Seeking financial advice puts a person in a vulnerable position.
Ted Klontz, associate professor and founder of Financial Psychology Institute at Creighton University, told FPA Annual Conference attendees during his education session, “Gifts from Neuroscience: Building Robust Resilient Client Relationships,” that clients are probably already stressed out when they come to your office and it’s up to you—and the environment you create in your office—to calm them down.
“Our challenge as experts is to keep that anxiety level down,” Klontz said.
Keeping those stress levels down is vital to having clients follow your advice, said Ryan Sullivan, CFP®, CLU®, ChFC®, of MoneyGuidePro, who in his Annual Conference presentation, “Measuring and Managing Stress in the Financial Planning Process,” addressed results from research by Sonya Britt-Lutter, Derek Lawson, and Camila Haselwood published in the December 2016 issue of the Journal.
“When clients are stressed they make bad decisions or don’t stick with decisions they’ve already made,” Sullivan said.
Britt-Lutter, Lawson, and Haselwood monitored the heart rates, skin conductance (sweat levels), and skin temperatures of clients working with an adviser for the first time. Essentially, they found when clients were more relaxed, they were more likely to follow your advice.
The research Sullivan presented noted stress levels decrease as the planning process progresses—peaking in the beginning and during discussions on how to improve finances while leveling out during the other phases. However, stress levels were higher for clients doing in-person meetings. Those clients started the process at high levels before leveling out to moderate levels. Stress levels among clients working with a planner virtually started out moderate and dropped to low levels or no stress at all. This may speak to the need to for planning firms to adopt virtual meeting technology or robo-solutions.
Other key findings included: women were more stressed than men going through the research process; and advisers (who were also monitored like the clients) also had high levels of stress prior to the meetings, though it leveled off further down the process.
Because clients are more stressed when meeting in person, do what you can to make your office, your demeanor, and your information-gathering process welcoming. Plus, try to keep your stress levels down; doing so will help keep your clients’ stress levels down, too.
If you missed FPA’s Annual Conference this year, register for next year’s event in Chicago, Ill., from Oct. 3-5, 2018.