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How Utilizing Visualizations Can Enhance Shopper Communication

Govt Abstract

Communication is among the most vital expertise for a monetary advisor. Whereas technical experience is important to formulate a monetary plan, having the ability to clearly talk the findings to a shopper could make all of the distinction between whether or not or not the shopper will perceive and conform to implement the advisor’s suggestions. Many advisors are accustomed to utilizing verbal communication with shoppers (e.g., in shopper conferences) and written communication (e.g., by way of the supply of a written plan), nevertheless, some ideas are tough to elucidate and perceive by way of these means. However by utilizing visualization aids of their communication, advisors can make clear complicated data and generate higher conversations with shoppers.

In accordance with one studying mannequin, there are 4 fundamental classes of studying kinds: visible, auditory, studying/writing, and kinesthetic. Analysis means that communication and schooling are each more practical when a number of studying kinds are integrated as a result of a person’s most popular studying fashion typically varies day-to-day. Moreover, presenters who use visualizations can are typically perceived by their viewers as higher ready, extra skilled, and extra fascinating than those that rely solely on text-based displays. Taken collectively, these findings counsel that utilizing visualizations when presenting data to shoppers utilizing different modes (verbally in conferences and thru written plans) is usually a good approach to show experience whereas constructing rapport with the viewers.

When contemplating how you can use visualizations, it is very important acknowledge that totally different kinds of visualizations can be utilized to fulfill totally different communication targets. As an example, visualizations will be categorized based mostly on their content material (conceptual or data-driven) and goal (declarative or exploratory). By contemplating the character of the content material and goal of their message, advisors can select an acceptable fashion of visualization to implement. For instance, data-driven, declarative concepts will be conveyed by ‘on a regular basis information’ visualizations, corresponding to a chart or graph objectively illustrating relationships between info and figures (e.g., the S&P 500’s efficiency through the previous 12 months). Alternatively, a conceptual, exploratory thought could be higher conveyed by way of an ‘thought era’ visualization, corresponding to an array of concepts that encourage brainstorming concepts. Conceptual, declarative concepts are finest conveyed by way of visualizations that illustrate tough ideas, and information pushed, exploratory concepts can typically be conveyed by combining visualizations merged collectively from a number of sources of knowledge to encourage identification of recent tendencies or themes.

Advisors can select to create their very own visualizations (corresponding to a easy Venn diagram), however may also go for turnkey software program options or white-labeled merchandise for extra elaborate visualizations. Whichever choice an advisor chooses, there are key design rules to bear in mind. For instance, the considerate use of traces, colours, shading, font measurement, and different visible components will help to speak concepts and draw consideration to key elements of the visualization.

Finally, the important thing level is that visualizations is usually a great tool for enhancing advisor communication and shopper comprehension. Given the data-intensive nature of economic plans, visualizations can function a helpful complement to written and verbal communication from the advisor and might present readability to shoppers, which can provide shoppers extra confidence of their plans and of their advisors!

Michael Lecours

Creator: Michael Lecours, CFP®

Visitor Contributor

Michael Lecours, CFP® is a Co-Founding father of fpPathfinder. fpPathfinder makes checklists and flowcharts to assist advisors be extra diligent within the planning course of for his or her shoppers. Michael can also be a monetary advisor and planner at Ohanesian / Lecours. Michael started his profession in promoting and makes use of that have to distill complicated monetary planning ideas into simple methods for shoppers. He has been featured within the Journal of Monetary Planning.

In the case of communication, monetary advisors usually take certainly one of two approaches to elucidate monetary planning ideas to shoppers and prospects. They are going to both verbally clarify their concepts or write out their factors in an e mail or report back to share with their shopper. Each will be helpful as strategies of communication, however every comes with its personal particular set of points.

For instance, a shopper who solely hears a advice could turn out to be overwhelmed making an attempt to maintain observe of the numbers, whereas a shopper who solely reads the advice could get misplaced within the particulars and fail to grasp the high-level purpose that the advisor is recommending the technique. Whereas there are various methods to beat miscommunication, there may be one specific technique to assist advisors make sure that their shoppers perceive what they should know: incorporating visualizations when speaking with a shopper throughout conferences.

Visualizations Are Efficient Aids In Communication

Visualizations will be an vital instrument to assist advisors talk with their shoppers. Contemplate the previous adage, “An image is value a thousand phrases”, showing in Printer’s Ink, an promoting commerce journal printed within the Twenties, advocating the usage of extra graphics and fewer textual content for ads to be efficient throughout a time when most ads consisted of textual content. To the purpose of this adage, visualizations have typically been used all through historical past to assist clarify complicated concepts, as they provide a novel alternative to obviously convey ideas that will in any other case be significantly tough to elucidate by way of both spoken or written phrase alone.

The explanation visible communication will be so efficient offers with the way it pertains to totally different studying kinds. In accordance with the VARK studying mannequin, developed by Neil Fleming to assist individuals perceive the strategy of studying that works most successfully for themselves, there are 4 fundamental classes of studying kinds: visible, auditory, studying/writing, and kinesthetic. Whereas Fleming argued that folks had a most popular studying fashion, additional analysis has steered that more practical communication and schooling happen when a number of studying kinds are integrated as a result of somebody’s most popular studying fashion really can fluctuate day-to-day.

Vark Model of Learning Styles Mike Lecours Visualizations

Within the classroom, academics typically try to coach college students utilizing strategies that tackle quite a lot of studying kinds as a result of individuals have alternative ways of taking in data most successfully and thus have a desire for a way they be taught finest. A 2011 research by Iranian researcher Abbas Pourhossein Gilakjani discovered that the scholars within the research usually most popular to make use of visible studying kinds over auditory or kinesthetic studying kinds.

The important thing level, although, is to acknowledge that conveying data solely in a single specific fashion – e.g., all the time sending every thing as a written e mail, or all the time explaining verbally – will not be a very good match no less than a few of the time for some shoppers (and doubtlessly not a very good match all of the time for sure shoppers that will have a powerful desire for one more studying fashion). For which the usage of the visible fashion – in any other case much less typically utilized by monetary advisors – creates the chance to develop communication.

Visualization Can Help Consideration, Settlement, And Retention

To look at studying kinds in a enterprise setting, a research by Swiss researchers Sebastian Kernbach and Martin Eppler was carried out in 2010 to see if visualizations did a greater job speaking a proposed enterprise technique than textual content. The authors supplied a enterprise technique to review individuals utilizing certainly one of three codecs: a text-based bullet checklist, a visible metaphor (which makes use of a graphically structured structure utilizing a metaphor to characterize new concepts utilizing ideas from an already mastered topic space), and a temporal roadmap diagram (designed to visually spotlight the chronological features and relationships within the technique).

Text Based and Visual Presentation Formats Mike Lecours Visualizations

Their outcomes steered that the visible codecs (vis-à-vis the visible metaphor and temporal roadmap displays) have been “considerably higher than textual content by way of the achieved consideration, settlement, and retention.” This additional means that visualizations are an vital ingredient within the communication technique.

One shocking revelation from Kernbach and Eppler’s analysis was that presenters utilizing visualizations have been perceived to be higher (extra ready, extra skilled, extra clear, extra persuasive, extra fascinating, or a mixture of those attributes) than presenters who used textual content. This means that advisors who incorporate extra visualizations into their communication might merely be higher appreciated by a shopper or prospect. And if the advisor is best appreciated, the shopper could also be extra seemingly to stick with the advisor or to behave upon the recommendation that’s supplied.

The Course of Of Visible Pondering

Dan Roam, the writer of The Again of The Serviette, has laid out 4 steps of visible pondering that apply to individuals when really taking a look at a visible:

The Step Visual Thinking Process Mike Lecours Visualizations

Step 1 – Wanting. Step one of visible pondering entails really wanting on the visible. For this step, people are accumulating and screening the visible. They could be wanting on the complete visible to grasp what’s making an attempt to be communicated, or they might be searching for one thing acquainted or one thing they acknowledge (and will even see components which might be complicated). In essence, a person merely begins by getting their bearings with the visible.

Step 2 – Seeing. The second step entails a extra thorough inspection of the data and entails choosing areas of the visible to deal with. Maybe the individual begins searching for patterns or observing the place patterns don’t exist. At this step, components of the visible could begin to stand out for additional inspection.

Step 3 – Imagining. On this step, an individual begins to suppose critically about what they’ve seen. Maybe they might be questioning in regards to the ramifications of what they see within the visible. Or, maybe there’s a want for extra data to additional perceive the visible. At this stage, they’re pondering critically in regards to the visible and what it might be speaking.

Step 4 – Exhibiting. The ultimate step within the course of is having the ability to present the visible to another person and assist talk it to them. This step is about making the visible extra clear. Maybe there are key factors, tendencies, or observations to share.

In follow, when contemplating visible content material to make use of with shoppers, advisors could undergo these 4 steps. Maybe they Look, See, and Think about a shopper’s efficiency report earlier than Exhibiting it to them throughout a gathering presentation. On this case, advisors are serving to the shopper undergo the primary three steps of their very own strategy of visible pondering extra simply.

The Model Of A Visualization Can Be Categorized Based mostly On Its Content material And Function

Not all visualizations are the identical. Totally different kinds of visualizations needs to be used to assist in numerous communications targets. In his 2016 Harvard Enterprise Overview article, “Visualizations that Actually Work”, Scott Berinato gives a framework that characterizes visualizations by asking two questions:

  • Is the data within the visualization conceptual or data-driven?; and
  • Is the aim of the visualization to declare one thing or to discover one thing?

The primary query addresses the content material of visualizations and whether or not they’re used to explain qualitative data (like an idea or technique) or quantitative data (corresponding to information, data, or statistics), whereas the second query addresses the goal of visualizations and whether or not they are often organized as declarative (to make some extent or an announcement) or exploratory (to elicit suggestions on a brand new development or to brainstorm concepts).

Relying on the solutions to those questions addressing each content material and goal, a visualization can match into certainly one of 4 classes, as illustrated within the graphic beneath.

The Four Types of Data Visualization Mike Lecours Visualizations

Every of those 4 normal classes identifies how the fashion of visualization fulfills a novel goal of communication, as mentioned beneath.

Thought Illustration: Conceptual – Declarative

On this case, the visible helps to speak a identified idea. If a shopper referred to as involved a couple of market correction and expressed a want to promote their shares, an advisor could start by speaking about why they need to keep invested. To strengthen the argument, the advisor might comply with up with an e mail to summarize the dialog and embody a visible.

Carl Richards is a pacesetter on this discipline with a whole bunch of easy sketches to elucidate complicated ideas (together with one that may realign a shopper’s deal with the vital issues which might be inside their management). On this case, the visible can ship a strong message that may be misplaced in written or spoken communication. In different phrases, the visible is used to “promote” an idea or technique.

Idea Illustration Communicating Known Concepts Mike Lecours Visualizations

Thought Technology: Conceptual – Exploratory

In comparison with Thought Illustration, the Thought Technology visualization is a helpful assist within the brainstorming course of. For instance, an advisor can use thought era visuals to uncover one thing new that they don’t already know and that the shopper could have by no means thought of earlier than, corresponding to by serving to shoppers or prospects take into consideration their future and priorities to establish the objectives they wish to tackle of their monetary plans.

Idea Generation Discovering New Information Mike Lecours Visualizations

On a regular basis Information Visualization: Information-Pushed – Declarative

When most advisors take into consideration visualizations, they consider data-driven charts and graphs exhibiting account valuations or internet value over time, which frequently include bar charts and graphs that report on 1 to 2 sorts of information (time and account values are usually the commonest). These visualizations will help to set the context for extra significant conversations and for reporting functions. Utilizing charts will help shoppers shortly and simply put key numbers in perspective relative to earlier years. If a shopper appears to be like at an announcement and sees that their accounts are down a complete of $10,000, it might evoke concern. But when there’s a chart that reveals that, over the past three years, their accounts have appreciated greater than $250,000, it might assist to place that $10,000 decline into perspective.

Under is a quite simple chart of a well-liked funding – an S&P 500 ETF – exhibiting the date on one axis and the value on the opposite axis. The info reveals how the value of the ETF has modified over the past 12 months. It’s reporting on a development and making a declarative assertion about how the ETF has carried out.

Everyday Data Visualization Providing Context for Additional Discussion Mike Lecours Visualizations

Visible Discovery Of Information: Information-Pushed – Exploratory

That is typically the class the place many alternative sources of knowledge are mixed into one visualization to establish new tendencies or themes. There could also be some trial and error concerned because the parameters of the visualization are modified to see if higher tendencies or insights will be garnered.

For instance, the chart beneath illustrates the identical inventory proven within the “On a regular basis Information Visualization” graphic above, however now it contains a number of totally different information factors. A number of the adjustments embody the usage of colour, development traces, buying and selling quantity exercise, and the kind of traces used (e.g., candlesticks).

Together, these additions create a special perspective from the earlier chart. Whereas the earlier chart reported on just one side of the info, this chart contains extra information issues to encourage the invention of insights and tendencies.

Visual Discovery of Data Identifying Trends and Themes Mike Lecours Visualizations             

Turning Concepts Into Visualizations

Understanding the advantages that visualizations can provide to enhance communication efforts is step one for advisors to absorb designing an efficient visible; the following step is to establish which fashion of visualization will work finest to speak data to shoppers. Fortunately, there are instruments and assets obtainable to assist create efficient visualizations.

Usually, there are two choices for advisors to contemplate: Creating the visualizations themselves or contemplating one of many many turnkey choices for assist. For many who determine to construct their very own, there are programs that may assist train how you can make efficient visualizations. Harvard gives a course on information visualization that focuses on serving to professionals higher current information and knowledge (with no necessities for a particular software program or programming expertise).

Particular visualization classes will be created both by the advisor themselves or by way of the usage of turnkey choices.

Thought Illustration (Utilizing Visualizations To Clarify Advanced Ideas)

Creating Visualizations Your self: Advisors can create visualizations on their very own with many alternative instruments. Visualizations don’t should be difficult – Carl Richards used a Sharpie marker to sketch out his ideas. Microsoft Phrase and lots of different purposes provide easy instruments and templates to place collectively visualizations corresponding to course of maps and pyramid charts.

Categories of Microsoft Words SmartArt Illustration Tool Features Mike Lecours Visualizations

Advisors may also use software program applications to create graphics that look extra skilled. Canva is a well-liked design software that can let you create all types of graphics. And the very best half is that it is rather simple to make use of.

Napkin Finance Book CoverAdvisors who can create the idea, however don’t have the will or capacity to really design it themselves, can outsource designers to assist deliver their idea to life. For instance, Fiverr, Upwork, and 99designs can join advisors to quite a lot of totally different designers. Creator Tina Hay developed sufficient visuals to assist her create a ebook entitled Serviette Finance: Construct Your Wealth in 30 Seconds or Much less. You may learn her story and see a number of examples of her work at

Turnkey Choices: Advisors preferring to not create graphics themselves have loads of turnkey choices to contemplate, relying on their communication targets. The turnkey choices usually present advisors with the visible and provides them the chance to then white-label it to their firm/model.

As an example, comparable in fashion to Conduct Hole’s graphics, MoneyVisuals gives a large library of graphics to assist assist in explaining tough ideas. MoneyVisuals takes it a step additional, although, by writing client-facing memos that may accompany the visible, which the advisor has the choice to share with their shoppers.

Money Visuals Mike Lecours Visualizations

One other instance is fpPathfinder, which creates flowcharts to assist clarify monetary planning ideas like their 2022 model of “Can I Make A Deductible IRA Contribution?”. The flowcharts will help illustrate the principles related to sure planning methods or assist visualize the important thing decisions a shopper should contemplate earlier than making a choice.

fpPatherfinder Can I Make A Deductible IRA Contribution Mike Lecours Visualizations

Thought Technology (Brainstorming Classes)

Creating Visualizations Your self: Thought Technology visualizations will help advisors establish new concepts or lead higher brainstorming periods in shopper conferences. For instance, utilizing a whiteboard or iPad (or another medium handy for the advisor and shopper) to create thoughts maps will help shoppers seize objectives and talk their aspirations or just assist them categorize their property.

Turnkey Choices: MindMeister is an software that may assist with thoughts mapping. Thoughts mapping workouts are an ideal instance of how an advisor might incorporate a visible part into a gathering presentation with a brand new shopper or prospect to assist establish and talk about their monetary objectives.

No matter whether or not advisors use a instrument to facilitate brainstorming or select to do it themselves, they might discover it useful to see how different advisors have integrated brainstorming into their processes. For instance, Sten Morgan incorporates whiteboard periods into a few of his conferences to assist the shopper or prospect perceive a few of the planning choices to contemplate.

Creating Visualizations Your self: On a regular basis Information visualizations are the true area of Microsoft Excel or Google Sheets. Advisors who wish to create their very own visuals can use these two purposes for his or her flexibility in creating all kinds of various charts and graphs to elucidate information.

Turnkey Choices: Most monetary planning and efficiency reporting software program covers this sort of On a regular basis Information visualization. They typically embody the potential to create charts exhibiting the change in a shopper’s internet value or efficiency of particular investments.

One-page monetary plans may also fall into this class, as they supply a concise approach to seize plenty of helpful data on one web page. A number of one-page choices assist report on tendencies for shoppers, together with One Web page Monetary Plan, Lovely Monetary Plan, and Proper Capital’s Snapshot.

Fident One Page Financial Plan Mike Lecours Visualizations

Clearnomics gives white-labeled chartbooks illustrating market and financial charts. Included are observations that accompany every chart to assist clarify vital tendencies and to place the chart into perspective.

These graphics will be discovered elsewhere, however this can be a highly effective instrument to make use of as a result of the white-labeled visuals will be personalized to match the advisor’s model.

Clearnomics Total Returns and Pullbacks Mike Lecours Visualizations

Visible Discovery (Uncovering New Insights By Wanting At Visualizations)

Creating Visualizations Your self: As soon as advisors have information, there are a plethora of instruments obtainable to assist them create refined visualizations. Harvard Enterprise College has compiled an inventory of a number of prime instruments that enterprise professionals can use, starting from Microsoft Excel and Google Sheets (which permits the person to add reside monetary information like inventory costs to visualizations) to classy charts developed by Tableau (which has particular options to assist the Wealth Administration business collect insights into difficult buying and selling methods and inventory screening) and Datawrapper (which is a free web site that can convert person information right into a personalized, polished graphic format and supply embed codes for the completed graphic).

One other format to contemplate is a Sankey diagram, a kind of visualization that depicts processes by indicating charges or frequencies with the sizes of chart components. An fascinating instance of a Sankey diagram that advisors have created illustrates the shopper’s revenue and bills. Mike Zung of Java Wealth Planning has integrated a model of this right into a deliverable he offers to his shopper and was featured within the Kitces Monetary Planning Worth Summit of 2021.

Cash Flow Estimate Baseline and Mike Lecours Visualizations

Turnkey Choices: Attempting to supply clear information can typically be an excessive amount of of an impediment for advisors to deal with. When that is the case, there are many choices to contemplate that may assist them uncover new concepts for shoppers.

Mike Zung has lately developed a sequence of templates that enable advisors to create their very own one-page monetary plan. One of many modules permits for the creation of a Sankey diagram that outlines cashflows. He has additionally turned this right into a module obtainable in Lovely Monetary Plan.

Funding-oriented choices embody Fund Visualizer and Morningstar Advisor Workstation, which can be utilized to determine new insights for a client-specific portfolio that will in any other case be tough to see if wanting solely on the information or simply seeing the numbers. The intention of those sorts of experiences is to uncover new observations, tendencies, or insights that in any other case could also be missed.

For instance, Morningstar Workplace’s Portfolio Snapshot offers a Threat Evaluation chart that shortly reveals the danger/return profile for particular person investments, the portfolio as an entire, and the benchmark. This could uncover observations for the advisor that they might not have seen in any other case.

Morningstar Risk Analysis Mike Lecours Visualizations

Visible Capitalist gives visualizations with a broader market and financial perspective in a novel approach. For instance, contemplate its illustration of the State Of The World’s Debt. Merely taking a look at this instance invitations inquiry in a approach that different charts could not present.

State of the Worlds Debt Mike Lecours Visualizations

Investments Illustrated gives a fascinating account of US and worldwide markets in a large chart that examines varied elements of market historical past.

The Big Picture Mike Lecours Visualizations

Whereas a chart illustrating a typical steadiness sheet or assertion of money movement is ubiquitous, monetary planning software program firm Asset-Map introduces a novel perspective by using a Gestalt-style visualization that presents the identical type of data in a approach that’s extra intuitive and extra digestible for the shopper.

In an earlier article, Derek Tharpe means that the one-page format of a shopper’s Asset-Map helps “advisors draw out patterns and formulate holistic perceptions which might be related to the shopper’s broader environmental contexts.” Merely presenting the identical type of data in a novel approach may end up in new insights that will in any other case be misplaced.

Asset Maps Holistic One Page Client Reporting Format

One of many key targets of Visible Discovery is to current data in new methods to encourage the identification of recent tendencies or observations beforehand unrealized. Whereas many examples listed on this part could also be used initially with shoppers to discover Visible Discovery, these identical approaches could turn out to be extra helpful as On a regular basis Information Visualization instruments over time as shoppers turn out to be acquainted with them. It’s because the position of visuals which might be used with shoppers frequently (e.g., Asset-Map experiences or Sankey diagrams) are usually much less about visible discovery (because the visible not presents them with novel data that promotes new concepts) and, as an alternative, turn out to be extra about reporting on present tendencies.

Design Rules Of Efficient Visualizations

For the visuals which might be developed to make some extent (i.e., Thought Illustrations and On a regular basis Information Visualizations), following sure design rules will assist to make sure concepts are communicated clearly. Some of the vital elements that units a well-designed visualization other than one that’s poorly designed is how the general context of the communication is considered. Traces, colours, shading, font measurement, and varied different components needs to be utilized to assist talk the concept and draw consideration to the important thing elements of the visible to assist in communication.

Good Charts Book CoverScott Berinato has authored a ebook on this very topic entitled Good Charts: The HBR Information to Making Smarter, Extra Persuasive Information Visualizations, and has additionally offered two wonderful webinars on the subject: The Proper Stuff: Chart Varieties and Visualization Finest (and Worst) Practices and Higher Charts in a Couple of Hours: Sketching to Win. These are all assets that may assist advisors perceive vital rules about utilizing visuals to create efficient displays.

UX Collective additionally gives a number of design-related gadgets to contemplate when designing a chart. A couple of of essentially the most related examples embody:

  • Use a well-recognized chart sort. Should you use a fancy or uncommon chart sort, it might be distracting for the shopper.
  • Add not more than 5 slices to a pie chart. It turns into too cluttered to incorporate greater than 5 slices. If that isn’t potential, contemplate a special chart sort.
  • Don’t use randomly generated colours. Take care to pick colours which might be distinct from one another. Be conscious that inexperienced is usually used to characterize one thing optimistic, and purple typically represents one thing damaging. Which implies that exhibiting a damaging quantity in a inexperienced font could also be complicated!
  • Development traces will be distracting. Earlier than including a development line to a chart, see if the story will be informed with out including the development line.
  • Embody a legend solely when it’s really wanted. In some instances, the data ordinarily present in a legend will be integrated into the title of the chart.

Under is a abstract of a few of the instruments and assets recognized earlier:

Visualization Tools Resources and Turnkey Solutions Mike Lecours Visualizations

Finally, the important thing level is that visualization performs an vital position in communication. Whereas it doesn’t essentially exchange an precise dialog with a shopper, it does present an exquisite complement to a gathering or e mail. Not solely can visualizations assist to convey an idea extra clearly, however, as analysis has steered, they will additionally lead shoppers to understand their advisor extra favorably.

For monetary advisors, the business lends itself very properly to the usage of visualizations. There may be an awesome quantity of vital but complicated data (from funding to tax-related information) that have to be communicated to shoppers. Luckily, there are many instruments and assets obtainable for advisors to develop nice visuals, whether or not they choose doing it themselves or discovering turnkey options. And by strategically utilizing visuals, advisors can attain their communication objectives, offering readability for his or her shoppers and serving to them perceive their monetary plans to make the suitable selections!

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