Make personal finance fun

Stop using jargon and graduate school terminology. Talk with your clients the way you talk with your friends

As financial advisers, we all know that most Americans are woefully mismanaging their personal finances. And we all know why: Most lack the education they need to make effective financial decisions that are in their best interest.

Few Americans are taught about money by their parents. Fewer take any classes about the subject in school, and it’s a rare employer that provides any advice or information about personal finance to its workers.

Yep, America is a land of financial illiterates. And that’s why most people find the topic intimidating, confusing and even downright scary.

We can improve the situation by doing something that few advisers ever attempt: Let’s make personal finance fun.

It’s a routine approach for us at Edelman Financial Engines. Here’s just one example, using perhaps one of the most hated and confusing aspects in all of financial planning: life insurance.

Few clients want to talk about it. No one wants to spend money on it. But we have found a way to create a conversation that is always filled with laughter — and results in the client agreeing to get the insurance policy they need. How do we do it? We ask our clients one simple question.

Does Batman need life insurance?

You’re already smiling.

After a fun dialogue about superheroes and favorite movies, and the comic books we read (or didn’t read) as children, we return to the question. And almost every client’s response is, “Yes, of course, Batman needs life insurance.” After all, everyone knows that Batman engages in very risky behavior; his odds of dying are pretty high.

But as a financial planner, you know the truth: Batman, aka billionaire Bruce Wayne, has no need for life insurance. Bruce is unmarried, with no living parents and no children. With no one financially dependent on him, Batman has no need for life insurance. (Protecting Alfred via his estate plan is a different matter — and the opportunity for another fun conversation.)

So who does need life insurance?

Homer Simpson.

Laughing yet?

Homer, we explain to our clients, is the sole wage earner in his family. Marge and the kids are at great financial peril if Homer dies.

This simple conversation — funny, disarming, engaging — is all it takes to help our clients put life insurance into proper context. They get it, and that lets them get the life insurance they need to protect their family.

It’s time for the financial planning community to stop showing off. Enough with the multicolored charts and graphs. Stop using jargon and graduate school terminology that you use (let’s face it) partly to impress your clients but mostly to intimidate and bully them into acquiescing to your entreaties.

Talk with your clients the way you talk with your friends. Make it fun.

And then, when they agree that Batman doesn’t need life insurance, you can ask them if he needs disability insurance coverage — and whether he can quality for a policy!

[More: Cure for financial illiteracy? Teach them when they’re young]

Ric Edelman is founder of Edelman Financial Engines, the RIA firm ranked No. 1 in the nation by InvestmentNews.