How Can Communication Be Tailored to Clients With Different Financial Literacy Levels?


    How Can Communication Be Tailored to Clients With Different Financial Literacy Levels?

    When it comes to demystifying the complex world of mortgages, a Mortgage Loan Advisor-Certified Divorce Lending Professional begins by walking clients through loan estimates. Alongside expert advice, we've gathered additional insights, including those not from industry professionals, to ensure everyone, regardless of their financial literacy, can grasp the intricacies of mortgage terms. From using visual aids to deploying interactive financial tools, here are seven ways to tailor communication to educate and empower clients.

    • Walk Through the Numbers
    • Ask Questions to Build Trust
    • Use Visual Aids for Clarity
    • Adjust Terminology for Understanding
    • Offer Simplified Mortgage Summaries
    • Customize Newsletters by Literacy Level
    • Deploy Interactive Financial Tools

    Walk Through the Numbers

    For active clients in the quote or work-up stage, I send a detailed Loan Estimate or written quote showing rates, terms, and costs, and walk them through all the numbers. For prospects who don't move forward, I tailor my email communications to their specific area of interest or need, determined at the time of the interview. For example, credit- or debt-challenged buyers are put on a credit repair/financial education drip, and I check in from time to time to see if they are ready for another look.

    Cindy Tansin
    Cindy TansinMortgage Loan Advisor-Certified Divorce Lending Professional, HouseAmerica Financial

    Ask Questions to Build Trust

    It always starts with asking great questions. When I ask great questions, I receive a lot of information that bank advisers or other brokers often miss. The answers to these questions then dictate the flow and level of the conversation. I have to go into every conversation with an open mind, as I don't know what they don't know, and they don't know what they don't know; so, I have to discover their blind spots and fill in the gaps. If I make assumptions about what they know or what they believe I need to know, then we can run into misunderstandings. Asking great questions builds trust, and with trust comes sharing.

    Keith UtheMortgage Broker, Mortgage Alliance Enrich Mortgage Group

    Use Visual Aids for Clarity

    Mortgage brokers comprehend that intricate financial concepts may be challenging for some customers to grasp, and thus, they leverage visual aids. Graphics, flowcharts, or comparative images can convey the details of loans, interest rates, and the lending process more clearly than verbal explanations. These aids foster a better understanding by breaking down complicated information into digestible visuals.

    Not only does this approach help clients visualize their potential commitments, but it also aids them in making informed decisions. If you're struggling to grasp mortgage details, ask your broker for charts or visual breakdowns to make things clearer.

    Adjust Terminology for Understanding

    In the realm of financial jargon, a mortgage broker's ability to adjust terminology is paramount for communications with clients of varying financial literacy. Brokers who are adept at this can explain terms like 'amortization', 'equity', and 'escrow' in simpler words that make sense to those not well-versed in financial language. This tailored vocabulary helps clients to not only understand their mortgage options better but also feel more comfortable in the discussion.

    By providing explanations without complex terms, clients feel more empowered to ask questions and engage in the process. If financial terminology has been a barrier for you, encourage your mortgage broker to explain terms in everyday language.

    Offer Simplified Mortgage Summaries

    When dealing with the basic principles of mortgages, it is crucial that all clients, regardless of their financial knowledge, understand what they are undertaking. Brokers often offer simplified summaries of these core concepts, ensuring clarity without overwhelming the client with information. These summaries might cover the basics of how a mortgage works, what is expected in terms of repayments, and the consequences of defaulting.

    By distilling the information to its essence, clients can grasp the critical points necessary for a wise financial decision. Be sure to request simplified overviews of any financial arrangements to ensure you fully understand your commitments.

    Customize Newsletters by Literacy Level

    Mortgage brokers recognize the diversity in their clients' financial literacy and may opt to customize newsletters accordingly. These newsletters can range in complexity, with some offering a more in-depth analysis of market trends and product information for the financially savvy, while others provide straightforward updates and guidance for those needing clarity and conciseness.

    By segmenting their communication in this manner, brokers ensure that clients receive information that resonates with their level of understanding and interest. To stay informed and comfortable with your mortgage journey, you might opt to subscribe to a newsletter tailored to your level of financial literacy.

    Deploy Interactive Financial Tools

    In an effort to enhance client understanding and involvement, mortgage brokers may deploy interactive tools. Interactive tools, such as calculators, online quizzes, and applications, facilitate active learning and provide clients a hands-on approach to understanding their finances. Engaging with these tools can help clients see the real-time implications of different mortgage rates, payment schedules, and overpayment benefits on their individual circumstances.

    By making education interactive, clients are more likely to retain information and feel confident in their financial decisions. Feel free to explore interactive educational tools offered by your mortgage broker to deepen your understanding of the mortgage process.