Clients and financial planners who shy away from uncomfortable conversations risk compromising their financial plans.
Sharon Moller, financial coach at Old Mutual Wealth, says most financial planners dread difficult conversations because “we assume certain reactions that might be difficult to manage”.
These conversations can range from simple discussions about advice or product fees to emotional interactions after death or illness in a client’s family.
Moller says financial planners should use the Conversation Model as a framework to engage with clients on outcome-critical aspects.
The Conversation Model uses a series of questions to clearly understand the client’s situation, and then leads to open engagement in which the client offers possible solutions to the situation. This culminates with a combined assessment of potential actions.
“The Conversation Model is valuable in educating clients about their situation and often leads to clients proposing the best possible solutions for themselves,” Moller says.
Many obstacles that prevent progress on important financial planning actions have less to do with what a planner has done or not done, and more to do with concerns that clients have, and struggle to articulate.
Financial planners who show vulnerability can help break down communication barriers and create spaces for clients to talk more about the things that trouble them. However, this should not be confused with over-sharing.
“It is also a great communication tool to allow clients to feel more at ease and ask questions without the fear of being ridiculed by someone who knows more about the world of investments and savings than they do.”
Trust is also an important element that is needed between clients and financial planners.
An observation about trust, Moller notes, is that once a client sets out on the engagement process, they have already decided to trust the financial planner.
“It is then up to the planner to hold that trust, and if they break this, it will be difficult for the client to trust again.”
She adds: “The aim of financial planning conversations is for the client to have that ‘aha’ moment and see something new about their relationship with money; if they see new possibilities, then that becomes their new story.”
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