Hey, we need to talk….

For many of us, this is one of the scariest phrases , especially if you are a financial advisor. Like all professionals, financial advisors may have blind spots when it comes to having difficult conversations. And yet the ability to have these conversations with other people is one of the most valuable skills one can possess.

Not being able to address the “elephant in the room” is a common cause of miscommunication, confusion, and frustration in both personal and professional relationships.

As a financial advisor, talking about difficult subjects is unavoidable. Developing a holistic financial plan for your client will require you to address some of life’s most sensitive and uncomfortable subjects, including death, divorce, job loss, medical needs and money !

Here are few points to consider when having those crucial conversations…

It starts with trust

Too many people seem to think that financial advice is about money. It is not. It is about a client’s goals. But for clients to tell us about their dreams, they must trust us deeply. Without a foundation of trust, broaching an uncomfortable issue can feel like intense judgment or an outright attack on a person’s life choices.

Easier said than done, right? How do you go about gaining someone’s trust?  For many people, becoming trustworthy requires a mindset shift from an inward focus to an outward focus. 

A self-focused inward mindset is seeing other people as objects. While an outward mindset is defined as seeing others as people who matter like we do. We consider their needs, challenges, and objectives. With an outward mindset, the intent of communication changes to focus on collective results and avoids the pitfalls of individuals pursuing their own goals at the expense of others.

Having a structure

In 2021, face to face meetings having shifted to virtual meetings for obvious reasons. While there are advantages to remote meetings over Zoom or Microsoft Office, there are of course other issues that might need to be considered, such as being aware of a client’s body language and tone of voice – things picked up more easily during in-person meetings.

So how should advisors set about helping to structure conversations when it comes to financial planning or guidance for people?

Customers self-evidently will have different needs and will want and warrant different approaches. Therefore, getting to know your client, in the way that best suits them, can take time but will be valuable for them – and for the advisor. it is useful to be as flexible as possible when it comes to even setting up that initial meeting. You may need to have an in-person conversation, they may want to chat solely by email until they are more comfortable, or they may not want to chat about their certain issues at all.

Making the client feel comfortable is vital, because only when they feel they can trust the adviser with their personal information will they trust the adviser with managing their finances.

Implement more frequent check-ins

Frequently, financial advisors miss the mark on check-ins with clients. An annual review is a bare minimum, but all too often things happen throughout the year, such as the need to refinance a home equity line, the need to select investments in a retirement plan at work, etc. Check-in points must be scheduled throughout the year to do this. 

Give client communication a personal, relevant touch

Make sure every email or contact you have with your clients is relevant. There is plenty of spam and “content” out there giving free financial advice. Make sure your contact points are personalized, relevant, comprehensible, and actionable. Be the relevant advisor so your clients will know that communications from you are always important and helpful.

Learn to listen!

Listening is not easy to master, but, like most skills, with practice, it can be improved. Of primary importance is the necessity of ensuring that you are fully present in the moment and able to give the other person your undivided attention.

To start, make sure that you are removing any distractions that would affect your ability to focus on the conversation. Try to create an environment that limits the amount of visual and auditory interruptions that will occur. Everyone has slightly different distraction triggers, but some of the common disruptors to avoid include phones ringing, coworkers or visitors dropping in, or new emails or Slack messages.

Digitize and virtualize services

In 2021, it’s more crucial than ever to streamline onboarding. Requiring physically signed hard copies adds friction to what could be a simple, digital process. Instead, give clients the option to submit documents online via Docusoft or a similar app. Additionally, add flexibility to your schedule (and remove location-based barriers) by making virtual meetings an option for all clients.

Regularly share updates and educational content

Poor communication—or completely neglecting communication—is often what financial advisors need to focus on improving for better customer service. Clients may feel you are asleep at the wheel with their finances if you do not stay connected, especially during dips in the market. Regularly reach out on a personal and professional level to share updates and educational content. 

Ask questions

You will likely need to clarify the information presented by you through follow-up questions. Some people are naturally effusive when given an opening to speak, but others may need some encouragement. Asking open-ended questions is often the best way to create an opening for someone who is struggling to verbalize their thoughts and emotions.

The good news: asking more questions helps improve your emotional intelligence over time which makes it easier to ask better questions.

However, there are a few things worth avoiding when using questions to solicit information or clarify your understanding. The biggest mistake to avoid is allowing your focus to shift from the responses that you are receiving to the formulation of your next question. If you lose the train of communication because you are working too hard on coming up with questions to ask, the benefits of asking those questions have also been lost.

Another way that questioning can backfire is through leading questions. Asking questions along the lines of, “Maybe you should..?” is really just a thinly-veiled offering of advice and does not further the conversation or provide new information.

Finally, asking primarily closed-ended questions can restrict the flow of conversation. Open-ended questions act as an invitation for sharing and show interest in another person’s thoughts, whereas questions that push for a “yes” and “no” response are best reserved for confirming your understanding of what has been said. 

Handling strong emotions 

One of the challenges that may come up through the conversational process is the presence of strong emotions. In many cases, talking about tough topics can elicit feelings of sadness, anger, shame, or fear.

So how do you manage emotional volatility?

The most important part of your response will be controlling that which is in your power to control: your reaction. If the conversation is heating up to the boiling point and voices are escalating, now is a good time to take a pause, breath, and step back from the situation.

If you’ve just given advice that someone doesn’t want to hear, it’s possible they’ll try to defend themselves by attacking your statement. Don’t allow yourself to become defensive in return, which will only escalate the tension.

It’s okay to let them vent briefly, but feel free to stop the meeting and reschedule if they aren’t able to defuse their frustration sufficiently to continue the conversation in a constructive manner. If they are able to resume the conversation, try to seek out the “why” behind their response to get to the real heart of the issue.

Offering to end the meeting or leaving the room to give them some privacy, while well-meaning, can sometimes exacerbate feelings of shame over the show of emotion or create a sense of pressure for them to hurry up and get their feelings back under control.

Introducing a difficult topic

One method that often helps create the psychological safety needed to embark on a difficult dialogue is asking permission. By asking permission to discuss the topic, you are demonstrating respect for the individual’s autonomy and creating an opportunity for you to explain why this conversation is needed.

Practice makes perfect

Even with experience, having difficult conversations is unlikely to become something you enjoy doing, but with practice it will become easier. One way to help prepare for potentially challenging communication is through role-play. Having mock conversations on tough topics with other people with whom you have already developed a high level of trust and getting their feedback on your communication can be invaluable in cementing the needed skills for real-life interactions. 

Difficult conversations are inevitable, but by engaging wholeheartedly with the intent of finding a mutually beneficial solution, you unlock a powerful tool in strengthening relationships in all areas of your life.

If you would like to talk about any of your clients who is facing financial difficulties please get in touch with our financial advisors by filling a contact form on our website. One of expert advisors will soon get in touch with you.