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Helping Financial Planning Clients Believe in Themselves

Sasha Grabenstetter January 16, 2024

Mature woman is confident in her finances

How often have you worked with a client and provided a great financial plan, based on a thorough analysis of their unique situation and with a clear path for success, only to have the client fail to implement your planning recommendations?

Making changes to our behavior isn’t easy. Our research found that lack of client engagement and motivation is one of the biggest client-related challenges faced by financial professionals.1

In self-determination theory (SDT), a lack of motivation is called amotivation and it is characterized as the lack of intention to act. Amotivation is exhibited when a person believes they are incapable of performing an activity. For example, they don’t seek out a financial advisor because they don’t believe they have enough money to do so. This indicates a lack of self-efficacy and typically leads to poor performance and outcomes when it comes to financial planning.2

What steps can be taken to help these clients gain the confidence they need to meet their financial goals?

Exploring Financial Self-efficacy

All of your clients have different needs and unique situations when it comes to why they are seeking your financial planning services. Figuring out the best way to motivate them can be difficult but gaining that understanding is a critical component of building a successful plan.

Albert Bandura was a world-renowned Stanford University psychologist who focused on the concept of self-efficacy as one of his main areas of study. Self-efficacy refers to a person’s belief in their ability to succeed at specific endeavors and it can be applied to your clients’ beliefs that they can succeed in following the financial plan that you create for them.3

Bandura laid out four sources for self-efficacy that can be integrated into your financial planning practice to motivate clients who may doubt their ability to carry out their plans.

Feeling Success

The experience of feeling successful in completing a task is the most effective way to build self-efficacy. If you have clients who are struggling with completing specific action items in their financial plan, look at those items and determine if they can be broken down into smaller, more easily achievable tasks.

A client with the competing priorities of saving versus paying down debt may feel a higher sense of achievement if these items are built around shorter-term goals with specific levels of priority. By tracking these smaller goals and seeing effective change, clients will gain the confidence to tackle larger ones.

Financial professionals can use technology to keep clients on track in completing goals and tasks. A digital financial planning platform that offers a client portal is shown to increase client engagement and outcomes. By employing a task feature within a client portal, financial planners can allow clients to check items off their lists to gain a sense of accomplishment.4

Copy Financial Role Models

Perhaps in your conversations with your clients, they have mentioned friends or family members who have achieved financial goals that they admire. This is an opportunity to talk to your client about how they think this was accomplished and whether they could take a similar approach.

Keep in mind that this is also an opportunity to learn more about the client’s financial psychology. Just as there may be family members that they want to emulate, there may also be stories of family members whose behavior they want to avoid. Working with a client to gain an understanding of how these money stories have impacted them can be just as important in helping your clients achieve their goals.

Verbal Encouragement

Verbal encouragement goes a long way in building self-confidence and helping clients believe in themselves. Consider the tactic of breaking tasks up into smaller, more achievable pieces. Take the time to acknowledge when those tasks are complete. That recognition is key to continuing the behavior.

Encouragement can also be used to get a client out of a rut. Perhaps they had been doing well in changing their financial behaviors but have hit a slump. Don’t be afraid to remind them of their past successes and praise them for their achievement. That might be just the push they need to further their success.

When you find yourself with opportunities to praise a client’s accomplishments, make sure it’s authentic. Avoid generic platitudes in favor of specific references to what they have achieved and deeper discussion into the positive impact this has made on their plan. Use the conversation to guide future behaviors to build their self-confidence in reaching even greater goals.

Managing Physical and Emotional Responses

Perhaps your client lacks the confidence to make financial changes in their life because of the emotional or physical reactions they feel when they think about what is required of them. Talking about money is stressful, so their gut reaction may be to avoid dealing with it completely.

Involving clients in the exploration of their financial psychology can help them learn how to minimize stress and elevate their mood when facing challenging financial tasks. As a financial planner, you can teach your clients how to use problem-solving strategies to address challenges they can control.

Anxiety related to money management is often compounded for couples where something as common as paying monthly bills can create tension and touch off arguments regarding spending habits. Assisting your clients in mutually defining and committing to ground rules for financial conversations will facilitate respectful and productive communication. It will also lay the groundwork for reducing the physical and emotional responses that interfere with self-efficacy.

Increasing Clients’ Engagement with Their Financial Plans

Your clients could be lacking the motivation to achieve the goals in their financial plans for several reasons. For those lacking confidence in their abilities, financial professionals can use these tactics that boost self-efficacy to help clients believe in themselves.

Start their journey to greater self-efficacy by reminding them that they have already achieved one measure of success by coming to see you in the first place. Taking the step to engage with a financial professional can be scary, especially for a client who has self-doubt. This one accomplishment demonstrates that they have the spark of motivation needed to complete behaviors that will ultimately lead to the successful implementation of a financial plan.

For more ways to improve client engagement and motivation, watch our webinar, From Client Resistance to Action.

Sources:

1. eMoney Leading with Planning Research, May 2022, Advisors n=360.

2. Di Domenico, Stefano I, Richard M Ryan, Emma L Bradshaw, and Jasper J Duineveld. “Motivations for Personal Financial Management: A Self-Determination Theory Perspective.” Frontiers in Psychology 13 (Personality and Social Psychology), 2022. doi:10.3389/fpsyg.2022.977818.

3. Bandura, A. (1977). Self-efficacy: Toward a unifying theory of behavioral change. Psychological Review, 84(2), 191–215. https://doi.org/10.1037/0033-295X.84.2.191

4. eMoney Beyond the Plan Research Study, June 2023, n=1,507​

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.

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About the Author

Sasha Grabenstetter, AFC®, BFA™ is a Financial Planning Education Consultant at eMoney Advisor. She is an integral part of the internal and external financial planning education programs, as well as financial planning content development. Sasha won the 2020 Outstanding Symposium Practitioners' Forum Award from the Association for Financial Counseling and Planning Education. She previously co-authored “Apple Seed: A Student Guide to Pro Bono Financial Planning” and “All My Money: Change for the Better.” With close to 10 years in financial education, Sasha received her AFC® designation in 2015 and graduated with her master’s degree from Texas Tech University in 2012.

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