Have you ever had a client become overwhelmed with stress while attempting to make an important decision? Such situations require more than financial advice—they call for the human touch: compassion, active listening, and emotional support. In fact, according to research, potential clients hire financial planners based on emotional support needs as much as they do for specific financial advice.¹

Yet many financial planners feel ill-equipped to handle clients experiencing strong emotions due to stressful life events and changes. However, by recognizing signs of stress and anxiety, allowing clients to vent frustrations, and helping them prioritize major decisions, advisors can provide human connections at a time when they are most needed.

Recognize Signs of Client Stress

Clients experiencing a major life event may show a noticeable event that initiates signs of stress, but not all. The best plan for financial planning professionals is to get to know their clients and be aware of the signs of rising anxiety:

• Overly quiet. An often unnoticed or misread client behavior is shutting down completely, not wanting to talk about or discuss their finances or life situation. This may also manifest in canceled appointments and general avoidance.
• Big emotions. Reacting with strong feelings such as anger or deep sadness.
• Drastic ideas. A sudden desire to make drastic life changes such as someone thinking they need to sell everything and live on a houseboat.
• Trouble focusing. Stressed clients may ask the same questions repeatedly, either from confusion and lack of focus or simply needing reassurance during a difficult time.
• Panic decisions. If a client is making irrational statements or requests, like wanting to take all funds out of the market and put their money under their mattress, it’s not a good time for them to make decisions.

If a client is stressed and anxious, it is important to help them avoid making big decisions while in that state. Allowing them to vent or sit with their frustrations before making a decision can help them lower their anxiety and create an environment where they feel safe expressing their true concerns.

Why It’s Important to Pause Before Making Big Decisions

It is crucial for financial planners to encourage clients experiencing stress to wait before making impactful financial decisions for several reasons. Stress can cloud judgment and lead to impulsive decisions that may not be in a client’s best interest. Allowing the client to “be” with their emotions first may be the best course of immediate action.

Key reasons to avoid making decisions during stressful times:

• Emotional decisions can lead to regret when the dust settles, and the long-term consequences become clearer.
• Clients may prioritize short-term relief over long-term goals, such as liquidating assets to cover immediate expenses without considering future tax implications or the impact on their portfolio.
• Waiting allows clients to regain clarity and perspective. Financial planning is inherently long-term, and hasty decisions based on temporary emotions often disregard the bigger picture.
• Delaying a decision allows clients to gather more information and assess their options. Financial decisions related to investments, insurance, or retirement plans should be rooted in understanding the available choices and their potential consequences.
• Holding off before making the decision ensures that the decision is made with a clear head, aligned with long-term goals, and based on a well-considered strategy, which leads to preferred outcomes.

Patience, listening, and thoughtful discussions are key to achieving financial success during stressful periods. A financial planner who can help clients during these times will likely establish a significant amount of long-lasting trust.

Build Trust Through Active Listening

Avoid rushing to provide answers or fill silences. Be comfortable allowing the client to process thoughts before responding. Rushing can make the client feel unheard and increase their stress levels.

Be comfortable with pauses in the conversation. Silence gives clients time to reflect and proceed at their own pace. Filling every silence with more questions or advice can overwhelm the client and prevent them from fully expressing themselves.

The dialogue itself is a trust-building exchange. Being fully present and engaged demonstrates that you are truly listening and invested in helping them.

Understand Sources of Client Stress

Stress can stem from major life events like the loss of a loved one, health issues, or divorce, requiring a referral to other professionals like grief counselors, therapists, or support groups. Major life changes can impact all areas of life, so avoid jumping straight to financial matters. Instead, have an open discussion to understand the transition before addressing money-related topics.

Be aware of the different sources of stress clients may be facing:

• Lack of money: Clients may worry whether they’re saving enough for retirement, whether their funds will last, and how long they can afford to maintain their current lifestyle.
• Debt management: Many clients struggle with large amounts of credit card, student loan, or mortgage debt and feel overwhelmed by the pressure to pay it off.
• Market volatility: Clients often get anxious during market downturns, fearing their investments will lose value or they’ll be unable to recover losses.
• Income instability: Those in unstable industries or with fluctuating incomes may worry about how they’ll manage financially during job loss or economic downturns.
• Uncertainty about the future: Clients may worry about future economic crises, inflation, or changes in government policy that could affect their financial security.

One size does not fit all personal crises, so it’s crucial to tailor your conversational style to the circumstance.

Differences in Working with Established Clients vs. New Clients

Familiarity enables you to provide personalized support to a long-term client, while new client relationships require investing in rapport-building first.

When meeting with a client you have known for a long time, take a moment to check in personally before diving into business matters. Ask how they are doing and be certain to ask if anything is new in their lives.

For clients new to your practice, the level of openness and vulnerability may understandably be lower initially. These clients require more effort to build relationships and create an environment of trust before they feel able to share personal challenges. Move at their pace and avoid pushing for deeper discussions until they seem ready.

How to Know When to Make Decisions Again

Recognizing when a client’s stress has passed is different for everyone. There is no universal set of signs that someone is relaxed enough to make important decisions again. As their financial planning professional, you may need to closely assess their body language, tone of voice, and overall demeanor for clues that their mindset is shifting.

For planners helping clients navigate clients beyond a stressful period, engaging with intention is the best course of action:

• Set up check-in meetings every 3-4 weeks to provide valuable continuity and gauge their emotional state over time as the transition progresses.
• Pay attention to changes in their priorities, energy levels, and general outlook from one meeting to the next.
• Notice if their conversation takes on a more optimistic tone, or if they seem reinvigorated and able to focus on practical next steps.
• At any point in the process, consider taking a temporary break from meeting if emotions run particularly high for a long period of time.
• Avoid forcing conversations prematurely before they’ve had sufficient time to process the stressful situation. Let them guide the pace and be ready to meet them where they are in their journey.

Embrace the Opportunity to Develop Trust

While some financial planners may want to shy away from client stress and anxiety, providing emotional support is crucial for building trust and facilitating open communication, which is the foundation of a successful client-planner relationship. In most cases, when a financial planner has helped the client get past the difficulty in their lives, a renewed and valuable bond is created.

By creating a safe space where clients can freely express their emotions without judgment and advisors foster an environment of trust, planners help clients feel understood, respected, and empowered to make the best choices for their future.

For more ideas on what you can do to support clients during stressful times, check out our blog Financial Advisors Help Clients Cope During Times of Financial Stress.

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.

1 Labotka, Danielle, and Samantha Lamas. “Why Do People Hire Their Financial Advisors?” Natural Library of Medicine, 2023.

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