Florian cites guidance from neuroscientific research and from Finra that states that investors should not be pushed to make financial decisions while they are emotionally fragile and dealing with a recent transition. It is unwise because when clients experience loss and grief, the brain gets flooded with the hormone cortisol, which regulates the body’s stress response.
“A little bit of cortisol gets you up in the morning, but a lot takes away the higher level of rational thinking skill,” Florian says. “In extreme cases, it can push you down to survival-level thinking where you’re dealing with things on a moment-to-moment basis. In that state, someone might think they’re making rational decisions, but later on they’ll find that they regret the things they’ve done. It’s not a fault, it’s a physiological fact. They’re not ready to make those decisions yet.”
Financial firms should be ready for client calls after a transition, says Florian.
“This starts with the call informing the advisor of a transition,” Florian says. “Instead of talking about you or your reaction, always start by asking what happened, or how they found out, or what it’s like for them right now. In almost every case, they’re going to need to be able to tell their story, so give them space and permission to talk to you.” Later, asking the right questions can help advisors to determine the right time to proceed with addressing a client’s needs.
Such a person is incapable of considering the implications, the financial advantages and the potential drawbacks to a decision, says Florian. So advisors must learn to wait — and to assess their client’s emotional well-being.
While it’s easiest to reach out via email (unless clients specifically state they don’t want it) and it’s always nice to be able to attend ceremonies like weddings, funerals and graduations to engage with clients and their families, financial advisors should use the telephone to check in on grieving clients.
“Call every week at first, then every other week, just to check in,” Florian recommends. “Ask what kind of day they’re having -- is it an up day, is it a down day or an all-over-the place day? Ask what is happening with them and their families at this point. Ask how their social network is reacting or who they find to be the most supportive. Ask open questions and then really listen to the answers. Keep track of where their grieving process is going.
“It’s also okay to ask if anyone has given them suggestions on what to do with any investments -- offer to answer any questions that they might have, be the second set of eyes for them.”
This kind of communication is even more important when dealing with a partner, spouse or other loved one after a client has died, says Florian. By volunteering to be an objective advocate for the family, an advisor not only solidifies their relationships, but also improves their odds of keeping a higher percentage of client assets through transition.
But capturing more client assets in transition also means conducting ground work to establish closer relationships with clients’ families and seizing the multiple opportunities advisors have to practice grief support.