Speechless: When a Client's Comments Stuns Her Investment Advisor

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Practice Management

"I have a terminal illness." "My daughter is in rehab." How planners can respond to disturbing comments or questions.

This Practice Management article is intended for financial advisors only (registered representatives of broker/dealers or associated persons of Registered Investment Advisors).

When was the last time a client stunned you into silence?

For instance: “I’ve fallen in love and am filing for divorce.” Or: “I’ve been diagnosed with cancer and am looking into hospice.” One colleague was recently told about a client’s child being admitted to rehabilitation following drug abuse. My co-worker had no idea what to say to the client, who asked how much he should shell out before giving up on his daughter.

Clearly, many advisors need advanced training with communication. There are sessions advisors can take to improve their skills, yet these are not taught in our basic curriculum and they do not deal with crisis management. Sadly, messing up can exacerbate a situation and ruin a relationship.

When I worked in medicine before becoming a planner, we were taught stall tactics when we faced a dire situation, but needed to buy time to get our wits about us so we could handle a matter effectively. Advisors can use many of these tools to help them through crisis situations with their clients.

Acknowledge the Situation
Making a major life announcement is probably not easy for a client. They may be in great pain; sharing it with you likely took a lot of courage. You must acknowledge that you both heard them and what they are facing. Two techniques are particularly useful: paraphrasing and validation.

Paraphrase what has been told to you in the way you understand it. For example, with a client who calls to say they’ve been diagnosed with cancer and are dying, essentially repeat what you heard: “Joe, you have cancer that has gone to your brain and you are calling hospice. I can’t imagine what you are going through.” By paraphrasing, you verify that you’ve heard what they told you clearly. By validating, you’ve acknowledged the pain of the situation. Other good phrases to validate tough situations include, “I hate that you are going through this” or “This is such a sad situation.”

After absorbing the news, it’s important to learn more facts. Asking questions buys time and lets the other person vent, share more about the situation and get to why they are telling you their story. Good phrases to employ:

  • “Tell me more.” This lets the client know you are willing to listen to their pain.
  • “How are you handling this?” This lets you know the client’s state of mind in how they’re handling the situation.
  • “Is there anything else I need to know to help you with this?” This help ferrets out if there are other issues that may be exacerbating the situation.

For our client with the child in rehab, he wanted us to run cash-flow projections and come up with objective numbers on how much he could spend, where he could take the money from, and how it was going to affect his financial plan.

Clients with a serious illness often need help transferring financial caretaking duties, want to know that their spouse will be OK financially, or want to make certain their estate plan is constructed as expected. Sometimes, a client just wants you to know what is going on and only wants you to listen.

Share Your Boundaries
If a client is asking for help that isn’t in your wheelhouse, don’t wing it. Directly state what you can and cannot do.

For example, if a client asks if they are doing the right thing by marrying someone they just met, a good answer is, “Wow, this is the first time someone has asked me something like this and they didn’t teach me that in financial-planning school. From a financial side, I can tell you that it is better to get a prenuptial agreement in place and that needs to be done at least a month in advance of getting married.” You have to honestly and confidently share what you don’t know and what you do.

Where would you take the conversation next? Help the client figure out where to get additional assistance. Would therapy, a lawyer, a doctor, or other professional help? To truly support your client, don’t just tell them they need professional help—offer to arrange that help.

People in pain often have difficulty making decisions, and are paralyzed by fear and anxiety. As a planner, it is good to learn the resources in your community around common problems you are likely to encounter so you can quickly elicit help and spur the client to take appropriate action.

Develop relationships with family therapists, geriatric case managers, divorce attorneys, and other “helpers” in your community. Call them, perhaps take them to lunch, learn what they do, and tell them that you are trying to expand your network so that you can better help your clients. Guess what? By doing this from the good place of being a resource to your clients, you likely will pick up new clients from the people you refer to. Good begets good.

Learn the resources in your community. I recently received a call from a client about a friend with a young adult son who had developed serious behavior issues and didn’t have health insurance. I quickly supplied the number for a mental health resource center; they took the son right away. My client and her friend were thankful. Word gets around when you develop a reputation as a problem solver.

Thankfully, these tough conversations don’t come up often. But it’s best to be prepared for when they do. When I need to learn something, I put it on a piece of paper on my whiteboard and look at it every day as a reminder. Take these process ideas and stock phrases and stick them in front of you. The next time you’re stunned into silence, the odds increase that you will win the day.

—by Carolyn McClanahan
Carolyn McClanahan is the director of financial planning at Life Planning Partners.


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