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It happens to all of us eventually. When you are a financial advisor, it is only a matter of time until a meeting takes an unpleasant (and sometimes unexpected) turn and one client loses his or her cool. Unpleasant sentiments can be expressed in harsh terms. That can make clients lash back.
And there you are, caught in the middle of it. Quite often it is an awkward and painfully uncomfortable experience.
For everyone.
It’s easy to understand how a seemingly routine discussion can suddenly jump the tracks. We are taught at a young age to avoid certain topics in polite conversation: religion, money, and politics.
But how can you comply when money is at the heart of what you do as a wealth manager? And given that someone else’s money is on the line, the potential for emotions to get supercharged, super-fast is very real.
A recent study of some 1,300 financial planners found that nearly three out of four of them (74%) had often worked with a client who was in an emotionally distressed condition. What’s more, nearly half reported that they had refereed spats between married couples.
We’ve all been there, me included. I distinctly remember one incident involving a couple with wildly different perspectives.
They were like children on opposite ends of a teeter totter. When one said, “Invest in stocks,” the other answered, “Stay in cash.” Emotions escalated and temperatures grew heated. When one said, “I’m comfortable with volatility,” the other shot back, “I can’t sleep at night if my money is invested.” It grew to the point where one insisted, “Let’s spend the money we have saved!” with the partner countering, “We haven’t saved enough!”
Saying it was a tense moment was an understatement. Things were quickly spiraling out of control. And there I sat in the middle of it! It wasn’t an enviable predicament.
What should you do when you find yourself suddenly caught in the crossfire? You are an expert on wealth management, not a ringmaster. While you can never eliminate the possibility of a client getting overly distraught, there are some important steps you can take to manage the situation and steer it away from becoming an outright confrontation.
Take a quiet, deep breath. This likely isn’t the first you have encountered this surprising turn of events, and it likely won’t be your last. And remember, you’re not alone. Every financial advisor hits turbulence during a meeting at one time or another; remind yourself that today just happens to be your turn.
It’s vitally important that you keep a cool head while your clients are turning into hotheads. That will help you navigate the storm and lead it in a direction that is not only less adversarial. but can become positive. That study I mentioned earlier also found the majority of advisors said that discussing sensitive financial matters in a constructive manner led to improved communication between family members, and even helped bring clients in tune with their core values. Not only that, 39% of respondents even said the discussions eventually produced an increase in their business. Promoting an open environment can be healthy for your bottom line as well as your clients’ emotions.
How do you go about helping them get there in the heat of the moment?
Try to de-escalate tensions. You didn’t ask to be an umpire or referee, yet that is the situation you are now in.
Remember the couple I mentioned earlier? Here’s how I managed that situation. I led by asking questions of both spouses, and I listened to their answers. I made sure to explain to the more aggressive spouse that I understood their feelings, because I have a conservative nature, too. I made sure both were engaged and began soliciting their feedback to my thoughts. It took several minutes, but we slowly transformed from an argument into an insight exchange of views that led to a successful compromise and moving forward together as a team.
Speak in a low voice using a calm, reassuring tone. Choose your words deliberately. Speak slowly and clearly. If that sounds like you are talking to an angry toddler, well – you are, in a way! You are the grownup in the conversation at that moment. Handling it in a soothing, reassuring manner can help get your clients to return to grownup behavior on their part, too.
Be polite and impartial. Even if you agree with one client, you must never be seen as taking their side. Your mission is to create an environment that will return to professional, productive discussion. That won’t happen if you are seen as being an ally of one party.
Give your clients time. Some people turn white-hot at the speed of light, then calm down just as suddenly. Others take a little while. It’s only natural to want this uncomfortable situation to conclude as fast as possible. But allow the clients to decompress at their pace, not yours.
When you reach the point when rational discussion can resume, don’t ignore any differences. It sounds counterintuitive, but fighting can open the door to helping clients better understand each other, and can even lead to compromise and agreement.
This is where you will need to prompt and guide the conversation. Here are four simple steps to get things going in the right direction.
1. Start with a “soft” start-up approach by gently nudging the clients into the areas where issues remain to be resolved.
2. Make verbal attempts to repair the dialogue while being ready to defuse and return to hostility.
3. Open the door to compromise by suggesting it. When the moment feels right, try saying something like, ``Why don’t we agree to meet in the middle on this?” while leaving the final decision up to the clients.
4. Guide the conversation with mutual respect and understanding. Lead by example. Make sure both clients feel valued.
Finally, don’t expect a magical “kumbaya moment” at the end of the conversation. Words can cut deeply, and deep wounds often take time to heal. Give both parties the space they need to recover.
But people are also thinking while they are recovering. They frequently find themselves in a better place after an argument than before.
Finally, never remind either client about their previous meltdowns. There is nothing to be gained from revisiting them. Keep the conversation looking ahead, not back. That’s where their goals and dreams are waiting, after all.
And your cool, level-headed guidance will help get them there – in more ways than one.
Matt Reiner is a CFA, CFP®, and partner at Capital Investment Advisors, a $2.8+ Billion RIA in Atlanta. Reiner is also CEO of Wela Strategies, a sister company to Capital Investment Advisors, and is the founder and CEO of Benjamin™. Benjamin is an AI technology created by Reiner after seeing the gaps in technology used in his own firm. Reiner's true passion is using his vast experience to coach other advisors across the country, helping them evaluate their firms' practices and find the best strategies for future success. To reach Matt Reiner, visit www.MattReiner.com.
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Advisor Perspectives welcomes guest contributions. The views presented here do not necessarily represent those of Advisor Perspectives.
