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Financial advisors need to be prepared to discuss emotional topics with clients such as divorces, according to consultant Sasha Grabenstetter.
“Financial advisors are really good at normal everyday financial planning conversations, but when we add in emotions or other people into the start of these conversations … their comfort level decreases dramatically,” Grabenstetter, a financial planning education consultant at eMoney, said Wednesday at the virtual eMoney Advisor’s Summit.
Among the most difficult conversations advisors said they have with clients includes premarital planning and divorce planning, according to a recent eMoney study.
Given the demand on advisors to be more holistic in their advice and not just focus on asset management, there is a greater need for them to have to handle those emotional issues as well, Grabenstetter said.
Among the biggest adjustments that clients can experience pertain to a change in identity, which is impacted when a person loses their job or ends a long-term relationship including a marriage, she said.
In those instances, the advisor should allow the client to share their feelings and emotions while not allowing themselves to become emotionally involved, she said.
When talking with clients and trying to gleam information from them on a sensitive topic, it is wise to give the client space to speak by using open-ended questions or knowing when to not speaking at all, Grabenstetter said.
“While it may be uncomfortable to use silence, giving space for your client to think and respond appropriately [can be effective],” she said. “If you ever just sat there and were just quiet, sometimes the client will continue to just spew information, They’ll keep talking because silence for a lot of people makes them uncomfortable.”
In addition, advisors must focus on being good listeners, she said. A potential distraction advisors should be cognizant of is their cell phone. It can be off-putting when an advisor is constantly looking at their phone while the person is talking, Grabenstetter said.
“We should be mindful of smart phones when we’re around our clients,” she said. “We don’t necessarily need to have our phones in the room, unless there’s some sort of family emergency going on.”
Handling difficult conversations with clients is among the ways advisors build trust, she said.
“We want clients to share positive changes in their own life, but they might be hesitant to share some of that private financial information with you,” Grabenstetter said. “While you are their advisor, you are also their guide, their guru, the person that they are putting their financial trust into, and to me it’s relationship first, financial plan second.”
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