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Dealing with clients can be tough

18 July 2019 Jonathan Faurie

At one point in every financial planner’s career, they must deal with a challenging client. Perhaps they deal with these clients daily.

At the Financial Planning Institute of South Africa (FPI) Convention the issue of dealing with a client that is not motivated to follow through with a financial plan was dealt with.   

Both sides of the coin

Dr Moira Somers, a Consultant and Executive Coach, pointed out that non-adherence to a financial plan is possibly one of the biggest challenges that financial planners face. 

It is a challenge because financial planners they honestly want to help their clients and a lot of work goes into formulating a plan’s. 

“Financial planners need to be honest with themselves in the advice that they are giving clients. Some advice is intuitively easy to follow, other advice is convoluted (in their minds) and harder to follow. It is this advice, that is like writing down an important piece of information on a sticky note, that does not want to stick. It isn’t bad advice, it simply doesn’t resonate with clients,” said Dr Somers. 

A sensitive topic

Before trying to find a way to make advice resonate with clients, Dr Somers pointed out that financial planners need to realise that talking about finances is a touchy subject with many clients, and that it is emotive and when there are emotions involved, there is a certain measure of reluctance that needs to be worked past. 

“Talking about finances is not something that humans are accustomed to. It possibly involves revealing an aspect of their lives where they are failing or inadequately trying to manage. Humans do not like to admit when they are failing.” 

Embrace a new role

Dr Somers pointed out that there are three simple ways in which a financial planner can find success when it comes to managing difficult clients. 

The first step is for the planner to embrace their role of being an adherence partner. Planners are not only there to present a financial plan; they are there to motivate and encourage clients to make the necessary sacrifices to implement the plan. 

“Most advice deals with sacrifices that will eventually bear fruit years from now. If there is no immediate sign of success, clients are reluctant to make sacrifices. Humans are obsessed with instant gratification. This is where the planner becomes the captain who steers the ship through a storm. While doing this, it is important that looking to assign blame is not a discussion that is held. When there is blame, clients will be reluctant to move forward with a financial plan,” said Dr Somers. 

Reduce complexity

The second way to get clients to follow through with a financial plan is to come to terms with the fact that they may not be financial professionals, and therefore, they are not aware of the jargon that is used in the investment industry. To them, it is Greek.

“When clients are given too much information, and information that they do not understand, they face analysis paralysis and shut down. Clients need to understand their financial plan. Perhaps give your clients a highlighter with their financial plan and ask them to highlight any issues that are vague to them,” said Dr Somers. 

She added that in a sense, financial planners are not to blame here. Once a financial planner learns something, it is hard for them to remember a time when they did not know that piece of information. Because of this, complex language tends to creep in. This needs to be managed.  

Thinking on your toes

When Muhammad Ali won the World Heavyweight Title against George Foreman at The Rumble in the Jungle, he employed a specific strategy that found a weakness in Foreman’s fighting style. 

Like Ali, financial planners need to employ a specific strategy which tries to assess client readiness to act upon advice. This is the third tactic that planners can use to ensure success. 

“Statistics show that only 20% of clients are ready to immediately act upon advice. Financial planners need to accept that non-adherence is present. This will allow planners to look at those plans and adapt them to ensure compliance with other clients,” said Dr Somers. 

Moving ahead

It is important that financial planners do not get discouraged when it comes to non-adherence. 

A financial plan that eventually fails is better then not meeting with a client and recommending a plan at all. Financial planers play a vitally important role in the financial services ecosystem. 

Editor’s Thoughts:
Clients are governed by emotions which are shaped by unique experiences when it comes to managing finances. No two clients are the same. Financial planners need to appreciate their value, stay the course and fight for their clients. Adherence will follow. Please comment below, interact with us on Twitter at @fanews_online or email me your thoughts


Added by Andre Goethals, 19 Jul 2019
I think that reducing complexity is probably one of the easiest things to do, but most difficult to implement.

That is where metaphors are really helpful. Einstein explained the effects of the speed of light by using the image of a person travelling on a train. This brought the highly complex scientific theory into the realm of our day to day lives.

In the same way we can cultivate the habit of using pictorial language to illustrate complex ideas in an easily understandable way. After all, a picture is worth a thousand words.

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