No matter how successful your client relationships, occasional disagreements are almost inevitable. Whether you’re trying to persuade your client to contribute regularly to an RRSP or prevent him or her from taking money out of the markets and putting it into low-risk, low-return investments, there are times when you’ll have to defend your position and perhaps try to change a client’s mind.
That’s why it’s important to learn how to disagree and make your point — without being offensive or seeming like a know-it-all.
> Listen actively
Pay attention to what your client is telling you. When he finishes speaking, paraphrase what was said, so your client knows you have understood him.
> Find the underlying issues
If your client wants to make an important change to her portfolio but does not have a rational explanation for the change, try to find out what’s motivating her.
If she wants you to move her investments from a spousal account to an individual one, for example, ask questions rather than immediately expressing your viewpoint, says Rosemary Smyth, a Victoria-based coach for financial advisors.
“What are they concerned about?” Smyth says. “What has changed so much that they want to take such drastic action? Try to discover their underlying concerns, rather than jumping in with your opinion or refusing to do what they ask.”
> Suggest alternatives
Ask your client: “Can I suggest another strategy that might save [or make] you money?”
That opens the door for you to explain your point of view.
> Create “what if” scenarios
When you want your clients to do something — or are trying to stop them from doing something that may jeopardize their financial plan — use “what if” scenarios, says Sara Gilbert, founder and business consultant with Strategist Business Development in Montreal
“Show them what their retirement will look like, both with and without a monthly RRSP contribution,” Gilbert says. “When you take the time to show a client how something will affect them, using charts, graphs and analytics to back it up helps the client to visualize what you’re saying and makes a strong impression on them.”
> Get back to basics
When clients don’t want to follow your recommendations, bring the conversation back to the goals you established at the beginning of your relationship. For example, if your client is hoping to retire at age 65 and you want him to contribute regularly to his RRSP, explain that this is how he can achieve his retirement goal.
“Bring it back to why you’re doing this,” Gilbert says. “Remind them that it’s designed to achieve their dream retirement or to leave money to their children.”
Linking the client’s investment decisions to what matters to them will allow you to get beyond the numbers and evoke positive emotions. And that makes it more likely that they’ll agree to your proposed action.
> Don’t give up easily
The adage “the customer is always right” holds true for financial advisors, Gilbert says, but your role also is to represent your clients’ best interests. You owe it to yourself and to your clients to communicate your position and outlook, while always maintaining your professionalism.