Do I Have To Get Comfortable With Emotions To Be A Financial Planner?

Wednesday, April 25, 2012 13:26
Do I Have To Get Comfortable With Emotions To Be A Financial Planner?

For some financial advisors, helping clients cope with the emotional side of money issues can be a little intimidating. As a psychologist with a clinical practice and consultant to advisors and families about money issues, here are some thoughts about an advisor's role in helping clients deal with the "soft" side of money.


Incidentally, I decided to address this issue because, at a recent webinar for Advisors4Advisors, an advisor said that many advisors feel uncomfortable assisting clients with this side of things.  

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Let's start by referencing a study by David Dubofsky and Lyle Sussman, which was written about in the Journal of Financial Planning in August, 2009. Among the findings of the authors' survey of 2,006 financial planners: 
  • 75% of had been in a meeting in which a client became distraught -- crying, trembling, and angry outbursts.
  • 58% had been told a secret in confidence that had never been revealed to another
  • 50% had served as a mediator for a couple when they were in conflict during a meeting.
  • 28% had to end a session and reschedule when a client became too emotional to proceed.
Divorce, family conflicts, addiction, illness and death are all events that will come to the surface in financial advising. Even if you want to avoid it, it is not possible.
Personal life goals are related to personal lives. By nature, humans are emotional beings covered with a layer of rationality. With enough stress, the rational layer disappears. When it does, the minimum skill required of an advisor is to be able to accept the outbursts, comfort the people involved, and be able next time to let the client know that there is nothing to feel ashamed about, and that everyone gets emotional from time to time in advisory sessions.
More importantly, this is your business and you need to run your business according to the model that fits for you. If you are a technical, non-emotional person and uncomfortable with the coaching/life planning/emotive side of things and do not want to learn it, you will still need to learn the bare minimum skills listed above.
If you do not have the skills to handle these situations, you probably will need training to acquire thems. You will also need to make a skilled referral to a person who does have these skills. This may be a psychologist, counselor or other helping professional.
A skilled professional referral means that you have gone out and met with some helping types, vetted their reputations and abilities, and you have a collaboration with them. It also means that you have a skilled way to bring up the topic and make the referral.
Most clients will bristle at the words “psychologist’ or “counselor.” A more skilled tactic is to say that you are referring them to a facilitator or coach who just happens to be a psychologist. About 10% will follow through. This is not a high percentage, so you may end up just doing the best you can with the above mentioned skills.
Communication skills training is available for advisors, often through a professional conference or a program but is not typically offered during the coursework leading to the credential. That's unfortunate.
Like it or not, the emotional side of money will come up in your discussions with clients. Be prepared for it.
Getting coaching on your own or with your study group with a professional who can teach you these skills is another good alternative.

Comments (5)


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If you're not comfortable with emotions, how good of an advisor could you be?

Jim "Da Coach" Rohrbach
This e-mail address is being protected from spambots. You need JavaScript enabled to view it , April 27, 2012
Money and sex are the most intimate topics a couple will discuss or fight about -- this article seems to restate the obvious. (And people will tell you about their sex lives much faster than their financial ones.)
nefnyc , April 28, 2012
To you, it's obvious. To advisors who think technical excellence is most important, it's not so obvious. And to advisors who are prompted to develop skills in this realm, this post could open up a whole other dimension.
agluck , April 28, 2012
There is no one right or wrong way to practice financial advising. There is a wide range of advisor comfort with emotions and that needs to be acknowledged. The article states the minimum requirement needed in advising because as the survey indicates, it will happen in 75% of advising offices.The maximum? Another discussion...
docgresh , April 28, 2012
Advisors often also assume that the client's reaction to questions they may ask about the emotional and family dynamics side of money may be negative. As with most assumptions, this is likely not to be the case. Clients often want to be asked about these issues but may be reluctant to bring the topics up on their own.

Advisors also may feel they don't have the time to give adequate attention to these issues in addition to offering clients an optimal level of expertise. This further points to the value of including professionals who deal with these issues on the advisory team.
lisagray , April 30, 2012

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