Sometimes clients challenge us in ways that go beyond financial planning. When there is strong bond between the financial planner and the client, the client is more apt to discuss emotional issues stemming from family stresses, marital problems, or deep unhappiness that make us uncomfortable. How prepared are you to respond if a client desires greater personal involvement than you are willing or able to provide?
Getting inextricably involved in a client's problems can drain your time and cause you to lose focus and objectivity on financial planning issues. It's important to know what is going on in your client's life to effectively plan for them, but you don't have to solve all of their non-financial problems.
CFP® Professionals must recognize when they are able to address their client’s non-financial issues competently, and have the wisdom to know their limitations. In these cases, collaborating with a therapist may lead to a more effective long-term relationship.
There are three possible outcomes from prolonged financial planner-client dysfunction: Things will get better, worse, or stay the same.
Effecting positive change in a client’s behavior can happen through a concrete plan with clear goals and objectives delivered in a low-key manner. There are no quick-fixes, so expect reasonable progress to take months, if not years.
If continuing attempts to effect positive change don’t succeed, then there is a temptation for the planner to blame the client for the failure of the financial plan, which could lead to terminating the engagement or allowing the relationship to deteriorate to the point where the client does not return. A client’s reluctance to make recommended changes can also become a liability.
The founding principal at Stepp & Rothwell, Kathy Stepp, gave me a great piece of advice about fostering a client relationship. She said, “Never respond to client’s request with, ‘It’s not a problem.’, because that insinuates that it is a problem.”
We don’t have problem clients; just problematic situations that clients are looking to us to help them solve. With patience, understanding, and a concrete plan to effect positive change, we can convert these situations from problems into successful outcomes. For the exceptions, I have a blue pot where you can put them.
Dan Mathews is a financial planner with Stepp & Rothwell in Overland Park, Kan.
Before joining Stepp & Rothwell in 2001, Dan worked for five years as a specialist in Investor Relations and Retirement Plan Services at American Century Investments.
In October 2011, he was selected to be a CFP Board Ambassador, serving as a consumer advocate and representing more than 63,000 financial planning professionals who hold the CFP mark.
He has a Bachelor of Business Administration degree from University of Missouri-Kansas City.