How Accountants Can Master Financial CommunicationNovember 13, 2023
Explaining complex financial concepts—a process often called “financial communication”—is a regular challenge for accountants, especially when working with clients who don’t have backgrounds in finance. To the uninitiated, the world of financial statements, tax laws and investment analysis can seem like a foreign language. Yet clear communication is key for building trust and empowering clients to make sound decisions.
When you take the time to break down complicated ideas into plain, understandable language, it allows clients to truly grasp how finances impact them. They become more engaged partners in mapping out plans since they understand the why behind your advice. And clients who comprehend the reasoning are much more likely to take action on recommendations.
Unfortunately, making complex information clear for a non-specialist audience is far from easy, especially for those who are more comfortable with numbers than words. The good news is that there are some simple strategies you can use to improve mutual understanding. Read on for tips on turning concepts that once seemed to fly right over clients’ heads into lightbulb moments.
Getting to Know Your Clients
Before jumping into financial planning, it’s important to assess each client’s baseline financial knowledge. People have widely varying levels of financial literacy. Some grasp budgeting concepts well but get lost in investing jargon. Others find even basic terminology confusing.
Take time to gauge their understanding directly—ask about their familiarity with key terms and tools. Develop simple questionnaires to evaluate knowledge of core topics. Listen carefully to the questions they ask during discussions to identify gaps. Encourage open feedback so clients share struggles freely.
Once you have a sense of their starting point, tailor your approach accordingly. For those less versed, use analogies and break down complex ideas step-by-step. Define unfamiliar terms clearly with examples for context. Consider visual aids like charts that demonstrate concepts simply.
For more advanced learners, you can delve deeper into financial analysis while still inviting questions. Avoid complex data dumps that overwhelm. Assess their reactions to gauge comprehension.
Simplifying Complex Financial Data
Leverage Visuals to Demonstrate Concepts
Incorporate graphs, charts and infographics to provide visual representations of complex data. Well-designed visuals can instantly convey trends, proportions and impacts—translating numbers into digestible pictures. Consider line graphs to showcase trends over time, pie charts to illustrate percentages and infographics to summarize key takeaways. Quality visuals make dense data feel tangible and accessible.
Explain Jargon in Plain Terms
Complex financial vocabulary can quickly confuse those unfamiliar with the industry, posing challenges for effective financial communication. Whenever possible, break down technical lingo into simpler phrases. Define unfamiliar terms in everyday language. Provide analogies clients can easily relate to. For example, you could compare diversifying investments to not putting all your eggs in one basket.
Create a glossary of key terms and plain English definitions to share with clients. Format it as a digital resource on your website or a printed guidebook. Ensure the glossary is readily available during remote or in-person discussions for easy reference when questions arise. This will empower clients to better grasp concepts on their own terms.
Empowering Clients Through Education
Share Financial Education Resources
Provide clients with resources to enhance their financial literacy over time. Develop a section on your website with informative articles, eBooks, videos and curated lists of reputable learning materials. Send email newsletters with tips, new tax laws, investment strategies and planning insights. The more you educate, the more engaged and empowered clients become.
Consider hosting workshops or webinars on financial topics to make learning interactive. Cover basics like budgeting for beginners and more advanced strategies for informed clients. Webinars allow clients to ask questions and get to know your team in a low-pressure environment. Make continuing education a cornerstone of your client relationships.
Maintain Open Communication
Consistent financial communication is vital for advisor-client relationships. Schedule regular check-ins and reviews through phone, email or in-person meetings. Keep clients updated on their financial situation and thinking behind recommendations. Be available to address concerns and questions as they arise.
Frequent touchpoints demonstrate your active involvement in managing their financial lives. It shows you care and builds trust. Tools like ABLE CRM can help you maintain seamless communication with your clients, prospects and referral opportunities.
Bridging the Communication Gap
For clients lacking financial backgrounds, the world of investments, taxes and accounting can seem like an impenetrable maze. However, effective communication from accounting advisors provides the map they need to navigate complex data and make informed choices.
Financial expertise may be your specialty, but making those concepts accessible is the key to client success. With patience and clarity, you can illuminate the path and walk with them, step by step. Effective communication unlocks their understanding and, in turn, unlocks fruitful advisor-client relationships that stand the test of time.
We at ABLE specialize in helping accountants build stronger client relationships through strategic touchpoints. If you’re interested in learning more about how our tailor-made CRM platform can be an asset to your financial communication, schedule a no-obligation demo today.