The Four Drivers of Client Emotions

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How do you answer when prospects ask what you do as a financial advisor? The understandably easy answer is, “I manage people’s investments.”

But the truth is much more complex, isn’t it? At its core the wealth management profession is about personal relationships. We manage our clients as much as we steer their investments. The ability to help people navigate the emotional aspects of their journey is what separates successful advisors from algorithms and online brokerages.

Because each client’s circumstance, background and objectives are different, they all bring a unique mix of emotions to their financial thinking and decision-making. Still, certain feelings surface in every money discussion. By anticipating and learning how to address these stressful emotions, we can tailor solutions to each client.

The four emotions that I encounter in client interactions are fear, guilt, shame and envy. People fear not having enough money to retire. They feel guilt over not starting to save earlier or not having better managed their money. A lack of financial knowledge prompts shame. Envy of others’ financial success skews a client’s view of their own situation.

All these problematic feelings can be managed with a bit of skill and a lot of empathy. These emotions are very real to the client — even when they are not supported by the facts. Dismissing their feelings is a huge mistake.

Instead, strive to understand the root of their concern. Listen. Then listen some more. Ask lots of questions. The goal is to understand what the client values and how their background may impact their thinking. Reflecting statements, in which you repeat back to the client what you heard them say, are useful for making the client feel heard and understood. An example of a reflecting statement is, “So, I’m hearing you say that you’re worried you’re going to disappoint your daughter by not being able to pay for the college education she’s earned.”