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Breaking Through Clients’ Money Taboos

By Thomas Coyle March 12, 2014

Our society frowns on people who talk openly about money, especially their own. The self-censorship is so powerful that psychotherapists say patients clam up about their finances even on the couch. Whatever its cause — modesty, superstition or a fear of getting robbed — the taboo means advisors need strategies to overcome it, ones that don’t offend or frighten clients who have in many cases been trained from the cradle to avoid the topic like the plague.

“Money and sex are equally difficult to talk about,” says Lori R. Sackler, a Morgan Stanley advisor in Paramus, N.J., who has written a book about how to overcome this cultural prohibition. “They are both linked to self-esteem and connected to shame, anger and fear.” The Sackler Group manages $200 million in assets.

Advisors know that candor about money is crucial to effective wealth management — and to keeping family fortunes intact. But in getting clients to open up, they have to tread carefully. The nuances of people’s relationship with their money defy easy categorization, says Szifra Birke, a psychologist who consults to businesses and high-net-worth individuals in Chelmsford, Mass. Birke says advisors must be ready to let go of preconceptions and listen closely to clients if they hope to break through the walls of fear and reticence.

Bangor, Maine-based wealth manager Jean Deighan says it doesn’t hurt to prime the pump. “We simply tell people, ‘We can’t help you unless we know your full circumstances,’” she says. From there, Deighan and her colleagues at Deighan Wealth Advisors, a firm that manages about $150 million, listen intently. They glean clients’ goals and values from a thorough interview process, which includes finding out which relatives clients trust enough to handle their financial affairs in case of incapacity. Deighan is careful to frame the discussion in broad, vague terms — “What if you were in a hospital somewhere?” — rather than specifically mentioning stroke, dementia or death, which could frighten the client into silence.

Jean Deighan

The fact is, one reason people are reluctant to discuss estate issues is that it’s hard to do legacy planning without staring mortality in the face. Experienced advisors say it’s helpful to understand that clients’ irrationality can be a mask for emotions they can’t or won’t express. For instance, Deighan talks of a sibling who uses long, tortuous arguments to keep his sisters from voting to sell some land left to all of them by their father. The son isn’t just being stubborn, says Deighan. He has such fond memories of time spent with his father on the land — hunting, maple-sugaring and the like — that he can’t separate the real estate from a parent he still mourns.

When such psychological dynamics keep a family from selling an asset, Deighan says, it’s important to categorize the holdings accurately, especially if they’re a drain on the client’s overall finances. She recalls a client with a distant beach home that he visits one weekend a year and has no intention of selling. Deighan insisted he stop pretending it’s an investment asset. “It’s a ‘use’ asset,” she says — one that, given about $10,000 a year in taxes and upkeep, is an expensive one for the client. “You have to help people understand the reality of things they’re emotional about,” she adds. “It puts them in a better place to make decisions.”

Genuine Concern

The taboo surrounding money isn’t just about airing private affairs in public. Some very rich families avoid talking with the next generation about money for fear of spoiling their children — but they risk having heirs who either think they’re richer than they are or aren’t prepared for the responsibilities of great wealth. “Often the parenting just isn’t conducive to wealth transfer,” says Morgan Roberts of Manchester Capital Management in Manchester, Vt., a firm that manages more than $2.6 billion.

Even though they’re not trained as family counselors, advisors can help guide the families they advise by getting the generations to articulate their feelings about their money and their expectations around wealth stewardship, adds Roberts.

But there are no tricks or surefire formulas for drawing out a client’s feelings about money — none beyond “listening with genuine curiosity,” says psychologist Birke. As she explains it, conversations guided by heartfelt interest and concern aren’t likely to offend and will result in revelation. This process can take time, she adds, but it’s “where enduring change comes from.”