Tackling Challenging Conversations With Your Clients

I write a lot on this blog about the importance of talking to your clients. Of getting to know them as individuals, listening to their hopes, dreams, and even their darkest fears, and then helping them chart a course for where they want to go financially.

Yet there are occasional downsides to open dialogue with another person. Sooner or later, we must talk about things we’d rather not discuss.  And heaven knows plenty of such topics weigh heavily in investors’ minds these days.

How about the rise in interest rates? That always sets the mood for a happy conversation, right?

Or what about this year’s market slump?

Or how about the war in Ukraine, the most significant conflict to hit Europe Since World War II? More than three months since Russia launched its invasion, there’s no end in sight. And we all know the financial markets hate nothing more than uncertainty.

And then there’s the cherry topping the sundae of cheerful news these days: Inflation. How bad will it get, and how long will it last?

The list goes on and on. If you’re like most wealth managers, you’d love to talk about almost anything other than the things that are keeping your clients awake at night. But there’s no escaping it. Difficult conversations go with the territory.

So, don’t try to avoid them. Delaying the talk won’t make it go away. My advice is to confront these issues directly and tackle them head-on.

It’s always wise to begin by reminding clients that they are in it for the long haul. When a project spans several decades, there will be ups and downs, twists and turns, and curveballs that no one sees coming. It’s part of the process.

While nobody likes down phases, they happen. An old German saying reminds us, “The tree doesn’t grow to Heaven.” Meaning nothing goes up and up forever. There are always drips and drops. Unfortunately, we are in one of those right now.

But also remember this: Downturns don’t last forever. They always end and many times are followed by remarkably growth opportunities. Yes, wars and pandemics and financial crises happen. But then comes recovery. Much the same way spring follows the bleakest part of winter, things are renewed, and there’s new growth. But you can’t fast forward from autumn to spring—you must endure winter to get there. 

So, keep your clients focused on the long-range goal. Circumstances and situations change, but the ultimate destination doesn’t.

If the barrage of negative headlines leads to a lot of tossing and turning when they should be sleeping, tell the client it’s OK to take a break from the news for a while. Stressing out will not hasten peace in Ukraine, but it will keep their stomach tied up in knots. So, if it feels like bad news is becoming a burden, skip the nightly news for a while. Trust me. The networks will still be there when you decide you’re ready to catch up on current events again.

Also, keep in mind the client’s age and experience and remember not all client experiences are the same. A Gen Yer who is just entering the workforce is living through their first tumultuous market. Compare that to Baby Boomers in their early 60s who are nearing retirement: they’ve lived through countless twists, turns, dips and highs. So be patient with younger investors. You’ll want to take more time and do more explaining to help them see the big picture.

Conversely, the Baby Boomer client may worry that there won’t be enough time for them to recoup all their portfolio has lost. Likewise, give them extra time to express their concerns, then explain how you can assist them in recalibrating their investments to better take advantage of new opportunities created by new world realities.

Above all, be the adult in the conversation. It’s up to you to provide the soothing reassurance that whatever comes along, the client isn’t going through it alone. You’ll be there every step, and you’ll be happy to join them when their investment ship ultimately drops anchor in the port of success.