What's the Money For? Listening for What Clients Want, with Derek Hagen [Ep. 06]
Every advisor has a client who nods along to the plan and never moves. Derek Hagen has spent years on why that happens, first as an advisor, then as a financial therapist, then teaching life planning to other advisors at Money Quotient, and now at Root Financial. His starting point was humbling. Carl Richards was calling advisors poor listeners, and Derek, sure he was the exception, went looking for how to get better. That search led him to Ted Klontz, the financial psychology program at Creighton University, and Facilitating Financial Health, the book he still recommends to any advisor starting down this path.
The most useful stretch for advisors is motivational interviewing. Telling a client what to do invites resistance, even when they agree with you. Derek's alternative is a one-to-ten scale: ask how important the change is, then ask why the number isn't one lower, so the client ends up making the case for acting in their own words. He walks through it with a concentrated stock position a client keeps agreeing to sell, and I couldn't help thinking of a UnitedHealth position I never got a client to move off of.
From there we turn to life planning. Derek pushes back on financial goals as the end of the conversation, since remodeling the house or taking a trip is a task, and the useful question is why. He shares the questions and exercises he uses to get underneath the answer, drawing on Stumbling on Happiness and The Top Five Regrets of the Dying, along with how he handles the client who just wants you to manage the money.
In this episode
Why telling clients what to do backfires, even when they agree with you
How Carl Richards' critique of advisors as poor listeners sent Derek to an "exquisite listening" workshop, and the gap between what a client thinks, says, and what the advisor hears
Facilitating Financial Health and money scripts: the stories clients tell themselves about money, and how those stories drive behavior
Motivational interviewing for advisors: the four S's, and listening for "change talk"
The one-to-ten scale, applied to a concentrated stock position a client keeps agreeing to sell
Why we're poor at predicting what will make us happy (Stumbling on Happiness), and what The Top Five Regrets of the Dying suggests for planning conversations
The questions and "limitless life" exercise Derek uses to get past "what are your financial goals"
How to handle the client who just wants you to manage the money
Derek's reading system, and the one book he thinks every advisor should read
Books mentioned
Facilitating Financial Health — Brad Klontz, Rick Kahler, and Ted Klontz
Four Thousand Weeks: Time Management for Mortals — Oliver Burkeman
Notable quotes
"The more you learn, the more you learn that there's more to learn." — Derek Hagen, on how a bus-ride reading habit compounded into a career
"Financial goals aren't a purpose. What's the money for?" — Derek Hagen, on why "remodel the house and take vacations" is where the life planning conversation starts, not where it ends
"Instead of me telling you or guessing, I'm gonna have you tell me." — Derek Hagen, on the core idea behind motivational interviewing
Chapters
(00:00) Welcome, and how Matt and Derek met
(00:36) Why Derek reads: from hating school reading to the bus commute
(03:22) How Derek picks his next book
(04:55) Variety versus deep dives: stoicism, existentialism, and following curiosity
(06:28) How reading shaped Derek's career, from back office to financial therapy
(09:56) Carl Richards, exquisite listening, and a weekend in Tennessee
(13:36) Facilitating Financial Health
(14:56) Motivational interviewing and the four S's
(18:40) What motivational interviewing looks like in an advisor's practice
(21:33) The one-to-ten scale and the concentrated stock position
(26:11) Life planning and Stumbling on Happiness
(29:05) The Top Five Regrets of the Dying
(31:31) Putting it to use: the questions and the "limitless life" exercise
(35:57) The client who just wants you to manage the money
(37:42) The Subtle Art of Not Giving a F*ck
(38:59) Existentialism, stoicism, and being intentional day to day
(40:47) Four Thousand Weeks
(42:05) Lightning round
(43:35) The one book everyone in wealth management should read
(44:21) How to connect with Derek, and close
About the guest
Derek Hagen, CFP®, CFT-I™, CFA, is a financial therapist and advisor at Root Financial, where he advises clients and helps shape how the firm's advisors approach client conversations. He started in the back office of an RIA, handling trading, operations, and compliance, before becoming an advisor himself. After studying financial psychology at Creighton University, he moved into financial therapy and later taught life planning to other advisors at Money Quotient. He is also the founder of Meaningful Money, where he writes a weekly column on the psychology of money and living a meaningful life, illustrated with his signature hand-drawn sketches.
