• Sun. May 26th, 2024

5 ways financial advisors can improve client relationships

Enjoy complimentary access to top ideas and insights — selected by our editors.

Family feuds, divorce and stress management aren’t often the first things that come to mind when discussing financial advising. But as clients’ lives become more complicated, advisors are finding themselves in the emotional-support hot seat. 

Juggling financial advice alongside clients’ personal issues is no easy task, and the best advisors will take a proactive approach to navigating these client conflicts. 

“Money is emotional,” Gerri Walsh, FINRA Foundation president, recently said on one of the organization’s podcasts. “But research shows that when you are in a heightened emotional state, whether it’s positive or negative, you are less likely to make optimal decisions when it comes to your money. And so, being able to diffuse the emotion, to take people out of the ether of a fabulous pitch, to have people look at the hard reality of their financial situation, really requires getting away from that fight or flight element of the brain.”

Read more: The rich link between planning and psychology — and its vast potential 

Regardless of a client’s specific emotional situation, it’s almost certain outside stressors are impacting the way they think about their finances. According to a recent FINRA Foundation and Fontes Research survey of 1,095 adults, the vast majority of respondents said that money affects their capacity to make important changes in their lives (79%), their health (72%) and their relationships (69%). 

Financial Planning’s recent reporting digs into the many ways wealth managers can arm themselves with new skills, certifications and even business models to respond to any unexpected client stress or need that will impact their financial standing, from health care emergencies to divorce. 

These specialized skills can increase credibility for wealth managers, but leading advisors caution their peers to be deliberate as they expand their skill sets, and to manage their own expertise (and client expectations) without stretching themselves too thin. 

“Be very clear in what your value proposition is, and (do) not deviate from that,” Ash Chopra, the founder and CEO of registered investment advisor Syon Capital, recently said on a 2023 panel hosted by VettaFi. “If you start to deviate, that’s where you’re taking business risks.” 

Check out some of our latest stories and expert tips for shoring up client relationships and future-proofing your business. 

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