How To Coach Undisciplined Clients Without Sparking Their Anger


You give great advice to clients. But what happens if they don’t take it?

[ibd-display-video id=3017220 width=50 float=left autostart=true] Many financial advisors find it easy to offer sound recommendations. The hard part is nudging clients to comply, especially if they lack the discipline to follow through.

Whether it’s an inability to stick to a savings plan or an asset allocation strategy, some clients will act impulsively or simply ignore what they’re told. Despite their best intentions, they may not do what their advisor says – and wind up sabotaging their goals as a result.

“It’s incredibly rare that a client can be completely disciplined and follow through on everything that you recommend,” said Evan Powers, a certified financial planner in Charlottesville, Va. “But it’s not that huge of a problem” because there are ways to support individuals over time – and help them get with the program.

Powers applies a three-step process to advise clients who may initially lack the discipline to adhere to a game plan. First, he probes to determine their goals such as targeting a certain age to retire or funding a child’s education.

Second, he collaborates with the client to draft a written plan built around three or four action steps to reach those goals. Examples may include managing household expenses, developing an ongoing savings strategy or adjusting a portfolio to reflect agreed-upon priorities.

Finally, he confers with the client every six months or so to review the formal plan. Most of the time, they find that one of the action steps has fallen by the wayside.

“It soon becomes clear which item the client struggles with,” Powers said. “So we make tweaks to the plan or change priorities.”

Small Steps

When clients fail to pounce on their advisor’s recommendation, it’s tempting to conclude that they lack discipline or are too busy or distracted to comply. But they may have other reasons.

Powers recalls advising a new client in his 30s to get life insurance. Over the next few months, however, the client didn’t take any action.

Eventually, Powers learned that the client’s medical history made him nervous about applying for a policy. Through gentle, supportive questioning, Powers determined that the client’s reluctance stemmed from his fear that he’d be denied life insurance and that would prevent him from ever obtaining it.

Armed with that information, Powers enlisted an insurance broker’s help to secure coverage for the client.

If advisors conclude that their client lacks the wherewithal to heed their suggestions, they may proceed in small steps to induce compliance. Establishing incremental milestones to advance toward a larger goal tends to work well with individuals who seem unwilling or unable to take practical advice that’s in their best interest.

“We prefer to nudge our clients (who don’t initially take our advice) rather than expect complete behavioral changes,” said Doug Amis, a certified financial planner in Cary, N.C. “Most clients are more receptive to making little changes.”

Assess And Coach

Nudging works particularly well when trying to get clients to stay within their budget. Some advisors might present them with a detailed budget, insist that they follow it strictly and lecture them if they don’t.

A better approach is to urge less responsive clients to take baby steps. Instead of drafting an annual budget broken down by month, encourage clients to meet weekly mini-goals.

Above all, beware of berating those who do not take your advice. Scolding or expressing disappointment in them can drive them away.

“I’ve learned that you want to position yourself as a consultant and coach who says, ‘Let’s work together to fix this,’ ” Amis said.

Personality assessments and other diagnostic tools can strengthen your understanding of how clients behave and what motivates them to act. Analyzing the results can help you appeal to certain types of clients more effectively.

Lisa Kirchenbauer, a certified financial planner in Arlington, Va., often asks new clients to take such assessments. She likes products by Kolbe and the Sudden Money Institute’s “communication preference” tool.

For example, the results may show that an individual is more apt to comply when given an urgent deadline. So Kirchenbauer will create a crunch deadline to rivet the client’s attention on following through.

“It takes the judgment out of it so that we can find creative ways to help clients,” she said. “When clients feel judged, it doesn’t help your relationship with them.”

In some cases, Kirchenbauer recommends that a client enlist a life coach or join a support group to acquire more discipline. She says she finds it “more useful to brainstorm with the client than to signal disapproval.”


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