How and How Not to Respond to Clients, 5:1, and Other Gems
Notes from Martin Seligman's masterpiece: "Flourish"
This winter, I finally read Martin Seligman’s “Flourish: A Visionary New Understanding of Happiness and Well-Being.”
Actually, ‘read’ is too light of a description. Devoured is much more accurate. It was like a thousand neural connections erupted in my brain each time I picked the book up, and I obsessively read it over the course of a week or two.
Flourish is a fantastic book, and it reignited my love for positive psychology, a subject I haven’t spent much time with since publishing my own book, Money with Purpose, in 2019.
Suffice it to say financial advisors can learn a great deal from positive psychology and this book in particular.
Flourish is a large book with a great deal of research cited, so today, I want to focus on a couple of sections that had me falling out of my chair with excitement.
By the way, you can buy Martin Seligman’s Flourish here:
Toward Flourishing
First, let’s get this out of the way: positive psychology is about more than just feeling positive.
Let’s be clear. It is okay not to feel great when not great things happen.
For some reason, popular culture has come to believe that positive psychology is about yelling, “EVERYTHING IS GREAT! I’M SO HAPPY!” at every opportunity.
This couldn’t be further from the truth. Positive people don’t ignore the bad. Rather, positive people have the tools and disposition to be more resilient to unplanned or unsatisfactory events even as they seek better outcomes, framing, and future opportunities.
From Happiness to Flourish
In Flourish, Seligman expands his notion of positive psychology beyond just ‘positive feelings’ or happiness to what he calls the PERMA model.
What’s the PERMA Model?
Positive Emotion
Engagement
(Positive) Relationships
Meaning
Accomplishment
Philosophy lovers will find similarities to Aristotle’s concept of eudaimonia. As Aristotle taught, happiness is the purpose of our lives. Every action we take is begun with the understanding that it will lead to more happiness.
But ‘happiness’ isn’t exactly the right word, is it? Eudaimonia goes further than that.
It’s closer to well-being but with an element of spiritual sacredness. Eudaimonia points us to the highest human good.
It’s closer to ‘Flourish.’
PERMA for Financial Advisors
The implications of the PERMA model for financial advisors are clear: financial well-being is about a lot more than just money.
Look, we are financial advisors, and we care about money. We like it. We like working with it. We like helping people with it. We like when people have more of it. And we like having it as well.
That’s okay!
You're in the wrong field if you don’t like money or are uninterested in it. Just as chaos begets more chaos, financial advisors with money issues only create more money issues.
But it’s also fair to say that the financial advice profession is about more than money. Money is the tool, a means to an end, not an end in and of itself. Like all humans, our clients are ends in and of themselves, full to the brim with sparks of goodness and nobility.
Ideally, our work with clients increases their positive emotions around money while allowing money to offer them comfort, security, more engagement, positive relationships, meaning, and accomplishment.
How and How Not to Respond to Your Clients
When your clients tell you a good thing, how do you respond?
Are you interested? Can they tell? Or are you distracted? Instead of being engaged, are you considering their financial plan, the numbers, or what’s for dinner?
According to research done by Shelly Gable of the University of California Santa Barbara, how we respond to people, like our clients, directly impacts the strength of the relationship.
Strangely, marriage counseling usually consists of teaching partners to fight better. This may turn an insufferable relationship into a barely tolerable one. That’s not bad. Positive psychology, however, is more interested in how to turn a good relationship into an excellent one. Shelly Gable, professor of psychology at the University of California at Santa Barbara, has demonstrated that how you celebrate is more predictive of strong relations than how you fight. People we care about often tell us about a victory, a triumph, and less momentous good things that happen to them. How we respond can either build the relationship or undermine it. There are four basic ways of responding, only one of which builds relationships. ~ page 48, Flourish (emphasis added)
Do you celebrate your clients? Do you cheer them on while offering positive energy and engaged listening?
Creativity-guru Julia Cameron calls them wet rags, and I’ve been surrounded by a few in my life. You know the feeling. You’re overflowing with excitement for a new idea or opportunity, or maybe something creative, like a picture, song, or poem, and you can’t help but share it with the people around you, especially someone you love or admire.
And they listen. And then they throw the wet rag on you.
“Oh, I tried that. It won’t work.”
“Hmm.. you made an error here. I think it will sound better like this.”
“Oh, that’s a nice sweetie. Not really my thing, but it’s nice.”
“Can you be quiet? I’m trying to listen to my show.”
It took me decades to fully shirk off the wet rags.
Are You a Wet Rag?
I think financial advisors are often wet rags to our clients.
In fact, I think our clients expect us to be this way. We are The Numbers People, after all. Numbers People want you to throw away your dreams, save more, stick to a budget, and die at an actuarial appropriate time.
But that’s not true, is it?
We must overcome this cultural bias to truly celebrate our clients and strengthen our bonds with them.
To do so, remember these two words: Active and Constructive.
4 Ways to Respond; Only One is Relationship Building
Seligman writes that there are four ways to respond to someone:
Active and Constructive
Passive and Constructive
Active and Destructive
Passive and Destructive
Only one of these is relationship building. Can you guess which one?
Gable offered this example:
Imagine your client saying to you, “I received a promotion and a raise at work!”
How do you respond?
Gable’s work points us to the upper left quadrant of the chart below:
You might say, that’s so obvious! But is it?
Many of us fall into that lower quadrant, even the lower left ‘Active and Destructive’ quadrant, more than we would care to admit.
“Hmm… that’s interesting. But, have you considered…?”
And, of course, we do! I don’t know many financial planners who aren’t hyper-focused on risks. It’s what we do! It is easy to see why we think our value is telling our clients right away the terrible risks of their decisions.
Fight this urge.
Instead, get excited with them. Ask questions. Be engaged. Smile. Lean in.
When it’s time, ask if it would be helpful to think through some obstacles or tradeoffs to their decision. They’ll let you know when they’re ready for that conversation. If it is not right now, honor their wishes (as long as they aren’t engaging in something truly destructive).
Also, remember that passive constructive doesn’t ‘destroy’ relationships but doesn’t improve them either.
Watch how you respond as your clients bring news your way, especially good news. Try to move into the active constructive quadrant.
This Ratio Matters: 1→3→5
What’s your ratio of positive comments to negative ones? Have you ever considered this?
“Here’s our latest finding,” Barb [Frederikson] explained to the thirty-five students and five faculty members, all of us now on the edge of our seats.
“We go into companies and transcribe every word that is said in their business meetings. We have done this in sixty companies. One-third of the companies are flourishing economically, one-third are doing okay, and one-third are failing. We code each sentence for positive or negative words, and then we take a simple ratio of positive ot negative statements.
“There is a sharp dividing line,” Barb continued. “companies with better than a 2.9:1 ratio for positive ot negative statements are flourishing. Below that ratio, companies are not doing well economically. ~ page 66, Flourish (emphasis added)
2.9: 1. Or, since it’s easier to round up a bit:
3:1
Last year, I found myself in a negative loop with my co-workers. I was definitely not hitting a 3:1 ratio, and it was impacting our partnership. After reading this section, I began asking myself a series of questions prior to our team meetings.
What’s good here?
What can I/we celebrate?
What gifts and opportunities may come about because of our tough conversations?
Questions like these primed my brain for goodness. Moreover, priming myself for positivity prevented me from being threatened by consultation, dissension, and conflict. It was all an opportunity to move further into positivity.
Suffice it to say targeting a 3:1 ratio has helped immensely.
5:1
The ratio matters at home, as well. But here, the evidence is more stark.
“John Gottman computed the same statistic by listening to couples’ conversations for entire weekends. A 2.9:1 means you are heading for a divorce. You need a 5:1 ratio to predict a strong and loving marriage—five positive statements for every critical statement you make of your spouse. A habit of 1:3 in a couple is an unmitigated catastrophe.” ~ page 67, Flourish (emphasis added)
After reading this, I started targeting a 5:1 Ratio every day. With my wife and my kids, I focus on ensuring I make five positive comments to every negative one.
As the evidence shows, my marriage depends on it.
Though I haven’t seen a study on this point, I imagine my kids’ sense of well-being (i.e., whether they flourish or not), as well as my future relationship with them, partially depends on my hitting this target.
Am I perfect? No! Do I track this in a spreadsheet? Of course not.
But when I am off or hijacked, making my ratio off, I have a compass to show me the way toward relational health.
How about our clients?
I’ve been around many financial advisors in this industry over the past fifteen years1.
Many of us are in negative loops with our clients. Maybe we think we are giving them tough love. Or maybe it feels good to commiserate about whichever political party we are prone to disliking. Maybe we are just matching their own negativity bias. Or, like a wet rag, maybe we think it is our job always to confront them with the risks of their current situation.
I’m going to presume that the positive-to-negative ratio also matters with our clients.
Though I’m unsure if it is 3:1 or 5:1, my guess is each of us can individually do better on this front.
Action Step: Immediately after a meeting, think through your comments2. What do you think your ratio of positive to negative was? If it was below 3:1, what can you do to increase that?
Can You Be Too Positive?
Of course, this begs the question: What happens if the positive-to-negative ratio goes too high?
“But don’t go overboard with positivity. Life is a ship with sails and rudder. Above 13:1, without a negative rudder, the positive sails flap aimlessly, and you lose your credibility.” ~Flourish, page 67 (quoting Barbara Frederickson)
Ending Notes
Flourish is a big book chock full of relevant insights, but I’m going to stop myself here. Maybe I’ll come back to this in a future Advisor’s Notes post.
Yes, we work with money but don’t forget that our work aims to help our clients flourish.
What can you do today to turn your clients toward the PERMA model? How can you help them flourish? How can you help them, in any small way, have more positive emotion, meaning, or engagement?
Your Cause Is Righteous.
Heck, I grew up around financial advisors. My dad was a financial advisor. My sister is a financial advisor. And now, many of my best friends are advisors. I can’t escape it!
You could also record your meeting or have Zoom provide a transcript.