It’s the conversation many financial professionals dread: delivering bad news to a client. Unfortunately, these conversations are an inevitable part of the financial planning profession. Whether you need to share news of a market downturn or explain that a client won’t be able to retire as early as they would like, there will be a time when you have to deliver news your client won’t be happy to hear. With the following tips, you can navigate these difficult conversations with confidence while maintaining your clients’ trust.

Lean Into Empathy

It’s important to approach the conversation with empathy rather than sympathy. Empathy is about truly feeling with someone. It’s the ability to put yourself into their shoes, understand their feelings, and experience their emotions as if they were your own. When you demonstrate empathy, your clients will feel heard and understood.

Sympathy, on the other hand, is more about feeling for someone. It’s recognizing and acknowledging another person’s suffering or hardship but maintaining an emotional distance. Sympathy often leads to offering comfort or pity rather than sharing the emotional experience. While sympathy is well-intentioned, it may inadvertently create a divide between you and your client.

By leaning into empathy rather than sympathy, you will cultivate an environment where your client feels supported and validated during tough conversations.

Be Aware of Your Body Language

It’s common to shy away from eye contact when you’re feeling uncomfortable. But you’re going to have to get comfortable with the uncomfortable here. By leaning into the conversation, maintaining steady eye contact, and adopting an open, welcoming body posture, you convey not just empathy but also confidence in addressing difficult topics.

Your body language sets the tone for the interaction, showing your clients that you are present, engaged, and ready to support them through any financial hurdles they may face.

Communicate Clearly, Honestly, and Transparently

When delivering challenging news about a client’s financial situation, the importance of clarity, honesty, and transparency cannot be overstated. By delivering the message as directly and clearly as possible, without diluting it with softening language, you demonstrate respect for your client’s ability to handle the truth and make informed decisions.

Focusing on the facts of the situation and being thoroughly prepared with all the necessary information before the meeting shows your commitment to professionalism and integrity. If a client raises a question to which you don’t have the answer, honesty is the best policy. By admitting that you don’t have the information handy but committing to provide the answer and following up afterward, you reinforce trust and accountability in your client relationships.

Finally, remember to frame the news within the context of the bigger picture, such as aligning a market downturn with clients’ long-term goals and financial plans, providing the necessary perspective and reassurance. This approach empowers your clients with a clear understanding of how the news fits into their overall financial journey.

Listen, Then Problem Solve

It can be tempting to jump right into fix-it mode, but it’s important to be mindful of how emotionally charged your client is after you share the initial facts of the situation. If they’re angry or upset, allow them to vent their feelings without interruption. They might not be emotionally ready to have a conversation about potential solutions until they’ve had the opportunity to fully express their feelings.

Focus on active listening so that once they’ve calmed down, you can summarize their thoughts and make them feel heard. From there, you can transition into talking about next steps. For example, you might have a client who is upset because a market downturn is affecting their goal to retire early. You could say, “What I’m hearing is that you’re really upset about the changes in the market. Let’s start to brainstorm some ways that we can minimize the impact on your retirement.”

Engage your client in a constructive, collaborative discussion about the possible actions they can take to mitigate the issue at hand. Leverage your financial planning technology to help your client visualize how different actions, such as delaying retirement or saving more, will impact their future.

After the meeting, send a comprehensive summary of your discussion and the next steps you decided on together. This will not only ensure accountability but also showcase your commitment to working together toward a brighter financial future.

Navigate Difficult Conversations with Confidence

Delivering challenging news is never easy, but armed with the right strategies, you can navigate these conversations with confidence, professionalism, and empathy. If you find yourself uneasy about having these kinds of discussions with your clients, consider role-playing them with your colleagues first. Practicing different scenarios, including clients having extreme emotional reactions, can prepare you to approach the real conversation with confidence.

For more tips on navigating difficult conversations, check out our Candid Conversations eBooks. They provide detailed insights and actionable strategies for navigating scenarios such as sudden singlehood, estate planning, and couples with conflicting priorities.

DISCLAIMER: The eMoney Advisor Blog is meant as an educational and informative resource for financial professionals and individuals alike. It is not meant to be, and should not be taken as financial, legal, tax or other professional advice. Those seeking professional advice may do so by consulting with a professional advisor. eMoney Advisor will not be liable for any actions you may take based on the content of this blog.

You may also be interested in...