Creating Visual Aids That Clearly Communicate Financial Planning Concepts

Creating Visual Aids That Clearly Communicate Financial Planning Concepts

Communication is one of the most important skills for a financial advisor. While technical expertise is necessary to formulate a financial plan, being able to clearly communicate the findings to a client can make all the difference between whether or not the client will understand and agree to implement the advisor’s recommendations. Many advisors are accustomed to using verbal communication with clients (e.g., in client meetings) and written communication (e.g., through the delivery of a written plan), however, some concepts are difficult to explain and understand through these means. But by using visualization aids in their communication, advisors can clarify complex information and generate better conversations with clients.

According to one learning model, there are four basic categories of learning styles: visual, auditory, reading/writing, and kinesthetic. Research suggests that communication and education are both more effective when multiple learning styles are incorporated because an individual’s preferred learning style often varies day-to-day. Furthermore, presenters who use visualizations can tend to be perceived by their audience as better prepared, more professional, and more interesting than those who rely only on text-based presentations. Taken together, these findings suggest that using visualizations when presenting information to clients using other modes (verbally in meetings and through written plans) can be a good way to demonstrate expertise while building rapport with the audience.

When considering how to use visualizations, it is important to recognize that different styles of visualizations can be used to meet different communication objectives. For instance, visualizations can be categorized based on their content (conceptual or data-driven) and purpose (declarative or exploratory). By considering the nature of the content and purpose of their message, advisors can choose an appropriate style of visualization to implement. For example, data-driven, declarative ideas can be conveyed by ‘everyday data’ visualizations, such as a chart or graph objectively illustrating relationships between facts and figures (e.g., the S&P 500’s performance during the past year). Alternatively, a conceptual, exploratory idea would be better conveyed through an ‘idea generation’ visualization, such as an array of ideas that encourage brainstorming ideas. Conceptual, declarative ideas are best conveyed through visualizations that illustrate difficult concepts, and data driven, exploratory ideas can often be conveyed by combining visualizations merged together from multiple sources of information to encourage identification of new trends or themes.

Advisors can choose to create their own visualizations (such as a simple Venn diagram), but can also opt for turnkey software solutions or white-labeled products for more elaborate visualizations. Whichever option an advisor chooses, there are key design principles to keep in mind. For example, the thoughtful use of lines, colors, shading, font size, and other visual elements can help to communicate ideas and draw attention to key aspects of the visualization.

Ultimately, the key point is that visualizations can be a useful tool for improving advisor communication and client comprehension. Given the data-intensive nature of financial plans, visualizations can serve as a useful complement to written and verbal communication from the advisor and can provide clarity to clients, which can give clients more confidence in their plans and in their advisors!

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