Best Books for Financial Advisors

By Dan Solin

Many books recommended for financial advisors focus on the technical aspects of running an advisory firm and honing your experience in certain areas (like investing or financial planning).  These books can provide valuable tips and should be part of your reading list.

My focus, in books and blogs, has been on summarizing studies in the fields of psychology and neuroscience and applying that research to helping advisors convert more prospects into clients.

Because that’s my area of interest, I’m going to confine these recommendations to books with a similar focus.

Here is my list of six books every investment advisor should read.

1.  How to Win Friends & Influence People, by Dale Carnegie.

This book is a timeless classic.  When I wrote my books, The Smartest Sales Book You’ll Ever Read, and Ask: How to Relate to Anyone, I kept coming back to the lessons so brilliantly set forth by Carnegie in 1936 when he wrote the first edition of his book.

What’s particularly appealing about this book is the way Carnegie takes a complex topic (like sales) and distills it to very simple concepts:  Be nice, be respectful and don’t criticize prospects.

While the overriding theme reflects these values, there are some seemingly minor insights that, when implemented, have a major impact.  Try implementing this lesson:  “A person’s name is to that person the sweetest and most important sound in any language.”

The impact of doing so is immediate and readily apparent.  

2.  Thinking, Fast and Slow, by Daniel Kahneman.

Self-awareness is a critical trait exhibited by successful advisors.  However, self-awareness alone is not sufficient.  You need to also be aware of the thought process of your prospects and clients, if you want to serve them effectively.

Although Kahneman was trained as a psychologist, in 2002 was awarded the Nobel Prize in Economic Science.

His book brilliantly explores how we believe we are acting rationally when we make decisions, but the reality is quite different.  We are influenced by many “cognitive biases” that cause us to make poor decisions.

3.  Successful Aging, by Daniel J. Levitin.

Daniel Levitin, Ph.D is a well-known neuroscientist and author.  His recently published book, Successful Aging, is a treasure trove of information about how the brain works, especially as we age.

Levitin debunks many of the myths about the aging brain, including the tropes about how cognitive decline is inevitable.  He offers valuable insights about living a rich and fulfilling life well into our 80’s, 90’s and even longer.

His stories about highly accomplished people who didn’t start their careers until late in life, and those who maintained their high levels of expertise well into their senior years, were particularly inspiring.  

4.  Advice that Sticks, by Moira Somers.

In my experience, most advisors are extremely knowledgeable about investing and financial planning.  Yet few have spent any meaningful time studying how to give advice that actually gets through to their clients.

As a consequence, well-intentioned (and well-grounded) advice sometimes goes unheeded, clients suffer financial harm and the relationship between advisor and client is imperiled.

Advice that Sticks, by Dr. Moira Somers, fills this gap.  

What I particularly liked about this book is that it’s evidence based.  Somers, a neuropsychologist, supports her recommendations with peer-reviewed studies.  She show how advisors can change their behavior to maximize the possibility that their advice will be heard, positively received and implemented.

5.  The Trust Mandate, by Herman Brodie and Klaus Harnack. 

Every advisor recognizes how important it is to establish trust with their prospects, clients and colleagues.  Yet few understand that doing so is heavily influenced by science and even fewer are familiar with the studies underlying that science.

Here’s one compelling example:  Often advisors believe they must present an image of perfection, which means being perfectly dressed and presenting themselves with extreme self-confidence.

The authors debunk this myth.  They discuss how videos produced by advisors would be more relatable if they showed the advisor erring in some way (like spilling a cup of coffee, tripping, or dropping a file folder).  They explain that we can all relate to imperfection.  Showing yourself in a more realistic light is much more likely to establish trust.

6.  Honest Signals:  How They Share Our World, by Alex Pentland 

What’s more important than being able to evaluate whether what you are saying is making a positive impact on your prospect or client.

In his fascinating book, MIT professor Alex Pentland describes “honest signals” which are telltale signs of interest (or non-interest).

These signals include mimicry, activity level, change in speech volume and active listening.  

Pentland found, through a number of intriguing experiments, that a combination of variability in speech tone and the amount time listening, when combined, could accurately predict whether a sales interaction would have a positive outcome.