As a financial professional, you’ve likely asked “why do people do what they do with their money?” about your clients before. By deciphering the underlying emotions and motivations that shape your clients’ behaviors, you can unlock a powerful opportunity to guide them toward sound financial decisions and ultimately pave the way for improved life outcomes. 

The Impact of Emotions on Behavior

All humans tend to feel before they think. In everyday scenarios, emotions often take the lead. For example, if you’re driving down the street and someone cuts you off, you’re going to feel a surge of emotions before even considering the other driver’s perspective—and you may even have a reflexive reaction, like honking your horn. This emotional response isn’t unique to traffic situations; it extends to financial behaviors as well. When it comes to money matters, we often feel emotional first and act unconsciously based on those feelings.

Tap Into Your Clients’ Values

To empower your clients to make sound financial decisions, you must first tap into their values. As people get older, they become increasingly interested in living a values-based life. This means that they want their goals and behaviors to be aligned with their values or the things they care about most.

Engaging your clients in discussion about their values will not only strengthen your relationship with them, but it will also enhance the relevance and impact of your financial advice. By grasping your clients’ values, you can seamlessly link your financial advice and their financial goals to what truly matters to them on a deeper level.

To kickstart these conversations effectively, consider introducing values exercises into your practice. There are several different tools available to help your clients explore their values, from our digital values sorting exercise to card decks to simple lists of questions.

Helping Clients Make Values-based Decisions

Although we want to live values-based lives, our emotions sometimes get in the way of that ideal. My top values are integrity, family, excellence, achievement, and health. On my best day, when I’m my ideal self, I’m aligned with all five of those values. But I can tell you with full integrity that this doesn’t happen very often.

You can help your clients make better choices by creating “speed bumps” that trigger values-based reflection in emotional situations. The key is to create a separation between the stimulus and the response by engaging higher levels of thinking and reflection on one’s values. This increases the probability of them making better choices aligned with long-term goals rather than acting impulsively on emotions.

I’ve heard a lot of creative solutions from advisors on this subject. One shared a story about clients who valued education and had goals to send their children to higher education without incurring debt. However, they were always overspending. Their overspending was getting the worst of them and causing them to rack up credit card debt.

The advisor wondered if they would make better choices if they had their values top of mind. They created stickers with the clients’ values printed on them to put on their credit cards. Every time the client went to take out their card and make a purchase, they would see those values. It gave them a speed bump so they could take a moment and reconsider aligning their behavior with their values.

Go Beyond Wealth Management

A financial planner’s role goes beyond just managing money. You can add tremendous value to your clients’ lives by helping them navigate the emotional side of finance and make choices aligned with their values. Money is deeply intertwined with many aspects of life, so financial professionals have an opportunity to be a guide far beyond just investment management.

If you want to learn more about why it’s important to incorporate values-based planning into your practice, watch the on-demand webinar, How to Meet Future Client Needs with Financial Advice, that I hosted with our CEO, Doug Lennick.

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.

The views and opinions expressed by this blog post guest are solely those of the guest and do not necessarily reflect the opinions of eMoney Advisor, LLC. eMoney Advisor is not responsible for the content, views or opinions presented by our guest, nor may eMoney Advisor be held liable for any actions taken by you based on the content, views or opinions of the guest.

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