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Written by: James Woodfall and Cliff Lansley
As a financial planner a large part of the role evolves around client interaction which means having to take into account people’s emotions and personal circumstances, which is why emotional intelligence (EI) is important. Two of the most difficult subjects to address as a financial planner is death, and admitting when you have made a mistake. In this article we will cover how to use EI to handle both of these subjects in a sensitive and professional manner.
Increasing one’s EI as a financial planner is also beneficial from a business perspective. In a 1998 study, financial planners who showed higher levels of self-awareness in their EI scores sold more life insurance.43 Selling life insurance involves discussing difficult topics like accidents, illness or death. Navigating these topics requires high levels of self-awareness which assists the adviser in recognising and managing their own discomfort around these topics. Mortality or critical illness of the client, or their loved ones, can be tough to discuss, but advisers shouldn’t avoid difficult conversations because of their own discomfort. A difficult conversation about death may help the client, and that is the focus of this article, not to only make this process easier for you as a planner, but easier for your clients as well.
Death and illness
The issue of death or illness may be raised by the client early in their relationship with you. Sometimes it may take a while before they feel comfortable enough to share at this level with you. Some clients may have rehearsed their death plans and be comfortable discussing this as you are a detached person who can make it easy, even cathartic, for them to bare their souls, fears and thoughts with you. While you may not be a qualified therapist or grief counsellor, you might lean on EI skills to do what you can when things get sad and difficult. If you care about the person and are willing to give them some of your undivided time, you will do ok. Honestly.
Memories work best for emotional moments and episodes of personal significance, so your support and help for people who are sad will be ingrained in your client’s memory and serve your relationship well. Yes... there is a business reason for being kind.
The secret to managing sad moments is to:
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Be 100% attentive
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Create plenty of time for your client – cancel your next meeting if necessary
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Be kind
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Show empathy
Even when bad news isn’t out on the table, it can serve you well to respond to emotional disclosures, first, with empathy (eg ‘That sounds tough!’, ‘I can see you are really angry!’, ‘You must be so proud of her!’). Let them vent, share, and open up about how they feel so you can help them process their emotions and segue back into the main purpose of the interaction.
Getting that apology right
One of the most important parts of making a mistake is owning up to it. This starts with an apology, and it’s important to make sure that it is a proper apology.
For example, which of these is a proper apology?
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‘I am so sorry for being late but there was a traffic accident on the motorway/highway.’
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‘I am so sorry that you feel let down by my advice and services.’
Neither of them. Well done!
Any apology with a ‘but’ in the middle (like example 1) isn’t an apology. The ‘but’ negates what has come before it. A more honest response would be: ‘I chose not to prioritise your meeting over my long breakfast by setting off without allowing for contingencies like traffic accidents, which happen a lot on roads. I have no excuses apart from maybe my own unforeseen serious injury or illness – which didn’t happen here. I offer the traffic accident as a weak excuse for my choices (whether it’s true or not).’
Harsh, I know, but your client deserves better.
Apologising for how someone feels about your actions isn’t an apology either (in example 2). That is making it their fault for being so sensitive. Come on!
Here is an example of a good apology for forgetting to send a document to a client:
‘I am so sorry for not sending you the document that I promised I would send to you by last Friday. It won’t happen again. I have now created a diary system in which I enter my commitments to you, so this will never happen again.’
CASE STUDY: From aggression to understanding
When his father died, leaving a pension to be split between his three children and four grandchildren, Mr Henshaw contacted the financial advisor handling his father’s will. Due to the grandchildren being under eighteen, the FA had to follow guardianship legislation, requiring original ID verification. Additionally, the lack of online forms increased the administrative burden. Mr Henshaw grew increasingly angry over time. The FA, being naturally passive, struggled with Mr Henshaw’s aggressive style and felt bullied. He escalated the issue to his boss, Daniel, who took over the case. Daniel, assertive by nature, sought to understand the reasons behind Mr Henshaw’s anger and build rapport. During one call, he learned that Mr Henshaw was facing financial problems affecting his business, marriage and family life. Receiving the inheritance soon would alleviate these issues.
Understanding this, Daniel respectfully explained the legal obligations they had to follow and why they couldn’t bypass the legislation. He assured Mr Henshaw of his value as a client, promised to expedite the process where possible, and offered regular updates. Mr Henshaw appreciated the clear explanation and chose to stay with Daniel, who successfully managed his expectations and completed the work to his satisfaction.
Overall, even though a Financial Planner’s main role is to provide financial advice it is the empathy and support that they can offer that creates a lasting impact. Whether discussing challenging subjects like death or addressing mistakes, employing empathy, attentiveness, and genuine communication strengthens client relationships. By integrating EI into their practice, financial planners not only enhance their professional effectiveness but also create meaningful connections that benefit both their clients and their business.
Related: When Loss Hurts Twice: Emotional and Financial Impacts of Grief