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The Trouble With Explaining Behavioral Coaching

Morningstar explores why word choice could make or break investor appreciation of a key advisor value proposition.

In a recent blog post, Morningstar set out to help advisors better communicate the value of behavioral coaching. After finding that investors seem to underestimate advisors’ value as a behavioral coach, researchers decided to test different linguistic approaches. They wanted to see if a change in terminology, essentially using different words to describe behavioral coaching, might make it seem more appealing to investors.

Morningstar gave its study participants one of five versions of the baseline behavioral coaching attribute: “Helps me stay in control of my emotions.” Industry observer and financial advisor Michael Kitces had suggested, in an April podcast, that that particular phrasing of behavioral coaching “may have sounded judgmental or accusatory,” according to the blog. 

Researchers compared the baseline description with four other phrases, which could be categorized as depersonalized (“Helps people stay in control of their emotions”), avoiding jargon (“Helps me make decisions with a cool head”), directly addressing behavior (“Helps me avoid common behavioral mistakes”) and avoiding assigning blame to the investor (“Helps protect my portfolio from excessive emotional reactions (for example, panic-selling during downturns)”).

behavorial coaching language

“Although none of the phrases made behavioral coaching the top attribute, a few did help move the needle in a substantial way,” Morningstar observed. “Based on its average ranking, the phrase ‘Helps protect my portfolio from excessive emotional reactions (for example, panic selling during downturns),’ was the most effective at helping investors see the value of behavioral coaching.” 

For advisors interested in conveying their value as behavioral coaches, that turn of phrase could be key to changing investors’ perceptions. Language matters, Morningstar concluded. Describing behavioral coaching “in a way that avoids blaming the client and offers accessible examples of behavioral mistakes” could be helpful in getting investors to see value in the behavioral coaching advisors can provide.

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