There are plenty of subjects clients like to avoid when it comes to financial planning. But as a financial advisor, you have to know how to start those sometimes tough conversations.
The most difficult conversations usually revolve around estate planning issues, such as wills and powers of attorney, says Jeanette Brox, a certified financial planner and senior financial consultant with Investors Group Inc. in Toronto. Just bringing up the subject briefly isn’t enough, she says. You need to take these topics seriously and discuss them in depth with your clients.
You can make conversations about estate planning a little easier by following these tips:
> Use tact
Choose your words carefully when starting a difficult conversation with a client.
Start the discussion with something that is not likely to put your client on the defensive, says Rosemary Smyth, coach and owner of Rosemary Smyth and Associates in Victoria, which specializes in coaching financial advisors. Use unassuming phrases to avoid sounding judgmental or as if you are trying to pry.
Smyth suggests starting a conversation with the phrase: “I’m just curious …”
> Make it a routine
Turning wills and powers of attorney into routine topics can take the edge off an uncomfortable discussion.
Brox uses a standardized personal financial review process, which she completes with new clients, as a lead-in to difficult conversations about wills or POAs
As part of the review, she asks her clients whether they have a will and whether they have designated someone as POA. If the answer is “no,” Brox says, she marks the question with a circle and comes back to it later in the meeting to find out why.
> Use stories
Cite examples to get clients to question their concerns about wills and POAs.
Most people know of someone who has died without a will, says Brox, and how that has caused problems for the family.
Start an estate-planning conversation by asking your client to share his or her stories about people who weren’t prepared for the inevitable, she says. Then give a few examples of your own.
> Offer an explanation
Make difficult conversations about POAs a little easier by demystifying the subject for clients.
Clients are often confused when it comes to POAs, Brox says, because there are different types — for example, for personal care and for property.
Brox often gives her clients a chance to discuss their understanding of POAs and then spends time explaining those documents and their importance in estate planning.
> Know your client
The deeper your understanding of your client, the more comfortable you will feel about broaching any financial topic.
“Know your client’s [preferred] communication style,” Brox says. And, she adds, make sure your tone is serious but not threatening.
As well, remember to have the names of professionals on hand, she says, such as an estate lawyer the client can contact.