When a client starts to ignore your advice, you may be tempted to push your opinion or cut them loose. But you should resist the impulse.
Instead, you can treat their resistance as an opportunity to build a better relationship, says Larry Distillio, director of financial advisor business management with Mackenzie Investments in Toronto.
“The last thing you want to do with a client is get into a tug-of-war,” Distillio says. Clients may be engaging in “safety behaviour” or even “self-sabotaging behaviour,” he says, which means they’re procrastinating about making financial decisions out of fear. As an advisor, it’s your job to help them alleviate some of that anxiety.
Here are three steps for advising clients resistant to your advice:
1. Tap into their emotions
Clients often resist advice because they find that financial decisions carry too much emotional weight. It’s not about your recommendation, Distillio says. Your client is likely too overwhelmed by their emotional response to fully commit to a financial decision.
Distillio suggests asking: “When I bring up this recommendation, how does it make you feel?”
Clients will be hesitant to share their anxieties, Distillio says, so you want to invite them to bring up all of their concerns. Quite often, clients are burdened with thoughts such as, “What if I lose my money? What if there is a major setback in the market? What if there is a recession? Or, what if I lose my job?” Distillio says.
2. Validate their concerns
You risk building a wall between you and your clients if you dismiss their concerns or show that you can’t relate to them. If clients feel that they’re understood, they’ll put more faith in the relationship, Distillio says.
Distillio recommends validating client concerns by saying, “I appreciate that you let me know how you’re feeling and why you’re not taking action at this current time.”
3. Provide support
Reassure clients that you can help them reduce feelings of frustration, anxiety or nervousness, and help them regain control over their finances.
“If we can change what our clients are thinking, we can change how they feel. If we can change how they feel, we can change how they act,” Distillio says.
Remind clients of their previous financial plan, and explain how your recommendations fit within the goals, objectives and values that your client has previously put forth.
This is also the time to inquire if life circumstances have changed, Distillio says. For instance, your client might have a parent who has fallen ill, and may be too scared to make any financial decisions until more is known about supports the parent may require. If that’s the case, you’ll want to ensure that adjustments are made to the client’s financial plan to take account of changes in the client’s financial responsibilities.