Strategies Advisors Can Use To Calm Anxious Clients In Tough Times
Among the many skills that advisors need, perhaps the most crucial has nothing to do with money. It’s all about radiating calm amid a storm.
As advisors try to reassure clients — about the pandemic, their portfolio or whatever else — there are right and wrong ways to proceed. Appealing to reason can work well, although it’s usually wise to begin by addressing their emotions.
The psychology of comforting anxious clients involves playing the role of therapist and attempting to learn what drives an individual to worry. And that process requires the discipline to keep quiet.
“We don’t talk them off the ledge,” said Michelle Arpin Begina, a New York City-based certified financial planner. “We listen them off the ledge.”
Some clients will succinctly summarize what’s bothering them. Others will tiptoe around the core issue and take awhile to articulate the source of their concern.
“It’s during the pauses when the client is thinking of what to say next, you have to get comfortable with the silence,” Begina said. “Just let them get it all out.”
For wealth managers who are accustomed to dishing out advice, staying mum may prove difficult. But fretful clients will appreciate the opportunity to talk through their worries with an empathetic, supportive listener.
Patient listening also prevents advisors from rushing to issue directives or pooh-poohing a client’s anxiety. Telling someone how to react to adverse events — or educating them about facts, figures and historical trends — can backfire if you launch into a lecture before the person is ready to digest it.
For Begina, calming clients unfolds in three steps. It starts by letting them open up about their feelings. Allow them to speak freely without interrupting them. If they ramble or repeat themselves, remain attentive and take notes.
Second, uncover the client’s sources of information. Questions such as, “Whom are you listening to?” and “What are they saying?” help you determine the factors that are influencing the client’s mindset.
If a client speaks frequently with a friend who’s a “Sell Everything!” pessimist, for example, you may want to ask, “How do those conversations with your friend make you feel?” The client might realize that it’s better to limit exposure to a toxic friend.
Conclude by asking, “What actions are you thinking of taking?” and “What alternatives are available?” This way, you and the client can brainstorm on the most prudent path forward.
“It’s important to engage the client in what they’re experiencing,” Begina said. “When you put it on your client to come up with alternatives, they tend to calm down and start to see what’s going on in themselves. They talk themselves into more options.”
If an agitated client insists on taking action that you deem unwise, avoid saying so. Arguing can raise tensions and lead a heated client to defend their position even more aggressively.
A smarter response involves suggesting a delay before finalizing the decision. A few days later, the client may feel calmer and able to assess the situation with a clear head.
“If they’re so focused on the right now, put some distance between their emotions and what they’re experiencing,” Begina said.
Strike The Right Tone
Anxiety often spikes in uncertain times when market meltdowns, natural disasters or other shocks disrupt life’s daily rhythms. The pandemic causes many people to feel disoriented and shaken.
“The lack of clarity is creating confusion and an inability to think clearly,” Begina said. “Reducing the impact of emotions” helps restore a semblance of calm.
After identifying what’s causing a client’s concern and listening well, advisors can help problem-solve by suggesting a small step toward a larger solution.
“Get the client to take a micro-action and they start to feel better,” Begina said.
Just as therapists sometimes suggest that patients keep a diary, advisors may urge clients to write a journal to reflect on their money, health and other personal issues.
“With a journal, they’re a little more removed from their feelings and they can be a little more analytical” as a result, said Chris White, a Boston-based advisor.
It also helps to communicate with placidity. Speaking in a soft volume and slow tempo works better than raising your voice, sounding dismissive or racing through all the reasons why someone needs to calm down.
“Voice tone is critical,” said White, co-author of “Working With The Emotional Investor.” “You’re in the room with a client. But that client might (imagine) three or four others in the room, like their parents, who have influenced their thoughts about money, loss or attitudes about taking risk.”