If I had the right magic formula, I would replicate that attitude and instill it in all my clients. In the midst of the current financial uncertainties, focusing on the bright side is certainly a healthier response than giving in to negativity and despair. I would like to have all my clients do that, not only for my own comfort but also for their long-term peace of mind.
Yet I've worked with clients' emotions and beliefs around money long enough to know better than to tell them, "You should be grateful for what you have left."
Such a statement would ring hollow and actually cause clients to resist becoming more positive. It would sound defensive and self-serving. It's only natural for financial advisors to want to justify our clients' losses and explain that the current mess isn't our fault. That may seem like the best way to keep clients' trust and loyalty. But it's not.
Thankfully, almost none of my clients blame me for their current losses. They understand that this economic crisis is far beyond the investment decisions of individual financial planners. But the last thing they need is a cavalier dismissal of their losses. Nothing is to be gained by telling clients they shouldn't be upset about losing a third of their financial security.
Ideally, financial advisors should help clients move away from fear and toward a more optimistic long-term perspective. Yet before clients can focus on the bright side and begin to be grateful for what they have left, they may need to spend some time on the dark side with the pain of what they have lost.
Our most useful role may be to be there for clients as they talk their way through the darkness. Effective listening is so crucial when we work with clients that it is the foundation of the majority of the exercises in the recent book, Facilitating Financial Health (NUCO),that I co-authored with Drs. Ted and Brad Klontz.
One of the simplest yet effective listening techniques is "Tell me more." For example, pick out a key word or phrase a client has said and then ask in an open-ended way for more information about it. "Tell me more about the idea of postponing retirement."
This encourages clients to elaborate and give their planners more information about what they actually mean, feel, and want. It can help the planner suggest appropriate solutions. In addition, it often helps clients begin to come up with their own solutions.
The idea of sitting and listening while clients express their fears--and possibly their anger--is likely to be uncomfortable for many planners. Yet listening respectfully, instead of trying to dismiss clients' fears or tell them how they "should" feel, is a powerful way to build and maintain clients' trust.
Rick Kahler, MS, CFP, ChFC, CCIM
President, Kahler Financial Group
Rapid City, SD
Rick@kahlerfinancial.com
