Here’s What Financial Advisors Gain from Embracing Difficult Clients

Jun 27, 2023 | Blog Posts

There are many reasons why people don’t align in professional contexts. So what should you do in these moments, especially as a financial advisor seeking to meet the needs of investors who understandably need your support?

Sometimes, the best course of action is to simply embrace the dissonance by challenging your own assumptions about what’s right.

Here’s a deeper discussion into the topic.

Understanding why people act difficult

The short answer: you could spend hours of your life trying to understand the psychology of a person, but is it worth the time and energy?

There are countless reasons why someone might be acting difficult. Maybe they’re having a bad day. Maybe they have poor social skills, don’t have experience working with a financial advisor, or have a traumatic past with money. Perhaps they are accustomed to receiving a level of service that your RIA firm simply isn’t equipped to provide.

You could keep guessing. Or you could solve the problem.

One counterintuitive approach to handling a difficult person is to simply meet them where they are — to accept their experiences, words, and perspectives.

The importance of validating others

Conventional wisdom states that you can’t change other people, but you can change yourself. One way that you can shift your response to someone else’s difficult behavior is to simply listen and acknowledge the other person’s perspectives. That’s what validation is all about.

“Validation doesn’t necessarily mean we agree with another’s subjective reality,” writes psychologist Dr. Jamie Long. “Validation simply allows another person’s emotional state a space to exist.”

There are a few things you can say as an advisor to validate the other person’s perspective:

  • I hear you
  • I share your concern
  • I’m listening and processing what you’re saying
  • Let me reflect on that

Validation is not about agreement, allowing the other person to win an argument, tolerating negativity, or admitting fault. It’s about acknowledging the other person’s views and committing to finding a solution together.

What you’ll gain from staying calm, calibrated, and positive

Who knows, maybe you’ll realize that your perspective wasn’t right after all. Maybe your client was acting reasonable given their life circumstances. Even more importantly, at the very least, you’ll learn something valuable about your financial advisory practice.

Consider the situation of a client who calls you at 8AM in panic about the state of the stock market. Perhaps this situation is a reminder to get a self-serve client portal up and running — and perhaps create some boundaries around your working hours.

You might recognize additional operational upgrades to implement:

  • Documenting detailed notes
  • Recording conversations
  • Following up with detailed plans
  • Investigating frameworks and tools
  • Tagging in additional teammates to handle uncomfortable situations
  • Establishing systems to communicate more proactively and in advance

There’s something to gain from every difficult situation.

The best lesson learned of all

Know your boundaries.

Some negative dynamics simply aren’t worth it, no matter how well intentioned both parties are. If you need to part ways, at least you’ll do so peacefully and respectfully. 

“It can improve staff productivity to not have to deal with very difficult people and their often-time-consuming problems, not to mention simply improving morale by not needing to deal with unpleasant people in general,” writes Michael Kitces on his blog.

No matter what, even if a client doesn’t stick around, there’s no harm in listening and discovering space for professional growth.

About CircleBlack

CircleBlack is an all-in-one technology platform for relationship-focused financial advisors. To learn how our software can help you build, manage, and grow your wealth management practice, get in touch to request a demo.

This material has been prepared for educational purposes only. It is not intended to provide, and should not be relied upon for, investment, accounting, legal, or tax advice.

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