This week we interviewed Jim Adkins, president and CEO of Strategic Financial Associates, a financial planning, investment advisory and wealth management firm based in Bethesda, Md. Adkins recalls how he stopped a clients’ embarrassment from getting in the way of a successful planning conversation.
One thing I picked up on early in my career is that when people come to the office for the first time to discuss their financial situation, they often come in with a strong sense of shame or embarrassment.
The advisor needs to disarm that shame before they can get any real work done. I discovered this for the first time when I had an initial meeting with a couple in their early 50s.
They were successful entrepreneurs who owned their own small business but they’d been so focused on keeping the business going that they had neglected to plan for retirement.
While they had considerable assets from their business they hadn’t really done anything strategic with them.
Right away, I sensed that they weren’t entirely comfortable talking to me about their financial situation. The husband kept asking how he stood relative to my other clients. I kept trying to reassure him, telling him that it didn’t matter how he stacked up to others.
The thing that was really important, I assured him, was whether or not he was on track to meet his own goals, based on his own time horizon and risk tolerance. Other people didn’t matter.
Despite my attempts to reassure and redirect him, both he and his wife still seemed somewhat ill at ease.
I kept trying to look across the table at them but neither of them would meet my eye.
Eventually I realized the husband wasn’t inquiring about other people because he was competitive; rather, it was because he was insecure.
Both of them knew they hadn’t paid much attention to their retirement savings and they were embarrassed about that. They didn’t have much of an idea of where they stood and that made them nervous and ashamed.
I realized that in order to get through to this couple I had to cut through the shame before I did anything else.
Even if I had presented them with the best financial plan in the world or gave them the good news that they were on track to meet their retirement goals, they wouldn’t be able to hear it.
Their shame was blocking their ability to connect with me and consider what was really going on.
I stopped what I was saying and instead took time to reassure them that many clients found themselves in the exact same situation as they were in.
The mood in the room immediately changed; both the husband and the wife looked as though someone had lifted a weight from their shoulders.
Finally, they were able to look me in the eye. They’ve been great clients ever since.
To disarm shame, clients need to hear that they are not alone in their problems, whether they involve a lack of retirement savings or too much credit card debt or a bad investment.
Shame is such a strong emotion; it can really overwhelm clients and prevent them from taking the steps they know they need to take.
Since that meeting I’ve become adept at noticing the signs of shame. If a client won’t make eye contact or seems to shy away from a particular area, that’s a good sign that the advisor needs to spend a little bit more time there.
As advisors, we need to make sure our clients understand that we’re not here to judge them or scold them for what they have or haven’t done.
Our role is to put them at ease. In many cases, that means giving them some much-needed perspective, which can be a good antidote for shame.
Once you’ve done that, you can start to dig into the nuts and bolts of planning.
But if you don’t disarm the shame first, your clients may still have that nagging sense that something isn’t right, which can derail the planning process.
That’s why dealing with the shame and embarrassment needs to be a priority.