisor is to have all the information. You have the information so that you are equipped to best advise your client, to tell them what they should be doing based upon whatever their circumstances are. Then you start to realize that's not enough. It's not enough to have all the information. And layer two becomes this sense of I know all the information, but now I have the discernment to understand which of this information is relevant today and which of this is just noise. If layer number one is information focused, you could almost say that layer number two is wisdom focused. There's an old saying that knowledge is knowing what to say, wisdom is knowing whether or not to say it. So that's layer two. Starting to understand that, okay, my job is not just to have all the information, it's to have the information, but be able to have that discernment, be able to say it when the time is right. But even that is not fully complete. Level number three is understand that your job becomes to tell stories that invite that client into experiencing that information in a way that changes behavior. So you can think of this as transformation focused. So level one is information focused, level two is wisdom focused, but level three and the level that we should all seek to operate at is transformation focused. How do I actually get my clients to take action? How do I actually get them not just to understand information, but to take action on it, to use this information to transform their lives? And again, the lesson I learned is facts tell, stories sell. So what does that mean? How do we actually apply this to our lives as advisors? Well, think about your lives as an advisor. What do you do a lot? What does the information look like? Well, it's a whole bunch of different information. You're giving investment recommendations, you're helping clients understand when they can retire, you're helping clients understand why they need insurance coverage, you're helping clients understand whatever the case might be. And our tendency, because we know the information, we've taken our CFP designation, we've listened to lots of podcasts, we've done a ton of research, we have the information. That information by itself, though, is not going to be compelling enough to change behavior. Let's break down a few different examples to show what this needs to look like because you don't need to be a masterful storyteller. You don't need to understand the hero's journey and the story that goes along with that, and how do you set up a plot and how do you have the main character and how do they meet a guide and how does that lead to transformation? There's so many elements to storytelling. You don't need to be the perfect storyteller, but you do need to understand how telling a very simple story is going to be far more powerful than just telling information. Maybe you're trying to get a client to retire. You know they have enough money in their investments, you have the right plan, they're in a good spot to do it, you know that they don't absolutely love work, and you're trying to get them to retire, but that client's fearful of doing so. And maybe you're telling them, you know, you're not promised tomorrow, so you should go ahead and do this. Well, that might work in some situations, but consider what would happen if you told them a story instead. Hey, Mr. Client, hey, Mrs. Client, would it be okay if I told you a story? I'm gonna tell you a story about a woman that I used to work with. Her name is Lisa. Lisa was an amazing woman. She had saved, she had invested, she was ready to retire, but she never got around to actually pulling the trigger. She kept saying one more year, she kept saying if I save a little bit more, I'll do this. If I save a little bit more, you know, I'll max social security. And she just kept working. Now, finally, she did retire. And she was finally able to do all the things that she wanted to do until she passed away six months into retirement. And this isn't a made-up story. This is a real client I used to work with, and what it showed me in that moment is that life is so precious. And that yes, we make all these plans and we run the Monte Carlo simulations and we run the social security tests and we run the whatever tests it is to make sure you're in a good position to retire. But my client Lisa never actually got to enjoy this. See, we think that we've got 30 years, we think that we know what life's gonna throw at us, we think that we can make plans and we assume those plans are going to be the things that actually come to realization. But the reality is that's not the case. And the reality is if we don't start living, if you don't retire right now and start doing the things that you want to do, there's no guarantee you'll ever get to do that. So these are the years that you have your health, your vitality, your time that you could spend together. I wish so badly for Lisa's sake that she had retired earlier because the things that she wanted to do, the dreams that she had, she never actually got to do them. Not because she didn't have the money or the finances or the ability to, but because she passed away unexpectedly and was never actually able to realize those. So I don't want you to make that same mistake. I want you more than anything to live the life you want to live. You have the resources, you have the plan, you have the numbers. I'm here as your advisor encouraging you to pursue that. So let's take a step back, wrap that story up. What's more powerful? If you're an advisor talking to a client, is it more powerful to tell them, hey, you should retire? Or is it more powerful to tell them that story? And in that story, they're going to be able to see a little bit of themselves. In that story, there's gonna be a little bit of a warning, a little bit of a caution of man, I really do need to get this right because nothing is promised. So that's one example. Now let's talk about other examples. Investments is a big thing that many of us are probably talking about. How often do we tell clients, hey, diversify your money because we know it's the right advice, but from the client standpoint, they're just thinking, yeah, everyone says diversify. Diversify sounds boring. Diversify sounds like the thing you do if you don't want to make a lot of money. So what you're saying is diversify, and what you're saying is correct. But what the client's hearing is, okay, there goes James, tell me to diversify, just like every other single advisor out there. And maybe they take that advice, maybe they don't. But how much more powerful would it be to do this? Let's assume I'm having this conversation with my client and his name is Joe. And I'm gonna say, Joe, you need to diversify. But instead of saying that directly, I'm gonna tell a story around this. I'm gonna say, Joe, if you had to guess, what do you think the best performing stock since 2000 is? And Joe's not gonna know the answer off the top of his head, but there's probably a few names that are gonna come to mind. He's gonna think, okay, well, what's performed well recently? What are the the top stocks, the largest companies in America today? Is it Nvidia? Is it Apple? Is it Tesla? Is it Google? Is it Amazon? It's probably gonna be one of those names because that's what has performed best. And then you're gonna say this. You're gonna say, Joe, I'm gonna tell you a quick story. Back in the year 2000, there was this little company called Hansen Natural. Now, Hanson Natural is a publicly traded company, but it was selling at about$250 million or so, the total market cap of the company. For context, anything that's under$2 billion in total market capitalization is considered a small company. So this is a very small company. Hansen's growth wasn't especially exciting. The outlook wasn't especially exciting, and Hansen was trading about 10 times earnings. Just for some context, you know, those companies that we're talking about, Joe, the Amazons, the Netflixes, the Teslas, their price to earnings ratios are significantly higher than that. What that's telling you is it's telling you how much are people willing to pay for every dollar of earnings that this company has. During different times, the price to earnings ratios of some of these companies was well over 100. So for context, 10 is low. Just for some additional context, the price to earnings ratio of the SP 500 has been about 20, give or take. It's been much higher, it's been much lower, but around 20 is average. So anything trading below that means the market doesn't think too highly of this company, doesn't think like the growth is going to be that great or the outlook is all that great. So that was Hansen Natural. Now here's what happened. In 2002, Hansen Natural launched a drink called Monster. Monster became a gigantic energy drink that competes with the likes of Red Bull and others like it. So what you had was this tiny little, in many ways irrelevant company in 2000 reinvented itself. It became Monster Energy. Monster Energy sales took off like crazy. Now that little company that was trading at$250 million of total market capitalization today is trading at more than$75 billion of market capitalization. So when I tell you to diversify, I'm not saying don't own the Apples and don't own the Amazons and don't own the Teslas. Those are incredible companies. And we want you to have those in your portfolio. But if you become so hyper-focused on those companies, you're going to miss out on what the actual best performing company since 2000 has been. The best performing company is Monster Energy, better than all those companies that I've listed, better than every other company, better than the stock performance of those other companies. Now, we don't see that because in 2000, it's not an inspiring story. It's not an exciting story. But that's how investing works. Oftentimes growth comes from the places we least expect it. So as we're building a portfolio for you, that's why we diversify. We don't diversify because it's boring and we want to play it safe. We diversify because we do believe that it's going to help to protect the future you're trying to build, but also because that's how we capture the performance of what are going to be the future best performing companies. I couldn't tell you if it's going to be Monster or Tesla or any other company that's going to perform best over the next 10 years or 20 years. But when we diversify, we're making sure that wherever that performance happens, we're going to capture it. So backing up a little bit, why does this work? This works because we are hardwired for story. We are drawn to a story. That is why facts tell, but stories sell. This is simply the way you and I are designed. We are designed to hear story and be far more drawn to it than simply hearing facts. Now here's the other thing that it does. If you just tell your client, go back to this investment example, hey, I think you should diversify. Cool. James, you and every other financial advisor. So what's actually different about you? But if you can start with a story, it doesn't have to be the one that I just used, it can be any story. But if you start with that story, all of a sudden your advice is still the same. It's still the right advice, which is diversify. But you're signaling to your client that there's an extra level of depth to your knowledge, there's an extra level of your understanding of how things actually work. It's not just that, okay, James read in a textbook one time that we should diversify. So he's saying that. James is demonstrating that he has a deeper level of understanding. So tell stories and your clients will think the same about you. So let's go over one more example before we start to wrap this up here. Back in 2020, of course, we had COVID. And when COVID happened, markets around the world reacted violently. We had a significant drawdown in a very short period of time. It was not a fun time in the markets. I'm going to tell you the story about two individuals at that time that I was working with. One was actually a prospective client, and one was a current client. The current client, we'll call Dave. Dave and I had a conversation. I want to say it was the week of February 10th. This was the week before markets started plummeting in a hurry. And Dave called me and he said, Hey, James, you know, this is what's going on. Obviously, there's these things on the news about this virus that's in China and it's starting to spread. And he said this to me. He said, James, I know this is going to be a really bad event. I know this is going to keep spreading. And I think there's going to be a massive downturn in the market. I think that we should get more conservative with our investments. In fact, maybe we should even get our money and put it in cash. Now I had the conversation with Dave. And I said, Dave, you know, I don't really know. We don't really know. It's unpredictable. We had a very long conversation. And at the end of that conversation, I told him, I recommended to him, I don't think we should get out of the market. And he didn't. Now, right after that, a week after that, the downfall started, and his investments, just like everyone else's investments, were down 30 plus percent over the next few weeks. A client that came to me and said, James, this is going to be very problematic. I don't think the world, let alone the financial markets, have fully grasped the impact of what's about to happen. He was recommending, he was wanting to get out, and I convinced him not to. He then went through a significant downturn. Okay, I'm going to put that client on pause for a second. That's trying to pause for a second. There was another, this was a prospective client that I was working with. We're going to call this individual John. John had reached out to me, and John had a few million bucks in his portfolio. His portfolio was invested very conservatively. We started talking at the very beginning of 2020. And his portfolio was invested very conservatively because he had previously gotten out of the market and he was waiting for the right time to get back in. He had made a decision that cost him lots of money because he got out of the market and the market continued to climb without him. So from his standpoint, he was stuck in this position where he probably knew long-term he should get back in, but was fearful of doing so. He didn't want to get back in right when he felt like markets were high, just for that money to be dropped or just for that money to drop again. So John was saying, James, I want to move forward, I want to get back in the market, but I don't want to do so until there's at least a 20 to 30% drawdown. And you know, I talked to him about this. I said, I don't actually think that's a good idea. Here's the reasons I don't think that. But John was pretty convinced. He was pretty set in his ways that no, I'm not going to get back in the market until there's a 20 to 30% drawdown. And that is when I'm going to get back in. Okay, so that was John. Both of these conversations are kind of happening right at the same time. One with my client Dave, one with my prospect John. Now, I don't need to tell you, you all remember what happened in 2020. There was a massive market downturn. Now, that massive market downturn was a horrible time in a lot of ways, but in the markets, that was a very jarring time to be an investor. Okay, so that's where we are so far. Let me go back to John. John, I was having this conversation, he was saying, once the market's down 20% or more, I'm going to get back in. What happened? The market was down 20% or more. He got exactly what he was looking for. The market was down. I called John. I said, John, I think we should move forward with the financial planning work that we discussed. And he told me, he said, No, James, this is not the right time to do it. I do feel like the cure is going to be worse than the disease with what's happening here. Remember that phrase exactly. And in retrospect, he said that the exact day the market bottomed out. I have an email in my inbox from him saying, No, we're not going to move forward with this work that we've talked about, we're not going to get back in, we're going to stay in cash. So here's the thing: John seemed like he'd be in a better position with this compared to my client Dave, who I recommended he stay completely in his full equity portfolio, even despite his recommendation, and Dave's portfolio dropped dramatically. But fast forward a few years. Who's actually doing better? Heck, don't even fast forward five years. Fast forward five months from there. Who was actually doing better? John had all the benefits in the world there. He had the drawdown he was looking for. All he had to do was get back into the market like he said he wanted to, when we initially started having conversations together. Dave, on the other hand, his portfolio was plummeting. So in that moment, it felt like John was significantly better off than Dave was. But if you fast forward just a few short months, Dave had fully recovered. He had fully recovered from the downturn and then some, whereas John, who had this amazing opportunity to get back in, to have exactly what he was looking for, he skipped it. And when he skipped it, the recovery happened without him. So why do I tell that story? I tell that story because when people want to time the markets, it's easy enough just to tell them, no, don't time the market, it doesn't work. But when I tell you that story, what you start to realize was that timing the markets, number one, it's not necessary. Dave is doing incredibly well in his portfolio despite the fact that he dropped significantly and then fully recovered. But number two, the most important thing to realize in that story is that if you get out of the market, that's just one decision that you need to make. The second decision that needs to be made too is when do you get back in? And I'm here to tell you, Mr. Klein, I'm here to tell you, Mrs. Klein, it's never going to feel like the right time to get back in. John had the perfect opportunity to get back in. And you know what? That sounds good rationally. It sounds good from a rational standpoint to say, yeah, when the market's down 20%, of course I'll get back in. But here's what isn't thought about when you say that. What you don't think about when you tell yourself you'll get back in when the market's down 20% is what's it gonna feel like at that moment? Why is the market down 20%? The market's never down 20% because everything's golden and everything's rosy and everything seems like it's gonna be okay. The market's gonna be down 20 or 30% because the world seems like it's coming to an end. Because you look around and there doesn't seem to be anything but negative news. That was exactly what things felt like in the end of March when this prospective client had the perfect opportunity to get back in, but squandered it. Because yes, they told themselves they would do it when the market was down 28%, but they didn't recognize what it would feel like. So talking to you here on this podcast, when your client is saying they want to get out of the market, when they want to do something because markets are scary, having a story like that to tell them really helps to frame things. It's not just telling them information, the story draws them in. The story is what allows them to actually feel what it's like there, not just to have the information and rationally know what it's going to be like there. So this pertains to all kinds of different things. When you're telling a client what to do, whenever possible, don't tell them what to do. Instead, invite them into a story if possible. This can be about investments, this can be about retirement, this can be about insurance, this can be the importance of anything that you want to tell your client. But when it comes down to it, understand that facts tell and stories sell. And if you want to be the highest, most effective advisor that you can be, you have to understand that your Ability to do so is contingent upon your ability to transform the behavior of your client. And our behavior isn't transformed based on more information. Our behavior is transformed when we can see ourselves in a story, when we can hear a story that compels us to do the thing that we need to do. So keep that in mind as an advisor. If you want to be more effective, you don't need to be a big grand storyteller. These stories can be as simple as a few short sentences. But doing that, where appropriate, is going to be significantly more impactful than simply telling your client what to do. So that is it for today's episode. If you're listening, just real quick, make sure that you subscribe if you haven't done so already. Also, if we're not connected on social, find me on LinkedIn at James Cannole. I am now on Instagram and TikTok and Facebook. Didn't used to post a whole lot there, but now I am. So follow me there if you want to connect. So that's James at Root is Instagram. Facebook is James Cannol. LinkedIn is James Cannol, and then TikTok is James Cannol if you want to connect there as well. Thank you as always for listening. I'll see you next time.